Estimates Debate — Finance and Government Administration Sector

Members, we now come to the votes in the finance and government administration sector volume—B.5, Volume 5. The question is that Vote Audit, Vote Communications Security and Intelligence, Vote Finance, Vote Internal Affairs, Vote Office of the Clerk, Vote Ombudsmen, Vote Parliamentary Service, Vote Prime Minister and Cabinet, Vote Revenue, Vote Security Intelligence, Vote State Services, and Vote Statistics stand part of the Schedules.

As the chair of the Finance—

💬 Barbara Kuriger: Point of order.

—and Expenditure Committee, I’m delighted to take the first call—

CHAIRPERSON (Hon Ruth Dyson): Sorry to interrupt the member. We’ve got a point of order.

💬 Barbara Kuriger: I raise a point of order, Madam Chairperson. It was my understanding that Dr Jian Yang was the first speaker in this section of the Estimates debate.

💬 Dr Jian Yang: And I did call.

CHAIRPERSON (Hon Ruth Dyson): I understand you sought the call. The advice that I have is that this section of the debate should be led by the chair of the Finance and Expenditure Committee, which is why I called Dr Deborah Russell.

💬 Barbara Kuriger: We’ve obviously got different information.

CHAIRPERSON (Hon Ruth Dyson): I apologise to the member, but that’s the information I have. Back to Dr Deborah Russell.

As chair of the Finance and Expenditure Committee, I’m delighted to lead off this particular debate. I wish to begin by paying tribute to the outgoing chair of the Finance and Expenditure Committee, Mr Michael Wood, who led us through the Estimates hearings for the Finance and Expenditure Committee, and who did a marvellous job, of course.

It covers a large portfolio of interests in this particular section of the debate, and in the finance sector, we in particular look at Vote Audit, Vote Finance, and Vote Revenue—all critical parts of the Government’s work. I wish to focus in particular on Vote Finance and, very importantly, on the new approach that has been taken in this year’s Budget, which was very much part of the discussion, especially in Vote Finance. It is a directional change in how we do Budgets in New Zealand and, as such, it’s a very important matter. I am referring to the wellbeing approach and, within that, to the Living Standards Framework, which has been developed by Treasury over a number of years.

We asked the Minister, “What difference does this new approach make?”, and the answer was that it makes a considerable difference. One of the many things it does is encourage agencies to work together—so, instead of operating in silos, that agencies develop Budget bids together. I think the most interesting example of this was the joint venture package on family sexual violence, which will be discussed in a later vote. But, from our point of view—from the point of view of this new approach—it joined together these agencies: health, social development, education, justice, police, ACC, corrections, and the Department of the Prime Minister and Cabinet, all working together as part of the wellbeing approach. It is a singular new approach.

The Minister admitted that it had been a challenge getting agencies to work together, and this was something that Treasury said too, but they also pointed out that it was work they were doing already—in particular, with the Living Standards Framework, which focuses around four capitals: financial and physical capital, natural capital, social capital, and human capital. That word “capital” is, of course, a very Treasury or a very financial word, and when we asked the Minister to talk about the difference between social capital and human capital, he said that social capital was really the way that we connect together and that human capital was the skills and capabilities of each person. Then, he gave a very specific example of how this might actually work in a budgetary approach. How did it work, for example, with the school donations? Now, this is the policy whereby, under this Labour Government, in return for extra funding for schools, parents will no longer be required to pay school donations. So what difference did it make?

In terms of a wellbeing analysis, the donations policy, as the Minister said, provides support to schools, which allows them to provide a strong educational environment, which is deeply relevant to human capital, and it supports parents by ensuring that they don’t have to find that money each year, which supports their financial capital. This wellbeing approach could also be applied to KiwiRail investments to increase wellbeing, and we talked about it in the context of wellbeing approaches for State-owned enterprises. It is actually very possible to describe almost anything in terms of wellbeing, but that’s not the point of the wellbeing approach and the Living Standards Framework. The point is to drive a new approach to doing budgeting in this country, and I recommend that each of us, in thinking about this Estimates debate, thinks of it in terms of that framework.

Just turning briefly to Vote Revenue, at a stretch you can even apply it to Vote Revenue by talking about how the Business Transformation project, which makes life easier for ordinary taxpayers in terms of doing their tax returns, or not having to do them, and in terms of getting refunds automatically—all part of that Business Transformation—actually assists people’s wellbeing. The wellbeing approach that we examined in these Estimates is new, it’s revolutionary, it’s exciting, and it is part of the transformation that this hard-working Government is leading.

Thank you very much, Madam Chair. We come to talk about the Estimates of the Government, which, really, wants to tax more and spend more and, in the process, waste more.

Let’s take Vote Statistics, for example. Vote Statistics has funding of just over $32 million for new policy initiatives—$32 million. Out of the $32 million, $16 million will be used to complete the 2018 census and to begin the 2023 census. I understand that the $16 million will be used for that. Now, had we had a more competitive, more capable Government, had we had a more responsible Minister of Statistics, and had he shown more interest in statistics, then we might have had the census data now, which means we would have saved millions and millions of dollars. But, unfortunately, now we are still waiting for the data from the 2018 census and we do not know whether the census data will indeed be accurate. So this is because this Minister was asleep at the wheel and didn’t show much interest in the census.

Now, more importantly, the postponement of the release of census data and the extremely low response rate in the census have caused strong concerns in some communities—particularly in the Māori and Pacific communities—and also, because of the delay of the data and the problematic quality of the data, now we have to wait, and many Government agencies are not able to use the updated data to budget, to make their own funding. So this is a huge problem, a huge challenge, and very costly. Another $16 million out of the $32 million for a new policy initiative in this financial year is supposed to be used for—I quote—“maintaining statistical products and services, data services and data system leadership”. This sounds very encouraging and very positive. However, if we look carefully, then we’ll see this money is not well spent, either.

So this $16 million is not additional money, actually. Stats NZ made a bid and wanted more money, otherwise—they made it clear—Stats NZ would have to cut non-priority services. And guess what? Shortly after Budget day, Stats NZ indeed cut what they called non-priority services. They dropped four surveys, including the commercial accommodation monitor. Whilst Stats NZ might think that that is not important, for tourism groups this is extremely important. So they were simply shocked and devastated, and later on, in mid-July, we learnt that a few months before Budget day, Stats NZ made it clear that they needed a lot more money—at least a minimum of $20 million—and then more afterwards. In the end, it did not happen.

Much of the $16 million supposed to be used for maintaining statistical products and services, data services, and data system leadership will be spent on—what? It will be spent on an improved wellbeing measurement—an improved wellbeing measurement. Now, this is yet another example of misguided policies from this Government. What they are doing is attempting to measure New Zealand wellbeing with what they call Indicators Aotearoa, but this is not achievable, is very elusive, and is about spiritual health, a sense of belonging, an ability to be yourself—all these elusive indicators. How can we trust the Government to do it if they can’t do the census properly? Thank you.

Madam Chair, thank you for this opportunity. I’m new to the Finance and Expenditure Committee, and I’m learning things about finance every day. I have to admire the Opposition for the way they’re trying to grow our economy: you go overseas and you get someone from the Inner Mongolia racing club to invest in our country, growing the economy. They don’t see that there’s that much wrong with that, so I see that, clearly, the Opposition have got all the answers there.

