3. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: In light of his comment that “this Budget will start making the long-term changes that National promised to make and that are needed to lift New Zealand’s long-term economic performance”, what was the forecast growth in Budget 2009 for each out-year to date and what has been the actual growth in each of these out-years?

Rt Hon JOHN KEY (Prime Minister) : That was a statement I made 3 years ago, and, in fact, the actual growth in the years the member referred to was very close to the forecast in Budget 2009, in spite of the fact that in the intervening period we experienced the Canterbury earthquake and a prolonged European debt crisis, neither of which was forecast at the time. The average annual percentage growth for the year ended March 2009 was forecast in Budget 2009 to be minus 0.9 percent, and it turned out to be minus 1.2 percent. For March 2010, it was forecast to be minus 1.7 percent; it turned out to be minus 1.2 percent, an improvement. For March 2011, it was forecast to be 1.8 percent, and it turned out to be 1.6 percent.

David Shearer: What effect has the migration of 53,000 people to Australia—a record number for New Zealand—for jobs and better pay had on the economic growth of New Zealand?

Rt Hon JOHN KEY: We have created 60,000 jobs in the last 2 years. What is true is that some New Zealanders have gone to Australia. I note that, actually, on the front page of the New Zealand Herald when it was discussing the job expo, there was a massive picture of a mine, and if the Labour Party wants to support the National Government in the extension of mining, or in the 1,000-odd jobs that will be in the Skycity convention centre, or the 3,000 jobs that were created in The Hobbit, or the jobs that were created by a more efficient Resource Management Act, I look forward to all of that support.

David Shearer: Given that over the last year we have seen an increase in unemployment, and growth that was $8.5 billion less than projected at the height of the economic crisis, does he stand by his statement prior to Budget 2011 that the Budget is likely to see “very strong job growth; and a much stronger economic outlook for New Zealand”?

Mr SPEAKER: Before I call the right honourable Prime Minister, I say that I need to be able to hear these supplementary questions, and I found it very hard to hear that one because of interjections.

Rt Hon JOHN KEY: History has taught me to make sure that I clarify any statements that the member attributes to me, but what I will say—[Interruption] Well, you have got a lot to say, but not much outside the House, eh?

Mr SPEAKER: Order! [Interruption] No, the House will come to order. We will not have any more of this nonsense. I just remind the right honourable Prime Minister that when he says “you” he is referring to the Speaker, and I am not sure that that was intended for the Speaker. But let us just come back to order. I think there were some problems with both the question and the answer, and I could not hear the question because of interjections. I ask the Leader of the Opposition, please, to repeat his question, because I do want to hear the question, and I want to hear the answer.

David Shearer: Given that over—[Interruption]

Mr SPEAKER: Order! I want to hear the question.

David Shearer: Given that over the last year we have seen an increase in unemployment, and growth that was $8.5 billion less than projected at the height of the economic crisis, does he stand by his statement prior to Budget 2011 that the Budget is likely to see “very strong job growth; and a much stronger economic outlook for New Zealand”?

Rt Hon JOHN KEY: Over time, yes. I will make the point that the last quarter of negative growth we had was in 2009, before, actually, Bill English delivered his Budget. That was on the back of the recession we inherited from the Labour Government. We have had a global financial crisis, which the Labour Party has forgotten about. We have had the Canterbury earthquakes. Today we had the real ripper from David Parker, who said “I am tired of Greece and Europe being rolled out as an excuse by this government.” Well, tell that to Angela Merkel, Barack Obama, and David Cameron.

Mr SPEAKER: I call the Leader of the Opposition. [Interruption] Order! I want to hear this question.

David Shearer: With over 50,000 more unemployed, over 50,000 a year leaving for Australia, nearly 50,000 more on benefits since this Government came to power, and the worst growth record of any Government in the past 50 years, when can New Zealand expect the brighter future he promised?

