Appropriation (2022/23 Supplementary Estimates) Bill, Imprest Supply (First for 2023/24) Bill

I move, That the Appropriation (2022/23 Supplementary Estimates) Bill and the Imprest Supply (First for 2023/24) Bill be now read a second time.

This is a feature of the House’s programme of looking after expenditure in the House. I’m just looking at the—yes, Mr Speaker, that’s right: I’ve plenty to say, but don’t need a stopped clock to do so. This is a regular part of the—

Chris Penk: It just feels like it!

Hon GRANT ROBERTSON: Just like Mr Penk, a stopped clock tells the right time at least twice a day. It’s good to have it going now, though.

This is a regular part of the financial processes of this House, to put these two bills together and pass them in the way that we are. I think it might be helpful at the outset just to go through again for members exactly what these two bits of legislation do. The Appropriation (2022/23 Supplementary Estimates) Bill seeks appropriation by Parliament of changes to appropriations and new appropriations for the 2022/23 financial year that the Government agreed to between 22 April, when the 2022/23 Estimates were finalised, and 23 April, when the 2022/23 Supplementary Estimates were finalised. Spending against these appropriations has already been incurred under the authority of imprest supply, but unless this spending is appropriated by Parliament before the end of the 2022/23 financial year, it would become other unauthorised expenditure requiring validation by Parliament in the appropriation (confirmation and validation) bill. I want to thank members of the Finance and Expenditure Committee for their prompt—

Chlöe Swarbrick: Great committee.

Hon GRANT ROBERTSON: —indeed, a great committee—scrutiny of and report back to the House on the 2022/23 Supplementary Estimates bill.

The Imprest Supply (First for 2023/24) Bill is needed to provide the sole parliamentary financial authority for Government spending in 2023/24 until the Appropriation (2023/24 Estimates) Bill—the Budget—is passed. As the third reading on the latter bill must take place before the House rises on 31 August before the election, this imprest supply bill provides supply for the first two months of the 2023/24 financial year. In addition, it is standard practice for imprest supply bills to cover possible materialisation of fiscal risks and the uncertain timing and spread of expenditure.

On the imprest supply bill, just briefly, what it does this time around is seek sufficient authority for the Government to incur a maximum of $27 billion in expenses, $9 billion in capital expenditure, and $1 billion of capital injections. The total imprest in the bill is lower than what has been provided over the last three years. That’s partly because it’s dealing with only expenditure up until the general election but also because the amount provided has been declining over time as the COVID-19 emergency response spending has become a less significant part of what the Government is doing.

As I’ve said many times when I’ve spoken on imprest supply bills, these are limits; they are not targets. They provide room for the Government to be able to undertake the business of Government until such time as the Budget has passed, but they also by necessity build in a buffer to that approach in the unlikely event that something occurs that means we need to use expenditure that hadn’t otherwise been foreseen. Obviously, during the COVID period, this was happening on a much more regular basis, and therefore we were closer to the limits on occasions. I would expect in this case to be quite some distance from the limit unless there is some largely unforeseen thing that arises. So imprest supply is very much part of the way Government runs due to the timing of the return of the Budget from select committees, where it currently is being interrogated, and it is an important part of allowing the Government to get about its business until that time.

Returning to the Appropriation (2022/23 Supplementary Estimates) Bill, I do just want to take the time of the House to highlight the fact that this bill does contain the Supplementary Order Paper (SOP) that has just very recently been tabled into the House. That is not the normal practice when it comes to this kind of bill, but it does happen from time to time. I can recall debating it when I was in Opposition and I can also recall doing it during the COVID period. This occurs when we end up with some expenditure that is required by the Government to be undertaken after the time at which the Supplementary Estimates are finalised.

The Supplementary Order Paper in this case relates to the Government’s expenditure that we’ll be undertaking when it comes to the North Island weather events and the need to have a policy in place to be able to manage those who will have to relocate from their current residences, as well as some other expenditure that is required with relationship to support for councils to be able to undertake works. While not much, if any, of that expenditure will actually take place during this financial year, given that the Government has taken a decision that it will cost-share these situations with local government, it is necessary to reflect that into the Supplementary Estimates. So in many ways it is accounting that leads us to this place. While we don’t expect to pay out that money in the financial year, what the public finance rules tell us is that if the Government makes a serious determination that it will be doing this, we then have to account for it under the rules of good financial management.

