Watts Simon; Robertson GrantSIMON WATTS (National—North Shore): Mr Chair thank you very much for the opportunity. Minister I wanted to cover three key areas in regards to building on some of the conversation we had before the break. And in particular the area firstly is in regards to the significant increase in Government debt but more in particular around that looking at the Crown financing costs of that debt profile—and as you'll know in 2022 per our accounts we're looking in the region of $2.8 billion of finance costs. The actual 2023 forecast goes up to in the region of $6.3 billion and 2024 up to $7.5 billion.My questions are in terms of those proportionate costs of Crown finance against total Government expenditure—Government expenditure sitting at around 125 going up to 130 so not a significant increase there but the finance cost obviously as a proportion of total cost line represents in 2024 the fourth largest Government expenditure line above welfare health and education and then finance and dwarfing law and order and other underlying issues. So I'm interested from the finance Minister in regards to how much of a factor is the in effect $4.5 billion difference in interest costs between 2022 and 2023 in regards to dealing with what is in effect this growing fiscal hole and the considerations around what role the Minister foresees that playing as we go forward. Because the interest rate environment definitely looks probably more sticky than what it was you know even three to six months ago.The other is in regards to the Climate Emergency Response Fund and I'm interested in the Minister's observations in regards to the fact that two of those auctions have subsequently failed—the quite significant nearly a billion dollar shortfall in funding in regards to that fund. And I'm interested from the Minister's perspective how he sees that that gap is going to be filled and whether he's confident the changes announced recently actually are going to be orders required in order to provide certainty there.And the last aspect is around the climate adaptation and the fiscal consequences on the Crown balance sheet in regards to this liability—and the Minister's observations in regards to the fact that in reality we have absence of a clear framework for decision making in regards to compensation for loss or at least a mechanism that I think we should have. Particularly to deal with not only the shortterm implications which we are dealing with post Auckland floods and other aspects but if we think about the fiscal liability on the Crown's balance sheet in the next five 10 15 years from now how and what are the mechanisms that we're going to have in play in order to be able to determine and drive the capital decision-making required in regards to that? But also I think more importantly where is the line drawn between the compensation for loss conversation and on what side of the line does central government sit on that versus local government and of course other players in the market? Thank you.Hon GRANT ROBERTSON (Minister of Finance): As the member noted we did cover a little bit of ground around the question of finance costs earlier on before the dinner break. But just to reiterate the member's correct in terms of the levels of core Crown finance costs and where they go where they are and where they are projected to go. Obviously there's a very significant lift in there and as we discussed before the dinner break we are in a period of particularly high interest rates and that is across the world and that's bearing out in the finance costs.As I did note before the dinner break where we are in terms of the 2023 final projected number forecast number it's 1.6 percent of GDP. I can at random pick out other years where it's been at that level 2002 being one of those. As I say we had it around that 1 percent level running into COVID. And unfortunately the high global interest rate environment means it does pick up. According to the Treasury's forecast that is to 1.8 percent of GDP. So it's a much higher number or much higher percentage and much higher number than it has been but it is reflective of the borrowing that was done during the COVID period. As again we've discussed a number of times in the House and at the committee that was necessary it was an important part of getting New Zealanders through but now we do have to do as we always knew we would do and manage the costs of that whilst also looking long term to steady our level of debt and bring it down as well. So it is what it is. It is where we are and those are the numbers.On the Climate Emergency Response Fund the member is right to pick out some of the volatility of the carbon price. I used his question to quickly google up where it had got to by the end of today. It's just sitting a little under $60 now. It had been up above $65 I think even on Wednesday of last week and it's settling just around that $60 mark as a result largely as the member points out of the announcements that the Government made in response to the decisions of the courts.Simon Court: Which is that the Government of Argentina?Hon GRANT ROBERTSON: It's a market mechanism. I know Mr Court's a big fan of those and therefore that is what will dictate what will be available in terms of the Climate Emergency Response Fund. What we did in the Budget that we're dealing with here in these Estimates is top up the fund somewhat because we did recognise that on the projections we would need to do that. It's important for us that we continue with the climate action that's needed and the investments that we need to make to reduce emissions and develop that more sustainable economy. But I'm confident given where we are now that we will come back and we will have further resources in there on top of the $1.5 billion that was left.I think the member's last question is a really interesting one around adaptation and the costs of adaptation and I would be the first to say—and I've said a number of times publicly particularly in the wake of Cyclone Gabrielle—that I think the ad hoc approach that we've been effectively forced into now is not good. I think as a country we do need a framework that can give people much more certainty that can be rolled out much quicker.And I think it would be fair to say—and this is not a criticism of any political party at all—that there's been a lot of attention around mitigation of climate emissions reductions which there should be but not so much on adaptation. And when I met—myself and James Shaw—with our Australian equivalents earlier in June this was one of the topics we had because they similarly were saying We don't know that we've got the metrics. We don't think we've got the framework the measurement the common language even to talk about adaptation."The Government has the national adaptation plan which is out there and everybody can see it and the adaptation Act that will be coming through the system shortly; they'll provide some of that framework. But when it gets to the crunch of what happens when people do need to leave where they live or there needs to be significant investment in creating a situation where they can stay there—flood protection stop banks etc. etc.—how do we resource that well and adequately? I believe that is a challenge that future Governments will need to address rapidly. And certainly we've been giving some thought to that and what that might look like as well.It's not reflected in these Estimates. What's reflected here is the National Resilience Plan—the $6 billion we put aside to look at creating a more resilient and adaptive infrastructure. Most of the first couple of years of that will now be spent looking out and rebuilding for those who've been affected. But I think it's an area where I'd like to see some cross-party work over time because it's definitely a long-term issue for New Zealand."