Russell DeborahDEBATE ON BUDGET POLICY STATEMENTDr DEBORAH RUSSELL (Chairperson of the Finance and Expenditure Committee): I move That the House take note of the report of the Finance and Expenditure Committee on the Budget Policy Statement 2020. I'm pleased to present the report of the Finance and Expenditure Committee on the Budget Policy Statement and the Half Year Economic and Fiscal Update both of which were presented by the relevant Minister and ministries in December 2019. I'd like to thank the committee for the work they did reviewing these important documents and I'd like to thank the Minister of Finance the Hon Grant Robertson and the Secretary to the Treasury Dr Caralee McLiesh for appearing in front of our committee to answer our questions. I would especially like to thank the submitters who put in submissions on the documents. Forty-two individuals or groups took the time to present their views to us on the Budget Policy Statement and on what they thought we should be doing. Many of those were from representative bodies so it represents a large number of New Zealanders who took an interest in what is happening in Budget 2020. I especially though thank those who came and spoke to us in person. It's an important part of the Budget process and an important part of the functioning of our democratic system. This Budget Policy Statement and of course the Half Year Economic and Fiscal Update were prepared last year. We reviewed them in February this year just a month or so ago and since then much has changed. In December 2019 I don't think we'd even heard the term coronavirus in respect of the illness that broke out in China. By February 2020 when we were starting to review the Budget Policy Statement we had just started to use the word COVID-19 and now coming up for nearly a month later of course COVID-19 and its impact on New Zealand and on the world is being regarded as a very serious matter indeed. But what this report shows is just how very well we are placed to meet the challenge posed to us by COVID-19. Let me turn to the Budget Policy Statement to show why this is so.First of all I want to talk about how the Budget Policy Statement builds on the work that we did in 2019. It focuses on wellbeing and that's important because it means we are moving beyond measuring just the economy and focusing on what really matters to New Zealanders the traditional things: housing jobs families and so on—all those sorts of things that ensure that people have the capabilities to live lives of purpose of balance and of meaning to them.This Budget in 2020 draws on the work that we did in the Wellbeing Budget of 2019 and it draws on a long tradition of considering what makes a life worth living. What we know when we talk to people—this is well-established in the literature—is it's not money though money does help. It's family it's friends it's satisfying work it's security and it's health. Understanding that gives us our focus on wellbeing and it has enabled us to identify priorities for Budget 2020. So the Minister of Finance has identified those in the Budget Policy Statement and they are reflected in our report. So what are the priorities for Budget 2020? They are a just transition supporting New Zealanders into a climate-resilient future the future of work enabling all New Zealanders to benefit from new technologies and to lift productivity. It's the focus on Māori and Pasifika lifting Māori and Pacific incomes skills and opportunities; a focus on child wellbeing; reducing child poverty and improving child wellbeing; a focus on mental and physical wellbeing; and improved health outcomes for all New Zealanders.That's the focus that is talked about in the Budget Policy Statement and it builds on the strong economy—a strong economy in which wages are up 4.9 percent a strong economy in which the minimum wage will be going up to $18.90 an hour a strong economy in which household incomes are up a strong economy in which debt is low at 19.5 percent of GDP a strong economy in which unemployment is at 4 percent and a strong economy in which growth is ahead of our OECD partners. It was raised at 2.2 percent growth in December and just today we've heard that it is still being raised at 2 percent growth. At the time of our HYEFU the Half Year Economic and Fiscal Update it was predicted there would be a small deficit for the year ended December. In the event the actual financials have shown a small surplus.This is the fundamentally sound and strong economy which means that we are very well placed to meet the threat of COVID-19. We are facing an international storm but we can meet it. And why can we meet it? It will have a profound effect on us and we are responding. It is a health issue primarily but it also is an economic issue and we can meet it. Why can we make it? Because of the programme that is laid out in the Budget Policy Statement in 2019.So what's the best thing to do when facing that kind of economic storm? The Budget Policy Statement 2019 tells us what we are doing. We have the New Zealand Upgrade Programme a Keynesian measure that will support our economy—$12 billion of infrastructure. So after the nine years of neglect we are doing the work that sorely needs to be done in New Zealand. So there are upgrades for transport for education for health.The Budget Policy Statement tells us that there will be $6.8 billion going into rail and roads but not just roads for cars but roads which have dedicated lanes for freight roads which have cycleways and pedestrian walkways incorporated into them so that different modes of transport can be used to get us about from place to place.In the Budget Policy Statement we are told that there will be $300 million going into investment into our district health boards that sorely needs investment to replace the rundown infrastructure that was left to us. There is $200 million going into reducing carbon emissions in the public estate making sure that in the Government—in the Government—estate in the public estate we are moving towards a low-carbon economy. Four billion dollars is going to the multi-year capital allowance to look at future spending and support future spending on infrastructure and all of this will add 1.4 percent to GDP a 1.4 percent that will be so needed in the face of COVID-19. So what we have here is fiscal policy that is supporting our economy. Let me tell you how this works on the small scale and it's most easily seen in our schools package the package where we have fired $400 million into repairs and maintenance and upgrading school property. That is affecting virtually every State school in the country. In my electorate and in the electorate of every single constituency MP in this House and in the electorates where list MPs work there are schools who are benefiting from this schools who can at last replace the school pool can get some painting work done can get the roof replaced. But it is not just the schools who benefit from that; it is the local tradies—the plumbers the roofers the builders—who will get work the kind of work that enables them to employ people and that will sustain us through this COVID-19 outbreak. It is a classic measure to support the economy. The Budget Policy Statement has a whole series of other measures that we are building on. I just want to talk about that minimum wage increase. We all know that when it comes to low-income people that extra money gets cycled straight back into the economy. If there is a simple way to support the economy it is by lifting the incomes of the lowest paid. Why? Because they spend it to support a better life for themselves and that spending cycles straight back around the economy. It is an excellent measure. What this Budget Policy Statement shows is that we are supporting our communities we are supporting our families and we are working to support the economy that in turn supports all of us and we are governing for all New Zealand. We are challenged by COVID-19 but this Budget Policy Statement and this coming Budget show that we are doing what matters—leading with a public health response and then leading with an economic response an economic response that we are prepared for thanks to our Prime Minister with her concern for all New Zealanders and thanks to the excellent work done by our Minister of Finance. He is insightful courageous and visionary—a worthy successor to Sir Michael Cullen. I commend this report to the House.