I think one of the great summaries of the previous Government that I heard was “They prepared it for sale.”, and, of course, preparing something for sale means that you put a bit of black shiny stuff on the wheels. You don’t get the warrant, you don’t change the oil, but you make it look nice, and, certainly, that’s pretty much what we inherited. We didn’t buy it; we inherited it. I would say often there was a lot made by the previous Government about surpluses. Well, anyone can run a surplus if you don’t pay the bills and you don’t do the maintenance, and certainly that’s been quite clear with what we inherited. We inherited an economy where no one had paid the bills and no one had done the maintenance, and it’s that which has fallen upon this Government to do. A rock star economy? Well, there’s no point having a rock star economy if no one can afford a ticket to that concert, and, again, that’s the situation that we have.

So I’m very proud to be part of a Government that is actually tackling the long-term challenges which face this country: levels of investment, reinvestment, rebuilding on the things that we really need to do to ensure that we maintain the situation that we’ve achieved in 18 months—the fiscal responsibility. This is what I’ve enjoyed: catching up with has actually gone through, the various Ministers that have come here and spoken during the appropriations debate, to ensure our Government—the Government I’m proudly part of, led by the Rt Hon Jacinda Ardern—is doing the right things for this country. Anyone who has any doubt, have a look and see just what has been achieved and what the various departments and various Ministers have addressed during this time. For example, the books are in good shape, delivering sustainable service and a strong GDP, despite what we hear about—in fact, to the extent that I notice there’s some dispute on the Opposition benches—how much we should be borrowing.

I understand there was someone saying we should be borrowing more. I actually do recall during the middle part of the 2000s, when I was speaking with the, unfortunately, now long-departed Roger Kerr, who was quite a well-respected economist in the Business Roundtable. At that time he was lamenting the performance of the New Zealand Government under Michael Cullen because we hadn’t actually been borrowing at a time when countries like—and he named them—Portugal, Ireland, Greece, and Spain were getting way ahead of us because they were borrowing. I understand the anachronism for that was the PIGS, and we saw what happened to them.

So I just look at the way that this Minister of Finance is looking after our economy. It’s extremely responsible, and he is carrying on from where Michael Cullen in that Government of the early part of the 2000s was, which, of course, ensured that when 2008 came along, when the global financial crisis came along, and, in fact, when the National Government arrived, they had 3 percent of GDP debt—3 percent. I think when we arrived, it was around well over 20 percent. So that just gives an idea of the continued responsibility of the Government, that I’m certainly very proud to be part of.

Also, it’s said often that we’re not doing anything for business. Well, let’s just go through Vote Revenue, which is part of this appropriation. “Putting an end to unnecessary tax for workers with more than one job”—well, that’s pretty good. That’s addressing something for workers. “Ensure companies in the digital economy who do business across borders as well as multinational companies pay their fair share of tax”—something again—“extending the brightline test to address property speculation”. Again, when I hear people complaining in the media about their prices going down—although one price went down a lot earlier than others, I think, from reading the New Zealand Herald today, by about $500,000, which was clearly less than what it was worth. So, obviously, that started to happen north of Auckland, for some people, earlier than it did.

So my time come has come to an end, but I’m very happy to be part of a Government that is addressing all the long-term issues that we inherited.

Thank you, Madam Chair. I wanted in my contribution to speak about Vote Finance, and Vote Revenue, and if time permits I want to make some comments on Vote Statistics. I speak on finance and revenue as a permanent member of the Finance and Expenditure Committee.

I, first of all, want to comment on what the committee recorded with regards to the economic outlook. So we’ve just had a contribution by a Labour member, saying that the Minister of Finance is looking after the economy. We record in detail in this report that GDP growth now, as at June 2019, is 2.4 percent. In the report we note that Treasury suggests GDP growth at the end of June next year will be 3 percent. I say to this House today, that will not be achieved, and if any Minister or any member on the other side of the Chamber wants to take a bet—I mean, with a bottle of New Zealand wine—I’m only too happy to do so.

This economy will not achieve 3 percent, and it won’t happen for two reasons. One, I accept, is we’re facing international headwinds and that is because of the trade issue, it’s because of the tweets from the President of the United States and his battle with China, it’s because of the Brexit issue providing uncertainty, and, finally, it’s because the Chinese economy is certainly slowing.

But that’s only one of the reasons for a decline in GDP growth in this country. The other major reason is that business has absolutely no confidence in the current Government, and we get successive confidence measures produced by the business community which say that the confidence in the current Government’s agenda has never been lower. We’ve seen it before with the response on monetary policy and the current Governor of the Reserve Bank, Adrian Orr, now reducing the official cash rate (OCR) to 1 percent. He’s out there today—he’s quite an interesting governor. It’s one that we haven’t seen before—very much a sort of in-your-face type of governor, and he’s out there saying people should be investing.

Well, I’m sorry to say to Mr Orr and to this committee that just because the Governor of the Reserve Bank drops the OCR to 1 percent—meaning we do have probably the cheapest interest rates you’ve had, certainly in the time that I’ve been borrowing money in farming businesses—that doesn’t mean to say that people will start to invest. They’re not doing so, because they lack confidence in this Government.

The second point I want to make on this report is the absence of the Secretary to the Treasury for our hearing on finance. It has never before happened in my 25 years in this place. The then Secretary to the Treasury did not bother to come to the select committee. Of course, at that time we had the issue whereby the Government and the Treasury, particularly, had left its website open, gifting to National a preview of the Budget the week before it was delivered. But Mr Makhlouf then went to the police and claimed criminal activity. He subsequently had to back down because it was incompetence at the Treasury that allowed the Budget to be pre-leaked to the National Party. So I just want to record the disgust, really, that we didn’t have the secretary prepared to front to our select committee.

I now move to Vote Revenue, and the particular issue I want to focus on is the Government’s continuation to look at another tax, the vacant land tax. Both the Treasury and IRD have advised the Minister that this will make no difference whatsoever to housing affordability, yet the Minister is continuing to investigate this further tax. The question we ask now is: why does he continue to investigate a vacant land tax when what he says it will achieve—an improvement in housing affordability—has been rebutted by both Treasury and the IRD? I suspect we won’t get an answer to that question I raised.

The final question I just want to raise is in regards to Vote Statistics—a complete and utter shambles—and I understand that the decision is now to proceed with the redraw of electoral boundaries based on this, effectively, false or fake information. I ask who is making the decision to proceed, because they should not be doing so.

Thank you, Madam Chair. I’m really pleased to be able to take a call in this debate, and, in particular, in my comments I wish to focus on Vote Finance and Vote Revenue. In contrast to the last speaker, who had a pretty gloomy and negative view of the world, I really want to focus on some of the very positive and good news that is reflected in the reports of the Finance and Expenditure Committee on both of those votes, although I will acknowledge that the member did at least turn up to those Estimates hearings.

We heard during the Vote Finance hearings a lot of good news about the state of the economy and a lot of good news about the way in which the Government is making investments which are about the long-term health and sustainability of the economy—looking ahead to 30 years, not just sort of trying to score points and get through the next two or three years, but planning for the long-term prosperity of New Zealand. So if we refer to the report, we see some really positive initiatives such as the establishment of the Infrastructure Commission—actually having a body that coherently plans for all of that underlying economic and social infrastructure that New Zealanders rely upon. I’m pleased there’s been pretty broad support across the House for that Government initiative. But it really does speak to the approach that we see threaded through the report from the select committee of significant investments in the long-term wellbeing of New Zealand. It’s noted in this report that we’ve got a huge increase—about a $10 billion increase over the next five years—in the capital expenditure that the Government’s putting into infrastructure through the multi-year capital allowance. That is something that is going to give all sorts of sectors, including the construction sector, much more confidence and ability to plan their spend, knowing the Government is making those investments that are necessary.

