3. Question No. 3—FinanceDr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of FinanceQuestion No. 3—Finance3. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Finance: What announcements has the Government made on the fiscal strategy for Budget 2022?Hon GRANT ROBERTSON (Minister of Finance): This morning I set out new fiscal rules to ensure New Zealand continues to maintain our world-leading financial position. Our economy is growing at 5.6 percent a year unemployment is at a record low of 3.2 percent debt is substantially below that of the countries we compare ourselves with and we are amongst a small number of countries which have maintained a triple A credit rating during the COVID period. As we move to a new normal post the peak of COVID it is the right time to resume a set of fiscal rules to carefully manage costs while planning for the future. The first new fiscal rule is that once we reach our operating balance before gains and losses surplus as expected in 2024-25 the Government is committing to maintaining a small surplus in the range of zero to 2 percent of GDP over time. The range is based on advice from Treasury. That means that as we enter the new normal the spending required to operate Government services won't be adding to Government debt. There will be allowances for significant shocks and it is an average percentage so as to allow additional investment in a particular year if required.Dr Duncan Webb: How will debt be measured under the fiscal strategy for Budget 2022?Hon GRANT ROBERTSON: New Zealand has a comparatively strong debt position but we have been an outlier in the international community in the way our net debt is measured. I have accepted Treasury's recommendation for a new net debt measure to be introduced to bring New Zealand closer in line with other countries. The measure is more reflective of the real state of our fiscal position so that we can accurately compare ourselves against other countries. Unlike the main headline measure that we currently use—net core Crown debt—the new measure includes a wide range of Government assets such as the super fund but also liabilities including debt held by other Crown agencies such as Kāinga Ora. It gives a headline net debt figure about 20 percentage points lower than the current one but is far more comparable when assessing our fiscal sustainability against other countries. We will ensure that the Budget documents continue to publish the old measure alongside the new measure for transparency and the ability to make historical comparisons.Dr Duncan Webb: What other fiscal rules are being introduced?Hon GRANT ROBERTSON: We will be introducing a debt ceiling that ensures New Zealand maintains some of the lowest Government debt in the world while giving greater room for investment in high-quality infrastructure. Under the old measure of net debt the Treasury has recommended the ceiling be 50 percent of GDP; when we translate that to the new measure and it is comparable with other countries the cap is 30 percent of GDP. It is a limit rather than a target and it is again flexible enough to allow a buffer against short-term shocks while providing greater room for productive investment. The interaction of the two fiscal rules means that the additional debt cannot be used for day-to-day spending as that is limited by the surplus rule. This leads the debt ceiling to guide capital investments needed in infrastructure to keep our economy moving.