3. CRAIG FOSS (National"”Tukituki) to the Minister of Finance: How do the Government's initiatives to support jobs compare with other countries'?

Hon BILL ENGLISH (Minister of Finance) : The Government has focused on a stimulus programme that protects people from the sharpest edges of recession in the short term, and raises our economic performance in the long term. The Government is borrowing an extra $30 billion over the next 4 years to support the economy and to support jobs. The effect of this is that, while the rate of unemployment is 9.4 percent in the United States, 7.2 percent in the United Kingdom, and 9.2 percent in the eurozone, in New Zealand it is 5 percent, which is why it is intriguing that the Opposition finance spokesman should be telling us to copy Australia, whose unemployment is higher than ours at 5.7 percent.

Craig Foss: What is the underlying cause of the rise in New Zealand's unemployment rate?

Hon BILL ENGLISH: New Zealand is dealing with two recessions. One is the coordinated global recession. The other is the New Zealand recession that started in early 2008, which was caused by 10 years of unbalanced policy under the last Government. Many of the people who are losing their jobs today are the unfortunate victims of policy that built economic growth on borrowed money and big Government spending. Those were never sustainable jobs, and it is unfortunate that those individuals and families are now feeling the pain of losing jobs that were not sustainable.

Hon David Cunliffe: Is the Minister aware that the 2009 Australian Budget is forecast to save 210,000 jobs"”the equivalent of some 40,000 jobs in New Zealand terms"”and to reduce the unemployment rate in Australia by 1.5 percent below its forecast level; if so, why will he not now admit what every other New Zealander knows: that National has failed to construct a credible systematic plan for jobs, and that New Zealanders are sick and tired of gimmicks, charades, and "party central", instead of a substantive plan.

Hon BILL ENGLISH: The Opposition finance spokesman might want to explain this simple conundrum: our unemployment rate is 5 percent; Australia's is 5.7 percent. Its rate is higher, so why should we copy its policies?

Craig Foss: What is this Government doing to create sustainable employment?

Hon BILL ENGLISH: Because of a decade of economic mismanagement the Government has a huge job in creating sustainable employment, because we cannot base jobs on extensive borrowing and big Government spending. We are setting out to create an environment for business to thrive and have the confidence to retain and create jobs. In the long run those businesses need to be in the export and tradable sector, rather than in the Government and domestic sector.

Hon David Cunliffe: How can it be that when the Minister is discussing the 5 percent annual unemployment level that currently exists it is all his Government's fault, but when he is discussing the 60,000 extra unemployed yet to arrive, it is all the previous Government's fault?

Hon BILL ENGLISH: The Government has put together a programme designed to deal with two major problems: a decade of economic mismanagement, which is one of the reasons so many New Zealanders are losing jobs, and a global recession, which is another reason New Zealanders are losing jobs. No amount of strategies and press releases can create jobs; only the nitty-gritty of infrastructure investment, an improved business environment, and getting Government finances and debt under control can do that. We are proud that New Zealand has one of the lowest unemployment rates in the developed world.

Craig Foss: Has the Minister seen any reports that take a realistic view about unemployment during a recession?

Hon BILL ENGLISH: Yes. I have seen one such report, which states: "There is in some quarters a temptation to address the problem of unemployment with simplistic answers. In reality, there are no quick-fix solutions. Unemployment has to be addressed at a number of levels. By far the most important are macroeconomic policies aimed at achieving sustainable economic and employment growth." That is a quote from a previous Minister of Employment, Phil Goff.