It’s the same with KiwiRail. Again, we see this in the report: a $1 billion investment in KiwiRail. That is recognising that for the past nine years it was run down—absolutely run down—and has had to be rescued by the previous Government that was made up of the constituent parties on this side of the House. Once again, under this coalition Government, $1 billion invested in the long-term viability of KiwiRail to get freight moving and get our regional economies moving. Those are the kinds of long-term investments that New Zealanders expect and are receiving from this Government.

Also, there is good news in terms of the strong economic management. I do want acknowledge the previous speaker, the Rt Hon David Carter, who did acknowledge some of those significant economic headwinds that our economy is facing, and you’d have to be utterly economically illiterate not to understand that a trade war between the world’s two biggest economies, Brexit, and a slowing-down international situation aren’t going to have a major effect on a small trading nation like New Zealand. Some colleagues on the other side of the Chamber make that out, but I’ll acknowledge David Carter for acknowledging that those are challenges to the New Zealand economy.

What the report of the Finance and Expenditure Committee on Vote Finance reveals is that in spite of those challenges, we are doing well. With growth around 2.5 percent, we are ahead of virtually all of our—

💬 Kanwaljit Singh Bakshi: From 4 percent.

—major trading partners. But the reality is, Mr Bakshi, that we live in the present; we don’t live in the past. We live in the present, when we face these significant challenges to our exporters and to our growth prospects around the world, and we are doing better than virtually any of our trading partners.

One thing I note in the report of the Finance and Expenditure Committee—here’s some more good news for members around the Chamber to really celebrate—is that Treasury predicted, and it’s in the report there, that by mid-2020, we might get unemployment down to 4 percent. Well, the good news is that actually we’ve already seen unemployment reduce down to 3.9 percent, the lowest in 11 years, and despite the protestations of members on the other side of the House that you can’t have low unemployment and grow wages—because, boy, do they make a lot of noise every time we raise the minimum wage and support workers to get better wages—at the same time as we have the lowest unemployment in 11 years, at 4.4 percent, we have the highest wage growth in 11 years. That is the record of this coalition Government in terms of providing work and opportunity, and a fair chance to get ahead for ordinary Kiwi workers: the lowest unemployment in 11 years and the best wage growth. That’s all very, very positive. This is a Government, as reflected through the reports, that is managing the economy well.

I noted in the report of the Finance and Expenditure Committee that one of the areas we’re making savings in is that our debt-servicing costs are lower than predicted, and that is because, ahead of schedule, despite the big investments I’ve talked about, this Government has worked our debt down to 19.9 percent, which is already below the targets that we’ve set. So we’re saving money there so we can make the investments that we need. These reports reveal a Government that is making the long-term investments that are to the benefit and wellbeing of all New Zealanders. Thank you.

The Hon Judith Collins.

Thank you, Madam Chair—a great choice. I think I’ve been listening to people on the other side of the Chamber who are living in a fool’s paradise. Anybody who wants to know about how lacking in confidence small-business people are should go out and visit some of the people in our electorates, where people are actually deciding that they can’t take on extra staff. They can’t get skilled staff in to do the work, because the Immigration Service is now so absolutely hopeless at letting anybody in who is skilled. They’re orchardists—we have people who have berry farms who can’t get people in. Why? Because this Government has a big issue around immigration. You’ve got three parties to it who actually voted against the sort of immigration that National was very happy to enable into this country.

When I’ve been listening to some of the contributions from the other side tonight, I’ve heard some comments about how interest rates are really low. They are, actually—they’re the lowest I can certainly remember. And there is another issue with that too, which is that when you have very low interest rates, it is very easy for people not to put their money into banks. It is very easy for people to say, “Well, I’ll go and put my money somewhere else.” It may be, for instance, overseas. It is very easy for people to do that. If low interest rates were the answer, then Japan would have become more of the powerhouse that it used to be economically.

Sitting suspended from 6 p.m. to 7.30 p.m.

CHAIRPERSON (Hon Ruth Dyson): The House is in committee for further consideration of the Appropriation (2019/20 Estimates) Bill. When we suspended for the dinner break, the committee was debating the Finance and Government Administration Sector. The Hon Judith Collins had the call and has three minutes and 20 seconds remaining of her speech, should she wish to take it.

Oh, she does. Thank you, Madam Chair. Only three minutes, 19 seconds? I mean, goodness, I really need at least 35 minutes.

I think it’s really important that we come back to the theme of the economy and the Finance and Expenditure Committee’s Estimates, and our concerns that we felt in the committee about some of the head-in-the-sand type of behaviour coming from the Government. I think one of the big issues is the issue of business confidence, and we’ve seen quite a robust debate coming along—it seems to be quite one-sided—from the Governor of the Reserve Bank, which I have to say I’ve never seen before from a Governor of the Reserve Bank. I’ve always thought Governors of the Reserve Bank should be sort of quiet, unassuming, and should just keep a lot of confidence, but there’s certainly a bit of rarking up going on between the Governor and the banks generally.

I think one of the things that is really important is that we understand that whatever happens on a bad side in the world’s economies such as Australia and China, and the US, Europe, and elsewhere, it tends to hit us quite early on in the piece. That’s just a historical fact, and that is also based on the fact that we are very much a trading nation. We cannot really survive as a country without being able to trade, and, particularly, trade in the agricultural area. It is also really important to remember that it often takes us longer to recover than other countries, for instance. So we were hugely helped during the global financial crisis, which started to occur in the world in 2007-08, because of the strength of the Chinese economy and the fact that it was growing so steadily, and also because Australia was seen to be benefiting from that as well. Australia and China, as you will know, are our two biggest trading partners, and when they do well, we tend to do well.

The problem that we’re seeing at the moment is that they’re not necessarily doing quite as well as one would hope, and that does create a huge amount of uncertainty in the world. So it’s really important in New Zealand that our Government not do fruit-loopy - type things and actually do things like take wonderful productive farmland and plant it full of disgusting pine trees that drop needles everywhere and which the people who mostly benefit from it seem to be overseas investors, who have cottoned on to the little schemes going here in New Zealand. In the meantime, rural New Zealand and provincial New Zealand is being replaced—people are being replaced—by trees, and that is not good for this country. We have a huge natural advantage in agriculture. We feed the world with our mere 1 percent of the world’s cattle, and yet we are seeing this Government intent on ruining that wonderful asset that we have and turning it into pine trees. I give you Kaingaroa Forest—nothing but pulp and paper is the quality of what was coming out of that. That’s what this Government is doing to our country.

I call Fletcher Tabuteau.

I appreciate that very much, Madam Chair. Thank you for this opportunity for the contribution this evening on the Finance and Government Administration Estimates debate. I just want to actually take this time to thank the previous speaker, Collins, and, actually, before her, the Rt Hon—

CHAIRPERSON (Hon Ruth Dyson): Full name, please.

Oh, really? Judith Collins.

💬 Hon Members: Hon Judith Collins.