So an amount has been put aside there for this. That is to make sure that we have appropriated the funding; it doesn’t meant that it will necessarily be spent. So I hope that that is clear for the House as to why that came about. It came about due to the timing of the decision to do that after the Supplementary Estimates closed.

There is, of course, a committee stage for this bill, which will take place immediately after the second reading, where we will be able to go into in any more detail that members want on the Supplementary Order Paper. Committee stages are not used to debate the individual Supplementary Estimates, but where there is an SOP, the committee stage offers an opportunity for us to be able to do that.

More broadly in terms of the Supplementary Estimates, what they show is that throughout the period of the year there have been reasons to alter appropriations. Sometimes I think when members are considering such matters, they consider perhaps that we’re talking about all new extra expenditure. That is not always the case. Sometimes an appropriation changes its nature, as opposed to the amount of money that is going in. Sometimes it is simply to enable spending to remain appropriated and fit within the appropriations. So an example for that was a change to Vote Conservation in the Supplementary Estimates this time around, where the Jobs for Nature funding had changed its nature, and rather than leave the appropriation as it was, that was altered and updated.

Sometimes it indicates that there has been a need for extra funding, and on a number of occasions in the Supplementary Estimates that are in front of the House today, that has been caused by the fact that the cost of doing things—the inflation issues that we’ve debated many times in this House—have affected Government expenditure. So one example of that is a change in Vote Corrections which is largely around the Waikeria Prison project and the fact that the expenditure on that has been greater than expected due to some of the finance costs and inflationary costs that are related to that. So that is a reason to be able to make changes.

Sometimes when we make changes to Supplementary Estimates, it’s because of circumstances well and truly beyond control. So, for example, in putting together the census, when Cyclone Gabrielle hit, there was a need to make changes to the way census collection occurred to ensure that we did have those in the areas affected by Cyclone Gabrielle counted, and so Vote Statistics has a change within the Supplementary Estimates here to make sure that we were able to count all of those people. So that’s an example of where some matter that was unforeseen means that an appropriation needs to change.

Sometimes it’s to do with the way in which we fund things. So members of the House will be well aware that the Government, over a reasonably long period of time now, has been subsidising the cost of fuel both through the fuel excise duty and road-user charges. What that means is that in order to make up the difference from what is required for the National Land Transport Fund, the Government has been topping that fund up, rather than it being through revenue. That has to be reflected in the Supplementary Estimates as a change in terms of the way that the Government goes about what it does.

So, essentially, the Supplementary Estimates reflect the activities of Government through the period of the year that weren’t foreseen or weren’t part of the original Budget documentation, and, as I say, along with the imprest supply bill that we have in front of us today, this is legislation that is usual and normal and part of our parliamentary process. The one exception this year, as I noted, is around the SOP that we have, which, as I say, we will be able to have the opportunity to go through during the committee stage of this debate. But I would just emphasise again that the timing of that decision came after the close-off of the Supplementary Estimates.

I hope members of the House would agree that providing certainty to those who are in areas that have been affected by the cyclone justifies the approach that we are taking here. But as I say, actually, this is simply to make sure that we record the decision as opposed to that expenditure taking place in the remaining week of the financial year, or, indeed, up until the audit of accounts is finished. It just makes sure that we have tidied away a decision that Government has made and that members of the House can be clear about that. With that, I commend these bills to the House.

The question is that the motion be agreed to.

With this legislation, the Labour Government is, effectively, asking Parliament to sign off on continuing to fund its ongoing economic mismanagement, because in these two bills, we, the representatives of New Zealanders, are asked to say yes to that Minister of Finance’s proven record of failure in which we have an economy in recession, we have a cost of living crisis that has entered its third year, and in which New Zealanders from all walks of life are struggling to get ahead. These bills ask Parliament, in that context, to sign off on a Budget that fails to deliver overdue income tax reduction.

