Shaw JamesHon JAMES SHAW (Associate Minister of Finance): It is always a pleasure to follow the Hon David Carter in debate. I want to just start by thanking him for his acknowledgment of what a well-crafted piece of legislation this was when it first entered the House—that it required so little amendment as it passed through its select committee stage. I also want to thank the Hon Grant Robertson for bringing this legislation to the House and ensuring that we are going to be able to get through it before the House rises for the election. That is because this piece of legislation was actually part of the Green Party's confidence and supply agreement with Labour. It is good to be part of a Government that is delivering on something that the Green Party has stood for for several decades in this House. I also want to acknowledge Dr Kennedy Graham because in some ways this bill is the inheritor of Dr Graham's member's bill of some years ago the Public Finance (Sustainable Development Indicators) Amendment Bill which was a first cut at saying well look if you had to start thinking about a broader set of measures for the sustainable development of a country as part of your fiscal and budgetary process how would that look?I missed some of the earlier contributions I'm afraid. But I have to say having listened to the contributions of the Hon Judith Collins and David Carter I have some good news for them. One of the things that they were asking for is competent Government and why we don't measure competent Government. And I have some good news: (a) there is a competent Government but (b) trust in Government is one of the measures that form the wellbeing framework. So we are actually doing the very thing that the Hon Judith Collins spent a good portion of her speech asking for which is actually when you elevate it up what we refer to as social capital and the idea that you can trust in the institutions of Government and the broader Public Service are part of what got us through the worst of the COVID-19 crisis. Because we had built in this country over many decades a sense that we are all in this together there's a strong sense of social capital and that needs to be nurtured if we're going to get through the rest of this crisis.Ms Collins also asked for a measure about reoffending. The health of the justice system and the rate of reoffending is one of the things that forms the measures in the wellbeing framework. I've got some news for the Hon David Carter in this as well who said Is now the time when we're in the middle of the worst economic crisis since the Great Depression to be looking at the wellbeing of our people?" I would say this is exactly the time that you want a coherent framework a comprehensive and cogent framework for looking at how our people and our country are doing. Ms Collins asked about "What is the practical application? Is this just some kind of piece of fluff?" Actually the good news again for the Hon Judith Collins is that the practical application of this comes down to our budgetary processes. The idea that actually bids that come forward to Treasury have to be measured not only on their traditional benefit-cost ratios but on this broader set of measures that says well how are they building our social capital our human capital our natural capital our built-in environmental and cultural capital as well. So all of the things that they were asking for we are delivering and it's a shame that they can't support that but there we go.Now I would like to just come back to some of the substance of the bill and some of the history which is reflected in it. One of the questions that have been raised in this debate is why it is that we're amending the Public Finance Act in reference to these questions around this broader set of measures as opposed to any other part of our legislative framework. If you think about finance as the measurement and management of built and financial capital that has been the way that you know we've treated the role of Government in this country for a very long time. That is of course what the purpose of the existing Public Finance Act is: is to say well how does Government measure manage our built-in financial capital and assets.Now my second professional job was at that crazy hippie organisation Pricewaterhouse back in the late 1990s; so this is over 20 years ago. Pricewaterhouse started looking at non-financial forms of capital that would be important in the measurement and management and running of its large corporate clients around the world. We started looking at things like social capital and natural capital and intellectual capital brand value and so on. A series of intangibles—or some were tangibles and some were intangibles—that added to the value of a company that far outstripped the aggregate of its kind of hard assets and financial capital. This was largely derived on some earlier thinking in the 1990s about the idea of a balanced scorecard that companies were starting to develop: the idea that you would have some kind of dashboard that included the company financials but also started to look at things like how are your people doing how is your product doing and so on—this idea that you could develop a comprehensive view of the organisation that included but was not limited to its financial wellbeing. And so really all we are doing here is taking thinking that is decades old—it stretches right back to the 1990s when the Public Finance Act had its genesis. And 20 years behind some of the most conservative accounting organisations on the planet we are starting to think about how we incorporate that thinking into the running of a country. It's that simple. That's what we're doing. We are developing a comprehensive set of indicators across our financial our economic our social and our environmental capital and saying "How are we doing as a country?" And our traditional economic measures have an important role in that but it is not limited to that.The reasons for that have been well articulated on this side of the House. When you focus only on a narrow set of economic indicators you lose the sense of how you're actually doing as a country. That is why we had year after year of GDP growth and people living in cars and garages growing at the same time. We had years and years of GDP growth and an extension of pollution in our rivers that got to the point that you couldn't actually swim in them anymore. Years and years of GDP growth and the worst housing crisis in this country's history locking out first-home buyers driving up house prices causing endemic poverty around New Zealand. If you are going to have any sensible way of running a country at all you have to look at these things side by side and that is why the correct location for this work is inside the Public Finance Act because like I said this thinking has been around for decades the idea that financial capital is not your only form of capital. And for us to be able to have any sort of coherent sense of how our financial capital is doing versus our natural capital versus our social capital or our human capital those things have to be inside the same framework. That's it. It is actually very straightforward. It's very simple. It's been around in the private sector that the National Party has worshipped at the altar of for decades. We are merely adopting what is now common practice around the world.David Carter did say that our existing fiscal framework is the envy around the world; it's been acknowledged around the world. So is this. This is derived from an OECD framework; it has been picked up by other countries around the world—Ireland is the most recent country to say that there is no reason that just because we innovated something 30 years ago we can't innovate something else now that will be similarly adopted around the world. There is a recognition that actually the framework that we've operated under for three decades now has run its course and we do need to innovate. We do need to think more about the next 30 years and how we manage ourselves as a country. So I am delighted that we are paying attention to this bill at this particular time. It is critical that we look at the wellbeing of our people during the COVID-19 crisis and I commend this bill to the House."