Hon Judith Collins—absolutely. Very honourable. And, in that case, I also thank the Rt Hon David Carter, because they took time in their contributions this evening to acknowledge the circumstance in—well, there’s so many of them—the world in which this isolated economy is performing, and performing incredibly well. So I acknowledge that they took time out of their contribution and spoke quite eloquently to the fact that New Zealand is very much caught up in those international headwinds. Both of them spoke quite eloquently—

💬 Dan Bidois: Which headwinds? The Rugby World Cup?

—which is unusual. But, Mr Bidois, you were clearly not listening to your own members, who were speaking eloquently, as I said, about the trade debate, the trade issues, the contest that is trade between America and China. They were speaking about the circumstances in Europe and much of the issues that this world is facing right now, and the impact that is having on the economy.

But I want to take the time to acknowledge the hearings where we had the Minister of Finance in front of the select committee, where he was able to outline some of the highlights for the New Zealand economy and why the other side of the House needs to cheer up. They need to cheer up because, right now, we have a huge amount of New Zealand businesses who are making large sums of money overseas right now. Exports are at some of the highest that this country has seen in a long, long time, and that’s hard-working New Zealand men and women doing what they do well, supported by a Government who’s making sure that they can make some good coin overseas. And those on that side of the House don’t like it—they don’t like it. It’s just ridiculous.

So, what else? [Interruption] The Minister spoke to the committee about managing surpluses, Mr King. He spoke to the committee about $6 billion worth of projected surpluses in this current Budget period, and the fact that whilst we are paying down debt—“debt” being a dirty word on the Opposition side right now because they just don’t know, between the spokesperson who should be talking about debt on their behalf and the Opposition leader, just what a good level of debt might look like. But we do. We know, and we have committed to meeting the 20 percent of GDP in the next couple of years. Actually, at one point we were meeting that target, and—

💬 Mark Patterson: It’s met already.

Yeah, we were already there, and now we are back on track to do that because it is a responsible Government. I say that in all sincerity, because whilst we are running surpluses, this is a Government that is spending money in our regions, on our hospitals, in our schools, on our roads, on our transport sector—

💬 Hon Members: Roads!

Yes, roads. Listen to the gaggle of the Opposition members. They bring joy to my heart—they bring joy to my heart, because spending on roads by this Government, as the Minister pointed out, is tens of millions of dollars higher than those now in the Opposition attempted to do themselves.

There’s so much more to speak about, but I only have 15 seconds left, and I really want to hear the member from Northland. So I will sit down and say this is a great Government to be a part of. We have a great Minister of Finance and Minister of Revenue, and I thank them for their efforts.

Thank you, Madam Chair. I’d like to make a few comments traversing the Estimates examination for Vote Internal Affairs, and while I do have a few brickbats to offer tonight, I also have a bouquet, but I’ll leave that till the end because that’s a nice thing to do.

First of all, I want to make a comment around the RealMe project, which we heard from within the Vote Internal Affairs Estimates hearing. It was a bit sad to hear the same story that we’ve heard for well over two years now, since this Government came into being, particularly in this year of delivery, to hear that in terms of RealMe—which is New Zealand’s online digital identity service. The concept is fantastic—it came in under a National Government, of course—but the RealMe ID verified gives small businesses and individuals access to Government departments and other businesses with one point of ID. For individuals, it is most useful because it can be used for passport services and all sorts of transactions and identity verification.

So it was really very sad to hear, as we were told—and I’m quoting—that “Although the uptake of RealMe has been lower than expected, it is still used extensively, now that”, and on and on and on it goes. In other words, no progress—in this year of delivery, no progress. So that’s No. 1.

I want to move now to local government and mention the Three Waters Review. Once again, this is a story from the Minister of Local Government in the year of delivery about not a whole lot of progress. The Three Waters Review was announced in the wake of the Havelock North campylobacter inquiry. There were two reports. The first report came to the National Government. The second landed on the lap of the new Minister of Local Government. She promised the world; in fact, she travelled the world. She travelled to Scotland, Ireland, England, and Edinburgh, had a look at different methods of water delivery, and promised that there would be sweeping reforms. So what, in the end, did it come down to? It really came down to a $26 million Budget bid, which was declined in the Budget, for the three waters reform programme.

Those of us who follow projects such as the three waters reform programme will notice that, very quietly, the Government seems to have dropped any reference to amalgamation of water bodies. Why is that? Because it was a dumb idea, and local government—quite rightly—crunched the numbers on it and said to hang on a minute: there may well be problems in some areas of water delivery in New Zealand, but also, equally, there are a number of councils throughout New Zealand who are doing just fine. Not only are they doing just fine now in terms of water service delivery but they are planning for the future. The picture is actually quite patchy. So those big, hairy-chested reforms that the Minister of Local Government proposed have been quietly shelved, backed up by the lack of a $26 million fund, which was turned down by the Minister of Finance, who, no doubt, had more important things to do with that money, such as the light rail in Auckland or maybe the Shane Jones slush fund.

Finally, I just want to reference the proactive release of Government material, and I’ve turned now to the Office of the Ombudsmen. The proactive release of Government material has been nothing but shadows. It has been nothing but talk and no delivery in this year of delivery. I would like to see Ministers disclose their ministerial diaries in a more timely manner than the three-month horizon which I’m currently experiencing. It’s not good enough. This is the most open and transparent Government—

💬 Andrew Bayly: That’s right.

—right—that the world has ever seen. So to release a diary three months after the fact falls somewhat short of that and, I am sure, is giving a lot of concern to the Speaker of the House, who’s stewarding this project through.

Finally, the bouquet. I just want to acknowledge Peter Boshier, the Chief Ombudsman, who, when he came to our Finance and Expenditure Committee, acknowledged that there are ways in which the Office of the Ombudsmen could serve constituency MPs in dealing with their constituents’ complaints—he did that. He did that. He resolved it, and I thank him for that.

Thank you, Madam Chair. Can I say it’s with real pleasure that I rise to speak on the Estimates and, in particular, on finance. Sitting through the Treasury Estimates was quite enlightening in particular, because it gave me a real insight into the role that Treasury plays in giving an independent voice and an independent oversight of Government finances, and when we listened to Treasury, we got pretty much unedited the great state that New Zealand’s finances are in.

Now, that’s not to say there’s not challenges ahead and that things don’t change, but when you get constant year-on-year growth, you know you’re in a good position to face the international storms that may be ahead. So whilst there has been a drop-off in GDP growth, Treasury could tell us why that happened, and it wasn’t due to things that those on the other side would carp on about, but it’s due to entirely explicable reasons such as slowing immigration, a policy which this Government has implemented. So we have what Treasury described as solid growth, and to be quite frank, I’d rather have solid growth, year on year, than the erratic kind of growth that the policies of the last Government would have given us.

What’s more is we heard that our economy is at full capacity—that is to say that there wasn’t a whole lot of extra space in there for utilisation. We know that employment is pretty much full: 3.9 percent. There’s a few people out there who could get jobs, and I know we’re working very hard on that, but there’s not a whole lot of people out there to come into the workforce. So that’s really good, and the fiscal outlook is good. We were told that, in fact, core Crown debt is tracking down, as had been predicted, and, in fact, we are now in the much needed position, Treasury tells us, that Crown expenses can go up to meet the deficits in things like infrastructure and social spending. So core Crown expenses will, in fact, go to an 8.3 percent increase this year—and that’s very much needed—and will then still increase by slightly less next year, to 6.8 percent.