Rt Hon JOHN KEY: We can wish away all of those issues that have been there. They are a statement of fact. There has been a very significant earthquake in Christchurch—the fourth-largest earthquake insurance event in the world since 1973. We have had the worst global financial crisis since the Great Depression. We inherited an absolute mess from the Labour Government. Does anyone remember what ACC was like when we came into office? Does anyone remember what the basket case of the tax system was? By the way, it was not that flash. In 2008 these were the numbers of growth: minus 0.2 for the first quarter, minus 0.9 for the second quarter, flat for the third quarter, minus 0.4 for the fourth quarter, and the quarter we inherited from Labour was minus 1.3. These people do not live in the real world, which is where New Zealanders are.

Mr SPEAKER: I call the Leader of the Opposition. [Interruption] Order! I must be able to hear the question. Let me just make a point. Order! The more assertions members put into their questions—assertions of supposed fact—the more liberty the Minister then has in responding to them. I just remind members of that.

David Shearer: Is he aware that New Zealand has the worst growth of any OECD country outside of Europe, and if so, why does he keep on comparing New Zealand with failed economies such as Greece, or is this an indication of his aspiration for New Zealand?

Rt Hon JOHN KEY: If anyone is following policies that resemble Greece, it is the Labour Party. Interestingly enough, I think it was both David Parker and David Shearer who have now said they would be back in surplus by 2014-15. Do we know how that is going to happen? Oh, that is right: David Parker is now campaigning on the things that National took to the election, and won on—that is right—not paying into the superannuation fund, not having GST on fruit and vegetables, and he wants a brighter future! No wonder they got trounced last year!

Mr SPEAKER: I call Dr Russel Norman, supplementary question. [Interruption] Order! Look, I must be able to hear these questions. The level of noise is totally unreasonable. Dr Russel Norman.

Dr Russel Norman: In light of the Government’s aim of rebalancing the economy, does the Prime Minister consider Treasury’s projections of a deteriorating current account balance, a current account deficit that is increasing over time, to be an indication of an economy that is rebalancing, or that is becoming even more imbalanced?

Rt Hon JOHN KEY: Firstly, the member will realise and, I am sure, acknowledge that New Zealand has had a current account deficit for the better part of the last 30 years. The second thing I am sure he will recognise is, in fact, that that current account deficit is made up of two major structural points, which are the export balance—export and import balance, the trade balance—and also the capital imbalance. New Zealand has had significant amounts of borrowing from the private sector made up from foreigners, so on that basis it does knock our current account deficit around. But what I can say is that under a National Government, exports are rising. Therefore, the trade balance is back in surplus, which it was not under Labour. One of the fastest ways to grow that would be to grow our exports of agricultural products; grow our exports of minerals, oil, and gas; and grow our exports in other areas where the Green Party is totally opposed. Just like his summation of National’s tax plan, he plucks out a couple of things he wants and actually forgets the entire package.

Dr Russel Norman: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! A point of order has been called. Are members deaf today? Or is it just me? It could be just me.

Dr Russel Norman: My question was whether or not a deteriorating current account deficit indicates that the economy is rebalancing. The Prime Minister did not address that. He talked a lot about Green Party policy, which is fine—thank you very much; we have got a lot to offer—but I would like to hear about whether the current account deficit deteriorating indicates rebalancing. It is a simple question.

Mr SPEAKER: Order! In fairness, what the Prime Minister pointed out was the characteristics of the current account deficit. For a start, he pointed out that we have had, if I remember correctly, a current account deficit for at least 30 years. I think that is what the Prime Minister said. He pointed out that, in fact, there are a couple of components to the current account—one being the trade in goods, and the other in invisibles. So he pointed out that, in fact, the balance was not deteriorating and that the trade in goods was actually improving, and he pointed out that on the capital side there were reasons why there was a decline in that in recent years. That was a reasonable answer to the member’s question, because he disputed the basis of the member’s question right at the outset—that he does not accept that the current account is deteriorating any worse than New Zealand’s historic position. I cannot say the Prime Minister is wrong to answer that way, and that is why I am in some difficulty. I think it was a reasonable answer. It is certainly not what the member wanted exactly, but I think it was a reasonable answer and it gave a reasonably rational refuting of the basic point of the member’s question.

