Russell DeborahDr DEBORAH RUSSELL (Labour—New Lynn): On this side of the House we've said that the best economic response is based on a strong and excellent health response to the COVID-19 crisis. We went hard and we went early; we locked down tight for four weeks and nearly as tight for another three weeks. It was a huge shock to all of us and a huge shock to our economy but it worked—it worked. Our health response was perhaps the strongest in the world at the time in terms of the lockdown. Other countries didn't go as hard didn't go so strict and we've sadly seen some of the outcome of that across the Tasman and like all of us we really feel for our Australian whānau for the people who are now locked down again. But it's not just people returning to their homes again there; there is an economic consequence as well with businesses shut down again with the economy faltering. That is why the best economic response was indeed driven by a strong strong health response. Nevertheless when we shut our economy down—shut it virtually all the way down for four weeks—we knew that it would have a strong economic impact. During those four weeks of the lockdown the Budget was rewritten to respond to the COVID crisis to give a strong economic response. We can see that strong economic response in action now. We can see that economic activity is picking up. We can see that the rural sector which kept us all going is coming back strongly through exports that the shops are open that buildings are going up that friends can gather at cafes and at pubs and that we can stand and watch sports games. Our economic response is coming off that strong health response.But there is nevertheless still a strong economic response and as we have said many times now is the rainy day the time to respond. So the Budget does have the core Budget response as we always have to health to welfare to education but it also has a strong economic response to the COVID crisis in a five-point plan which is embedded in this Budget—a five-point plan where we are investing in our people.The wage subsidy kept people in touch with their jobs. The wage subsidy means that people still had money coming in. We responded to beneficiaries and we doubled the winter energy payment. Why? Because it enabled people to survive that intense COVID crisis. We are investing in our people by making all apprenticeships and trades training free so that we are training people for the trades that we need as we recover. We have extended the wage subsidy to ensure that businesses can get through this tough time. The whole point of that wage subsidy and the wage subsidy extension is to give businesses time to rethink to regather and to decide what they will do in the future. That's the first step: investing in our people.The second point of our plan was: protecting and creating jobs. That's what the wage subsidy did: it protected jobs. But we also have the shovel-ready projects which will create jobs in construction. In my own electorate is the North-Western busway and the Whau walkway which will bring jobs and economic activity to West Auckland. We've got 11000 new environmental jobs in this Budget responding to the needs of our economy and ensuring that people stay in employment and that the employment they stay in builds New Zealand. So that's the second part of our five-point economic plan.The third point is: preparing for a post-COVID future and tackling our long-term challenges in housing and in climate change. So we are providing 8000 new places in public and transitional housing. We are building building building State houses—about 300 dwellings going up in my electorate and that is repeated across Auckland and throughout the country. We are starting to deal with our waste better as part of an environmental response to COVID and we're investing in our hospitals. So that's the third point: preparing for a post-COVID future.The fourth point of our plan is: backing small business. That's what the wage subsidy does. We've provided interest-free and low-interest loans—a minimum of $10000 for a business and up to $100000 depending on how many employees each business has. That's an extraordinary thing to do. The whole objective of that interest-free or low-interest loan is to give businesses the cash to tide them over. We know that cash is king that getting cash in the door really matters to a business. This low-interest and no-interest loan provides that cash that a business needs. Sitting in here is a strategy around tax refunds where instead of having to carry a tax loss forward and set it off against future profits as a one-off temporary measure businesses could pick up a tax loss and carry it back and write it against previous years' profits. It's a timing difference only but the effect is to get cash into businesses faster to help them survive. So we are backing small business by doing that by making sure they get the cash they need.And our fifth point: we are positioning ourselves globally. We've had a brilliant health response here in New Zealand a health response that means that people are interested in New Zealand and that our exports are growing because our reputation has been enhanced by our response to COVID-19. We are backing those exports with further funding to New Zealand Trade and Enterprise giving practical support to our exporters so that they can access markets and grow markets. We are negotiating trade agreements with the UK and with the European Union and the work continues.So there it is—the five-point plan: (1) investing in our people (2) protecting and creating jobs (3) preparing for a post-COVID future (4) backing small business and (5) positioning ourselves globally. These are the things that we are doing as part of the economic response to COVID-19. It's great work.What do I hear from the Opposition? Carping and complaining and digging out the old bogeyman attacks. And they say Well we've had to borrow to respond to the COVID crisis and how are we going to repay it?" Let me just give the Opposition a little bit of an education on how debt works and why we need to engage in debt and how we will repay it. Now when the previous National Government came into power debt was at 6 percent of GDP thanks to the judicious stewardship of Dr Michael Cullen. But the Opposition the then Government was quite quickly hit with the global financial crisis and properly—quite properly—they borrowed to get through the global financial crisis. In fact under the former National Government debt rocketed up to about 26 percent of GDP—a 20-point increase in debt. That was the proper response. Over time it worked down gradually until we'd managed to pay off some of that debt until in 2017 debt was down to about 22 percent of GDP and this year before the COVID crisis under this Government and under Grant Robertson's stewardship we had worked it down to about 19 percent of GDP. That's what happened to debt: rocketed up along came down and it was the right thing to do. We are borrowing again in a crisis.We anticipate as is set out in this Budget that in fact debt will reach about 54 percent of GDP. But how does that compare? Well it compares very well indeed—it compares very well indeed. The OECD average of debt as an extension of GDP it's sitting at around about 86 percent—this is before the COVID crisis. In the UK it's about 80 percent of GDP. In Australia before the COVID crisis about 45 percent of GDP. In Germany about 60 percent of GDP. That is before the COVID crisis. So you can see that our borrowing after the COVID crisis is well within reasonable bounds and well within bounds that can be repaid.But here's the interesting bit. During the years when the former National Government borrowed money and then repaid it tax hovered at around about 25 percent of GDP. In 2006 it was about 32 percent of GDP but the tax take by 2012 was around about 25 percent of GDP—25 26. In 2018 it was about 26 percent of GDP and there it hovered. All during those years when debt went up and came down again it hovered at that level of GDP.So we do not need to drag out the bogeyman of tax increases in order to manage the debt. I'm sure that there will be some adjusting in due course but there is no need for a rash response there is no need for a bogeyman and there is no need for fears around it. As has been shown by the previous Government and will be shown again by this Government that level of debt can be managed and repaid and it is a necessary and needed part of this Government's response to the COVID crisis. This is an excellent Budget and I commend it to the House."