So that’s really good, because we know there’s a whole lot of work to do—a whole lot of catching up to do on fixing our hospitals, fixing our schools, and improving the welfare of our citizens—but against that background, we hear that revenue is increasing. In fact, our surpluses are going up. There’s going to be an extra $25.4 billion in tax revenue. That’s great news—that’s great news. What it means is that we’ve got a whole lot more activity. Despite the naysayers out there and despite the harbingers of doom and gloom, we’ve got a growing economy where tax revenue is going up and Crown spending is going up. So we can do things like the Families Package: spend billions of dollars looking after our families and our children so that they’re warm and cared for and they can meet their expenses on a day-to-day basis.

Of course, we heard about the Living Standards Framework. I must say that the Minister spoke eloquently about the Living Standards Framework, and what a great innovation it was—the whole idea of across-department bids for funding. So we know that if we’re going to apply for funds, we don’t simply want the Ministry of Education applying for funds for the mental health, but we’re also getting the Ministry of Health coming for those funds, or Whānau Ora—a whole lot, across the range—so that parties are working together and are not at cross purposes. It’s that whole idea of not simply saying how much we’re spending and what the outputs are but what are the real mental health outcomes of a spend, for example.

So it was really good to hear that, and to hear an explanation of the distinctions between human capital and social capital. The idea of education being partly human capital, increasing the nature of us as individuals, but also being part of social capital—the idea that we’re a better society for it. If, for example, in our schools we learn Te Reo, we’re a better, more connected community. So it was really good to see the Minister of Finance explaining that innovative approach and talking about what a strong position our economy is in.

I call the Hon Paul Goldsmith.

That’s very kind of you, Madam Chair, and it’s great to speak on this element. We’re talking about the finance side. Remember that this was called the botched Budget—the botched Budget. People might’ve forgotten. One of the things that, of course, we spend the money on Treasury for is to do the basics well, which is to draw up a Budget and not put it on a website three days before the Budget so that everybody can see it, and then turn around and complain about the Opposition doing their job, which is researching about what the Budget spending is all about. Remember that this was a Budget—the first time I’ve ever seen a Budget delivered on a Thursday and the Prime Minister wasn’t on the television news that night talking about the Budget. She was running a mile away from it because it was a shambles—the way that it was delivered.

But then we come to the issues of the actual Budget and what it delivered for itself. I think things are crystallising in the hearts and minds of New Zealanders around the country as they reflect upon this Government’s economic management, or lack thereof, at a time when the economy is slowing and business confidence is through the floor and people are wondering about where we’re heading as a country and what we’re achieving. The three issues that are crystallising are that this Government knows how to spend, and there’s no question about that, but what is the quality of the spending? It’s very easy to spend lots of money, but it’s much harder to spend it effectively and to actually achieve something purposeful with the money that’s being spent. So the quality of the spending—that’s one issue. The second issue is delivery. This is, of course, the year of delivery, remember? We were told “This year is the year of delivery.”, and we’re just hoping—we’re hoping against hope—that the only thing that they deliver is not a slowing economy. So we’re asking every month: what are they going to be delivering with all this money? The third issue, of course, is the question of competence: is this Government actually competent?

I want to go through these things. So, spending—when we look at the spending, what are we getting for all this money? Well, Shane Jones is wandering around the countryside with a roll of twenties, handing them out in a very loose fashion, where he himself described the nature of the decision making as “To the victor goes the spoils.”, “To the winner goes to the booty.”, and when really pressed on the issue, “That is the way the cookie crumbled.” So that is the quality of the spending decision framework that we have for the $3 billion in the Provincial Growth Fund.

Treasury, which we’re giving all this money to, who are supposed to be focused on ensuring that there’s good quality outcomes for the spending that it’s responsible for—what are they going to do? To work out how effective the money that is being spent in the Provincial Growth Fund is, what are they going to do? They’re going to spend the $3 billion and then do a quick survey at the end to figure out whether they got any value for money. Now, that’s the way that this outfit is running the economy, and no wonder people are nervous.

Then, of course, we think of the fees-free programme, and we all know that we’ve spent hundreds of millions on that and we’ve actually got fewer students than we had in the first place. We can all list examples of very poor quality spending and waste.

Then when it comes to delivery, what were they going to deliver? That is the question that’s hanging around, because this is a Government that seems to think that all they need to do is announce that they’re going to spend a whole lot of money and then the problem is solved. You know, a lot of people agree with the idea of spending extra money on mental health—$1.9 billion. Great, but that is not the solution. Just announcing that you’re spending the money is not the solution. They’re having to go around the countryside and talk to people about how they should actually spend this money and what they should actually do. You would think they would’ve done that thinking before.

So it’s a question of delivery—that’s the question—and why people are worried about that is because of the manifest incompetence that the Government has demonstrated so far in the way that they’ve done things. We think of KiwiBuild, of course. Remember Phil Twyford stomping up and down the countryside? “What a bunch of idiots the National Party were. They didn’t know how to build houses. We’re going to build 10,000 houses a year. We’re going to build 100,000 of them. This is easy—this is easy.” Then, we’d see him after the election, and I’d go up to him and pat him on the shoulders and say, “Thank goodness, Phil Twyford, that you’re going to fix the housing crisis.” And what happened? Well, nothing, actually. What are we up to?

💬 Matt King: 280.

Is it 280? I thought it was 73, but it could be 280. They’ve completely given up on KiwiBuild—it is a disaster and a shambles. We would’ve liked to have seen it succeed. Of course all New Zealanders would like to see some real progress on housing affordability. It’s one of the great issues of the day, and it’s one of the great focuses of the economic discussion document that we released on Monday, which I’ll refer to—a great document which outlines how the National Party would go about restoring confidence, reviving the economy, and lifting our aspirations as a country, both in terms of what we can earn but the problems and the challenges that we can overcome as a country.

Tēnā koe e Te Heamana, e tino harikoa ana ahau te tū i tēnei pō ki te kōrero e pā ana ki tēnei kaupapa, arā, mō te pōti pūtea. He mema ahau o te komiti pūtea. I reira anō hoki ahau mō te kōrero o te taenga mai o Te Minita mō te Pūtea, arā te Hon Grant Robertson. I rongo ahau i ōna kōrero, kua pānui ahau i te rīpoata me te tuhinga roa anō hoki.

E hiahia ana ahau ki te whakawaha ake ētahi o ōku whakaaro i puta mai i taua hui. I te tīmatanga o taua hui, ko te amuamu a tērā taha o Te Whare, mō te kore tae mai tētahi o ngā tāngata o te kaitohutohu kaupapa pūtea. Koirā noa iho tā rātou kōrero mō te nuinga o te wā i roto i taua hui, taua komiti.

Engari i āta whakarongo ahau ki ngā kōrero o Te Minita. I mea mai ia he tuatahitanga tēnei, he Tahua Pūtea e hāngai ana, e titiro ana ki te oranga o te tāngata, ki te oranga o tēnei motu o Aotearoa. He tuatahitanga tēnei Tahua Pūtea. He aha ai? I whakamārama mai Te Minita te rerekētanga o te hanga i tēnei Tahua Pūtea, ki ērā atu i ngā tau kua pahure ake nei. I aromatawai te kaitohutohu kaupapa pūtea i ngā tikanga o tēnei mea te oranga. Arā ko te pūtea, ngā rawa, ko te taiao, ko te hapori, ko te tāngata anō hoki. E hāngai pū ana tēnei Tahua Pūtea ki te Anga Paerewa Oranga, arā ko te Living Standards Framework.

