2. CRAIG FOSS (National—Tukituki) Link to this
to the Minister of Finance
Has he received any recent reports about the state of the New Zealand economy; if so, what do they reveal?
Hon BILL ENGLISH (Minister of Finance) Link to this
Yes; last Thursday the Reserve Bank delivered its Monetary Policy Statement. The statement highlights the longstanding structural imbalances in the economy. It highlights the need to move away from an economy based on big increases in Government spending and high levels of household borrowing, to an economy based on savings, exports, business investment, and new jobs.
What does the Monetary Policy Statement project for future growth, and how does this compare with the recent past?
The Reserve Bank expects solid growth through the next few years. It projects over 10 percent cumulative real growth for the 3 years to March 2013. This compares with anaemic growth in recent years. In the 3 years to September 2008, before the global crisis began, growth in New Zealand’s real GDP per capita was actually negative. That is, average incomes for New Zealanders were falling at a time when the rest of the world was growing strongly.
There is a great deal of interest in these reports about the New Zealand economy, particularly when they come from the Government. Just by way of contrast, I note that the Prime Minister and I addressed a packed audience of over 200 people at the Invercargill Working Men’s Club. The other day I saw a photo on page 15 of the Southland Times showing the Hon David Cunliffe addressing about six people at the same venue.