Govt on track: English

Finance Minister Bill English (R), with Prime Minister John Key. Photo / Mark Mitchell

Finance Minister Bill English yesterday hailed signs the economy was rebalancing for the better as proof his Government's "broad-based programme" for boosting jobs and growth was on track.

But Opposition finance spokesman David Cunliffe said Mr English's statement was cover for Government anxiety that its u-turn on mining in national parks this week left it with a major hole in its economic programme.

In a statement, and then later yesterday in the House, Mr English said it was encouraging to see signs that "some of the imbalances handicapping New Zealand's economy for the past five or six years are easing".

The principal imbalance was lack of growth in the tradeable sector - or export and domestic business that competed with imports - over the past five years. At the same time the non-tradeable sector, including Government and domestically focused areas of the economy, grew by 12 per cent.

"That's simply not sustainable."

Mr English said his Government had sought to address this challenge "by way of a substantial tax reform programme, a multi-billion dollar infrastructure programme, sorting out the Government's finances which were left in a mess, improving skills and education, and cutting red tape". It was encouraging that the economy was growing again "as opposed to shrinking as it did in Labour's last term".

He also pointed to Budget forecasts of 170,000 new jobs over the next four years and a $7000 increase in household incomes over the same period. The tradeable sector was now growing faster than the non-tradeable sector and household debt had begun easing for the first time in a decade.

"This reinforces the Government's commitment to continue with its broad-based programme to ensure growth and jobs come from the right parts of the economy," Mr English said.

However, Mr Cunliffe later said they showed the Finance Minister and his Government were "really rattled by its u-turn on mining".

"It's been even more rattled by the public's concern that this leaves it with a major part of its economic programme gone and it's clear that there is no credible strategy for growth."