Nā, ka tae mai ngā tono o ngā tari kāwanatanga katoa, ka aromatawai te kaitohutohu kaupapa pūtea. He aha te rerekētanga o ngā tono i puta mai i tēnā? Tuatahi, i piki ake te mate ā-hinengaro, te māuiui o te hinengaro o te tangata. Ki te mea tuatahi, me hoatu moni, me hoatu pūtea tēnei Kāwanatanga. Mehemea e hiahia ana tātou te kite kia piki atu te oranga o tēnei motu, ngā tāngata katoa e noho ana i roto i tēnei motu, koia tērā te mea tuatahi. Tuarua ko te whakapiki ake i te oranga o ngā tamariki, ko te whakaheke i te noho o te pōharatanga o ngā tamariki i roto i Aotearoa nei. Tuatoru, ko te whai mahi. Ko te mana i roto i te mahi. Ko te whakawhanaketanga i te ōhanga o Aotearoa. Tuawhā, ko te tautoko i ngā wawata, i ngā hiahia, i ngā tūmanako o te iwi Māori, o ngā tāngata o te Moana Nui a Kiwa anō hoki. I te mea mutunga, ko te whakangao hei tū pakari, tū roa, ngā hōhipere, ngā kura, wērā mea katoa i roto i Aotearoa.

Nō reira i te rerekētanga o te aromatawai i ngā tono o ngā tari Kāwanatanga, koia wērā ngā mea i puta mai i taua whakamātautau, koia ngā mea i whiwhia nei te pūtea. Nō reira e kite ana tātou ko te mahi a Te Kāwanatanga ko te tohatoha i ngā moni, ko te hoatu i ngā moni, ki te whakatikatika i ngā raruraru nui kei mua i tō mātou aroaro.

E hia kē ngā tau ēnei raruraru e titiro ana mātou, e kite ana mātou, engari horekau he mahi. Engari kua tīmata te mahi ki te whakatikatika i tēnei tūāhuatanga o wēnei raruraru kino i roto i Aotearoa nei. E mōhio ana mātou e kore e taea te whakatikatika i te pō kotahi noa iho. E kao. He nui ngā mahi kei mua i te aroaro. Ko te mea nui, kua tīmata tēnei Kāwanatanga ki te whakatikatika i te nui o ngā tamariki e moe ana i roto i ngā motokā. Te mea horekau he whare. Rātou horekau he mahi. Kua heke te nama o ngā tāngata kore mahi ki te 3.9 paihēneti o ngā tāngata. He mea pai tēnā. Nō reira, ko te mea nui kua tīmata mātou te āta titiro ki tēnei mea te oranga. Tēnā koe.

[Greetings to the Chair. I am pleased to stand tonight to speak about this matter, namely the financial vote. I am a member of the Finance and Expenditure Committee. I was also there for the discussion with the Minister of Finance, namely the Hon Grant Robertson. I heard what he said, and I read the report and also the longer version.

I want to express some of my thoughts that emerged from that meeting. At the start of that meeting, the Opposition of this House was complaining that none of the people from Treasury had come along. That was all they had to say for most of the duration of that meeting, that committee.

However, I listened attentively to what the Minister said. He said that this is a first, a Budget which is aligned with, and looks at, the wellbeing of people, the wellbeing of this country of New Zealand. This Budget is a first. Why? The Minister explained the difference in the structure of this Budget, to those of years past. Treasury has assessed the meaning of the concept of wellbeing—namely, financial, material, environmental, community, and also people. This Budget is directly aligned to the Living Standards Framework.

So, the requests of all the Government departments came in, and were assessed by Treasury. What is the difference of the requests which arose from this? Firstly, there was an increase to mental illness, the sickness of a person’s mind. Firstly, money should be given, this Government should allocate budget. If we want to see an increase in the wellbeing of this country, of the people living in this country, that is the first thing. Secondly: to increase the wellbeing of children, to reduce the children living in poverty in New Zealand. Thirdly: employment. Having status within work. The development of the economy of New Zealand. Fourthly: supporting the dreams, the desires, and the aspirations of Māori people, and Pacific people. The last thing: investing so that the hospitals, schools, and such like in New Zealand stand strong and long.

Therefore, the difference in assessment of the requests from Government departments, these things are what emerged from that test, these things are what received the funding. Therefore, we see that what the Government is doing is to distribute money, give out money, to address the significant problems which lie before us.

We have been looking at these problems for so many years, seeing them, but yet nothing has been done. However, the work has begun to address this aspect of these terrible problems in New Zealand. We know that it won’t be fixed overnight. No indeed. There is much work ahead of us. The main thing is that this Government has started to correct the number of children who are sleeping in cars, those who have no house, and those who have no work. The number of people who are unemployed has reduced to 3.9 percent of people. That is a good thing. Therefore, the main thing is that we have started to really look at wellbeing. Thank you.]

Thank you, Madam Chair, for the opportunity. First of all, I would like to pay my tribute to the former member of Parliament from New Zealand First Pita Paraone, who passed away recently. I had the chance to work with him for three years in Parliament, so I would like to start with paying tribute to him.

I would like to touch upon some of the votes which are under governance and administration. It has got a very wide scope, particularly when we talk about internal affairs. There are seven Ministers responsible for this work.

I would like to start with the Fire and Emergency New Zealand Act, the Act which was enacted in 2017 with the intention to bring the rural fire and the fire services together so that there could be substantial savings made in the future. But what we have seen is that the time line which was set, this Government has not been able to achieve and stay on that time line. Particularly, as we know, the funding for Fire and Emergency New Zealand is through the insurance levy, and the intention was that on 1 July 2019, the new levy regime would be enacted. But what we have seen is that the Minister of Internal Affairs has extended it by another four years, and it will continue to be running into surpluses. Every year, we will have almost $75 million in surplus and, afterwards, almost $600 million in surplus.

We have been asking the Minister where that money will be invested, and the Minister mentioned in her presentation that it will be used for upgrading the assets of the rural fire services. But still, I think it is not justified that we keep on getting the surpluses and the levy payers—particularly, New Zealanders—keep on paying extra money without any plan from the Minister. We want to make sure that the money which is collected is well monitored by the department, and I hope that Minister will be taking care of those areas.

The other area which I would like to touch upon is that the example has been given that the rural set-up will be upgraded with the earthquake. We saw that one of the stations to be newly built cost around more than $1.5 million and a similar kind of set-up in Australia costs about $500,000. So there is a huge gap. I know the Minister mentioned that she will look into this issue and then report back to us.

Another area which I would like to touch upon is gambling. We have seen that Skycity has teamed up with a company with a Mediterranean base to set up online gambling. The people of New Zealand can access those online gaming machines, and millions of dollars will be going offshore. We know that it is a big problem, and every Government has been focusing to reduce the harm from gambling. But this money, when it goes overseas, there is no benefit for the local community, whereas the money spent on the class 4 machines—which normally are known as pokies—is reinvested in the local communities. But this money will be going offshore, and it will be profit for those companies. That issue was raised with the Minister also.