Members opposite, today, have crowed about that, that beneficiaries in New Zealand have had their incomes rise 40 percent, even when you account for inflation. Well, I would ask members opposite to reflect on what has occurred for the everyday wage earner, who, by almost any measure, has gone backwards, whose wages have not kept up with inflation, whose after-tax wages have fallen behind inflation, such that they are going backwards in real-income terms. That is the economic situation New Zealanders find themselves in under this Labour Government.

Faced with the opportunity to account for some of that inflation, to reduce the income tax that workers pay, to adjust tax thresholds to compensate for some of the inflation that Grant Robertson has let rip through the economy, this Budget has failed to do so.

So we on this side of the House will not say yes to bills that give that Minister of Finance another go with the money hose, because we’ve seen what he does with that money hose. He sprays it all around without discrimination, without targets, without accountability, without clarity for what will be achieved. The result is record levels of inflation, which we were told would be transitory but, in fact, has gone on into its third year—inflation that is still running at more than triple what it should be, according to the Reserve Bank mandate.

What we have had as a result is interest rates that have risen faster than at any time in the history of New Zealand’s official cash rate. We have in front of us a ticking time bomb when New Zealanders from across the economy—first-home buyers, small-business owners, farmers—will, in the next few months, have to switch their home loan or their fixed loan from a loan with a rate of 2 or 3 percent to a rate of 6 or 7 percent. Many of them will not be able to cope with that. That interest rate will be the final blow for them. That is a ticking time bomb. Those interest rates have risen that fast because inflation has run amok in this economy.

In that context, the Minister of Finance is asking us to sign off on a Budget that completely fails to bring back-office bureaucratic spending under control, a Budget that fails to put in place any specific targets for what the Public Service will deliver. I look through this Budget and I see lots of money for restructuring, whether it’s at Te Pūkenga, the polytech centralisation; whether it’s at Te Whatu Ora, where we’ve got the new organisational chart and lots of restructuring happening; where we have the plans to restructure across the Public Service; but what I don’t see in this Budget are specific targets for the increases in services that will be delivered to New Zealand as result. That is a great failure.

We on this side of the House think that where money is appropriated, it should be clear what it’s going to achieve, Ministers should hold themselves accountable for achieving it, and where it’s not achieved, the Prime Minister should hold people accountable. But, actually, what’s happened on the other side of the House, whether it’s the $1.9 billion that went into mental health and didn’t deliver additional mental health services; whether it’s the money that was appropriated for the Provincial Growth Fund, in which the Auditor-General, the Public Service watchdog, came out last week and said that they cannot be confident that it has delivered value for money because the record-keeping was so poor, the processes were so poor, that the Auditor-General can’t even work out what was going on with all of the cash.

So what we see is that members opposite have become so used to dipping into the public purse, to using more and more taxpayers’ money, that they have become sloppy with the way they account for the use of that funding. The result is a Budget that will put more pressure on inflation and will put more pressure on interest rates right at a time when New Zealanders are begging and asking for some relief.

This is a Budget that will send more New Zealanders to Australia, because, unfortunately, too many of them will look at what’s appropriated for in this Budget and they will say, “Actually, there’s nothing here for me. There’s no income tax relief. There’s no prospect of inflation getting under control. There’s no prospect of my mortgage becoming more affordable. Actually, I can look to get a better opportunity elsewhere.”

I want to turn now to this whole process that we’re in, in which, with the Supplementary Estimates, we’re appropriating the money in between Budgets, essentially. I think it’s timely that we do so, when we see just how rushed this year’s Budget was. The Budget hasn’t even been passed yet—that’s why we’re doing these Supplementary Estimates—and yet the Government are already having to correct mistakes that were made in it. You heard the Minister of Finance speaking in some detail about some of those mistakes, in his remarks.

What you didn’t hear about was the tertiary bailout that he’s already had to announce today. So distracted was the Minister of Finance and the Minister of Education by their plans to centralise the polytechs in the form of Te Pūkenga, so distracted was the Minister of Education by her appearances at the Privileges Committee, that it appears—

Camilla Belich: Point of order. It’s not permissible for the member to make references to the Privileges Committee in a debate.

