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Source: New Zealand Parliament – Hansard

Question No. 2—Finance

2. INGRID LEARY (Labour—Taieri) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?

Hon GRANT ROBERTSON (Minister of Finance): New Zealand’s strong economic and financial position has been recognised by Moody’s Investors Service. In its annual credit analysis released yesterday, the credit rating agency notes that New Zealand has very strong institutions, sustained policy effectiveness, and a healthy fiscal position relative to its peers. They say that the New Zealand Government has a strong track record of managing shocks through effective fiscal policy while demonstrating fiscal discipline over the long term, and that they expect this to continue. They also highlight New Zealand’s ongoing economic performance relative to its peers, and that the strong economic recovery illustrates New Zealand’s resilience to the pandemic shock. While the output remains volatile, New Zealand finds itself in a good position to support New Zealanders as they deal with the challenges arising from the global energy crisis, supply chain disruptions, and the ongoing pandemic.

Ingrid Leary: What other reports has he seen on economy?

Hon GRANT ROBERTSON: The construction sector is supporting our recovery. Statistics New Zealand reported on Friday that the volume of building activity rose 3.2 percent in the March quarter, following on from a 9 percent jump in the previous December quarter. Residential construction rose 3.5 percent, while industrial and commercial building activity increased 2.7 percent. Statistics New Zealand also reported last week that annual building consents rose 18.1 percent to 50,583 compared with the previous year, only the second time ever that it has been over the 50,000 mark. Economists are expecting the momentum in the construction sector continue despite the challenging environment that they are facing.

Ingrid Leary: What do the reports say about challenges facing the construction sector?

Hon GRANT ROBERTSON: Westpac’s economists say that businesses show that continued demand in building activity is happening over 2022, but staff and materials constraints are limiting the extent of the industry to respond further to current elevated levels. The Government has been working together with the construction sector through the construction accord on critical supply chain resilience, working on construction sector product dependencies from off shore, and options to mitigate further disruptions. We’ve also continued to invest in trade training and apprenticeships, which in the last two years has seen over 190,000 people benefit. We also want to make sure that Kiwis get access to fair price building materials, and that’s driven the Government’s decision to review the residential building supply market. The Commerce Commission is investigating any factors that might affect competition for supply or acquisition of key building supplies, and that will report back at the end of the year.