Bayly AndrewBUDGET DEBATEDebate resumed from 25 June on the Appropriation (2024/25 Estimates) Bill.Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Thank you very much. It's an absolute pleasure to be talking today and of course it's a very auspicious day with many announcements being made but I do want to just talk about the Budget and what it meant for New Zealanders. It was a good Budget and it particularly has relevance to me in my role as Minister of commerce small business manufacturing and statistics because there are many good aspects of the Budget that were about supporting small businesses in particular and manufacturers that underpin much of our exports in New Zealand. I think as the Minister of Finance described on Budget day this Budget was prepared against the backdrop where we had challenging fiscal issues going on and the main focus of what we're trying to do is to make sure that we're getting better value for the investment we're making on behalf of New Zealanders to support New Zealanders and businesses so that they can grow prosper and enjoy the style of life that they expect and we should be achieving in New Zealand.I think the big issue is there's no longer a mythical money tree. That concept that has been sort of predominant thinking previously is no longer the case. We have to have a world-class education health and justice system and it's important that we invest in it and to do so we need the money to do so. And to do that we need to have the right settings in place that we can promote support innovation competition and businesses can flourish. I think that's our job as a Government. That should be the job of every Government of whatever hue over time to put in place the right framework. Unfortunately we haven't had the right framework.So the actual things that we've said about trying to achieve in this is a quite significant investment in a number of things. We've heard today in question time about the record investment in health—$16.6 billion over the forecast period. What we're trying to do is make sure that the key driver of this is that if someone needs an operation—needs a hip replacement needs a knee replacement needs whatever it should be that they should be able to get those services on time and we want to make sure there's an absolute focus on the health providers to make sure they're delivering against those key KPIs that the good Minister the Hon Dr Shane Reti has put in place for the health system.Also the major thing coming out of the Budget is the tax saving for ordinary New Zealanders everyday New Zealanders those caught in the tax squeeze who haven't had a tax change in the last 14 years and have seen their earnings whittle away because of inflation. That is part of what we can do mostly for individuals but also for businesses to stop that rampant drive in inflation. The step to address it in the meantime is the tax cuts—$102 per fortnight for most families and an additional up to $150 per fortnight for families with young children. I think that's a really important thing. Yesterday I was having a public meeting in my electorate and you know just how tough it is for New Zealanders at the moment and the tax relief that will be coming through starting next week is an exciting part of that mix. Also we are putting some more money into capital funding. We want to see more money going into infrastructure and the Hon Chris Bishop is obviously overseeing a wide programme that spans a huge amount of different projects—$7 billion to boost capital spending on top of what we currently spend as a Government. These are really really important things.But in terms of what the Budget held in place for businesses there is a lot of good stuff in the Budget and the overarching theme for businesses is that we do need to rebalance our Government books. We do need to get the Government back into surplus. This is like running a business or a household budget where you are continuously in deficit and have been for years. This country has been in deficit for years and we need to get back into a stage where we are running surpluses because that gives us even more money to invest in building schools investing in new roads investing in better health facilities—all the good stuff that every Government wants and even including the members from the Opposition from the other side. So rebalancing the Budget is a key thing. The second thing: by getting inflation down and the best news we've heard is the announcement that inflation is at 3.3 percent. When we see that coming down that will give the Reserve Bank the reason to drop the official cash rate. Of course that will have an immediate impact on interest rates which is what is burning a hole in most households at the moment where the cost of mortgage servicing is so significant where they've seen their interest rates going from 2.5 percent to maybe 8.5 percent. That is taking all their spare cash. That is the best thing we can do for individuals but it's also the best thing to do for businesses because not only are they paying debt on their businesses but also customer-facing businesses like hospitality like tourism like restaurants—all those types of industries that rely on people spending money. Of course at the moment people do not have the money and that's why we need to work and make sure that what we're doing is in alignment with the Reserve Bank so we reduce inflation as quickly as possible and that is a really really important thing.I think the big things for small businesses for improving their situation is really about how we can improve them. I've said about meeting with a whole lot of businesses—there are five common themes and it's the same for manufacturing. They want access to talent so that they can get more skilled people in their businesses. That's the number one priority.Secondly they want to be able to attract more capital coming into their businesses and I've got a piece of work I'm doing on how we can improve the New Zealand Exchange listings how we can get more equity capital going into businesses particularly hopefully through KiwiSaver providers but also how we improve competition in the banking sector. Of course we've got the Commerce Commission which has been funded to do these market studies and of course we're waiting for the outcome of the report into the banking study but we do want to make sure we've got more competition. Of course Minister Bishop's just announced that tomorrow morning the consumer data rights bill will be formally introduced into the House. That is also about promoting competition in the finance market and I'm looking forward to the support of the House for that bill because we need more capital—both equity and debt—going into financing small businesses and manufacturing.The third thing they want to do is reduce regulation and everyone's doing their part on that. Obviously the Hon Mr Seymour's doing that but also at a personal level I'm working with Stats New Zealand and the Ministry of Business Innovation and Employment (MBIE) to try and stop for instance silly survey results being asked of people all the time full of information that the Government already knows about them and stopping repetitive surveying going through. There are a whole lot of other initiatives we're doing on that as we're rolling around the country but we want to stop unnecessary regulation. Both Stats and MBIE have a huge part to play in that.The fourth one is about increasing digitisation and improving manufacturers getting to Industry 4.0. The Budget has specific information in that and money set aside. What we've done is we've allowed businesses to undertake what's called smart factory assessments or the Smart Industry Readiness Index. We're tripling the number of those assessments. For manufacturers they can get a better grip on where they sit on the progression of Industry 4.0. That's an important part—one of the biggest things they've asked for. It's all related to digitisation and we also want to support small businesses. The Budget included money for digital initiatives and we want to make sure that we are doing what we need to do to support businesses over time.The fifth one of course is recognising the importance of small businesses and manufacturing—too little focus is put on these industries. We need to make sure they are much more supported and they have the information flows that are coming to them. Stats are working on making sure that industries such as small businesses and manufacturers can get access to some of the great stats that Stats New Zealand has. But there's a wide range of other initiatives in there. Our big programme is the regional growth partners. At a time when we've got businesses struggling to survive we've maintained their budget of just under $16 million to support businesses. This Budget had a lot for small businesses and manufacturers and I'm glad to be part of a Government bringing this to fruition.