2. TODD McCLAY (National—Rotorua) to the Minister of Finance: How will Budget 2012 support sustainable growth?

Hon BILL ENGLISH (Minister of Finance) : The Budget will invest significantly in priority areas such as infrastructure, skills, innovation, and research, as well as health, education, and welfare. These measures show confidence in New Zealand in uncertain times and help build a growing, more competitive economy, with more jobs and higher incomes.

Todd McClay: What measures is the Government taking to support jobs and grow the economy?

Hon BILL ENGLISH: Sustainable jobs, sustainable and new jobs, are created only when businesses have the confidence to invest and grow, and make the decision to employ people. In the past 3 years the Government has worked to reduce the tax on work, raised taxes on property speculation, and approved regulations to reduce costs for businesses. I will give one example. On 1 April this year ACC levies were reduced. That reduction leaves $600 million in the pockets of New Zealanders and around $250 million in the pockets of businesses, which then have the choice to employ another person or raise wages.

Todd McClay: How do New Zealand’s public finances compare with those of countries in Europe?

Hon BILL ENGLISH: Compared with a number of countries in Europe, New Zealand’s public finances are in a great deal better shape. In Greece and in Ireland, for instance, there are very substantial cuts in public servants’ pay, and substantial cuts in entitlements and in the size of the Public Service. Even closer to home, Australia has just announced its largest fiscal contraction ever in its last Budget. The state of Victoria announced just last week 4,000 redundancies in its Public Service.

Todd McClay: What alternative approaches to managing public finances has he seen?

Hon BILL ENGLISH: There are a number of confusing alternatives, some of which say that the Government should be stimulating the economy more by, perhaps, not taking control of its spending. In fact, in the last year or two the Government has run quite large deficits to support the economy through a difficult patch. The same people are telling us to stimulate more, then criticising the Government for borrowing money. This is a bit confusing.