DEPUTY SPEAKER: That’s actually correct. The member will stand, withdraw, and apologise.

Hon Michael Woodhouse: Speaking to that point. This is an important matter, Mr Speaker.

DEPUTY SPEAKER: No, no; it’s quite clear that the member cannot make reference to an appearance before the Privileges Committee. That’s not a matter of debate; that is a black and white.

Hon Michael Woodhouse: Perhaps the Speaker can take advice. It is strictly prohibited for any member to refer to the deliberations of a committee. The fact that something has been heard in public before a committee is a matter of public record and is not a breach of Standing Orders.

DEPUTY SPEAKER: Thank you. No, the member is actually correct. The fact of the appearance is public record, just what can’t be referred to is anything that came out of the debate. I withdraw my request. Did we stop the clock there? We did stop the clock. So the member has two minutes and 30 seconds left.

Camilla Belich: Point of order, Mr Speaker. I’m not debating your ruling; I just want to make sure that—

DEPUTY SPEAKER: Well, I hope not.

Camilla Belich: —you saw and referred to Speaker’s ruling 213/4, which states, “Once a matter of privilege has been raised with the Speaker, it is out of order to refer to it in debate in the House.”

DEPUTY SPEAKER: No, the fact that the member has been before the Privileges Committee is a matter of public record. That’s what my ruling will be based on. So the member may continue.

NICOLA WILLIS: Mr Speaker, you’ll appreciate that the situation at our universities is one that we here in Wellington have had good cause to reflect on. I have had people working in that system say to me, “Where was the Government when we were begging them to invite the international students back? Where was the Government when we were saying to them, ‘If you don’t give international students some better visas, then they’re not going to come and there’s going to be a hole in our books.’?” Well, the Government was prepared to ignore all of that. It put together a Budget, and now today has decided that they are going to put on another band-aid. That’s just one example of the holes that we’ve already seen in Grant Robertson’s Budget.

The second example of a hole in the Budget that’s already having to be repaired before the Budget has even passed is the proposal for 20 hours childcare for two-year-olds. The sector were so unhappy with that proposal that they described it as unworkable. Before the Budget had even passed, Ministers were having to change the design and structure of it. It remains unclear whether that policy can be delivered without many, many early childhood centres either being forced to close or to reduce the quality of care they provide to two-year-old students.

And then we have the public transport debacle, where, again, with the Government that governs by slogans, we have a commitment to ensure free transport for certain age groups—but, again, the councils who are being asked to implement that say, “Well, that’s unworkable in its current form.”

My point is this: we have a Budget that is full of holes and we have a Budget that I predict—I predict—there will be many, many band-aids applied to in the months ahead. This is particularly important in the context of the Supplementary Estimates bill and the imprest supply bill, because what we will see is, in order to make it all stack up, you’re going to see the Minister of Finance finding a lot more cash down the back of the couch, and it’s going to be very hard to take him seriously, because he does that again and again. This is a Budget that delivers more debt, more inflation, and higher interest rates. It’s a bad Budget. On this side of the House, we will not support it.

It’s my pleasure to take a call in this debate on the Appropriation (2022/23 Supplementary Estimates) Bill and Imprest Supply (First for 2023/24) Bill. I think it’s important that we go back to that description that the Minister of Finance laid out in his first speech: exactly what this debate is about, what it does. It’s a very technical debate. I would draw members’ attention to the fact that this isn’t the Estimates debate. This is a very technical debate that does specific things.

What it does is it looks at the wash-up that needs to be done. Now, the need for these—if you’d only listened to the previous speaker Nicola Willis’ speech, you’d think this was some kind of anomaly, where we’re here in the House debating this bill, and that somehow this was a fix-up, because Government hadn’t done things correctly. In fact, these go back to 1989 and are a standard practice of the way in which Governments operate, in terms of the need between the expenditure that occurs between the setting of the Budget and the passing of the bill that brings that into law and also the things that change over the period of time.

