Woodhouse Michael; Salesa JennyHon MICHAEL WOODHOUSE (National): My colleagues were speculating on who would be the next Labour Minister of Finance and the name that came out was Dr Duncan Webb. Frankly he couldn't do much worse a job than the one we've got now. That's not my pick I have to say. I think the next Labour finance Minister is sitting two seats behind him and could be the first female Minister of Finance. That's Barbara Edmonds. She's the rising star in an otherwise—well interesting intake.I have to say about the Budget Policy Statement (BPS) though from the Minister of Finance the only thing fiscally prudent about this is the photo on the front and clearly they've saved a few hundred dollars in getting it done professionally. The Minister couldn't even be parochial. It's not an Otago shot it's not a Dunedin it's not Otago Peninsula but it is probably a little less than the cost of what's inside this.Now I want to take up the point that was made on page 19 of the Budget Policy Statement because it's simply not right. It says Before the onset of the COVID-19 pandemic the Labour-led Government ran surpluses." Well actually they didn't. It should have a few more words at the end of that. They ran surpluses into the ground and in two years took fiscal projections of surpluses up to $8.5 billion by I think 2024 or 2025 and turned it into a deficit by 2019/20. Now COVID needed spending but the amount of financial licence that has been taken by this Government and the use of COVID as a cover for financial profligacy is I think something that we need to talk about because if there's one thing that Labour Governments do really well it's spending money and the perfect storm is the conditions that enable them that give them the licence to do that.The Minister asked challenged us to say that we wouldn't have to borrow it. I don't agree. We would. We would've done many of the things that this Government has done and we did do them in times of other crisis—the global financial crisis where we made sure that not a single person had a benefit cut or was supported otherwise during those longer much longer straitened times. But the idea that if we were to spend less than this Government somehow things should have to be cut is a myth and it's wrong and it needs to be put down and away. The reality is that growing the economy helps the Government helps Crown revenue. Holding the economy stable and improving it is the best way to reduce borrowing. Returning back to surplus sooner than we otherwise might is the best way to reduce our debt.Now the Government's done well in that regard. But you know what? Going into lockdown was the easiest part of COVID. Managing and controlling people's lives and telling them what they can and cannot do and closing borders is actually quite easy. Moving from pandemic to endemic and safely opening borders and actually allowing international students in and allowing tourists in and the essential workers that we have so that fruit doesn't rot on the ground in the Hawke's Bay and Coromandel and Central Otago—that's the tough stuff. And how much more are we going to have to borrow because of the loss of Crown revenue because of the loss of profit because of the decisions that have and have not been taken by this Government?Treasury point out and the BPS says that there is significant uncertainty about the trajectory that we're on and one of the reasons for that uncertainty—and the biggest uncertainty in my mind—is Crown revenue. Now the numbers in this statement are frankly heroic and they're based on receipts that are cash GST—so spending has been OK—provisional tax. But tax on profits eventually finally returned is going to be down—significantly down I would suggest—on what this Budget Policy Statement is saying. It is a rose-tinted view of the revenue projections for the future.And the degree of borrowing and the projections for future borrowing are going to be affected by interest rates. We know now from Air New Zealand that the Government lends at a pretty eye-wateringly high rate. The chances are it's borrowing at something higher than some parts of the market would have but there's no doubt that when inflation hits interest rates will go up. And inflation is coming. You can't spend as much as we are spending and not have an inflationary environment. They've probably prevented deflation with the Reserve Bank policies that are being embarked upon. But we see from the housing market that if one pump primes $20 billion into a housing market that doesn't have increased supply and prices will go up the eventual effect of that on the rest of the economy is that inflation will occur across the economy not just in the housing market.But it's the spending that's the one thing the Government does control. And there's no doubt that COVID has been used as a stalking horse for significant structural spending increases. If one looks at the trajectory if it was COVID and COVID was finite then the spending trajectory should then drop again and it doesn't. And it doesn't because this Government has spent 3½ years doing things that don't add to productivity: increasing wages in the Government sector well beyond that which has taken place in the private sector. I'm not saying that doctors nurses and schoolteachers don't deserve it.Helen White: Yes you are.Hon MICHAEL WOODHOUSE: No I'm not.Christopher Luxon: At the right time.Hon MICHAEL WOODHOUSE: Exactly. And there has to be a quid pro quo. There has to be an expectation that services will improve. The irony of this Government talking about wellbeing Budgets is that the very metrics that they would use to measure wellbeing they've dispensed with. They've dispensed with better Public Service targets they've dispensed with national health targets and they don't want to talk about things like NCEA pass rates or reoffending because they're all going the wrong way. And they're going the wrong way because they're not being measured. The public sector is not being held to account in the way that they are used to being held to account under a National-led Government and that means fewer kids are getting immunised fewer houses are getting insulated by the State cancer treatment is going longer kids are failing at school reoffending is high.Christopher Luxon: Some people can't get mental help.Hon MICHAEL WOODHOUSE: Well I'm going to come to mental health Mr Luxon. It's a very good segue because the cornerstone of the 2019 Budget was $1.9 billion according to the Government of spending in mental health. Well that was a myth because $400 million of that was in pay equity settlements another $400 million of that was in cost pressure increases that would've occurred regardless of who was in Government and about $300 million of that was in housing support not mental health. So the kindest thing you can say about that mental health announcement was that there was probably $800 million over four years OK? Call it what it is. And that might've made an improvement if it was even spent. But my colleague Matt Doocey has been prosecuting the case that actually we're still stuck at the start line. And the reason is this: announcements don't improve mental health. Announcements don't build houses.David Seymour: Surely not!Hon MICHAEL WOODHOUSE: Well apparently. We've come to know that now Mr Seymour. Just talking about it doesn't get it done. So I would support this spending and the envelope—I think it's $10.2 billion in operating expenses and $8 billion in capital expenditure—if I could see any evidence that the roads that they announced the shovel-ready projects the New Zealand Upgrade Programme Dunedin Hospital—Dunedin Hospital was announced by the previous Government four years ago this week. The indicative business case was approved and four years later we've got a flat car park where we knocked over a building and the detailed business case still hasn't gone to Cabinet. Four years. If that's an example of the performance and the output of this Government we're in big trouble.The finance committee heard this morning from Treasury and we've previously heard from the Auditor-General who has reviewed the 2019/20 account and they expressed significant concern about this very point that there is insignificant robust reporting on Government performance. "There should be reporting"—I'm quoting from Treasury. "There should be reporting on what services have been delivered and what has been achieved." Under this Government Treasury say too much reporting is widget focused. They're not focusing on the right things. They talk about lovely wellbeing outcomes. That's fine. They know how to announce things but they don't know how to get things done.So we need a Budget that delivers quality spending quality infrastructure and we need a Government that actually follows up on what it says and makes sure that the people of New Zealand benefit from that because the last three years are certainly evidence that they don't have that capacity.ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call Tāmati Coffey."