Robertson GrantHon GRANT ROBERTSON (Minister of Finance): I never thought I would see Steven Joyce as the Labour sleeper in the National caucus until today when he actually asks for an urgent debate for us to talk about a Budget Policy Statement and a half-yearly update that we're proud of on this side of the House. So I thank Mr Joyce for his generosity in giving me that opportunity today.It was my great honour to release the Budget Policy Statement today and to sit alongside Treasury's half-year economic and fiscal update. What we were able to show in our Budget Policy Statement today was that it is possible for a Government to be both fiscally responsible and implement progressive policies. That is a lesson that the previous Government completely forgot.So when we look at the economic and fiscal outlook that is in the documents today growth will continue to be solid; it will average nearly 3 percent over the forecast period. I heard throughout the election campaign from the National Party that growth would collapse under a Labour-led Government. It would be all over. There would be no growth in the future.Well actually what the fiscal outlook says today is that next year growth will be a little softer—or in the second half of this financial year growth will be a little softer. That's actually about activity in the second half of 2017. By 2019 when the Government's policies are being rolled out guess what happens? Growth goes back up—3.6 percent—and Treasury directly says that that's the result of having a Government that invests in the economy having a Government that lifts the minimum wage having a Government that builds some affordable houses having a Government that invests in the regions. That's what you get; you get growth and this Government is proud of it. It is not the kind of growth that we've seen under the National Government which is driven by population increase and housing speculation. So yes the forecast growth for 2018 is a little softer but in 2019 and 2020 we start to see the transition to a productive economy and I am proud that this Government will be leading that.Also in today's half-yearly update is the news that Treasury expects unemployment to fall to 4 percent by the end of the first term of this Government. That's a promise. We've actually said we want to do that and we're proud that Treasury realises that that will happen. But it also says—and this is very very important—that wage growth over the next five years will average at 3 percent.Finally New Zealanders are going to get the dividend of their hard work because the members on the other side of the House seem to believe that the reward for New Zealanders' hard work should be a tax cut. But actually we're more ambitious than that because if that's how you reward workers where does it end? Where does it end? Do you stop? Do you just keep cutting taxes as a reward? Or do we actually invest in productive growth that lifts wages? And that's what this side of the House will do. So we will see much higher wage growth under this coalition Government.Then we come to the issue of surpluses which Mr Joyce included in his statement. On this side of the House we have committed ourselves to sustainable surpluses. They're not surpluses manufactured by underfunding public services. They're not surpluses manufactured by failing to invest in our infrastructure. They are real surpluses once we have done what New Zealanders need us to do. And by the end of the forecast period in the half-yearly update we see the surplus reaching $8.8 billion higher than what National's forecast was so not what Mr Joyce said; in fact the opposite of what Mr Joyce said. But again as I say he is obviously now the Labour sleeper in the National caucus.Then we come to the question of net core Crown debt. This is a very important point because in the last Government I as an Opposition member asked many questions about the issue of debt and every single time I got an answer from the Minister of Finance about the percentage of debt relative to GDP because that's how Governments measure it. And the previous Government had a target to lower that percentage and they didn't seem to quite be able to meet it so they pushed it out and pushed it out and that target was 20 percent. Well we have adopted that target but we've said we're going to take a little longer to get there and the reason that we're going to take a little longer to get there is because of the infrastructure deficit that this country is facing. So in this Budget Policy Statement and half-year update there is extra capital spending from this Government and that is for the affordable housing programme called KiwiBuild. We can either be a Government that sits on the sidelines and says housing will become more and more unaffordable the lowest homeownership rates in 50 or 60 years—Hon Member: They don't care.Hon GRANT ROBERTSON: They don't care about that but we're going to invest so we're going to make sure that we invest in the future.The other element of that increased borrowing is to restart contributions to the New Zealand Superannuation Fund. I am extremely proud that after nine long years of zero contribution to our super fund finally the Government this Government is stepping up to do that and that first payment will happen tomorrow. So Mr Joyce wants action—it's happening tomorrow. He can come along if he likes. He can come along and watch as we start again to invest for future generations. And it is the combined commitment of the parties that make up this Government that we will have sustainable superannuation. The very first thing a Government can do is contribute to the super fund and we are doing that.So all of that is part of what contributes to the fact that over the next five years we will reduce debt as a percentage of GDP to 20 percent exactly the same target that National had but over a longer period of time because there are investments to make.What Mr Joyce now has is an obsession with the cash amount of debt. Well let me say this: on this side of the House we remember the fact that when the last Labour-led Government left office net debt in cash terms was tiny; it was even under $10 billion. When we come back into Government it's at $60 billion. What happened in the meantime? To hear Mr Joyce blame the global financial crisis—I also sat in this House when Bill English said that the global financial crisis was over in 2012. What happened in the remaining five years? What happened then? The previous Government has no credibility when it comes to the issue of debt. We will pay down debt reduce New Zealand's debt but we'll do it in a way that is responsible and allows us to invest in the assets that we need to invest in.The Half Year Economic and Fiscal Update presents a picture of an economy that—yes it was growing but it's going to grow more and it's going to grow sustainably under this Government. It presents an economy that was