8. Government Financial Position—Treasury Forecast Reliability and Contributions to New Zealand Superannuation FundGRANT ROBERTSON (Labour—Wellington Central) to the Minister of FinanceGovernment Financial Position—Treasury Forecast Reliability and Contributions to New Zealand Superannuation Fund8. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he agree with the Prime Minister's statement that Treasury forecasts are a load of nonsense because they can't get predictions in 44 days right let alone 44 years"?Hon BILL ENGLISH (Minister of Finance): I always agree with the Prime Minister although I would state my views about Treasury forecasts somewhat more generously. It has a reasonable track record but that does not mean it is always right—for instance when Treasury issued its Challenges and Choices: New Zealand's Long-term Fiscal Statement in 2009 it suggested that net Government debt would reach 223 percent by 2050. Last week when it updated that statement the estimate is now around half of that—124 percent of GDP. So you can believe either that the forecasts were wrong or that the Government is doing a good job of getting on top of long-term fiscal pressures.Grant Robertson: Why does he think the Prime Minister has changed his tune on the reliability of Treasury forecasts between Saturday and Monday given that he is now spending Treasury's forecast surpluses before he has earned them?Hon BILL ENGLISH: I can assure the member that the Prime Minister is not spending the surpluses before they have been earned. In fact the Prime Minister is very reserved in his expectations of being able to throw money around partly because actually he is just a very accomplished political leader and does not have to try to buy votes the way the Labour Party does.Grant Robertson: Does he regard tax cuts as a greater priority than restarting contributions to the New Zealand Superannuation Fund?Hon BILL ENGLISH: These things of course in the first place are not mutually exclusive and secondly the Government has had a consistent policy about restarting contributions to the Superannuation Fund which is that when net debt reaches 20 percent of GDP it will restart contributions. But the member should read the long-term fiscal statement because what it will show is that because the Government has taken a measured approach with Government spending the long-term cost problem is not as large as it used to be.Grant Robertson: In light of that answer why did he backtrack on his commitment to restart contributions to the New Zealand Superannuation Fund when the Government reached surplus especially in light of the projections of superannuation costs in the Treasury long-term fiscal statement?Hon BILL ENGLISH: The point about the Treasury forecast—the long-term forecast—is simply this: the participation rate that is the proportion of working-age population in the workforce is much greater than was expected 15 years ago and over time it means that the economy is bigger and that means it has got more ability to carry the costs of national superannuation. I thought the member would be pleased about that rather than unhappy.Grant Robertson: Why did he backtrack on his commitment to restart contributions to the New Zealand Superannuation Fund when the Government reached surplus?Hon BILL ENGLISH: I am not sure what the member is referring to—Hon Members: Ha ha!Hon BILL ENGLISH: Well the Government position as articulated in the last Budget was that when debt gets to 20 percent of GDP we will restart contributions to the Superannuation Fund. We have had the odd challenge along the way—like the Kaikōura earthquake which is probably going to cost quite a bit; that makes it a little bit harder—but the Government can still manage.David Seymour: Should the New Zealand public have confidence in the usefulness of Treasury's statements on the long-term fiscal position; and if not will the Government consider amending the Public Finance Act so it no longer has to produce such "nonsense"?Hon BILL ENGLISH: The requirement is in the Public Finance Act as a result of bipartisan support across Parliament. The usefulness of the long-term forecasts every 4 years is to demonstrate to politicians and to the public that there are long-term consequences of what look like short-term decisions. The good news about this most recent forecast is that if you compare this long-term statement with previous ones Treasury despite itself has to report something that is a little bit less gloomy. It prefers to report that things are going to go really badly but actually they are not going to go as badly as Treasury thought."