1. Question No. 1—FinanceCATHERINE WEDD (National—Tukituki) to the Minister of FinanceORAL QUESTIONSQUESTIONS TO MINISTERSQuestion No. 1—Finance1. CATHERINE WEDD (National—Tukituki) to the Minister of Finance: Has she seen any recent reports on fiscal policy?Hon NICOLA WILLIS (Minister of Finance): Yes. I have seen the latest edition of the IMF's Fiscal Monitor report for New Zealand. Its headline message was—and I quote—durable and credible fiscal consolidation is needed to reestablish sound public finances to build budgetary space for priority investments and to deal with future shocks. … Fiscal tightening would also be an important contribution to completing the last mile of disinflation (especially in economies characterized by excess demand)."Catherine Wedd: Does the IMF's advice apply to New Zealand?Hon NICOLA WILLIS: The IMF was in New Zealand recently to conduct its annual review of the economy. It said that New Zealand has a structural fiscal deficit with a higher spending to GDP ratio this year because of the large operating and capital allowances in Budget 2023. It said that in recent years debt has increased more rapidly in New Zealand than in many other advanced economies and it said that the Government's fiscal strategy should signal a strong commitment to consolidation. So in answer to the member's question: yes the IMF's advice very much applies to New Zealand.Catherine Wedd: Does the IMF have any advice about how to implement fiscal consolidation?Hon NICOLA WILLIS: Yes. The IMF recommends gradual credible and durable consolidations. It says that these stabilise debt more permanently and increase the likelihood of stronger medium to long term growth. The Government's strategy reflects this approach. Our strategy for managing expenditure is to embed a culture of responsible spending restore fiscal discipline right-size the Government's footprint and improve the efficiency and productivity of spending. A legacy we inherited of elevated and lazy spending will take several Budgets to fix but the first steps will be taken in Budget 2024.Chlöe Swarbrick: Thank you Mr Speaker. Can the Minister confirm that the IMF also recommended a comprehensive capital gains tax?Hon NICOLA WILLIS: I can confirm there are three things that are certain in this world: death taxes and the IMF recommending a capital gains tax.Catherine Wedd: Will the Government's fiscal strategy be revised in the Budget?Hon NICOLA WILLIS: The Government's fiscal strategy as set out in the Budget Policy Statement is to return to surplus put debt on a downward trajectory and reduce Government spending as a proportion of the overall economy. The Public Finance Act requires the Government to publish a Fiscal Strategy Report alongside the Budget. The Government's fiscal strategy will be unchanged in this report but will contain additional information from the fiscal forecasts and projections. I can promise members that the fiscal strategy will not continue the approach previously adopted of making the books look better by funding $350 million of additional medicines for one year only.Hon Kieran McAnulty: Point of order. Yesterday we established and you ruled that matters of fact can be used in response to a question from the Government's own side. But we also ruled that political commentary on previous policies is out of order and I would put to you that the last statement in that response would fall into that.SPEAKER: With all due respect I certainly didn't rule that commentary on past policy was out—I said where it affects a Minister who now has responsibilities it's not unreasonable for them to comment. I'm not sure that in the commentary just offered by Minister Willis that there was any particular criticism beyond talking about something that was factual reality. Do you dispute that or—Hon Kieran McAnulty: Well not now that you've ruled. No.SPEAKER: Well I'm giving you that scope to be able to sort of put your case. Because I do want question time to be as reasonable as it possibly can be so that the public do get answers and that the Opposition can hold the Government to account."