[Sitting date: 27 November 2014. Volume:702;Page:2. Text is subject to correction.]

2. JOANNE HAYES (National) to the Minister of Finance : What progress has been made towards meeting the Treasury’s Budget forecasts for job growth in the economy over recent years?

Hon STEVEN JOYCE (Minister for Economic Development) on behalf of the Minister of Finance : I am very pleased to report that there is excellent progress being made towards meeting Treasury’s forecasts for job growth. Members will recall that in Budget 2010 Treasury forecast that 174,000 new jobs would be created across the economy over the 4 years to June 2014. As it happened, 170,000 new jobs were created over that period, so we are very close to achieving what was then seen as a very ambitious forecast. But the news gets better: in Budget 2011 Treasury forecast 171,000 new jobs would be created in the 4 years to June 2015. So far, with almost a year to run, 159,000 new jobs have been created since Budget 2011, so we have around 12,000 jobs to go. That is very good in terms of what we need to achieve for the forecast by June of next year.

Joanne Hayes : How is the growing economy, combined with continued high levels of business and consumer confidence, influencing the outlook for employment and investment?

Hon STEVEN JOYCE : The growing economy is supporting employment and investment—for example, the unemployment rate fell to 5.4 percent in September. That compares with 6.2 percent in Australia. There were 18,000 more people employed in the September quarter alone, and the labour force participation rate increased by 0.1 percent to 69 percent, which continues to be one of the highest in the developed world. Statistics New Zealand has noted that rising employment is more than keeping up with a strongly growing population and inwards migration. Although business and consumer confidence have come off their record highs, they do remain at elevated levels. This indicates strong employment intentions—for example, the New Zealand Institute of Economic Research quarterly survey of business opinion reported that a net 18 percent of firms expect to increase staff numbers in the coming quarter.

Joanne Hayes : How are positive employment indicators being reflected in average wages, and how do the latest average wage increases compare with movements in the cost of living?

Hon STEVEN JOYCE : Cost of living increases are actually very low. Consumer price inflation was just 1 percent in the year to September. That is helping to keep interest rates lower for longer. Food prices actually fell by 0.1 percent in the year to September, with fruit and vegetable prices falling 3.3 percent. By comparison, average hourly wages rose 2.3 percent in the past year and average weekly wages rose 1.8 percent. Therefore—

Dr David Clark : What about median wages? What about something that matters?

Hon STEVEN JOYCE : Oh, I think, actually, people’s wages and costs of living do matter. I think it is interesting that the Opposition does not think it matters, but actually I think it does matter to New Zealanders. It probably matters a lot more than Dirty Politics and blogs and all the sort of rubbish the Labour Party focuses on.

Joanne Hayes : What other indicators confirm the economy is heading in the right direction and will continue supporting new jobs and higher incomes into the future?

Hon STEVEN JOYCE : Apart from low inflation, low interest rates, and real wage growth, there are a number of other positive indicators—for example, the economy grew by 3.9 percent in the 12 months to June, which is one of the fastest growing developed economies in the world. New Zealand’s households have now posted positive saving rates for 5 consecutive years. Just this week the Institute of Economic Research said that although one-off boosts to the economy are fading, there is a durable underlying recovery taking place that is not built on borrowing. It is in stark contrast to the situation the Government inherited in 2008. Back then the economy was mired in a recession before the global financial crisis , inflation was more than 5 percent, floating home mortgage rates—you may remember—were nearly 11 percent, and we faced a decade of fiscal deficits.

Dr David Clark : Does he believe the target of the Minister for Economic Development of reducing unemployment to 4 percent by 2025 is ambitious, given it falls 14 years after the Canterbury earthquake and 14 years after the end of the global financial crisis, or does he think we can perhaps get there just a little faster?

Hon STEVEN JOYCE : Well, the member is incorrect, and I think he was told about this in the last session. It is not the target of the Minister for Economic Development, and also, by the way, it is not even the target of the Ministry of Business, Innovation and Employment. The ministry target is to maintain employment as much as possible and maintain unemployment below 4 percent, and it is not specifically attached to 2025.

Dr David Clark : I seek leave to table a document signed by the Minister—

Mr SPEAKER : Order! I just need the source of the document.

Dr David Clark : It is the statement of intent from the Ministry of Business, Innovation and Employment, signed by the Minister.

Mr SPEAKER : Order! No, that is a document that is freely available to all members. [Interruption] Order!

ENDS

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