Robertson GrantAPPROPRIATION (2020/21 SUPPLEMENTARY ESTIMATES) BILLIMPREST SUPPLY (FIRST FOR 2021/22) BILLSecond ReadingsHon GRANT ROBERTSON (Minister of Finance): I move That the Appropriation (2020/21 Supplementary Estimates) Bill and the Imprest Supply (First for 2021/22) Bill be now read a second time. This is one of the regular features of the House of Representatives where we deal with two matters in one debate the first being that around the Supplementary Estimates for the 2020/21 year and then the first of the imprest supply bills. I thought it might be useful for the House at the outset to know exactly what these two bills are about. So the Appropriation (2020/21 Supplementary Estimates) Bill seeks appropriation by Parliament of changes to appropriations and new appropriations for the 2020/21 year the year in which we have just completed that the Government agreed to—Hon Michael Woodhouse: Not yet—eight days to go.Hon GRANT ROBERTSON: —well still going; we've still got a few days left Mr Woodhouse is correct—between April 2020 when the Estimates closed and early April 2021. These Supplementary Estimates which I presented to the House on Budget day contain a larger than usual number of new appropriations but fewer changes overall to new and existing appropriations when compared with the Supplementary Estimates for 2019/20. For those who are interested the bill makes changes to 507 annual appropriations and 102 multi-year appropriations. Members may recall last year that due to the unfolding impacts of COVID-19 and our ongoing and rapid fiscal response a Supplementary Order Paper was required to incorporate changes to the previous version of this bill that were made after the finalisation of the Supplementary Estimates for 2019/20 and the total number of changes was a greater number as a result. Colleagues across the House will be well aware that the period that we are dealing with here represents a significant amount of the expenditure in response to COVID-19. Many of the appropriations included for the first time in this bill provide authority for spending from the COVID-19 Response and Recovery Fund that the Government established as part of Budget 2020. Funding from that is reflected in the bill and includes many many initiatives and I'm sure my colleagues will speak to those initiatives over the course of this debate. What they encapsulate are the urgency of the Government's response. So a bill like this normally would be looking at matters that perhaps have arisen during the course of a financial year or times when appropriations either had not enough money or money had to be shifted around. This year and the previous one are different from the past because we were needing to respond in real time and that kept happening. And it's interesting. When you look at the Supplementary Estimates that are here you for example see the resurgence support payment. That was a payment that we had to bring into place as we learnt more about the impacts of COVID on businesses and workers. So that's the payment that was paid out when there was any kind of alert level rise and is now available at any point in the future God forbid that we might need to have an alert level rise. Hon Michael Woodhouse: How much is left?Hon GRANT ROBERTSON: So that resurgence support payment was created. It was designed with business because as Mr Woodhouse is no doubt applauding the Government for doing so the wage subsidy scheme parts of which are also contained in the Supplementary Estimates here needed to be supplemented by something that moved beyond wages to some of the fixed costs that businesses had when there was an alert level rise. So the resurgence support payment was designed in consultation with the business community and that is funded in here as well.But the scale not only of the economic response and the rapidity of it that meant that we needed to use this mechanism for the funding—is also set in context here by the health response that took place. And so within the Supplementary Estimates you will see items around personal protective equipment (PPE) purchase items around the additional support and staffing that was required right across the health sector. We needed to do that in real time. I acknowledge my colleague Dr Clark. I can remember some of the conversations that we had as we were trying to estimate what the cost would be of getting that PPE into New Zealand. Where were we going to source it from? Those decisions were needing to be taken day by day. And as I said and remarked at the time what is reflected in these Supplementary Estimates is the kind of decision making that Governments of many different stripes over the years have struggled with: being able to make decisions quickly and deliver quickly. And we made some fundamental changes to deliver this support within the Supplementary Estimates—in particular the number of decision points that a Government has. So a Government has always traditionally had one decision point a week and that is the Cabinet meeting. That wasn't good enough in COVID. We had to have two and three and four decision points a week and that required us to spend money in ways that was not envisaged in the original appropriations that we did. Equally it required us to take a least regrets approach and that was about saying we need to get this money out there. We need to support organisations and businesses and if it wasn't working or the design was not quite right we were prepared to go back and say we will change it. And again Governments have not always been as good as they might be in acknowledging when things don't work and that's something that I think we've learnt through this process. So all of that adds up to the Estimates that are in front of us here today and as I say there are many many different initiatives which colleagues will no doubt delve into that make up the money that is being sought via the Supplementary Estimates. The second of the bits of legislation in front of us is the first of the imprest supply bills. The bill is needed to provide the sole parliamentary financial authority for Government spending in 2021/22 until the Appropriation (2021/22 Estimates) Bill is passed. As the deadline for the third reading debate on the latter bill is to be completed within four months of Budget day—that is 20 September—this imprest supply bill is for the first three months of the 2021/22 financial year. In addition it's standard practice for imprest supply bills to cover the materialisation of fiscal risks and the uncertain timing and spread of expenditure including changes to appropriations that might actually be fiscally neutral. This bill also includes an allowance for the unallocated portion of the COVID-19 Response and Recovery Fund should additional spending be required to respond to the ongoing impacts of COVID-19 and members will be aware that at Budget 2021 we retained a buffer of $5.1 billion within the COVID-19 Response and Recovery Fund as a contingency in the event should there be—Hon Dr David Clark: Very prudent—very prudent.Hon GRANT ROBERTSON: —resurgences of COVID-19 in the community. It is indeed as Dr Clark says both prudent and responsible even though we are moving into an era with the vaccination programme where that is less likely to be required.The imprest supply bill seeks to provide sufficient authority for the Government to incur a maximum of $35 billion in expenses $5 billion in capital expenditure and $1 billion of capital injections. Although this is higher than we would seek in a normal year not least because of the ongoing impact of COVID and the COVID response fund spending it is actually lower than what was provided last year. And I think there you can see the trend. When I look at the total amounts of various imprest supply bills the first one I was responsible for was around $19 billion then around $30 billion then around $52 billion and now back to a total of $41 billion. I think members can see the trends there that we are bringing that back down now to more regularised levels of expenditure but in acknowledgment that we are still in uncertain and challenging times we are still in a period of time where spending is sometimes harder to predict than it would have been in the past. And I would seek to remind colleagues that this is the money that makes sure that we can spend it. It is not unusual in any means whatsoever. It is simply the way our system works so that the funding is available to be spent as it is required. As I said while it's larger than it is in earlier years I do think the ongoing uncertainty of the economic environment requires us to have this in place. Most importantly of all it is a limit not a target—something that I'm fond of saying to my colleagues on other matters as well. It is a limit not a target and I believe if I am correct that last year only around a quarter of the imprest supply was actually required. So the pattern here is that the money is not always needed. But in order to make sure we do not go unappropriated in order to make sure that we have the resources available to the Government to do what we need we set out a limit to which we cannot spend beyond. But if we are tracking as we did last year only a quarter of that was provided. So I commend these bills to the House. They are an important part of the way that we manage finances in New Zealand and I look forward to the rest of the debate.