1. CRAIG FOSS (National—Tukituki) Link to this
to the Minister of Finance
What reports has he received on New Zealand’s external financial position?
Hon BILL ENGLISH (Minister of Finance) Link to this
Today’s data shows that the balance of payments deficit for the year to June narrowed to $10.6 billion, or 5.9 percent of GDP, in the June quarter. This represents a narrowing of the deficit from the recent range of 8 to 9 percent, the record high levels that it has held since 2005. The decline would have been greater than it has been but for the 9 percent decline in the terms of trade in June, the largest quarterly fall since 1975 and the largest quarterly fall in export prices since 1951.
Hon Trevor MallardYes, come on, Trevor. [ Interruption] It is the same script. Today’s adjustment is what one would expect during a recession. The falls in imports, interest rates, and profits are all to some extent temporary, and as the economy improves, each of them will tend to reverse. The need to rebalance the economy towards investment and exports remains as important as ever. That rebalancing is critical to creating sustainable jobs.
Hon David Cunliffe Link to this
If the Minister is encouraged by the reduction in the financial and trade deficits, when can the struggling families who are currently having trouble meeting their power and grocery bills see a bit of light at the end of the tunnel and something extra at the end of the week?
Families, particularly those families who are struggling with the loss of jobs, must be concerned that, despite the best economic conditions in a generation, that member’s Government so badly mismanaged the economy that thousands of Kiwis have now lost their jobs.
I have seen some quite knowledgable comments from the Hon Phil Goff when the current account deficit was last a significant issue. He said we had got into the habit of borrowing from overseas, effectively relying on the savings of foreigners, to pay for our consumption and invest in our businesses. Given that Mr Goff identified the problem correctly, it is hard to understand why his Government managed to make such a mess of it once Labour got into power.
Dr Russel NormanWill the Minister join the Greens, Treasury, the Reserve Bank, manufacturers, and exporters in admitting that we need to change the taxation treatment of investment properties if we are to rebalance the New Zealand economy away from debt-fuelled consumption towards productive enterprise?