Watts SimonSIMON WATTS (National—North Shore): Thank you very much Mr Speaker. Well it's an absolute pleasure to get up and speak on the 2022 Investment Statement. I think the Minister—it sort of felt like she was doing a hospital pass across to her colleague to try and finish off that speech. But let's bring it back to some of the key issues that the Finance and Expenditure Committee (FEC) had the pleasure of listening to because as much as that other side of the House paints this rosy picture of how everything is great the reality sadly for the New Zealand public is not quite that. And I'm going to explain a little bit about the reality of where we are fiscally. When you start getting into the detail of the Government's balance actually there is a large number of warning signs coming up already; and Kiwis across this country should be very very concerned around that.The first aspect is around the debt levels in this country: $162.5 billion. That's a big number. People don't quite know well what does that actually reflect and what does that look like. But if you get to the element around the cost of debt people understand how big their mortgage is but what they really understand is the repayments they make every month or every fortnight in order to pay that debt. This Government is paying $4.7 billion every single year—$4.7 billion—in interest costs alone in that debt. That is just below the entire budget for law and order for this country. It is one quarter of the budget for health services across this country.When we talk about debt the greater the debt the less that we have as a country and pay for public services. So there is a clear correlation. You can spend today but you have to pay it back tomorrow. The correlation in regards to the fact that the more that that debt level is the less that we have to spend on public services. And as a reality of that this country as a result of the increasing debt is continuing to go backwards. That interest cost alone is just over $2000 per annum for every Kiwi household. That is a heck of a lot of money. And that amount is only going to increase with the increasing interest rates because that's based on an interest rate of around 2.8 percent. Well I can tell you what you can look in the back page of the Herald and the financial section and see what mortgage rates and interest rates are sitting at. Of course the Government don't pay what you pay in terms of a mortgage but you're absolutely going to see probably a 1 2 potentially 3 percent increase in regards to that. That will all correlate in terms of pressure on the public purse and it will all create pressure in terms of the affordability of paying for public services. That is what is coming down the track at the moment.The other element talked about in the investment statement was around spending. The Treasury actually made some pretty key statements in regards to that. They obviously said that the most significant component of the Government's liabilities is the borrowings that I've just articulated. They also said that net Crown debt has increased significantly reflecting a large increase in spending. Right there is a clear correlation. This is not money that is coming from some magic place. This is money that is being borrowed. This is funding and spending that is funded out of debt. As I've said before there is a cost to that. And we're seeing the sensitivity in terms of our balance sheet going to be heavily impacted by the changes of interest rates as well.The question here is so who pays for that debt? Well the reality is I think it's morally wrong for us to expect future generations to fund that addiction to spending that we're seeing today. But that is the reality of what is happening at the moment. And when you see lack of prudence around fiscal spend examples like cycle bridges in Auckland you've got examples all over the place—three waters—it gets to the heart of this money is money out of the pockets of hard-working Kiwis. It is taxpayer's money that is being wasted. And Treasury has highlighted as I've said that the increase in debt reflects a large increase of Government spending.I want to also touch on in terms of the time around what most Kiwis will understand as just Government money printing. It's called quantitative easing. There's a big long word that they use for it in this paper but it's basically where the Government prints money. And the reality of this Government is that throughout the COVID dilemma they jumped on the bandwagon with every other reserve bank around the world and said Well let's get into the pack. And everyone else is printing money so let's print money as well. And let's use that opportunity to sort of spend a little money on pet political projects." which they've done—well they've announced. They haven't actually necessarily delivered any of those but that's the reality.The correlation between that Government printing of money has actually led to a decrease in interest rates and that decrease of interest rates has correlated to an increase in house prices. They are all linked. And it was mentioned by a previous speaker that the Government obviously retains a huge amount of those assets. The Government actually has been a beneficiary in terms of the increase in house prices as a result. But the impact for hard-working Kiwis at home—those in the squeezed middle—the impact of that Government spending which has reduced interest rates which has led to higher housing prices has meant they have been locked out of that housing market. And combined with a regulatory reform programme that has not been modified or changed has led to that increase as well. One would hope actually that in most cases rent prices would decrease as well under those circumstances. The reality in New Zealand because of the regulatory environment that we have in play that this Government has failed to fix is rents have also held hard. So Kiwis at home have been squeezed as a result of that.Infrastructure is a significant enabler of economic growth and productivity—the Treasury refers to the fact of some concerns around that. It says that there is evidence in New Zealand that infrastructure spend is not as effective as it could be in delivering on infrastructure plans. Well that's a pretty clear statement in regards to that. And the element that they say is that the Treasury informed us that under-investment in some infrastructure in many cases may lead to reduced wellbeing and productivity. The number one issue in this country over a period of time is poor productivity. That is because we have not invested capital in the areas in regards to per labour unit in order to make sure that—as a labour unit or as employees—we're able to deliver productivity. We are one of the lowest compared to other OECD countries. So the need for targeted infrastructure investment that drives economic growth that drives productivity is absolutely essential. And when we see a Government that puts on hold key roading and infrastructure projects that are enablers of growth that opportunity cost of those projects being delayed for one two three five years can never be recovered. As a result we're going to need to play catch-up with that infrastructure deficit and that is going to hold and continue to hold Kiwis back.The other element around infrastructure and linked to infrastructure is around the three waters reform and the Investment Statement made a number of comments around that. It commented here that there is concern around the value for money going into the three waters programme. It referenced the fact that part of the $3 billion bribe fund by this Government given out to councils to try and buy their support—which has failed dismally. Well in Auckland alone the allocation of $127 million from that three waters fund that—I think most people at home would think "Did that go into water pipes? Did that go into infrastructure under the ground?" No. It went to plug last year's deficit in operating spending. That is unbelievable. That is unacceptable. That is taxpayer's money. And the comment from the Minister in regards to that is "Well that's not my responsibility." And that is the culture that we've got around poor fiscal discipline poor allocation of capital and the cost of that is going to be felt by future generations in terms of lack of investment.We also challenged as part of the FEC around the cost in order to deal with the infrastructure in the three waters space. We were given numbers between $120 billion and $185 billion. Well it's interesting that Treasury have assessed the total deficit of infrastructure in this country to be around $220 billion. So obviously the left hasn't spoken to the right in regards to the total element but there is an absolute lack of substantiation of these numbers.The Investment Statement paints a picture of a Government addicted to spending a Government that has debt levels that are unsustainable and the reality is the wheels are falling off the Labour bicycle."