So I’d just like to take on some of the matters that the previous speaker raised. So she said that already we’re back here in this House and we’re having to correct mistakes, and she used the example of tertiary education. It’s actually good to have an opportunity to actually talk about why it is that sometimes appropriations change. As some members of this House who have been involved in this will know, the Budget-setting processes happen late in the year, prior to the Budget being read. In this case, if we’re talking about Vote Tertiary Education, one of the critical inputs into decision making around that is the enrolment forecast that our universities come forward with. Universities every year—and people who have had dealings with the sector and who have talked to universities in their own patches will know this. They will know that sometimes universities track very closely to what those enrolments are looking like. They have to make a forecast, and when they come to say what the student achievement component of funding will be, when they’re speaking with their Minister around what that is, the Minister needs to rely on those forecasts.

Actually, the bill that we have in front of us here actually tells the tale of two parts of this. What the announcement we saw today—that those enrolment levels and those forecasts were not fulfilled, that there were not as many students enrolled at most universities. I say most, because, in fact, there was one university that did reach its enrolment forecast—I’d just like to give a shout-out to the University of Canterbury, if I can be a little bit parochial for a moment there.

So we see that because of that, ours is a Government that has been willing to work with the sector to find solutions and put in place some ways in which we can remedy it. That is in no way an error on the part of the Government. So I think we just need to check our outrage at the door a little bit on the other side of the House.

The other place where, of course, it’s a really good example—if we work our way through these documents, we can see underspends. It’s not only in the funding that would go to universities that result from lower enrolments, but you also see it in terms of the payments for student allowance. Because when you have lower enrolments for students, there will also be lower payments paid out in terms of student allowance, and that is another area in this bill where we do see some adjustments being made.

So these are important documents. They’re important documents for any Government of the day to be able to make sure, because Estimates are just that—Estimates are forecasts of what is going to be spent. Anyone who has managed a budget in any organisation knows that the actuals against forecasts can move around and that you need to have a process for tidying that up, and that is exactly what this process is about and has been the case since 1989. Sometimes, actually, there are as many as three imprest supply bills that are passed in a given year—sometimes two, but sometimes as many as three. So before anyone gets too excited about that, I think that that’s an important part to note.

I think what this document does also show is it’s an important document that chronicles, really, the responsive and agile way that our Government has responded to what happened in January in terms of the cyclone, the fact that there did need to be expenditure. It wasn’t anticipated when that 2022-23 Budget was put together, when that 2022-23 Budget was passed. But none the less, this was an activity that the Government had to respond to. We needed to make sure that we had funding not only for some immediate repair work but also in terms of a range of supports for people in Auckland and on the East Coast and in other parts of New Zealand that were affected by those extreme weather events. You’ll see that right back through these imprest supply and Supplementary Estimates documents. I’m sure if you go back and look at those documents following the February earthquakes in Canterbury, you will see similar adjustments that had to be made because there were immediate things that needed to be done. I think anyone expects that every Government would come on to that.

We did see, from the deputy leader of the Opposition, the finance spokesperson of the National Party, a speech that was largely more about the Estimates. I found it a really depressing speech. If you were only to believe what was in that speech, that everything was terrible, that New Zealand was the worst place in the world to be—it was so negative. I think that one of the things that I know, when I’m out and about speaking to people, is that people acknowledge that it is really hard out there at the moment. People are doing it tough.

But if we look at the facts, if we look at the evidence—we had the previous speaker say that what was in these documents was driving inflation, it was spraying money around, it was leading to inflation that seemed to have no chance of ever coming down. That was the indication I got from the speech that I sat here and listened to. But, actually, if you listen to the economists, what we’re hearing is most economists are now thinking that inflation has peaked, that we’re looking at inflation coming down. It won’t come down straight away, but we will look at it getting back into range in the coming months ahead, and that is a credit—

Hon Michael Woodhouse: Eh? Month?

Hon Dr MEGAN WOODS: Well, months as a plural, Mr Woodhouse. It has an “S” on the end of it. So if we look out over the next 12 months, the next year, that what we see is we have economists from—

Matt Doocey: So years now.

