Genter Julie Anne; Robertson GrantHon JULIE ANNE GENTER (Green): Tēnā koe Mr Chair. I thank the Minister of Finance for his answers to questions so far. The Green Party has a couple of concerns. Although we absolutely support the Government's response to COVID-19 and agree that superficially the economic indicators look good we do have real concerns about how unintentionally some of the Government's actions may be exacerbating inequality which is not an outcome that we want from the response—in fact we want to go the other way and reduce inequality—and then some questions about how the response can help us accelerate our work in responding to climate change. So firstly I'll just talk about the obvious issues happening with house price inflation. While it was forecast that house prices would fall in the face of the COVID-19 lockdown and the economic fallout in fact they haven't done that and arguably the quantitative easing engaged in by the Reserve Bank—because it went to the banks. It has mainly gone to private investors so most of it's been lent on residential property where supply is not increasing fast enough so you just have more lending on residential property which is driving up prices. In the absence of a wealth tax or a capital gains tax there's no way for the Government to recoup some of that inflation and use that to pay down the debt that's been incurred by it. So while I totally accept the Government will say and I'm sure the Minister will get up and say But we're spending all this money on increasing housing supply." arguably it's just not possible to do that fast enough. Arguably the type of fiscal support that would mean that we could rely less on Reserve Bank—I know they've been dialling back their quantitative easing but arguably the fiscal support needs to go in a different direction so it's not leading to asset price inflation. It needs to come from Government; it needs to go to the people who need it most. There's a second related point around infrastructure delivery because I note that the Government's response I think was a little bit heavy on investing in infrastructure to stimulate the economy when in fact the infrastructure sector was already at capacity and those weren't the jobs that were under threat—the sectors that were hit by the loss of tourism and loss to the service sector. So I guess the Greens have two concerns around the infrastructure aspect of this. I mean one is that we want the stimulus support to go to things that are going to employ the people who were affected by the shutdown and that was predominantly women. It was in the service sector and in tourism. I realise that our unemployment rate is very low right now but arguably where we need the money is more in operating expenses (OPEX) rather than capital expenditure (CAPEX). We need the Government to be investing in midwives nurses early childhood education teachers public transport services bus drivers social workers—all things that do deliver economic benefit and wellbeing to New Zealanders but tend to get underemphasised in part because of this underlying assumption I think that if we're borrowing money it's better used for CAPEX rather than OPEX.The second problem I guess with the focus on infrastructure is if the sector's already at capacity and we had the New Zealand Upgrade Programme with some big projects COVID response and recovery with quite a few infrastructure projects—arguably now we're spending more because we've put more money in and asked the sector to deliver infrastructure faster than it can. In other words the Government has actually bid up its own cost of infrastructure delivery. I realise that's not the only factor. I'm sure land costs and poor scoping of some of those projects have to do with it as well. So finally that leads to—climate action and action on inequality it seems to me have to be the major focus and criteria for ongoing Government investment and stimulus. I guess my question to the Minister is: how is that the case? How are we going to get Government funding to the people who need it to employ the people who will carry out the services that help New Zealanders that help reduce our carbon emissions and that help protect our environment because although I think the will is good I don't think the impact from last year's investment has been quite right and last year's policy has been quite right.Hon GRANT ROBERTSON (Minister of Finance): I thank the member the Hon Julie Anne Genter for the questions. I'll go in reverse just because it's in my head. Initially around the question of climate action the member will be aware that as this Budget these Estimates were announced we made the commitment—or I made the commitment as the Minister of Finance—we would take all of the revenue from the emissions trading scheme and put it towards emissions reductions initiatives. That in many ways was a signal from the Government to say that the next Budgets that come ahead of this one will be ones that have a very heavy focus around climate action and around emissions reductions. We need to do more than just that though and that is completely understood within Government. Just as an aside before I move to go into a little bit more detail around the how which is a big part of the member's question I do want to acknowledge actually the role of her colleague the Minister of Climate Change in terms of the leadership that he's shown in for example the New Zealand Green Investment Finance Ltd which we under these Estimates quadrupled the funding for. That's a signal or a sign of the way in which we see going forward from here that there is not only a massive challenge for us when it comes to climate action and emissions reductions and also an opportunity for investment in areas where we can make real differences to also bring in private sector capital and start to actually really move ahead of some of the obligations that we're obviously quite far behind on as a country. So that's really our signal of the direction of travel.In terms of the how around that we are now making climate assessments of virtually every single thing that we do. It's certainly a part of the investment decisions we are making in Government and at Budget time. It's also part of the programme within an area the member knows well in terms of transport. I know we aren't going far enough for the member but it is now a core part of our decision-making process in that area and so at every stage and in every way we are now trying to make climate action central to the way that a Budget or these Estimates are put together. In terms of the member's other questions—and I'm really conscious Mr Chair of not taking up too much of the committee's time with my answers but they're thorough questions.CHAIRPERSON (Rt Hon Trevor Mallard): It's on your own members' heads.Hon GRANT ROBERTSON: Indeed. So the question around housing is clearly a very complex and deep one. The member herself has alluded to the fact that the advice we got at the beginning of COVID was that the bottom would fall out of the housing market. It clearly didn't; it clearly went in the opposite direction from there. There are all of the supply responses that she's alluded to and I could go into detail on and some of them are funded within the Budget but then there are the demand restraints. Obviously as the Government was putting all of this work together we've moved to crack down more around speculators in the housing market to move to the interest deductibility policy and to make sure that we do everything we can. We're extending brightline out we've had the foreign buyer ban—all of those areas within our housing policy are important for that.The other side though is the monetary policy response and obviously we've changed the rules of the game for the Reserve Bank so that we want them to take into account sustainable house prices which they are doing by virtue now both of the monetary policy work and also within their financial stability remit as well. So I recognise that the growth of house prices that we've seen is utterly unsustainable and we are acting to shift the dial on that albeit not at the pace I acknowledge that the member would want us to.The question around who got support I would push back on that. The Government has moved extensively to ensure that fiscal support has gone to our lowest-income New Zealanders including through these Estimates by the biggest benefit increase in a generation but also by targeted response programmes as well. So programmes such as the Flexi-wage the extra support given to apprenticeships and trade training—all of these have been designed to be able to ensure we get a focus. We don't have time unfortunately for stories but a very heart-warming story I've heard about people using the Flexi-wage to create business is women who lost their jobs through the first phase of the pandemic. So there are fiscal responses that I believe have gone there but we always are conscious of the reduction of inequality as one of our core programmes. Then finally the member's question around infrastructure. It's a similar answer in some ways in the sense that the bottom was going to fall out of infrastructure and construction last year. It didn't and in fact construction and infrastructure has continued to go apace. Our responses have calibrated themselves towards that. So things like the infrastructure reference group projects they are rolling out over a number of years and they have now given pipeline and certainty to those in the sector but we also have to acknowledge that we haven't been able to see them be delivered as quickly as we initially envisaged because actually that sector has got a lot of work going on in it. So it is a sector that we still need but it's not the only sector we're investing in."