Robertson GrantHon GRANT ROBERTSON (Minister of Finance): Thank you very much. I'll only speak briefly at the start here to enable the kind of dialogue that the shadow Leader of the House was referring to in his contribution before. I just want to note at this point that obviously this is the annual review debate and therefore is a backward-looking debate. But I'm conscious of the fact that there is clearly a very significant economic shock that the country is facing and so current matters will no doubt enter into the debate. But if we do look at the 2018-19 Crown accounts they do show the Government's books in good shape going into this fiscal year. This is thanks to a responsible fiscal management approach and a healthy economy supported by hard-working New Zealanders. This has meant that we are in a good position to take the necessary actions to respond to the impacts of COVID-19. The surplus of $7.5 billion in these accounts was $4 billion higher than forecast at Budget 2019. It was mainly the result of some one-off positive changes impacting the operating balance before gains and losses (OBEGAL); the two key ones being tax revenue partly due to the way that tax revenue has been recognised and the change in the valuation of our rail network.Net core Crown debt as a percentage of GDP had decreased to 19.2 percent below the 20 percent target figure of the Budget responsibility rules and within the new range of 15 to 25 percent. The Crown's assets had increased by $25.8 billion slightly offset by an increase in liabilities of $15.1 billion resulting in an overall increase in the Crown's net worth of $10.7 billion. Nominal GDP grew by 3.6 percent in the year to June 2019 resulting in annual nominal GDP reaching $300 billion for the first time. Real activity was supported by population growth with New Zealand's population growing 1.6 percent in the year to June. Both nominal private and general Government consumption expanded by 5 percent in the year while residential investment increased by 7.9 percent. Nominal business investment growth slowed to 2.9 percent. Consumer spending has been supported by higher wage growth with average hourly earnings increasing 3.5 percent in the year. The Budget forecasts included an acceleration of real GDP growth to around 3 percent. Recent indicators and developments both domestically and abroad suggest that GDP growth is more likely to move significantly lower over this year. Tax revenue increased to $86.5 billion for the year ended 30 June 2019; a $6.2 billion and 28.8 percent of GDP. There were two key drivers of growth in tax revenue. Growth in nominal GDP led to a rise in core Crown tax year on year through higher employment higher wages more domestic spending and higher corporate profits. The recent transition to the new system for corporate and individual tax brought forward the recognition of some tax revenue. Tax revenue was ahead of forecast at Budget 2019 by $1.8 billion. As a share of the economy core Crown expenses increased to 29 percent of GDP as compared to 27.8 in 2018 but below their long-run historical average of 30 percent as is in line with the Budget responsibility rules. The 2018-19 financial year is when we start to see the real impact of decisions made by this Government in the 100-day plan and Budget 2018. The OBEGAL surplus as I've already said at $7.5 billion was an increase of $2 billion over the previous year and $4 billion higher than forecast at Budget 2019 for the reasons that I've mentioned before. I do want to mention briefly the change in valuation approach of KiwiRail because it was the subject of some comment at the committee. With the Government seeking wider benefits than just commercial returns from the rail network this has resulted in a change in the way the rail network is valued now that we recognise that rail contributes to national and regional economic growth reduces emissions and congestion reduces road deaths and injuries facilitates wider social benefits and provides resilience and connection between communities. The change in valuation approach resulted in an increase in the value of the rail network of $5.3 billion in the current year with a $2.6 billion positive impact on OBEGAL. This new valuation method was signed off in the accounts by the Auditor-General.Capital investment was a feature of the accounts totalling $6.7 billion for 2018-19—an increase of $800 million from 2017-18. In addition to this the Government has signalled its intention through this process to the $12 billion New Zealand Upgrade Programme.Overall what the accounts show us is that this Government had us in a strong position leading in to the COVID-19 shock.