6. Question No. 6—FinanceANDREW BAYLY (National—Port Waikato) to the Minister of FinanceQuestion No. 6—Finance6. ANDREW BAYLY (National—Port Waikato) to the Minister of Finance: Talofa Mr Speaker. What specific initiatives if any in Budget 2021 will materially lift productivity in New Zealand and by which year will this impact be seen?Hon GRANT ROBERTSON (Minister of Finance): I thank the member for the question. Budget 2021 includes a number of initiatives to ensure that our economic recovery results in an economy that is more productive than we have had before as well as being more sustainable and inclusive. A wide range of policy areas affect productivity so I'll ask the Speaker and the member to bear with me while I cover just a few of the investments included in Budget 2021. Most prominently Budget 2021 invests $57.3 billion in infrastructure over the next five years which will not only create jobs but also improve the physical and digital infrastructure that New Zealand businesses rely on and reduce congestion improving productivity. Improving the skills of New Zealanders is important when it comes to improving productivity and Budget 2021 invests in this. Building on the more than 100000 additional apprenticeships and trade training places that have been taken up since July 2020 Budget 2021 continues this with our reform of vocational education presenting $279.5 million of funding. We've also reintroduced the training incentive allowance with degree-level programmes so that 16000 sole parents disabled people and carers will have the financial support they need to get degree-level qualifications increase their skills and improve productivity. Research and development and innovation is also important when it comes to productivity. We will be investing an additional $300 million in the New Zealand Green Investment Fund along with $56 million in science research and innovation including a further $22 million to Research Education Advanced Network New Zealand and $10 million in ongoing investments in research—SPEAKER: Order! Order! The member will now get on to the second leg of the question.Hon GRANT ROBERTSON: Oh thank you Mr Speaker. In answer to the second part of the question: straight away and also over the next four years evidenced by the Budget Economic and Fiscal Update showing annual business investment averaging almost 6 percent over the forecast period and real per capita GDP growing at around 2.4 percent.Andrew Bayly: Is he concerned by the Productivity Commission report that shows New Zealanders are working longer but produce less than other OECD countries and if so how will Budget 2021 improve this?Hon GRANT ROBERTSON: In answer to the first part of the question yes and in answer to the second part of the question—I'll get in trouble with you if I go into that any more.Andrew Bayly: How can he be confident in his Budget when long-term labour productivity growth is now projected to drop to a mere 1 percent—the lowest in 15 years?Hon GRANT ROBERTSON: It's worth going through how that figure is derived. It is derived by the Treasury using a 30-year historical median. In making their assumptions on labour productivity growth Treasury do not make judgments on any current policy settings nor on the potential of new technologies nor on anticipated level of investments in coming years. Those assumptions are entirely based on backward-looking data over the last 30 years.Andrew Bayly: What are the reasons that Budget 2021 projects long-term labour productivity growth to continue to fall to just 1 percent per annum?Hon GRANT ROBERTSON: Referring to my last answer that is because that has been the historical record of New Zealand. The investments that we are making in infrastructure in skills and in research and development mean that we have every chance of improving on that record that has bedevilled New Zealand for decades.Andrew Bayly: Why did Budget 2021 not include a tax incentive to make it easier for businesses to invest in new plant equipment and software?Hon GRANT ROBERTSON: We've made changes in the package that we did in March of 2020 that enabled building depreciation which I know will benefit according to estimates around $1 billion in the 2021-22 year which will significantly help businesses. We previously introduced the research and development tax credit. But equally the member can't have it both ways. He wants more money spent but he also wants less tax coming in. It doesn't add up Mr Bayly.