Hon Dr MEGAN WOODS: No; months, Mr Doocey. We have a look at the Westpac economists saying that interest has passed its peak—and I think it’s really, really unfortunate that we have an Opposition that seems to find that that’s a negative thing, that inflation will begin to come down. We’re seeing this globally. Because, of course, inflation—and what we’re seeing isn’t something that is only being experienced in New Zealand. We’re seeing that play out in countries around the world, and for New Zealand that is something that is really positive for us, that we will see that come down.

But I think one of the things that has kept us going through this period in good shape is the fact that we still have those really low unemployment figures. That’s one of the things that is threaded through all of our finance documents and reflects the incredibly hard work that our Minister of Finance has put in. It is not by accident that we have such low unemployment rates in New Zealand; it is because of a determined programme of work by our Government and led by our excellent Minister of Finance, the Hon Grant Robertson, that we have put at the centre of so much of our decision making how it is that we’re going to ensure that people stay in work. That is important. It is fundamental. The name’s on the tin for us on this side of the House: we are the Labour Party and work and jobs are important. I think back to those months in March 2020 when that was such an important consideration, and we can see that that has flowed through into these Supplementary Estimates. We can see it in the imprest supply that these are the important things.

But I just would like to reiterate that this is standard practice. This is not an out-of-cycle bill that is being put to the House. This is what Governments have done since 1989. Each and every—each and every—Government has done it. It is a very technical debate. I think if you look through, as I did a couple of votes, you can see some really interesting threads to follow through, and it is important that we do that. These are difficult documents to deal with, the sheer bulk of them, but they do tell an important part and give an important insight into what is happening in the New Zealand economy. Thank you, Mr Speaker.

Well, on the last point that the Hon Megan Woods made, I would certainly agree with that—it’s a bulky document; the document that underpins this bill runs into 1,024 pages. And it is a technical discussion, on one level, but I think it is appropriate to highlight the context to which Supplementary Estimates have been considered in the last two or three years, because it is about unders and overs but there’s no doubt that since this Government came to office, there’s been a heck of a lot more overs than unders. They run into the billions of dollars.

It would be fine if we could see the progress that was being made with that investment, but on nearly every single measure of performance, this country is going backwards: financially, economically, socially. So we do need to scrutinise the performance of the Government in setting and following Budgets, because I think the count is now six where we’ve had a Budget Policy Statement which sets out the parameters of the spending of this Labour Government, and I think the score is six out of six for breaching the Budget Policy Statement constraints by the time the Budget is written. So it’s not even as if the Supplementary Estimates were the problem—they can’t even stick to their own disciplines in setting the Budget. And, once again, we saw that in Budget 2023. I have no doubt—well, actually, I do have extreme doubt that that will happen again, because the public will certainly pass judgment on that ill-discipline.

Now, the other issue is—

Hon Judith Collins: Good save.

Hon MICHAEL WOODHOUSE: Yeah, thank you, Mrs Collins.

The other issue is, of course, the unders doesn’t always mean it’s a positive thing. The way in which the Budget is set provides the opportunity for there to be what are known as “multi-year appropriations”, which is operational spending that goes over a series of years. So it’s not unusual—and indeed, Vote Health has a plethora of them—where underspends in one year are carried forward through the Supplementary Estimates of Appropriations. But the problem with that, and it is a bit masked in this document, is that it is falling considerably behind where the Government itself said it should have been in its investments, particularly around mental health. My colleague Matt Doocey has been prosecuting this extremely well by highlighting that of the new money in the $1.9 billion Budget announcement in 2019, some of it is still not spent four years later. New appropriations for mental health that should have had projects well advanced by now are still on the whiteboard. They haven’t even got off the ground.

So we can’t even say that underspending in this Budget is actually a positive thing, because what we really judge the Government by is their ability to get things done and their ability to improve the lives of New Zealanders. After all, they call them “Wellbeing Budgets”. Well, I think people, again, will make their own judgments about whether their wellbeing has been enhanced in the last 5½ years.

