Robertson GrantAPPROPRIATION (2021/22 SUPPLEMENTARY ESTIMATES) BILLIMPREST SUPPLY (FIRST FOR 2022/23) BILLSecond ReadingsHon GRANT ROBERTSON (Minister of Finance): I move That the Appropriation (2021/22 Supplementary Estimates) Bill and the Imprest Supply (First for 2022/23) Bill be now read a second time.I thought it might be helpful at the outset to recap for members exactly what these two bills are and the purposes that they serve. They effectively are both ends of a standard part—[Interruption] we don't usually interject when we're leaving the Chamber Mr McClay—of the financial system and the way that we go about managing the Government's accounts. The Appropriation (2021/22 Supplementary Estimates) Bill seeks appropriation by Parliament of changes to appropriations and new appropriations for the 2021-22 year that the Government agreed to between April 2021 when the 2021-22 Estimates were finalised and early April 2022. Spending against these appropriations has already been incurred under the authority of imprest supply Acts relating to 2021-22 but unless the spending is appropriated by Parliament before the end of the financial year it becomes unauthorised expenditure requiring validation by Parliament in an appropriation confirmation and validation bill—David Seymour: We've seen that before.Hon GRANT ROBERTSON: Seventy-eight times in the Government that the member supported when they were in office in fact. I thank the members of the Finance and Expenditure Committee for their prompt scrutiny of and report back to the House on the 2021-22 Supplementary Estimates.The second bill that we address during this particular motion is the Imprest Supply (First for 2022/23) Bill and this is needed to provide the sole parliamentary financial authority for Government spending in 2022-23 until the Appropriation (2022/23 Estimates) Bill is passed. As the deadline for the third reading debate on the latter bill to be completed is four months after Budget day—that is 19 September in this particular year—this imprest supply bill provides supply for the first three months of the 2022-23 financial year. In addition it is standard practice for imprest supply bills to cover the possible materialisation of fiscal risks in the uncertain timing and spread of expenditure. This imprest supply bill seeks to provide sufficient authority for the Government to incur a maximum of $30 billion in expenses $9 billion of capital expenditure and $1 billion in capital injections. Although the total imprest in this bill is higher than what would be sought in a normal year it is lower than what was provided for in the last two years and reflects the ongoing but reduced economic uncertainty from COVID-19. As New Zealand continues to recover from the economic impacts of the pandemic we will move more close to pre-COVID-19 levels of imprest supply.It is worth noting that there is a formula that is used by Treasury when it comes to imprest supply and I thought it would be useful for members to know what that is. Treasury calculates the amount needed in an imprest supply bill by initially taking a quarter of the annual appropriations for each vote as an approximation of three months' worth of Government expenditure. Treasury then provides for an additional margin for items where expenditure may be unknowingly incurred unevenly over the fiscal year; any risks that may materialise in the first three months of the fiscal year particularly with respect to but not limited to COVID-19; any in-principle transfers that need confirming in the first three months of the new fiscal year; and an allowance for any multi-year appropriations that first appear in the Appropriation (2022/23 Estimates) Bill. Treasury also then builds a contingency in on that. It is worth noting that this is a very cautious and conservative approach. If we look at the last couple of years in the 2021 equivalent of this legislation $51 billion was sought but only $12 billion was charged against the imprest supply.Hon Michael Woodhouse: And don't I know it.Hon GRANT ROBERTSON: In 2021-22 $41 billion was sought but only $23 billion—Mr Woodhouse—was charged against the supply. So it is a conservative approach but one that avoids unappropriated expenditure from coming through. As all members will understand from time to time expenditure does arise that needs to be accounted for and the Government is doing that in this legislation.It is instructive in understanding the imprest supply element of the motion today to look at the Supplementary Estimates because they give a good indication of the kind of expenditure that a Government might require in a given year and in the Supplementary Estimates that were assessed by the select committee we can see good examples of the way in which the Government is required from time to time to do things that are either unexpected or unbudgeted for—for example sometimes these are small elements of much larger appropriations. One example in this year's Supplementary Estimates is in the corrections area where there were significant changes required partly because of costs that were being incurred by the Department of Corrections when they were undertaking their capital works and revaluing land and building assets. These are reasonably normal occurrences that occur in each year and are accounted for in this bill.However there are also things that are not normal that do have to be dealt with and are not always expected and within the Supplementary Estimates that we're dealing with here today we have for example the process the Government had to go through with supporting Air New Zealand. As members in the House will be well aware Air New Zealand was facing potential insolvency in the face of COVID-19 in the immediate and dramatic reduction in people flying internationally in particular but also here in New Zealand. So the Supplementary Estimates include both what we did to support Air New Zealand through that but also their recapitalisation exercise and the Government's role in that. It again is a good example of the fact that expenditure can be incurred but then revenue returns to make up for that expenditure from time to time and as members will know Air New Zealand has begun paying the Government back the money that it lent it in that early phase of the pandemic.So that's the reason why we need legislation like this—to make sure that we deal with those things that are either unexpected or that occur without the necessary appropriation available. An even better example of that I believe is in the area of COVID and it does obviously make up a significant amount of what is being dealt with in the Supplementary Estimates and obviously what we're thinking about when we look towards the imprest supply bill. Within the Supplementary Estimates that we're dealing with today we have around $2.7 billion of support that was provided through the COVID-19 resurgence support payment and then a further $1.5 billion for the COVID-19 support payment that was provided in the early part of 2022. This is the kind of action that a responsive and responsible Government needs to take in the face of a global pandemic.Todd Muller: Ha!Hon GRANT ROBERTSON: I'm fascinated by the hindsight approach that is exemplified by the exclamation I just heard from the other side of the House because I recall that when it came time for the Government to make the tough and difficult decisions about when we had restrictions and how we dealt with them members on the other side of the House urged us to spend more and more to support businesses across New Zealand. We felt we were taking a responsible approach. Over a million jobs have been saved as a result of what we did through the wage subsidy and indeed these resurgence support payments. Businesses around New Zealand when I travel around New Zealand say it was these payments that kept them in business. So when the National Party today say the Government is wasting its money in this area that is a complete reversal of what they have previously said. They might like to think it's possible to govern in hindsight; it is not.As a Government we had to take difficult decisions none of which were costless and because we have managed to run New Zealand's finances in such a way that we could do this—make the payments that are covered in the Supplementary Estimates bill in front of us today and still have one of the lowest levels of net debt in the world—it is a tribute not only to hard-working New Zealanders but to the careful management of the books as well. Hon Member: Yeah because they're paying their taxes.Hon GRANT ROBERTSON: I would also note for the benefit of the Hon Louise Upston that within the Estimates also are changes where less spending than was appropriated also comes in. I would note that the appropriation for jobseeker support and emergency benefit decreased by $450 million because there was a lower number of people who needed to get support through income support than had been forecast and I want to pay tribute to the Hon Carmel Sepuloni for the hard work that she did in making sure we had the programmes in place to support people to stay in work—programmes such as Mana in Mahi He Poutama Rangatahi and Flexi-wage.So I commend this legislation to the House. It is an essential part of a financial system that between when we approve the Estimates formally the Government has the ability to incur expenditure. As I have noted the amount of money required for imprest supply this year is lower than the last two years and in those last two years the Government spent only a fraction of what it put aside. This is about being careful and making sure that we obey the rules of the Public Finance Act and I commend the bill to the House.