Willis Nicola; Robertson GrantNICOLA WILLIS (Deputy Leader—National): I'm going to constrain myself to Vote Finance and the narrow debate that we have before us and I want to use as much of my time as possible for questions for the finance Minister. The context for this Budget is an enormous amount of borrowing and spending by the New Zealand Government. And I say that not just relative to history—we're all very aware that COVID-19 necessitated a significant fiscal and monetary response—but also relative to the world. New Zealand relative to countries we like to compare ourselves with was one of the second-biggest borrowers relative to the size of our economy. And I note in these Estimates that means that the payments we are now making for interest at $4.6 billion exceed the funding we put into our primary schools each year. So there is a significant interest bill that taxpayers are paying today and will be paying into the future.So we have that debt side. We also have the money-printing that went on at the Reserve Bank. Now that was one of the fifth-biggest monetary policy responses in the world. So we hit both accelerators hard; we hit the fiscal borrowing and we hit the money-printing hard in a way that there isn't much precedent for around the world. So my question for the Minister of Finance is about the liabilities for the Crown resulting from that money-printing. These Estimates show that during 2020 and 2021 $3.1 billion was expensed to the Crown to recognise the liabilities arising from the indemnities that the Minister of Finance signed off for both large-scale asset purchases—that is around $54 billion worth of bond buying otherwise colloquially explained as money-printing"—and the Business Finance Guarantee Scheme of $60 million. My question for the Minister of Finance is: did he consider that the interest rate differential could be such that the liabilities to New Zealand taxpayers would get this large and what does that mean for the Crown accounts?Hon GRANT ROBERTSON (Minister of Finance): I thank the member for the question. Just before I come to the question of large-scale asset purchases in the first part of the member's comments she did refer to the finance costs and I just think while the raw numbers are—I'm not contesting the raw numbers that the member read out—it is very important to see those finance costs in the context of the overall economy. So if we look at where we were in 2022 we've got core Crown finance costs as 0.78 percent of GDP. They are forecast to peak in the forecast period at 1.15 percent of GDP in 2023-24. That is obviously higher than where we've been in recent years but low historically. And at other times in New Zealand's history where we have had to borrow money at large rates for various reasons we have been paying significantly higher. So I just think that it's worth acknowledging that yes there has been an increase in the cost of financing for the Government but relatively speaking to the economy it's still low and historically is still low.In terms of the large-scale asset purchases clearly the advice—and I know I think the member has received this under the Official Information Act—that we received when the Reserve Bank was proposing to do this and when the indemnity was sought from the Government was that interest rates wouldn't rise to where they are today. And I think the member would be hard pressed to have had a crystal ball back then to have said that interest rates would have risen to the extent that they have. And so yes the liability to the Crown is significant—you know we're up over the $8 billion mark—but the question the member needs to answer and indeed anyone else needs to answer is: what's the counterfactual here? What would have happened had we not done this?Nicola Willis: Less money printed.Hon GRANT ROBERTSON: Well what would have happened had we not—because the member can't know that—Nicola Willis: Less inflation.Hon GRANT ROBERTSON: The member can't tell me that she would be there—March 2020—knowing exactly where interest rates were going to be in two years' time. It's actually not possible and the argument that the member would have to have undertaken is that she could have said "You know what I can cope with interest rates rising but I think economic activity might come down by this much. I think I'll let unemployment go up."—because that would be the member's other response here presumably is that she wouldn't have worried about where unemployment had got to.Monetary policy and fiscal policy both had to act in response to the situation that we had and we did not then have the benefit of the hindsight that we have today. So we made these decisions on a least-regrets policy. The Reserve Bank Governor was very clear that he was working off a least-regrets policy when the bonds were issued and so therefore yes there is a cost to the taxpayer—absolutely—but the counterfactual of the costs to the New Zealand economy had we not done this cannot be quantified today and certainly at the time looked to be significantly worse than the outcome the member is now complaining about."