Finance Minister Grant Robertson has taken the opportunity to reflect on Labour's five years in Government as of October 25, saying he was proud of its economic achievements, including record-low unemployment, a bounce-back in economic growth, more house building and the fastest house-building since the 1970s.
Robertson rejected criticism of the Government's reset of Kiwibuild and denied any regret about the $55b of Reserve Bank money printing and loosening of lending rules that has been blamed for a 45% increase in house prices in the first 18 months of Covid.
He made the comments in Parliamentary Question Time and in a post-cabinet news conference as Acting Prime Minister, as Prime Minister Jacinda Ardern was flying to Antarctica (although her flight turned back to Christchurch on Monday afternoon).
He also made the comments after returning from meetings with the IMF and World Bank in Washington DC.
"Much of the discussion revolved around the reaction of the financial markets to the UK's mini budget, the energy crisis in Europe, the US and China relationship and the state of globalization in an increasingly polarized world," Roberts said.
"New Zealand's prospects are very much tied to events overseas, and there will be impacts on our economic prospects from what is happening globally, but I remain convinced that New Zealand is as well placed as any other country to deal with what will be a difficult year ahead," he said.
"A record number of New Zealanders are in paid work. We produce goods and services the world wants. Our books are among the world's best with debt levels well below those of our peers, and we are among small number of countries with some of the best credit ratings in the world from the leading ratings agencies.
"There is also a cause for optimism as we welcome summer, and with that, the ongoing return of international tourists and the important economic boost accompanying them."
Robertson said international card spending was at 88% of pre-Covid levels in August and an expected $350m to $500m was expected to be spent by cruise ship passengers this summer.
"While we can be optimistic for the future, we continue to take a balanced approach and to target our spending where it is needed most. While investing in building an economy that is more resilient and provides greater economic security for New Zealanders. The government, like all our other households in the country, is adapting to circumstances that are outside our control," Robertson said.
"There are no costless decisions and tough choices still need to be. But we do so with a focus on what matters to New Zealanders, growing wages and cost of living pressures, hospitals, schools, housing, and addressing climate change while ensuring we do get onto a sustainable pathway back to surplus and lower our debt as a proportion of GDP in line with long term averages. Those that make promises that are un-costed, untargeted, and inequitable, put that jeopardy as we have seen in the United Kingdom."
Robertson defended the Government's record on house building and pointed to economists' forecasts that supply would meet demand in Auckland next year. He said the Government would continue to build and fund infrastructure after that.
Robertson vs Willis in Parliament
Earlier, Robertson talked in Parliament about the Government's employment record and how manufacturing and services were growing, while they were contracting in the US, UK and Europe.
Opposition Finance Spokesperson Nicola Willis challenged Robertson to repeat comments made in an earlier interview about the opportunity for tax cuts.
He responded that: "Total personal income tax payments represented 41.6% of total tax revenue in the 2022 year just ended, compared to 41.5% of total tax revenue in 2017—that would be an increase of 0.1%," he said.
Willis then challenged Robertson about the Government's 16% increase in spending while workers real wages had fallen 3.7%.
"When you take out the emergency Covid spending, the Government spending as a percentage of GDP was 30.9%. That is, effectively, the long-run average. The member might also recall that when her party was in office, following on from the Canterbury earthquakes, spending reached as high as 34% of GDP and then came down. We're at 35% in the face of an even bigger economic shock."
Question 4 - Nicola Willis to the Minister of Finance from New Zealand Parliament on Vimeo.
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