1. CRAIG FOSS (National—Tukituki) Link to this
to the Minister of Finance
What reports has he received on the New Zealand economy?
Hon GERRY BROWNLEE (Leader of the House) Link to this
Mr Speaker—[ Interruption] Although my name is not Bill and I will never pretend to be Bill, nor am I changing my name by deed poll to Datacom, I reply that the Minister has seen reports that our economy is performing well relative to the economies of most other developed economies. Our unemployment is lower, our banking sector is stable, Government debt is lower, and we have a clear plan to bring public spending growth under control. However, one perverse effect of that strong performance is a higher than expected dollar, particularly against currencies where the economy is weak, like the US and the UK. As the Minister has said several times, the Government is concerned about the impact that this is having on exporters and local producers, and it is doing what it can to ensure that its actions do not add to the pressure on the dollar.
Hon GERRY BROWNLEE Link to this
We are focused on lifting New Zealand’s trading performance. In the 5 years before we took office, our imports had grown at twice the rate of our exports, despite the world economy booming. This was simply the result of mismanagement. Competitiveness covers all aspects of the economy. The Government is busy improving regulation, boosting State sector efficiency, and providing the country with adequate infrastructure. In addition, we have a clear plan to control public spending and debt. This reduces pressure on the exchange rate and allows the rest of the economy to prosper.
Hon GERRY BROWNLEE Link to this
Yes, the Minister has seen comments from Federated Farmers, stating that the Government should immediately cut its spending to ease pressure on the dollar. The Government understands farmers’ concerns. We have adopted a considered approach to spending decisions, in order to provide a level of certainty around public services and entitlements in a recession. At the same time, we have told Government departments to expect little or no extra money in future years. That is in marked contrast to reports we have seen of Labour’s plans to borrow an extra $6 billion a year. There is no doubt that that kind of reckless borrowing would push the dollar up further.
Dr Russel NormanHow will the Government’s changes to the emissions trading scheme, which will result in an increase in Government debt, according to Treasury, of 6 to 8 percent by 2050, reduce Government borrowing?
Hon GERRY BROWNLEE Link to this
Although I will not enter into any discussions about the veracity of those figures, I will say that if New Zealand did not have an emissions trading scheme, the opportunities for our traders to trade successfully, to lift our exports and do better for this country’s economy, would be significantly reduced.