2. Question No. 2—FinanceNICOLA WILLIS (Deputy Leader—National) to the Minister of FinanceQuestion No. 2—Finance2. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: Did he receive any advice from Treasury about potential for increased inflationary pressures from Government spending decisions made in Budget 2022; if so on what occasions if any did he choose to spend more on initiatives than Treasury advised?Hon GRANT ROBERTSON (Minister of Finance): In answer to the first part of the question I received a range of advice from Treasury about the macroeconomic environment during the Budget 2022 process including on the hypothetical implications of total spending decisions. In answer to the second part of the question it is always the case during the Budget process that initiatives change and evolve compared to the original submission meaning the funding required might also change. For Budget 2022 there were 564 proposed Budget initiatives.Chris Bishop: Good grief!Hon GRANT ROBERTSON: In the time available—I know—preparing for this question it has not been possible to compile every instance where Cabinet decided initiatives were of a greater priority than the Treasury's assessment of them. I can confirm for the member though for example we decided to invest more in Pharmac than Treasury advised because that was a priority for the Government. There were also instances where less funding was provided than what Ministers bid for based on advice from the Treasury. Ultimately the core Budget operating package came in at $5.9 billion within the $6 billion operating allowance set at the Budget Policy Statement.Nicola Willis: Does he recall receiving this advice on 7 March from Treasury recommending he reduce the size of planned climate change spending due to delivery risk potential for increased inflationary pressures and in order to preserve funding … for future funding requirements" with a recommendation of an alternative package with a price tag of $2.4 billion?Hon GRANT ROBERTSON: I certainly recall conversations with the Treasury around the phasing of the new Climate Emergency Response Fund. It is a multi-year fund. The Government made the decision to front-load some expenditure that the Treasury wasn't in favour of because we wanted to get on with the job of reducing emissions.Nicola Willis: Can he confirm that instead of taking Treasury's advice to reduce pressure on inflation he went ahead with $2.9 billion of spending on climate change projects that is half a billion dollars more than Treasury advised?Hon GRANT ROBERTSON: As I indicated in my primary answer the Government in its core operating allowance came in at $5.9 billion. As we indicated at the Budget Policy Statement in December last year we brought into place a new scheme called the Climate Emergency Response Fund. This Government takes very seriously our obligations to reduce emissions and meet the goals of the zero carbon Act. I'm sorry the member doesn't share that.Nicola Willis: Does the Minister recall receiving this advice on 3 March also recommending he reduce climate change spending—"Warning: higher-value initiatives are expected to seek funding in future years that will reduce emissions more."—and is he satisfied that all the funded projects are high value?Hon GRANT ROBERTSON: I believe that what we have funded under the Climate Emergency Response Fund takes serious steps towards meeting the carbon budgets that have been set by the Climate Commission. I'm not at all surprised that the Opposition are telling us to do less on the climate because that is their track record.Nicola Willis: Does the Minister continue to believe there is a magic money tree at the bottom of the garden and how can he claim all spending will be high-value when a report provided on the $652 million industry fund found four out of five projects evaluated would likely have gone ahead anyway without Government funding? SPEAKER: In so far as the Minister has responsibility. Hon GRANT ROBERTSON: In answer to the first part of the member's question I'd perhaps wonder if she'd like to reflect on the fact that her leader has said clearly that the National Party would have spent the same amount in the core Budget allowance. So perhaps Mr Luxon can go and look for the tree if the member thinks one is out there. Nicola Willis: Why does he keep blaming everyone else for inflation when he ignored direct Treasury advice that going ahead with lower-value climate change projects would add to pressure on inflation? Hon GRANT ROBERTSON: I would note that virtually every economic commentator in New Zealand believes that inflation has peaked at the June quarter level of 7.3 percent. That peak represents half of what is imagined to happen in the United Kingdom. We have worked hard to put out a balanced Budget package that continues to give New Zealand one of the lowest levels of debt in the developed world while also investing in core public services. Nicola Willis: Is it the Minister's position that as long as New Zealand is running lower inflation than a country beset by an energy crisis then he's doing a good job? Hon GRANT ROBERTSON: My position is that this Government has overseen getting New Zealanders through COVID with an economy that is regarded by rating agencies as being robust and regarded well by the IMF and the OECD. With unemployment at 3.3 percent and with more people going into work all the time I think this Government can be proud of its record. Does it mean it's not tough out there for people? No—of course it is when inflation is running higher than we have seen in recent years. But this Government is looking after low and middle income people to get through that. Nicola Willis: How can he justify spending more than $600 million on corporate climate welfare when he knew that would put pressure on inflation and add to the prices being paid by everyday Kiwis in all parts of the economy? Hon GRANT ROBERTSON: What I can justify is a Government that doesn't just go off to conferences overseas and sign up to climate commitments but actually takes action to do something about it. That Government failed New Zealanders with no real climate policy. I'm proud of the actions we're taking. Nicola Willis: Well do we take it from the Minister's answers today that his test for whether climate change spending is good is simply how much is spent and whether it's got good intentions and that he doesn't care if the evaluations show the work would have gone ahead anyway and not a single extra emission has been reduced? Hon GRANT ROBERTSON: That is simply wrong. The Government is actually getting alongside New Zealanders to make sure that we reduce emissions. I repeat: the National Party's record was to sign New Zealand up to agreements and then do nothing about it. We are committed to reducing emissions and also growing the economy."