Adams AmyHon AMY ADAMS (National—Selwyn): Thank you Mr Speaker. Look I am happy to take a call on this debate into the report of the Finance and Expenditure Committee (FEC) on the 2018 Investment Statement. As has been noted already by the chairman of the committee who has just resumed his seat this is the second Investment Statement that has been presented by Treasury under the Public Finance Act. The first of course was in 2014 and it's worth reflecting in fact that it was under the previous National Government that the first Investment Statement was put together and presented to the House. I do think it is a worthwhile document. Given that it's a four-yearly document it's not one that has such a high degree of public awareness and obviously only being the second such document it is still a reasonably new document.It was certainly interesting talking with Treasury officials and Mr Makhlouf the Secretary to the Treasury about this document and some of the ways in which it can be improved. One of those points that I particularly wanted to reflect on that we discussed as part of the committee is that the document itself currently in most of its assessments only provides a snapshot of the state of the assets in various iterations. That's not entirely helpful to the House or to the public when we want to understand the trajectory over time. Of course every Government over many years is dealing with replacing ageing stock in a number of areas and that is a continuing piece of work. So it would be far more useful to the House I suggest if Investment Statements going forward don't simply provide a snapshot without any context but provide that in the context of how that movement has changed over time and we can see whether there has been in fact an increased focus on asset performance under the various asset heads.The other area where I think the Investment Statement could be significantly made more useful is if there were indications given of international benchmarking so that we could see for example where our net worth as a country—relative say to GDP to make it comparable—sits compared to other countries. Otherwise again they are numbers which are very interesting as far as they go but make it hard for the public to understand the trajectory and also the relative place of New Zealand in the world.Having made those initial comments it is worth noting that the net worth of the Government since the first Investment Statement—or in fact since the time the National Government was in place—increased by $17 billion. When that is reflected upon in the context of the years over that Government what it actually shows is that during the period of the global financial crisis (GFC) the recession that was in place before the GFC when we took office the Canterbury earthquakes the Kaikōura earthquakes—to go through a period of considerable fiscal upheaval when the Government in fact had to turn around a poorly performing economy and get us back to a situation of strong economic growth that this Government has been fortunate enough to inherit. So over that period to see the net assets of Government increase by $17 billion I think is still worthy of comment.The Investment Statement talks to the importance of resilience of the New Zealand economy and it talks I think rightly about the need to ensure that New Zealand has the headroom to deal with a wide range of potential financial shocks that can hit our economy at any time. While Treasury has modelled three such potential shocks in the document under questioning at FEC they did have to concede that they were entirely reflective of a range of assumptions that Treasury themselves had decided to use. For example they've modelled what they say would be the impact of a foot-and-mouth outbreak and yet they have our international trade markets returning after six months. I think anyone who's involved in the agricultural sector would suggest that to think that our export markets would have recovered after six months after something like a foot-and-mouth outbreak is in the most generous interpretation an optimistic view of the world.So we would certainly take issue with some of the specifics of the modelling but what we do agree with is that it's utterly important that our economy has the resilience and the headroom to absorb not just one shock nicely paced after the next shock and where there are nice recoverable gaps but actually the ability to absorb—as often happens—a number of major shocks in quick succession. You only have to look at the period from 2009 to 2012 to see exactly that having happened in New Zealand. So while Treasury has looked at a range of shocks which might happen one by one and assumes there's always time to recover in actual fact we don't know the size the frequency or the repetitive nature of these shocks. That is why it is so critical that New Zealand retains considerable debt headroom so that should things turn bad—whether of our own making whether of nature's making whether of the world financial system's making—we have the space to adapt and protect New Zealanders as we were able to do successfully during the period of the early 2010s.The Investment Statement on page 23 makes it very clear that the ability for New Zealand to continue to maintain and maximise its assets is entirely dependent on and underpinned by our economic growth. Our economic growth story and the ability for us to have strong continuing robust economic growth is fundamental to ensuring that our balance sheet—which is what this document is talking about—continues to be able to be a good story for New Zealand. I think this is where we have considerable concerns over the direction that this Government is currently taking us in because we know actually that decisions of Ministers and Government policy—and Treasury says this themselves in the document—are critical levers in determining whether we will (a) have the economic growth to maintain and grow our asset base and (b) have the levers and the decision-making framework right to make good investment decisions.If you look at already the early indicators out of what Treasury is telling us since this Government has been in office we already see Treasury revising downwards their estimates of GDP per capita growth. We already see New Zealand's GDP growth dropping. It was 4 percent per annum back in 2016; now for this year it's looking to be around 2.8 percent. We were actually ahead of Australia for many years. Under the GFC we were regarded as one of the leading lights in the world economy during difficult times. Now we're being seen as a middle of the pack" a bit of an "also-ran" and "used to be good".You only have to look at business confidence—and the "falling off a cliff" to quote one of the reports out recently—to see the report card that businesses have given this Government on its ability to manage economic growth. It is that growth that this document makes very clear underpins the ability of a Government to maintain and grow its asset base because if the tax revenues from growth don't flow through to the Government then the ability to maintain and grow our asset base is significantly constrained. I want to comment on two other aspects in particular. One is to comment with interest on the changing mix we've seen over time of the assets in New Zealand and the mix between the physical assets that New Zealanders can understand and touch and feel and see and the financial assets. To see that change over a period of time is one of the really useful reflections of a long-run document like this that looks to report on our balance sheet and the mix of assets and how they've changed over time.But the other comment I wanted to make and reflect on was the very interesting reports around page 60 to 65 of the document where it looks at the performance of our listed companies—what we know as the MOM companies or the mixed-ownership model companies—that the National Government put in place under our term in office. One of the core things of asset management and managing your balance sheet well isn't just how much you can own and how old they are but whether you're getting the balance sheet to work well for you. This document makes it very clear that as a result of the previous Government and as a result of the changes that are made the performance of each of those companies through the mixed-ownership model has improved markedly. The return on capital has improved the operating margin has improved and the net profit after tax has improved and that is because the National Government knew that often ownership structures and the structures you put in place to maximise the assets are important.This ideology that says that only things that are owned by Government will ever be successful is fundamentally wrong.Hon Scott Simpson: It's flawed.Hon AMY ADAMS: It has been proven to be flawed time and time again and yet already we see this Government coming in and cancelling private sector involvement in projects like Tāmaki redevelopment on the basis that only the State can own and operate housing. Well this document tells us the story that good asset management is often about getting the ownership structure right getting the expertise right and driving performance of those assets. This is going to be a very interesting document to look back on in four years' time as we see the impact of the economic vandalism of this new Government play out and their ideology take hold and destroy the very good gains that Treasury themselves have noted were achieved under the last Government and that have led to the $17 billion improvement in our net asset position."