Russell DeborahDr DEBORAH RUSSELL (Labour—New Lynn): Mr Speaker it's a genuinely welcome opportunity to speak on this long-term fiscal report because it's one of the few times when the House can look a long way down the track and engage in debate seriously about the choices Government should be making. But it's worth remembering that this particular long-term fiscal report from Treasury was prepared against the background of the greatest crisis we have faced—perhaps for a generation—in terms of the global pandemic. And it is an ongoing crisis; COVID is not over and we need to reshape our new normal to fit this ongoing crisis of COVID. So it's an extraordinary challenge for the Government of the day.I wish to address in particular the issue that was raised by the previous speaker Andrew Bayly about the levels of debt that are prudent. Now as it turned out before going into the COVID crisis through all sorts of reasons this Labour Government had reduced our debt to around about 19 percent of GDP—the lowest it had been in a very long time indeed. Along came the crisis and at that stage the necessity was to keep the economy going so we adopted the best health response and we adopted the response that kept people in jobs kept businesses going and sustained our economy. And the way we did that—in common with countries around the world—was we adopted the strategy of borrowing to meet this crisis. So our debt has increased. But the issue is not whether or not debt has increased; the issue is whether or not debt is at a prudent level. Is it at a level that is sustainable for the New Zealand economy? Is it at a level where we can maintain our obligations and over time repay the debt?I wish to direct the Opposition to page 6 of the report of the Finance and Expenditure Committee on this long-term fiscal report. The Finance and Expenditure Committee including members of the Opposition have written their report and it addresses this issue directly—of the prudence of debt. So according to He Tirohanga the long-term fiscal report the Government's current debt is projected to reach up to 48 percent of GDP. Treasury informed us—that's informing the Finance and Expenditure Committee—that debt levels are still consistent with the framework for considering debt prudent and that the Government is currently at prudent levels of debt. It is still a prudent level of debt. Now we know that over the long term this debt will reach about 48 percent of GDP but even at that level it is still considered to be a prudent level of debt. It is a level of debt whereby the Government can service the obligations under that debt and can repay it.In fact previous papers by Treasury have examined the level of debt that is prudent and they've suggested that in New Zealand this could be between 50 and 60 percent of GDP with a buffer of around 20 percent to respond to shocks. So even under Treasury's own rules we are still at or even under the level that Treasury said was a prudent level of debt. The issue then might be how many shocks might we expect in the New Zealand economy and how will those affect us. And we do experience shocks on a fairly regular basis. They're not predictable but we kind of know that over time we face shocks—such as the global financial crisis such as the Christchurch earthquakes such as COVID-19. They seem to come along every seven 10 12 years or so. So the committee asked whether we could sustain these ongoing shocks. And in fact Treasury have modelled exactly that scenario; it's on page 29 of their report. Even under those conditions the level of debt we have reached is still sustainable according to Treasury itself. In terms of Treasury's perspective on that debt they said Yes it's sustainable for servicing the debt; yes it gives us greater market access to the world; yes it addresses intergenerational welfare." We don't like being in debt but debt can be good and it is a tool for the economy—not an end in itself. It is a tool that enables us to spread the cost of long-term assets over the generations.In fact the Auditor-General spoke to the Finance and Expenditure Committee about this long-term fiscal position report as well. And they suggested that perhaps there should be a broader approach to fiscal sustainability—so focusing less perhaps on the negative factors such as increasing debt and more on the positive factors such as the higher productivity and growing GDP that debt enables. And I do want to think about what sustainability of debt means. We might have a lower level of debt but is that sustainable when faced with crumbling hospitals? We might choose a lower level of debt but is that sustainable when we're faced with failing water systems? We might have a lower level of debt but is that sustainable when we simply don't have enough schools? Debt enables us to address all those capital challenges; it enables us to spread the cost. So far from being a bogey debt is a tool for us.I also want to address one of the other issues that was raised by the previous speaker and that is the ongoing pressure of an ageing population and the effect it will have on our expenditure. It is true that New Zealand superannuation will in fact over time demand a greater share of GDP as we support our senior citizens. I take it that we all agree that supporting our senior citizens is the right and proper and good thing to do. But I am also going to point out that it was the Labour Party in Government that took the most serious steps for supporting our senior citizens. It was the Labour Party in Government that introduced KiwiSaver—that enables people to save for their retirement. It was the Labour Party in Government under the leadership of Michael Cullen who set up the New Zealand Superannuation Scheme the Cullen fund. It was the Labour Party that put money into it and it was that party—the Opposition when they were in Government—who stopped contributing to the Cullen fund. If anyone doesn't know how to sustain New Zealand's superannuation it's that side of the House. On this side of the House we have taken a prudent and long-term view as to how to support our senior citizens—who we will all be ourselves one day—through to a dignified old age.And on that point I just want to talk briefly about the cost of living because members on the other side of the House have pointed out as is correct that we are facing some real issues with the cost of living at the moment—as are countries around the world. Inflation is running not caused by anything in particular here but caused by worldwide conditions. But whether or not it is caused by worldwide conditions it is our job as Government to address the needs of the people who are affected by it and that is precisely what we are doing. That is why we've had the Working for Families increases on 1 April; that is why benefits went up on 1 April; that's why superannuation went up on 1 April; it's why the minimum wage went up on 1 April; it's why we've increased student allowances on 1 April; and it's why we've got public transport assistance in there from 1 April. On this side of the House even though we have not caused the cost of living crisis we are addressing it as best we can to ensure that all New Zealanders—even though they are facing real pressure and we are facing real pressure—can manage to get through. And we will continue to do that. Why? Because we are a Labour Government and on this side of the House we intend to ensure that all of our citizens live with dignity. And of course that is part of what sustainability is about; it's sustaining all of us.So in terms of this long-term fiscal-position report it's a fascinating and interesting report; it does give us some really interesting insights into the challenges that are facing New Zealand but also it says that we've got some big policy decisions to make. We've got issues that we need to confront but we're in a pretty good position to do that in the next few years and on into the future. I commend the report to the House. I commend the actions of this Government to the House. Why? Because we're getting us there all together."