Another area which I would like to touch upon is the funding for the Language Line, which is very important to the migrant community because—particularly with seniors—sometimes they are not able to speak English very fluently, but with the help of Language Line, they are able to communicate with the different departments of the Government. But the funding for this is also a challenge, and I hope that the Minister, in the future, will get some money on this.

Lastly, I would like to touch upon the racing industry, where the Minister for Racing mentioned that he will be putting up $1 million, which will be matched by the industry for the contestable fund.

Madam Chair, thank you for the opportunity to take a call in this Estimates debate. I’d also like to acknowledge the passing of Pita Paraone. My condolences to his family, and my thoughts and prayers. I know he was a man of strong faith. I actually stood against Pita in Hamilton East in the election in 2017, and he was a very honourable gentleman. My condolences go to New Zealand First, as well.

We’re hearing from the Opposition a lot of hot air, but we’re not really hearing a lot of plans. We’re not hearing a vision of what they would do differently. They’ve put out a few economic policies from the 1980s and they’re saying, “That’s our plan.” But we have a Government with a plan and that plan is to tackle the long-term issues that are being faced in New Zealand, and we’re getting on with the job.

I’m going to explain some of the ways how we are tackling those long-term issues. We’re taking a long-term view. We’re looking 30 years ahead, not just three years ahead. One of the key ways we’re doing that is around investment in rail—investment in rail. We heard from the Minister of Finance. He said rail transport would connect the regions to the major cities—connecting the regions and the cities. I was over in the UK recently, and we talked quite a bit about Brexit. One of the aspects of Brexit that concerned me was the rural/urban divide. We have a Government who are working hard to invest in our regions as well as in our cities, taking a balanced approach to all areas that we’re doing.

One of the key areas, as I said, is around rail. Now, we have an incredible rail network across this country, built by our fathers, grandfathers, forefathers—

💬 Kiritapu Allan: And mothers.

—and mothers over many, many years. That network has not been utilised as well as it could, but this Government is taking a different approach from what we’ve seen previously. That approach is to invest in that network, both for heavy rail—taking trucks off the road and reducing emissions—but also for passenger rail.

One example in the area where I reside is passenger rail between Hamilton and Auckland. People have been wanting this for years, and as a Government we are delivering on that. In the middle of next year, there’ll be passenger rail between Hamilton and Auckland. Why isn’t there passenger rail already—why isn’t there passenger rail already? Because there was no vision from the previous regime. But this Government has a plan and a vision.

Some of the key aspects around that will be raising productivity. If you’re sitting in a car, you go from Hamilton to Auckland, and as soon as you hit that Southern Motorway, you’re sitting in a car, often for an hour or so, and there’s a huge loss of productivity there. There’s a huge loss of productivity.

The Opposition are sharing all these ideas they’re offering. Why didn’t you do it in the past nine years? Why didn’t the members do it in the past nine years? Because there was no vision. But we have a vision around rail, taking a balanced approach to transport.

I’m going to talk about another aspect which was raised, and that was the Provincial Growth Fund. So this is an investment within the Budget: the Provincial Growth Fund. Now, from the Opposition members, at times, we hear negative comments about the Provincial Growth Fund, and they say these negative comments in the House. But I’ve been in the electorates with, particularly, some of these rural MPs, and they secretly love the Provincial Growth Fund. They love it. We know that they love it.

💬 Kiritapu Allan: They love it because their constituents love it.

Their constituents love the Provincial Growth Fund. Their mayors love the Provincial Growth Fund. Their economic development agencies appreciate the Provincial Growth Fund. The reason they do is because after nine years of neglect in the regions, we’re seeing investment back into the regions of New Zealand. We’re seeing people come together. We’re seeing groups come together to organise business cases, to plan, and to lift their heads up again and think about what could be possible in their region. We’re seeing through this fund not just the money that’s been invested but also, even before that, people coming together to plan, to develop business cases, and to actually look at what could be possible within their region.

Look, I’ve got 30 seconds left. There’s so much to talk about, but I might just finish on one more thing. As a former schoolteacher, I would like to briefly touch on the aspect of education. There was an investment within education from Vote Finance, and that’s $1.2 billion for classrooms. Principals have been telling me for years that they need more classrooms, particularly in the high-growth areas—

💬 Hon Member: Nine years?

—nine years, actually—and this Government are delivering in that area. Thank you, Madam Chair.

Lawrence Yule.

Sorry, Mr Bayly.

💬 Andrew Bayly: Oh, you are just being difficult, aren’t you?

Look, I know—I know. I apologise.

On this side of the House, we are incredibly happy. The Hon—he’s not honourable, actually. Fletcher Tabuteau said we’re sad. We’re not sad; we’re incredibly happy.

As part of my contribution on the Estimates, I do wish to give a little bouquet out at the beginning of this contribution. My colleague from Hawke’s Bay, the Hon Stuart Nash, is looking very stern this evening, but I would like to say that as part of the revenue budget, I do want to congratulate the Hon Stuart Nash for the changes to the tax system, which are substantial and they generally went through without a hitch. So he should be happy about that—and that’s the first smile I’ve seen from him all evening. So it’s nice to give out a bouquet at the beginning.

However, in this year of delivery, there are two things I want to talk about. One is the 2018 census and the Statistics New Zealand budget, and the other is the Ombudsman. The 2018 census can only be described as an unmitigated disaster, and even today in a select committee, on public record, we asked questions. We actually asked for an inquiry to be done. Of course, it was blocked by the other side, because they’re not interested in openness and transparency. They showed us a report that’d been done, which I read. There are probably more questions than answers in that report.

The reason I want to talk about this in my contribution is because if you look at the Estimates summary, it says that there were some major lessons learnt—they spent too much time and money on the online part of it—but the bit that worries me the most is that we are now transferring $6 million from the 2023 census back into the 2018 census to try and fix up the mess.

Then, further on in the budget, the way of funding that is to discontinue surveys—surveys that are important to New Zealand for New Zealand’s transparency and understanding. So there is no longer going to be an accommodation survey. There is no longer going to be an energy use survey, a screen industry survey, or an internet provider survey. That’s what Stats New Zealand have decided to do to save $4.5 million to fix up the mess and the $6 million they’ve had to transfer from the 2023 census.

When I stand back and look at this, this Government should simply have said, “A lot of mistakes were made. We need to fund it. We need to fix it.” Instead, what we’re doing is compromising the future of those surveys and the future understanding of New Zealanders. I don’t think anybody in the New Zealand public quite understands the significance of the census data. Today, we were also advised in select committee and on public record that the data for the household numbers will be released in September, and we were also told that that’s likely to be enough to form electoral boundaries. So electoral boundaries will be formed on a census that 800,000 New Zealanders didn’t complete, and a $120 million cost was involved. It’s now $126 million because we’re nicking money—or “pinching” is more a parliamentary term—from 2023.

Now, I just think this is outrageous. Here we have a Government in the year of delivery that has significantly under-invested, underutilised the services. A person has been held accountable and is leaving, but as of today I have no guarantee that the lessons have been properly learnt. We have wasted money, we’ve wasted resource, and a once-in-five-year opportunity has been completely blundered.

