Robertson GrantPUBLIC FINANCE (WELLBEING) AMENDMENT BILLSecond ReadingHon GRANT ROBERTSON (Minister of Finance): I move That the Public Finance (Wellbeing) Amendment Bill be now read a second time.I want to thank the Finance and Expenditure Committee for their studious work in going through this bill and also for producing a very easy to read report from the committee which I appreciate and I'm sure all members do and thank them for returning the bill to the House in good shape.An awful lot has happened since I first introduced this bill in September last year but the impacts of COVID-19 serve to reinforce the importance of the changes that this bill is making as we've seen the devastating impacts of COVID-19 hit communities and economies worldwide. New Zealanders more than ever need a reassurance that their overall wellbeing is central to Government thinking and central to Government budgeting as well. And despite the strength of our economic and fiscal position going into COVID-19 we do need to bear in mind the health environment and social impacts of a pandemic such as COVID-19 and the long-lasting effects of those. So a wellbeing approach as put into law by this piece of legislation will continue to play a very important role.Just before I move to talk a little more about the detail of the bill I do want to highlight the fact that as we put together Budget 2020 we endeavoured to do as we had done in Budget 2019 and do effectively what this bill now makes legislatively real and that is include wellbeing reporting include a wellbeing approach in the decision around priorities and overall use it as part of our public financial tool kit. The reality however was that when we came to put Budget 2020 to paper and finalise it we were not able to complete the wellbeing outlook which would be a core outcome of this legislation simply because the people involved in doing so were 24/7 on the COVID response. That did not mean that wellbeing matters were not considered as we went through the COVID response and recovery programme but it does mean that actually putting that into law in this way provides the belt and braces that I think we all on this side of the House anyway agree with.It was 31 years ago that the Public Finance Act found its way through this House. I don't think anyone here in the House today was present during that but there are members of the House who were here. The Public Finance Act did make some profound changes to our system and many of them are positive.Rt Hon David Carter: All of them are positive.Hon GRANT ROBERTSON: And in later years when the Fiscal Responsibility Act—which Mr Carter was in the House for I think—was included into the—Rt Hon David Carter: Straight afterwards—straight afterwards.Hon GRANT ROBERTSON: Actually that's true because you were replacing somebody who had something to do with it but the Public Finance Act encompassed eventually the Fiscal Responsibility Act. I do believe the level of transparency that it brings is something that is important and is safeguarded by the changes made in this bill. Indeed through the COVID-19 period we've seen other jurisdictions struggling to generate data. The Public Finance Act actually has created and underpinned the system. It means that we have monthly accounts at a level and a depth that most other countries do not. So actually the system has served us well. But as has been noted several times along the way it is however narrow with regard to what it considers to be important when a budget for example comes to be put together. This Government in particular recognises that we need a much broader set of success measures. We have to go beyond the traditional gauges to get a full understanding of what is important in our society what is needed to be funded and use that to help assess what our priorities are and how we measure our success in going through that Budget process. So we have introduced this bill in large part to be able to ensure that that is now an automatic part of what we do within our public finance approach.I want to reassure members across the House—and this was raised in the first reading—this in no way detracts from the core responsibilities under the Public Finance Act and you'll see in the Budgets that were produced in 2019 and 2020 that we continued to do all of the long-term fiscal work that is already within the Public Finance Act. This is about adding to our tool kit. This is about making sure that we recognise the full life experience of New Zealanders when we are putting Budgets together and we are assessing what we do.So to remind members very briefly what the bill seeks to do is that the Government will be required when creating future Budgets to set wellbeing objectives and explain how those objectives will guide the development of its Budget and for Treasury to report periodically on the state of wellbeing in New Zealand. As I say we would look to do that at every Budget through the wellbeing outlook but Treasury's independent approach to do that on a regular basis will also assist us to do that.It is important that each Government has some flexibility on how it articulates what it thinks about wellbeing and adapts their approach over time. We will be required to take into account a broad lens of the selection of wellbeing objectives taking into consideration social environmental economic and cultural factors. Treasury will be responsible for preparing their wellbeing report including—and I thank the committee for their suggestions—a set of indicators that will be used using their best professional judgment. The first report on this will be due in 2022 and then every four years from that. It will complement a range of current reporting tools including the investment statement and the statement on the long-term fiscal position which are also required at least every four years.I believe we're striking the right balance between requiring an enduring focus on wellbeing but at the same time retaining sufficient flexibility for improvements and changes over time. When we put this in the context of wider public finance reform it is important to note that we have built on what has come before. The use of Treasury's Living Standards Framework and its four capitals—human financial natural and social—is a considerable advance on what had occurred under the previous Government. In addition to that we now have Statistics New Zealand's Indicators Aotearoa New Zealand project which has given us indicators across all dimensions of wellbeing for New Zealanders and when you sit this alongside the Public Service Legislation Bill which has been introduced and is soon to come before the House again from Minister Hipkins you see a full suite of changes to our framework that I think enhance transparency and improve the amount of information that is in front of both the Government and New Zealanders when considering our Budgets.So achieving genuine and enduring change in the way Budgets and policies are developed takes time. We know that we cannot meaningfully address long-term problems like child poverty inequality and climate change through a single Budget. We began our process with the first wellbeing Budget in 2019 that has now taken the first steps to measuring New Zealand's success more broadly. We've delivered a Budget that embedded wellbeing at every step of its creation—from priority setting to analysis of proposals to the final trade-offs that a Government must ultimately make. This year as I said at the outset we were not able to fulfil all of those things in Budget 2020 but the wellbeing lens was important to the creation of the Budget and the Budget itself still has the wellbeing of New Zealanders at heart. This Government is committed to taking a wellbeing approach to future Budgets and this bill sets out the framework for that. At first glance the changes introduced to the bill might appear to outsiders to be minor but over time they will fundamentally improve the way Governments build Budgets and change the way we think about economic and fiscal policy in New Zealand. I commend the bill to the House.