4. Question No. 4—FinanceNICOLA WILLIS (Deputy Leader—National) to the Minister of FinanceQuestion No. 4—Finance4. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: Does he stand by his statement that This tighter period will require some tough choices"; if so what tough choices if any has he made in relation to tax and spending? Hon GRANT ROBERTSON (Minister of Finance): Tēnā koe anō. I thank the member for again allowing me to highlight matters that I raised last Thursday in my speech entitled "The New Zealand Economy—The Case for Optimism". I stand by the full statement including the context surrounding it: "As with all of you with the emergency COVID response behind us now we will enter into a period of more targeted spending. This tighter period will require some tough choices. At a broad level my focus will continue to be on making sure New Zealand maintains responsible debt levels and ensuring our path back to surplus. This must not be done through austerity cuts to spending. Those would do more damage than any problem we are trying to solve." In answer to the second part of the question every finance Minister has tough choices to make during the Budget process. For example in Budget 2022 across all portfolios 564 initiatives were submitted for consideration seeking a total of $64 billion of operating funding. And with these decisions as well as our previous decisions to run larger surpluses before the pandemic than New Zealand has ever ran have meant that according to the OECD New Zealand workers have the 36th-lowest tax on labour income out of 38 OECD countries. We are working to maintain a careful balance in our Budget decisions. Nicola Willis: Did he read advice provided to him in this report from 12 April titled "GST treatment of services supplied to managed funds" including the warning that proposals to increase GST for managed funds would mean "KiwiSaver members would have less available when they withdraw funds to purchase a first home or at their retirement." and if so was his agreement to progress this policy change an example of a tough choice? SPEAKER: Any part of that question. Hon GRANT ROBERTSON: Exactly. In answer to the first part of the question yes. Nicola Willis: Well why did he decide to progress that policy in full knowledge that it would reduce the value of New Zealanders' KiwiSaver funds? Hon GRANT ROBERTSON: The advice from officials that that document is included in was to pursue a policy that would mean equitable treatment of managed funds with respect to GST. There were a number of matters contained in the report around advice about what might or might not happen and how particular KiwiSaver funds might or might not respond. The public policy purpose here was to create a level playing field. Hon Chris Hipkins: Do New Zealanders have less in their KiwiSaver funds today to spend on a first home or for their retirement as a result of the decision to tax employer contributions on KiwiSaver and if so who made that decision? Hon GRANT ROBERTSON: Undoubtedly yes New Zealanders do and that was a decision undertaken by the previous National Government along with the decision to not fund the New Zealand Superannuation Fund denying $32 billion to that fund which is expected to support New Zealanders in retirement. I am very proud of this side of the House's work on retirement savings. Nicola Willis: Did he read the regulatory impact statement provided to him on 26 May which warned that if the Government agreed to change the GST treatment of investment funds it would reduce KiwiSaver fund balances by $103 billion and if so why did he authorise that policy proposal going to Cabinet? Hon GRANT ROBERTSON: As the member knows that calculation goes out to 2070 and that calculation is also based on an annual 10 percent increase in KiwiSaver fees. On this side of the House we're trying to drive down the cost of KiwiSaver fees. Nicola Willis: Can he confirm that on 22 June this year he chaired the Cabinet economic development committee which authorised the Minister of Revenue in consultation with the Minister of Finance to make final policy decisions on proposals to change GST on fees charged to managed funds and does he stand by that decision? Hon GRANT ROBERTSON: It is one of my great honours to chair the Cabinet economic development committee."