The other thing I wish to talk about this evening is around the Ombudsman. It’s been mentioned by my colleague the Hon Jacqui Dean, and it’s around the proactive release of Government material. So, in December 2018, the Government announced its intention to release details from Ministers’ diaries on all meetings they attend. Then, it’s actually that they want to be more proactive about providing the advice they receive. It now can take, as the Hon Jacqui Dean said, three months to get that material to be proactively released—longer than you can get it under the Official Information Act. The Chief Ombudsman told us the objective is that the material be released on a weekly basis, once Ministers’ offices understood how the new system works. How difficult can that be—to release information you have in an electronic way?

Madam Chair.

💬 Hon Member: Go on, give him a go.

CHAIRPERSON (Hon Ruth Dyson): Andrew Bayly.

Oh, Madam Chair, you are so gracious.

That was a very good speech from my colleague Lawrence Yule. I’ve got to compliment him. I think I know why Mr Nash is smiling. I know why he’s smiling, because he’s overseeing this huge tax take, where this Government is going to take, what, about $80 billion this year, and in four years’ time is going to be raking in $100 billion worth of tax every year. That’s the Minister in charge of it, the Minister of Revenue. That’s why he’s smiling. It’s nothing else. That’s why he’s smiling.

I heard from the previous Labour speaker, Mr Jamie Strange. He said “What’s the plan? What’s the plan?”, and he looked at us. Well, actually, we know what the plan is. The plan for this Government is to tax more and spend more, and that’s the issue. We know they’re really good at taxing, because we know that they have introduced all these new taxes. I was looking at a list here, actually. It is extensive. Apart from cancelling our tax relief, there are three new fuel taxes, the regional fuel tax, extending the brightline test, ring-fencing losses, Amazon tax, GST on mobile roaming, WorkSafe levy increases, tourist tax, car taxes—all these taxes—and that is why that revenue is growing so dramatically.

But I think the reason why everyone on that Government side looks across at us and they claim that we’re black and we’re talking down the economy—well, the fact is that this is a squandered opportunity. This Government is actually squandering a huge opportunity, because, as we know, when they came into power a short 20 months ago, we had an economy that was actually motoring along. We had an economy that was growing strongly, at just under 4 percent—in fact, their stats were 3.3 percent every year for the last three years of our office. Now, it’s down closer to 2 percent, and what that means is that for every year, we’ve lost, roughly, about $5 billion of activity, if you say that we’ve lost nearly 2 percent, and it means that the Government’s lost nearly $2 billion of tax revenue. That is because the business community, the people that go out there and be entrepreneurial and hire people, are worried about what’s going on, and that is the issue that we’ve got going on.

I hear this thing about the headwinds, about the world economy and all that sort of stuff. It’s not true—it’s not true. If you look at the exports from New Zealand, they have grown month on month, right up to the last month that was reported—last month. There has actually been no impact on the exports from New Zealand, and that’s on the back of fantastic terms of trade. We’ve got a lower dollar; we’ve got all the things going right for us. This is not what is affecting the New Zealand economy. It may do in the future, but at the moment, our exporters are rocking. They are sending more goods overseas at higher prices, and that’s why our export receipts to this country have gone up month on month.

The real issue about what’s going on is nothing to do with exports. It’s about what’s happening locally, and that is just where people are worried about what’s happening with this Government. I was actually in a meeting with some business people the other day. One owned a machinery hire and tool hire business; the other one was a concrete-cutting machinery business. Both were local businesses with no export potential—don’t even talk about export. No foreign exchange exposure—nothing like that. All they were exposed to was what was happening in New Zealand, and they were just so angry at what’s going on with their businesses. They employed people, and they were all talking about the avalanche of changes that are having an adverse impact on their businesses.

They were talking about how their wage bills have gone up so dramatically. We all understand the need to raise the minimum wage, but the cascade going up through those businesses immediately meant that they were having their profits, if they were in that situation—but certainly driving them towards a loss situation. They were worried about the working conditions. They were worried about just the lack of activity, of people coming into their business. That is the loss of confidence that we’re seeing in this economy, and that is through poor governance. That poor governance is through poor Government, and that is the disappointing, squandered opportunity.

Thank you very much, Madam Chair. What a confused speech—we had a man who used to be the Opposition spokesperson for revenue talk about the fact that there’s this massive tax take, and yet the economy isn’t doing well. When you get more taxes because the economy is actually booming, it is doing very well, Mr Bayly.

The issue that is being faced is the fact that there’s record low unemployment, record high wages, and wages are growing, but there are a lot of long-term challenges that this Government is not afraid to tackle. We’re going really hard on them, we’re trying to grow productivity, and you know what? It’s the ideal situation: interest rates are low, full employment—now is the time when companies are investing. The thing about New Zealanders—and I hear this wherever I go—is they know that we can’t solve all the problems overnight. They know that it’s going to take time, but the thing that they respect about this Government and this Prime Minister in Jacinda Ardern is—you know what? We’re taking on the hard challenges and we’re winning. We’re making a difference—we’re making a difference. Wages are up, unemployment’s down, and the economy is doing really, really well.

Let me talk just a little bit about what’s happening in the revenue area. It is a time of change. What we have done as a Government is we have said it’s about fairness. We want multinationals to pay their fair share, and that’s what we are doing. So what we’ve done is we’ve passed legislation around base erosion and profit shifting. In common English, that is multinationals with a presence here, they are now paying their fair share. We have gone out and consulted on a digital services tax. This is, again, about multinationals paying their fair share. We are working with the OECD to come up with a solution, because it is not right that New Zealanders are working incredibly hard and paying their fair share, and multinationals do not—multinationals do not. This is a challenge that we are working incredibly hard on with the international community.

What we are also doing is we are putting GST on low-value goods, because what, again, has happened for far too long is Kiwis that own retail outlets on the main streets of New Zealand towns and cities are paying GST, yet the way retail is going globally is that people are buying stuff offshore, and if it’s below $400 they’re not paying any GST. We just do not think it is fair that overseas companies get an immediate 15 percent advantage. We are levelling the playing field and making it fair for those who are running a small business, running a retail business, in this country. That is about fairness in the tax system. It’s coming in on 1 December, and I think it’s a fantastic initiative.

There are some other things we are doing: release three of Business Transformation. Now, Business Transformation is the largest project in the State sector. It is being run incredibly well by one of, I think, the most competent State sector CEOs in Naomi Ferguson. She is doing an absolutely magnificent job. What release three did was it bought income tax in. There’s well over a million Kiwis that have automatically into their account got paid, on average, about $400. We have returned over $570 million of tax owed by Kiwis to their bank accounts. There have been some Kiwis that, I admit, have had to pay more money, but this is, again, about using the tax system to drive fairness—to drive fairness—which is what the tax system should be about.

There’s another two tranches to come in Business Transformation. It’s a $1.8 billion project, and the level of governance and the level of oversight is fantastic. In fact, about every six months, there’s a KPMG team that come over from the UK. These are world-leading experts in managing and reviewing systems of this size—global systems—and they have said to myself and Minister Robertson that this is one of the best-run projects in the world. So I take my hat off to Naomi Ferguson. I take my hat off to her staff, they are doing an absolutely fantastic job. I take my hat off to the IRD staff who are working with the OECD to find a solution to digital services taxes.

But the last thing I will say is that in the revenue area there are a number of challenges—there’s no doubt about that. There are a number of challenges and they are difficult challenges, because we want to balance things up. We want to make it fair, but we are facing those challenges head on. We’re working incredibly hard to make sure that the tax system works for all New Zealanders. Thank you very much.