3. Question No. 3—FinanceSUZE REDMAYNE (National—Rangitīkei) to the Minister of FinanceQuestion No. 3—Finance3. SUZE REDMAYNE (National—Rangitīkei) to the Minister of Finance: How much will the Government spend this year on financing its debt? Hon NICOLA WILLIS (Minister of Finance): In the current financial year Treasury is forecasting that the cost of financing Government debt—which is almost entirely interest payments—will be $8.8 billion and according to forecasts in the half-year update which assume the previous Government policies are continued this is expected to rise to $9.7 billion in the next financial year and $10.4 billion in the year after that. Suze Redmayne: How have the Government's finance costs changed over time? Hon NICOLA WILLIS: Finance costs are expected to be $8.8 billion this year. By comparison finance costs in 2017-18 were $3.5 billion so they have more than doubled or grown more than 150 percent since that time. In fact yes—Hon Grant Robertson: Was the interest rate the same? Hon NICOLA WILLIS: The member opposite is concerned that interest rates are very high after six years of his economic mismanagement. Now finance costs were relatively moderate even two years ago but have skyrocketed since then because of higher interest rates and greater debt issuance. Hon David Seymour: So can the Minister of Finance confirm that—Hon Dr Duncan Webb: Point of order Mr Speaker. That wasn't a question word that he started with. SPEAKER: Well I know that you're a Doctor of Law; I didn't know grammar was one of your strong points. However I'm sure he'll have another go. Hon David Seymour: Maybe they should have a Grammar" in Christchurch. To the Minister—SPEAKER: No no. Hang on—I did pick up people yesterday. No comments before you ask a question. Just ask the question. Hon David Seymour: Oh fair enough. Can she confirm what she is saying is that pretty soon on the fiscal track we've inherited the Government will be paying $10 billion a year $200-plus per citizen or $1000 a year for a family of five just on the interest on the debt these guys left? Hon NICOLA WILLIS: The Minister makes real an issue that the last Government left to us and to further his analysis I would put it this way: the finance costs alone of meeting our debt this year will equate to $1666 for every person in New Zealand. Rt Hon Winston Peters: Giving it a geographic inflection does that mean for example that Otago University will be paying $10 million a year just to pay off the interest on their debt? Hon NICOLA WILLIS: Well I don't take responsibility—SPEAKER: No. Hon NICOLA WILLIS: —for the finances of—SPEAKER: And no further comment. If you've got a—[Interruption] Look sometimes those questions might appear to be fun but they're not helpful and they're not in order. Suze Redmayne: How do finance costs compare with other areas of Government spending? Hon NICOLA WILLIS: At $8.8 billion finance costs are forecast to be higher this year than spending on primary and secondary schools combined or putting it another way finance costs are forecast to be higher this year than Government spending on the Defence Force the Police Corrections and Customs combined. In fact they are around $1 billion higher than that—$1 billion higher than spending on the Defence Force the Police Corrections and Customs combined. Suze Redmayne: How much are the Government's finance costs per New Zealander? Hon NICOLA WILLIS: Finance costs of $8.8 billion this year equate to $1666 for every person in New Zealand. Government debt in New Zealand is too high thanks to the financial mismanagement of the previous Government. Hon Grant Robertson: What percentage of GDP is the cost of borrowing at the moment and how does this compare with the past? Hon NICOLA WILLIS: The cost of borrowing at the moment relates to the official cash rate as it sits very high at 5.5 percent and the cost of servicing our debt as a proportion of GDP has risen to 43 percent by the old measure we used to measure debt before that member changed the measure to make it look lower. Hon Grant Robertson: Point of order Mr Speaker. I want to give the member the benefit of the doubt. That wasn't the question I asked. The question I asked was what the cost of borrowing the subject of this question—what that is as a percentage of GDP and not New Zealand's overall debt which is what she answered about. So I'll offer her the chance to answer now rather than have to come back and correct. Hon NICOLA WILLIS: Well Mr Speaker is that a supplementary question or is it a point of order or something in between? SPEAKER: No it was—you started speaking before I got a chance to comment but it is a reasonable clarification of the answer. I just want to make it very clear that points of order are not methods to be able to ask the question again but there was a seeking of clarification and I accept that the answer probably missed the percentage of GDP point. Hon NICOLA WILLIS: Well as a proportion of GDP those finance costs are high."