1. Question No. 1—FinanceHon Dr DAVID CLARK (Labour—Dunedin) to the Minister of FinanceORAL QUESTIONSQUESTIONS TO MINISTERSQuestion No. 1—Finance1. Hon Dr DAVID CLARK (Labour—Dunedin) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?Hon GRANT ROBERTSON (Minister of Finance): In the Crown accounts for the nine months to the end of March released this week the operating balance before gains and losses—or OBEGAL—recorded a deficit of $3.4 billion. This was $2.5 billion higher than had been forecast in December's Half Year Economic and Fiscal Update. Compared with the same period a year ago the deficit for nine months to March 2023 was lower by $4.7 billion. We know that 2023 is going to be a challenging year for the global economy and we are not immune in terms of New Zealand as to what happens overseas. The Government's accounts will be affected as the economy cools and we are doing our bit to both restrain spending and responsibly manage our finances while looking after New Zealanders. The upcoming Budget has required tough choices as we respond to the deteriorating economic conditions. The Government will take a balanced approach that is responsible and looks after those who are the most affected by changing economic conditions and recent weather events. I'm glad this popular question is back in the House.Hon Dr David Clark: What else did the report say about the impact of the economy on the Government's books?Hon GRANT ROBERTSON: Core Crown tax revenue was 2.7 percent below forecast at $83.6 billion. This was mainly due to lower than forecast GST returns and corporate tax revenue. However this was partly offset by core Crown expenses being 0.8 percent below forecast at $92.5 billion with lower core Government expenses COVID-related health expenses social security and welfare expenses all being lower.Hon Dr David Clark: What did the report say about the Government's debt position and its impact on the economy?Hon GRANT ROBERTSON: Net debt was 19.1 percent of GDP below the forecast of 20.4 percent of GDP mainly due to market conditions affecting the financial portfolio of the New Zealand super fund and ACC. Our debt levels are among the lowest in the OECD and well below the Government debt ceiling of 30 percent of GDP. This ensures that we are well positioned to deal with the impacts of Cyclone Gabrielle and any other future economic shocks.Hon Dr David Clark: What other reports has the Minister seen on the New Zealand economy?Hon GRANT ROBERTSON: An extremely good question. Statistics New Zealand has reported that the New Zealand Activity Index which is a broad and timelier measure of activity in the economy rose 1.3 percent in the March quarter from the previous period a year ago. Activity indicators were up for electronic card transaction activity heavy and light traffic movements but had eased in terms of manufacturing activity grid demand and job advertisements. As I've said previously New Zealand starts in a position of strength to face the challenges ahead. We have unemployment near record lows and public debt levels well below those of other countries that we compare ourselves to. We know many New Zealanders are doing it tough but the Government is focused on working hard to support them in the here and now while also investing in the public services and infrastructure that we need to grow our economy sustainably.Nicola Willis: As he looked at the deteriorating Crown accounts this week did he have a moment of reflection to think If only we had been more prudent last year and not spent so recklessly then I would have room to deliver tax relief and respond to the cyclone this year."?Hon GRANT ROBERTSON: I always take time to reflect when I receive the Crown accounts and work my way through them. And one of my reflections on reading this one was that this would be a terrible time to introduce large-scale tax cuts as the National Party would do.Nicola Willis: When did he or his officials last meet with the international credit rating agencies and how concerned is he that given his fiscal blowouts they will downgrade New Zealand's credit rating adding even more pressure to the cost of borrowing for New Zealanders?Hon GRANT ROBERTSON: We meet annually with the credit rating agencies and so we did that last year and we will do that this year. I am confident that the New Zealand economy is resilient and robust. Despite the National Party's desire to be relentlessly negative to talk down New Zealand and talk down our economy I have a great deal of confidence in New Zealanders and the resilience of our economy."