The Minister of Finance, in introducing the bill, talked about this being limits, not targets. And that’s true, except he doesn’t seem to act like it because he sets the targets so high that it’s almost impossible to meet. And that is the manifestation of the imprest supply bill. Now, I am pleased to note that this year the huge slush fund that they gave themselves in 2021, and a slightly less huge slush fund in 2022, is not being repeated in the imprest supply. As members should be aware, this is the authorisation to spend in the meantime while the main Budget bill is being deliberated on. But buried in amongst the $30 billion—I think it is—of appropriations is an allowance to account for “additional material risks” and the uneven timing of expenses within votes. That’s code for “It’s a new bit of money for stuff we haven’t thought of spending on yet, but we could in that period.”, and it’s $4.3 billion. Now, that might seem high, but actually it’s considerably lower than it was two years ago, and so it should have been. I have criticised the Government for the extraordinary amount of, effectively, slush funds that they give themselves in the imprest supply bill, so it is pleasing to note that that has gone down.

But what hasn’t gone down—if we return to the Supplementary Estimates of Appropriations—is how much this country is spending on servicing debt. On page 431 of the document, we find that the appropriation for, basically, interest—the cost of financing this spending has gone up by $752 million. That’s three-quarters of a billion dollars. So by the end of this financial year, we will have spent $5.32 billion servicing the debt that this Government has incurred over the last few years. Remember, our net core sovereign debt when they came to office was less than $6 billion, and now it’s nearly $800 billion—and that’s an offset, because the gross sovereign debt is around $214 billion. We are heading towards the sorts of appropriations to pay for the interest on that. That is double the police Vote, it’s double what we spend on early childhood education, or at least the Crown spends on it. So the higher that figure goes, the harder it will be to spend taxpayer money on the things that taxpayers want us to be spending on, and that is: keeping them safe, growing export markets, supporting those people who are in need through jobseeker supports and other benefits, supporting our elderly, maintaining our health services. Every dollar we spend on extra debt that is being incurred would be dollars that we wouldn’t be spending on those other things—if the Government had the fiscal discipline to stick to its own Budget Policy Statement.

So I get back to the original point: we are now at risk of coming into a vicious cycle of spend and pay for the debt through interest and having to borrow more, increasing our interest bill, and so on. We are in something of a cycle and a spiral that doesn’t appear to have a limit, so I’m particularly concerned about borrowing expenses.

I’m particularly concerned about the huge amount of money that we spend on vaccine costs. That was an extra appropriation—nearly $886 million purchasing potential and proven COVID-19 vaccines and other therapeutics. I’m not worried because we spent the money, I’m worried because they’re expiring in warehouses up and down the country. As we have found out, 17 million COVID vaccines are now expiring. So it’s a valid question to ask the Minister of Health: why on earth did we spend nearly $887 million on more vaccines at the same time as 17 million vaccines were going to waste? That suggests to me a ministry that has not got control of its stocks and does not know what’s going on in its portfolio.

There are a number—I would go into the transport Vote, I probably don’t have enough time, but there is a tremendous amount of money not being spent on transport issues. And when I see that the estimated amount to be spent on activities under the National Land Transport Programme as authorised by blah-blah-blah has gone down by $1.2 billion nearly, then I think there are serious questions that need to be asked about whether the funding that is taken in by NZTA through fuel excise is actually being spent. Because if we’ve got more than a billion dollars on National Land Transport Programme funds being underspent, then serious questions need to be asked.

Yes, it’s technical, and, yes, it’s necessary to keep the Government going, but there are significant questions about the quality of the spend and the lack of outcome that the taxpayer is getting for it. And we will continue to point those things out.

Thank you, Mr Speaker. I rise to take a call in the debate on the Supplementary Estimates. Can I begin by thanking all of the select committees that dealt with the separate Estimates, committee by committee, and reported back to Parliament; and too the officials who serviced those select committees, including those from Government departments, but also from the Audit Office.

I hear, from the Opposition, claims about a blowout in expenditure that is being poorly spent by the Government. They use nominal figures, which do show that, in nominal figures, Government spending has increased by tens of billions of dollars. Of course, nominal GDP, which you should compare expenditure with, has also increased hugely—in 2017, nominal GDP was $275 billion. This year, it’s over $400 billion, so the economy has grown from the start of the period when we took Government of $275 billion—and a few hundred million—to over $400 billion projected for this year. Indeed, the forecast as at the time of the Budget Economic and Fiscal Update for the year ended 30 June 2024 was $415 billion, and it will be there or thereabouts.

