3. JOHN BOSCAWEN (ACT) Link to this
to the Minister of Finance
By how much does New Zealand’s annual GDP growth rate need to exceed Australia’s to achieve the Government’s concrete goal of closing the income gap with Australia by 2025, and do Treasury’s 2010 Half Year Economic and Fiscal Update forecasts, released today, indicate that the Government’s economic plan will achieve the required rate over the next 5 years?
Hon BILL ENGLISH (Minister of Finance) Link to this
The growth rate needed to close the income gap by 2025 would be 1.8 percent per capita income growth higher than Australia’s. Today’s forecast does not indicate that the plan will achieve that rate over the next 5 years.
When does he expect “Treasury to increase their growth forecasts to account for the Government’s comprehensive plan to catch Australia by 2025”, or has it already done so?
Treasury, as an independent forecaster, will make a judgment roughly every 6 months, when the forecasts are updated, as to whether it believes New Zealand’s growth potential has increased. It is as aware as the Government that we are now dealing with the burden of 10 years of economic mismanagement. It will take some time to clear that out.
By what date does he expect Treasury forecasts to show that we are on track to catch Australia, or does he not know that?
The Government has not set some artificial date for that; we have focused strongly on putting in place an economic programme that will sort out the mess we were left with from the previous Government—which squandered one of the best decades New Zealand could have—and putting in place a platform for lifting our economic performance.