Dr Russel Norman: Thank you for that elucidation. In light of Treasury’s projections that New Zealand’s net international investment position will continue to deteriorate, does he consider that to be an indication of economic rebalancing or not?

Rt Hon JOHN KEY: Firstly, I would point out that it has improved in the time that the Government has been in office. But, secondly, what is true is that if we want to have a stronger economy and therefore more jobs for New Zealanders, the way to do that is to make sure we have good economic policies like the ones the National Government is advancing—that is, reform of local government, that is reform of the Resource Management Act, that is expansion of our mining exploration centre, that is the national convention centre, and that is international companies making movies in New Zealand. They are all things—

Dr Russel Norman: I raise a point of order, Mr Speaker. I am sorry, but I have been pretty tolerant. The Minister has once again—[Interruption] I have been pretty tolerant—

Mr SPEAKER: Order! The Prime Minister will come—[Interruption] I say to members that someone is going to leave the Chamber very, very shortly, and I include all Ministers in that, if they are not careful. When I get to my feet there will be silence. If members have forgotten that rule, members will be leaving the House until they remember it, because we will not have that any more. I accept that the way the point of order was raised was a little unusual and perhaps not the preferred way to raise a point of order. Obviously the member was concerned about the way his question was being answered. Maybe I did let the Prime Minister go on too long, although he was not attacking any other party, but the Prime Minister again refuted the assertion in the member’s question. The member, if I remember correctly, asked whether the net financial position—

Dr Russel Norman: The international investment position.

Mr SPEAKER: —the international investment position—deteriorating was a sign that the economy was not rebalancing. The Prime Minister refuted that assertion as the basis to the question. Under those circumstances the appropriate way for a member to handle that is to come back to the Minister, in this case the Prime Minister, if he believes that the Prime Minister has been wrong in that first answer, to pin him down absolutely, to force him, to answer specifically on that issue and not include other material that allows the Prime Minister room to avoid that fundamental issue. That is what supplementary questions are all about, not raising points of order because members do not like the answer. Make the question tight, pin the Minister down, then I can back the member. But I cannot if there are all sorts of other material in the question that seek opinions that allow Ministers to then express opinions that the members do not particularly like.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The problem with that is, in the primary question Mr Norman was seeking an explanation for why it is blowing out to $17 billion. He got the trade figures, that is, the imports over exports—or exports over imports, according to the Prime Minister—and no answer to the real question. So Mr Norman is now on his third question, trying to get an answer, and the Prime Minister is evading it.

Mr SPEAKER: I will hear the right honourable Prime Minister.

Rt Hon JOHN KEY: That is quite incorrect. The member asked about the current account deficit, and I correctly pointed out there are two major component parts of that, the trade balance and the capital balance. [Interruption]

Mr SPEAKER: Order! We will not interject on other members. We have had enough points of order. In fact, the member’s point of order is not correct. The member did not ask the primary question. The member came in with a supplementary question to David Shearer’s primary question. His supplementary questions left the Prime Minister with a lot of leeway in answering. I simply say to members that the more information alleged in a question, the more scope members give a Minister then to refute that information and not to answer the particular part of the question the member wants answered. Keep the questions tight if you want to pin a Minister down, then I can help members. I cannot if there are all sorts of assertions made in the question that give the Minister the chance to disagree with them.

Dr Russel Norman: So is the Prime Minister disputing Treasury projections, which show that the current account deficit will continue to deteriorate over the next few years, and the Treasury projections that show that the net international investment position will continue to deteriorate over the next few years?

Rt Hon JOHN KEY: No, and the latter point is a sign of the confidence that international investors have in a National-led Government.