2. TIM MACINDOE (National—Hamilton West) Link to this
to the Minister of Finance
What steps has the Government taken to increase incomes and to give businesses the confidence to invest and create new jobs?
Hon BILL ENGLISH (Minister of Finance) Link to this
The Government has taken many steps, including long-term investment in infrastructure, reforming the tax system to reward savings and productive investment, lifting education standards, cutting red tape, continued reform of the public sector, and investing heavily in science and innovation. All of this is helping to build business confidence, because, in the end, sustainable jobs come from confident businesses investing and feeding off the proceeds of New Zealand selling its goods to the world, not off unsustainable jobs from fast-growing government, and debt-funded housing booms.
One positive result is that the New Zealand economy has grown in seven of the past eight quarters, and in this 12-month period is likely to grow faster than the Australian economy. But probably the most important thing is the fact that these policies have assisted with the creation of 43,000 new jobs in the past 12 months. Treasury predicts that if we can stay on track with sensible policies, about 170,000 new jobs will be created over the next 4 years.
In terms of rising incomes, how has the increase in the after-tax average wage left more money in the pockets of hard-working New Zealanders?
Changes in the after-tax average wage are a combination of wage increases and tax reductions. We do not know the situation of every New Zealander, but the after-tax average wage is rising faster than inflation. In the year to March the after-tax average wage rose 7.4 percent, compared with inflation of 5.3 percent, which is a real increase of 2.1 percent, after all cost of living increases and the one-off rise in GST. Households on those wages are enjoying the benefits of the lowest interest rates in 45 years.
Any policy ideas that undermine business confidence with unnecessary red tape, and any policy ideas that mean more spending and expansion of government, and particularly spending that is financed by higher taxes and more debt. These would be corrosive of growth in New Zealand but also would make the New Zealand economy more vulnerable when the world is so volatile and unpredictable.
Hon Trevor Mallard Link to this
When does Treasury project that his policies will return unemployment back to 4.3 percent, which it was when he took office?
I do not think the forecasts show a return to that, but the member will not be taken seriously until he understands that that unemployment rate was based on unsustainable economic growth, fed by rapid Government spending—
Mr SPEAKERHon Trevor Mallard Link to this
I seek leave of the House to table a document prepared by the Parliamentary Library showing that Treasury forecasts that by 2025 the 4.3 percent rate will not have been attained.
Hon Trevor Mallard Link to this
How many jobs were created in the last quarter under his Government’s policies, and how does that number compare with the growth of the working-age population?
I cannot give the member those numbers, but in the last 12 months 43,000 jobs were created. That is a major achievement, given that it was done during the fallout from a global recession. What is more, they are real and sustainable jobs, not jobs based on excessive borrowing for a housing boom and a rapid expansion of Government spending, which was unsustainable and unaffordable.
Hon Trevor Mallard Link to this
I seek leave to table a document prepared by the Parliamentary Library that shows that the number of persons employed in the last reported quarter increased by 1,000, whereas the working-age population increased by 5,000.