3. Question No. 3—FinanceBARBARA EDMONDS (Labour—Mana) to the Minister of FinanceQuestion No. 3—Finance3. BARBARA EDMONDS (Labour—Mana) to the Minister of Finance: What are the Government's priorities for Budget 2023?Hon GRANT ROBERTSON (Minister of Finance): Budget 2023 will continue to prioritise New Zealand's overall wellbeing and economic security through what will be a difficult year for the global economy facing the challenge of inflation and also projections of an economic slowdown. The Government's primary focus at next year's Budget will be on supporting families and households experiencing cost of living pressures. Alongside that we will continue to carefully and responsibly manage our finances. Government spending as a percentage of GDP is expected to fall over the forecast period and support the direction of monetary policy to bring inflation down. We will continue our balanced approach in Budget 2023. We will also need to ensure we're investing in getting our public services and the basics of them right particularly in areas like health education housing and infrastructure and also look to the future for an economy that has high wages low emissions and provides economic security.Barbara Edmonds: What other objectives and priorities is the Government focusing on?Hon GRANT ROBERTSON: As I said the Government's economic plan is to move New Zealanders towards creating high-wage jobs in a low-emissions economy while providing economic security. In order to do this we must continue to invest in skills and innovation to get us there while continuing to address climate change issues as well.Barbara Edmonds: How is the Government prioritising its support for New Zealanders facing cost of living pressures?Hon GRANT ROBERTSON: In the immediate term the Government is extending the petrol excise duty cut in full to the end of February and then to the end of March at half that level. Half-price public transport will extend to the end of March. The Government has invested over $1 billion over the past year to reduce fuel prices and extend public transport subsidies. The estimate of the extension announced today was a further $116 million. It is not sustainable to continue to subsidise the cost of petrol indefinitely for everyone. We have to strike a balance between broad ongoing support and careful management of the Government's accounts; that's why we are transitioning to more targeted support for those most in need. That will begin in the public transport area with the Community Connect policy giving half-price public transport to community services card holders from 1 April. The extensions that we've announced today are also timed to link up with significant income increases on 1 April for seniors students beneficiaries those receiving Working for Families and childcare support. This is all about making sure we take a careful and balanced approach in what will be a difficult year.Nicola Willis: Can he confirm that from next year the Government will spend more money servicing the interest costs of the Government debt it has accumulated than it will spend on law and order?Hon GRANT ROBERTSON: I can't confirm that in the House. What I can confirm is that as a percentage of GDP yes our financing costs will lift because it will be obvious to everybody that interests rates around the world are lifting. I invite the member to have a think about what she would do if she wanted to reduce those—for example put herself back into her fiscal Bermuda Triangle where she thinks she can somehow or other reduce debt increase spending and cut taxes—not possible.Hon Chris Hipkins: Can the Minister of Finance confirm that the Government has no intention of reinstating the freeze on police funding that was in place under the last National Government?Hon GRANT ROBERTSON: Yes indeed I can confirm that and I'm very proud of the fact that we have been a Government that is on our way to fulfilling the 1800 extra police. We see more police on the beat more money being invested in crime rather than the freeze and the cuts we saw from the National Party.Barbara Edmonds: What is the economic environment in which Budget 2023 will be delivered?Hon GRANT ROBERTSON: Treasury today released its latest economic and fiscal forecast in the 2022 Half Year Economic and Fiscal Update. The deterioration in global growth will affect New Zealand. We will enter into a shallow slowdown but we will do this from a strong starting point with Treasury forecasting that real GDP will increase by 1.8 percent across the second half of 2022 and with unemployment at a near-record low: 3.3 percent. Looking ahead Treasury is forecasting economic growth will slow in 2023 but there will be a gradual recovery from 2024 onwards.Barbara Edmonds: What is the impact of economic conditions on the Government's books?Hon GRANT ROBERTSON: The resilience of the economy in the face of the global slowdown will see the Government's books back in surplus in 2024-25 a year earlier than it took the National Party after the global financial crisis. In the two years between now and surplus deficits are a combined $5.1 billion smaller than forecast in the May 2022 Budget. Net debt is forecast to peak at 21.4 percent of GDP and then reduce to 14.1 percent by the end of the forecast period. This is well below many of the countries we compare ourselves with. The Government's strategy of reducing deficits and returning the books to surplus is helping to reduce demand pressure on the economy and will provide us with the flexibility to respond to a testing global environment.Nicola Willis: Does he think rebranding recession" in New Zealand as "a speed bump" will make any difference to New Zealanders staring down the barrel of rapidly rising interest rates a cost of living crisis plummeting house prices and rising unemployment?Hon GRANT ROBERTSON: As I've said on many occasions in this House we know that it will be tough and has been tough for many New Zealand households facing cost of living pressures. That's why we've stepped up to support low and middle income families in particular to be able to get through that. But I invite the member tomorrow when the GDP figures come out if this is her line of logic for her to put out the congratulatory press release that she no doubt will do. If she's going to blame us for it she might like to look at tomorrow's numbers. We're going to see according to Treasury 1.8 percent growth in the second half of this year. The New Zealand economy is as well positioned as any economy in the world to deal with the challenges that face us."