Wood MichaelMICHAEL WOOD (Chairperson of the Finance and Expenditure Committee): Thank you Madam Chair. Can I just begin my contribution by acknowledging the members of the three select committees who have contributed to the Estimates reports in the finance and Government administration sector. Those would be the Governance and Administration Committee chaired by Brett Hudson; the Intelligence and Security Committee chaired by the Rt Hon Winston Peters; and the members of the Finance and Expenditure Committee which I understand is being chaired very well these days.Hon Ruth Dyson: Name him.MICHAEL WOOD: That would be undignified Ruth Dyson. I want to touch on a number of the key votes that came up in the hearings that contributed toward these reports starting with Vote Finance.We had a good examination of the Estimates with the Minister Grant Robertson. Just starting off with the appropriations in Vote Finance one of the notable sets of numbers that came before us is that there's been a reasonably significant increase in the appropriation to Vote Finance increasing from something like $5.1 billion to $6 billion in the 2018-19 year and we had some good discussion about the reasons for that. There were obviously some overs and unders but the two main drivers of that were firstly the Government's renewed commitment to contributing to the New Zealand Superannuation Fund which is an additional $1 billion of appropriation which comes through this vote; and secondly increased capital spending to support the anchor projects in the Christchurch rebuild. We had quite a good interchange on the committee just getting to grips with where that additional spending was. There was a bit of a lack of clarity about whether the additional $300 million Christchurch accelerator fund was new spending or whether it was perhaps a different name for old spending and we confirmed through a conversation with the Minister that that was $300 million of new spending that would be coming in additional to the cost-sharing agreement that's supporting other capital rebuild in Christchurch.Moving on to some of the other key features that came through in this vote—bearing in mind that the Finance and Expenditure Committee at the same time also examines the Fiscal Strategy Report and the Budget Economic and Fiscal Update (BEFU) which is presented by the Secretary to the Treasury. The key numbers in there which I think will be of interest to the House were that we have a projection of 3 percent growth over the next few years. That's Treasury's estimate of the growth track and they reported—and this is reflected in the select committee's report—that that's been largely underpinned by a combination of private spending increased Government spending and also increases in residential and business investment. There was a good discussion with the Minister about how he envisages that we can uphold that growth rate into the future and what the Minister identified—and again this is reflected in the report—is that his intention is that there is a shift toward supporting growth through higher labour productivity rather than population growth. The BEFU—which again is produced by Treasury and is part of this report—reported that the fiscals are looking strong. They noted a growth in revenue coming across all of the key parts of the tax base. I just want to jump over here to the Vote Revenue hearing at this point which we obviously had with Minister Nash. Some of the key highlights there were the intention to introduce the research and development tax credit. That's going to be an additional billion dollars in forgone revenue over the last four years but he reported that the intention of that is that stimulates some of that higher labour productivity I referred to before. In terms of the work that's going on in the BEPS—that's the base erosion and profit shifting area—the projections that we got through there in the hearings are that we can potentially expect about $200 million of extra revenue coming in through making those multinational corporations pay their fair share.Really interestingly we had quite a good conversation with Minister Nash about the IRD's Business Transformation project. He reported that we're now seeing 86 percent of taxpayers doing their returns online. The good thing about Business Transformation in terms of the Estimates is that we're getting much much tighter reporting. We recently had the legislation go through that means we're shifting to pay-day reporting. What the Minister discussed with us in the hearings is that this means—and this was in response to questioning—that we are actually effectively going to get to the point of abolishing secondary tax by 1 April 2019 in the forthcoming financial year because effectively people will be able to get tailored tax rates and automatic refunds.The thing I just want to finish on is across two of the reports in this sector—that is the Vote Finance report but also the Vote State Services report. We did hear from Ministers about the wish to have far more linked up activity between our Government departments over the coming year to really work toward supporting the well-being of all New Zealanders because in the end every single dollar that we spend through these Estimates is about supporting the well-being of our fellow men and women in this country. Thank you Madam Chair.