drifting along and not delivering benefits to all New Zealanders. We will return to the Families Package which is a critical element of this Budget Policy Statement. But can I say right now that that is the chance for all New Zealanders to share in prosperity.There is no point in crowing about high growth rates if people are living in cars and garages. There is no point in crowing about high growth rates if our hospitals are turning people away. There is no point in crowing about high growth rates when the average age of our schools is more than 40 years. We will invest in New Zealanders' future to give them a share in prosperity not simply allow ourselves to be comforted by the numbers that are on the sheet. All of this means that the Labour-led Government with New Zealand First and the Greens have delivered on our Budget responsibility rules. All of them have been delivered on and I am extremely proud of that.I now want to turn to what Mr Joyce seemed to be obsessing about which is the question of what is and what is not in the half-yearly update. Mr Joyce has been part of enough Budgets to know that when you actually do Budget 2018 it happens in 2018. What the half-yearly update does is tell us where the books have reached halfway through the year. Due to the excellent work of the officials since this Government has been in office we have been able to include in the half-yearly update the cost of the 100-day plan. It's actually an amazing achievement in 40-odd days to be able to put all of those costs in there.Think about what's in that package: the first year free post - secondary school training and education—one of the most transformative policies for the productivity of the New Zealand economy that we will see in many many years. Despite the Opposition trying to make out that that policy is only about universities we know that the vast majority of people who will benefit from those policies will actually be people who've never studied before who will go and train in polytechnics who will take up apprenticeships who will be in the trades. That policy is costed in to the Half Year Economic and Fiscal Update as is the Families Package as are the other commitments in the 100-day plan: setting up the Pike River recovery agency; setting up the tax working group; starting work on the independent Climate Commission. All of those things have been costed in so we're well in advance of where previous Governments have been. We've got that work in there. It's in the accounts.And then we come to the Budget Policy Statement. So the operating allowances that we have and the capital allowances that we have are over and above and beyond what we've already committed to in the 100-day plan. So we have an operating allowance for the 2018 Budget of $2.6 billion. Now we are an ambitious Government. I don't want any of my Ministers to get ideas that they may be able to spend all of that money but we are an ambitious Government. We have ideas. They're contained in the coalition agreement. They're contained in the confidence and supply agreement. And they are going to be implemented. Right now all around Wellington and New Zealand Public Service agencies are working out how those will be delivered. When we come to Budget 2018 all of that detail will be set out.But those operating allowances and those capital allowances are larger than the allowances that the members on the other side had. So bear in mind that we find ourselves in a position now where with careful financial management we can actually make a big difference in the lives of New Zealanders.I want to finish my contribution around the Budget Policy Statement because this is a document that lays out our priorities for the future. It does something that I don't think has been done before inside a Budget document. It talks about the fact that we as a Government will measure our success differently in the future. We will not be satisfied simply by having GDP growth. That's important. We need the economy to grow. We need activity in the economy. But we do not learn about the quality of that activity just from GDP numbers.So we are going to add to that by looking at how we improve the well-being of New Zealanders in everything that we do. How do we support the environment? How do we improve outcomes on child poverty? The Prime Minister has already said in this House that there will be a piece of legislation that will be introduced very shortly that will mean that when I get up to deliver Budget 2018 I will be obliged by law to report on how we have reduced child poverty. That is exactly as it should be. It's not just about the numbers on the page; it's about what good we can do for people with the money that we are privileged to look after in each Budget.So we will measure our success differently; we will measure our success by well-being. By the time we get to the 2019 Budget I have asked Treasury to make sure that when I am presenting that Budget I am able to present it by looking at how we've improved health outcomes how we've improved education outcomes how we've supported the environment and how we've reduced child poverty.This is world-leading work. Treasury have been doing a great job on their Living Standards Framework. I don't think Mr Joyce has got past page 1 of the Budget Policy Statement but if he got up to page 9 he would see an excellent table that outlines the way in which we are going to improve living standards. I'd be very surprised if he made it to page 13 but if he had he would have found a description of the Provincial Growth Fund.Of course the detail of that has not been worked out yet. We've only been in Government for 43 days. But what is written down here is the plan for reigniting the regions of New Zealand. I want to thank the New Zealand First Party for their contribution to bringing that to the table during the coalition negotiations. When we look at the criteria in that Provincial Growth Fund it says everything about what I want this Government to be marked out for.The investments in that fund will be about jobs and sustainable economic development social inclusion and participation climate change and environmental sustainability and resilience. That's the kind of economy we're going to grow one where we are resilient where we are adaptable and where we're inclusive; one where we don't think leaving out people is right one where we don't think child poverty growing is actually OK in this country but a Budget where we actually try to build a fairer and a better New Zealand because it's about what we do with the economy that matters. We will grow this economy sustainably we will be responsible in how we spend money but we'll be ambitious for our people and our environment. We will never ever on this side of the House settle for the status quo. New Zealand is a great country; it will be greater still. It will be fairer and better when we implement the policies in this policy statement.