Rurawhe Adrian; Swarbrick ChlöeSPEAKER: The House is resumed.CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai tēnā koe. Tēnā koutou e te Whare. We've become increasingly well versed in talking about the social determinants of mental and physical health—that is the things that determine whether you are more or less likely to be healthy. We know that those determinants for poor mental and physical health include things like poverty lack of access to opportunity and lack of security in the likes of housing. However we are far less familiar with the political determinants of those social determinants—that is the reality that poverty is a political decision in a wealthy country like ours where on 2021 estimates the top 10 percent hold 70 percent of the wealth and the bottom half that is 2½ million New Zealanders are told to fight over the scraps of just 2 percent of that wealth. The economy that enables that unfairness let alone that rewards land banking over hard work is a political decision.Today we are talking about the Investment Statement. These are published by the Treasury every four years so a debate like this is a pretty rare occasion. So the question is: what is an Investment Statement? Well it is supposed to make based on the legislative underpinning of it the Government of the day do three things. The first is to formulate a fiscal strategy with regard to its interaction with monetary policy. This is the theme that I want to return to soon because it has been one of the key points of contention in the wonderful Finance and Expenditure Committee throughout this term. The second is to formulate fiscal strategy with regard to its likely impact on present and future generations. I'll also expand on this requirement as weaved throughout the Investment State particularly on the issue of climate change. The third legislative requirement is to ensure that the Crown's resources are managed effectively and efficiently.Now here of course those words are open to interpretation and for that I think that we all need to recognise that they are open to that dirty word in this House ideology" because economic theories are not value-neutral they come with a vast range of assumptions. Since before I was born successive Governments have imbedded deeply individualistic conservative and short-termed views despite legislative frameworks like this. This is again despite an ostensible requirement to look long-term baked into the law that prompts these Investment Statements in the first place. Now we have started to see this ship turning around but it is simply currently not turning around anywhere near fast enough. That is the iceberg is still in our view—a peculiar analogy I guess for climate change.So let's unpack these issues and let's talk about fiscal and monetary policy and their interaction. For those poor souls who are tuned in at home monetary policy is the stuff of the Reserve Bank our central bank. It's the stuff that they do with an eye to their dual mandate as also outlined in law. The first of that dual mandate is financial stability traditionally considered keeping inflation between the 1 and 3 percent mark. The second is maximum sustainability employment something inserted in the last term of Parliament a measure which has proven itself in many hearings in our Finance and Expenditure Committee—a great committee—to be rather vexed in its subjective application and interpretation. The Reserve Bank does this—that is the dual mandate—through some pretty blunt instruments like the setting of the official cash rate which impacts interest rates that people get on their debt. In a nutshell the Reserve Bank's main way of doing their job of managing financial stability and that maximum sustainable employment is by influencing the cost of debt.Fiscal policy on the other hand is the stuff that the Government does. Basically it's what the Government spends money on; where what and how much it taxes; and the amount of debt that it is willing to take on. These two tools wielded on the one hand by the Government and the other hand by the Reserve Bank aren't used in isolation of each other. Each impacts the effectiveness of the other and they both have different consequences again as a reflected in this 2022 Investment Statement.So in January 2020 echoing some of the international concerns about interest rates potentially at some point looking like they hit zero the Reserve Bank prepared some advice for the Minister of Finance about unconventional monetary policy which I know is not particularly unconventional any more. The Reserve Bank noted that one of the major components of this at the time unconventional monetary policy was large-scale asset purchases (LSAP) otherwise known as the LSAP programme the other speakers have referred to. The Reserve Bank in this advice in January 2020 warned that the LSAP may and I quote "increase wealth inequality by more than conventional monetary policy by raising asset prices more directly." It called these concerns about inflation particularly house prices and spiking inequality distributional impacts. The Reserve Bank called on the Government more than two years ago to consider how it would deal with these distributional impacts—that is where LSAP would be deployed potentially at some point. It noted and I quote "externalities can only be addressed by other policy areas particularly fiscal policy." That is of course the stuff that the Government does.The Greens started raising concerns about the over-reliance on unconventional monetary policy when the Finance and Expenditure Committee returned at the beginning of the 53rd Parliament after the election. I can point to dozens of hearings where I put these questions to the Minister of Finance to the Reserve Bank Governor and to Treasury particularly to point out that the LSAP programme the fiscal costs of which are estimated at around $7.2 billion have occurred without the necessary intervention that the Greens would argue was necessary of the fiscal policy that also the Reserve Bank had warned would be necessary two years ago to deal with those distributional impacts or that inequality. This is of course why I've continued to fight for a year now for a proper review into the COVID-19 economic response. We in the Greens will continue to fight for it. Not only was the LSAP deployed with the Treasury the Minister of Finance and the Reserve Bank knowing full well that it was likely to turbocharge house prices and inequality it actually did do those things and it cost billions and billions of dollars. Now the Greens have never shied away from how we would have preferred the Government took the political responsibility that it has to utilise fiscal policy to not only minimise these so-called distributional impacts but to improve peoples' lives and to invest in our incredibly underfunded infrastructure whether that be in public housing public transport public education public health or otherwise. As Labour members have pointed out they've done some of those things. And sure they have. But unless they're willing to tackle the tax bogeyman that old wealth tax deep inequality and under-investment in these necessary investments for our future will continue.So let's talk about infrastructure and another long-term trend identified in the Investment Statement. Well estimates by the Infrastructure Commission which other members have bandied about set out in the Investment Statement say that there is an historical infrastructure gap of $104 billion and a future infrastructure gap of $106 billion. That is a total of $210 billion and that is only for our built infrastructure. It is a fiscal strategy attached to the 2022 Budget and the Government has started with some good Green influence to shift away from arbitrary debt targets which have meant that successive Governments have delayed these critical investments in infrastructure. That said we are still nowhere near where we need to be because there's still as outlined in that document attached to the Budget a peculiarity in the way that the Treasury identifies and differentiates the blurry line between capital expenditure and operating expenditure which means that it's still more comfortable investing in carbon-intensive motorways than in nurses teachers and social workers. This is something that we must continue to scrutinise because it is not a natural phenomenon that we make these demarcations but again the product of economic theories and the assumptions that underpin them.Which brings us to the planet that we live on. Despite these long-term Investment Statements happening every four years supposedly with a focus on future and present generations the words "climate change" were not mentioned once in the debut 2014 Investment Statement. The word "climate regulation" was once in passing. How times have changed and boy how much work we have to catch up on. Just today our Green Minister for Climate Change James Shaw launched the country's first National Adaptation Plan grappling with the real-world impacts of climate change. Now this Investment Statement has a whole section on the risks to the balance sheet from climate change. There are significant fiscal risks which we can see with the extreme weather events that we've experienced here in Aotearoa New Zealand in just the past few weeks and obviously with Europe currently burning. Some of the investments that the Investment Statement talks about as necessary are and I quote "investing in Social assets such as public transportation infrastructure and energy-efficient buildings such as schools and hospitals." and "taking on additional debt to support climate mitigation or adaptation to redistribute anticipated costs in a more equitable manner between central government local government Iwi and Māori as Treaty Partner and the private sector."In the 21st century poverty and anthropomorphic climate change are not natural phenomena they are political consequences of political decisions. If some of the things that have be begun to be unpacked in this Investment Statement speak for anything it is that there are still political choices to be made necessary to meet these challenges."