So those numbers don’t mean much to people; they’re enormous numbers, and the House is better to consider core Crown expenses as a percentage of GDP in order to assess whether there’s been a massive explosion in Government spending. Core crown expenses—and I’ll use a slightly different time series here—in 2013, under the National Party, five years after the global financial crisis, the core Crown expenditure was 32 percent of GDP. This year, it’s projected to be 33 percent of GDP. Now, it’s true that, in the intervening years after 2013, National did drop expenditure as a percentage of GDP, because that’s what National Governments do—they have a fixation on reducing Government expenditure. Wise use of Government expenditure is always appropriate, but I can recall a speech of the then Minister of Finance—or he might have been, actually, by then, Prime Minister—in Australia, where he said his prime indicator of whether he was doing a good job was whether he was dropping Government expenditure as a percentage of GDP; that was his driver. From the point of view of the Labour Party, by the end of that period, when they had dropped expenditure further, we had virtually no new hospitals built—

Hon David Bennett: Waikato Hospital was rebuilt.

Hon DAVID PARKER: Beg your pardon?

Hon David Bennett: Waikato Hospital was rebuilt.

Hon DAVID PARKER: Waikato Hospital was rebuilt, that was—

Hon Dr David Clark: That was under us!

Hon David Bennett: No, it wasn’t.

Hon Dr David Clark: Well, I committed the funding.

Hon DAVID PARKER: So we heard, then, from the list member for Hamilton, claiming credit for the Waikato Hospital build, when it was the Labour Government that funded it because the capital funding hadn’t been provided by the National Government. And, indeed, the Hon David Clark just interjected to confirm that he was the Minister that authorised the expenditure.

In respect of other issues, of course, they ran down housing—and we had questions in the House today about housing. The number of State houses in New Zealand or public houses decreased under the term of the National Government, because they didn’t spend on them, and, in fact, they sold them off. They sold off the capital stock—they rented a few more; but they sold off and used the capital that they realised from those sales to put into other things, which is why, by the time they left office, they had less funding. They froze the funding for the police: in inflation-adjusted terms, they “defunded” the police. The so-called “party of law and order” defunded the police—the National - ACT Government—and by the end of their period they had fewer police officers employed by the Government than was the case earlier, which is why we’ve reversed that and now have more than 1,800 more police.

In respect of debt levels: in my opinion, New Zealand hasn’t had a fiscally irresponsible Government since the Muldoon government, when debt increased hugely, and it was on an unsustainable trajectory and there was no route back to surplus. The next Labour Government, the Lange-Douglas Government, got debt under control. The following Bolger Government continued that trend. The following Clark-Cullen Government probably had the best record of anyone: nine surpluses in a row which reduced net debt to—on the current measure—zero; in fact, we had net assets and well-funded public services as well. Then the last Government, they had to deal with the global financial crisis and the Canterbury earthquake rebuild, but they so reduced taxes that actually, during the period of their Government, net debt increased, for a start, quite substantially—before it reduced towards the end of their term. And they left office with net debt, excluding the super fund, at 18.7 percent. I’m reading the Budget documents here, Mr Bennett. You could read them; you pretend to be an accountant, but I don’t hear you actually opening up the Budget documents—referring to the actual documents—rather than making superficial, inaccurate comments that show your ignorance when it comes to the matter of public finances.

Point of order. The member is very much aware of Helen Clark’s last Budget, and the deficits they left behind—

DEPUTY SPEAKER: No, no. I’m sorry—if the member is going to engage in vociferous debate, then that will, obviously, open the range of ability for a speaker on the other side to actually respond. Be aware. Carry on.

Hon DAVID PARKER: Thank you, Mr Speaker. So when we took office, net debt, excluding the super fund, was 18.7 percent, and net debt, including the benefit of the assets in the super fund, was 5.9 percent of GDP. That’s the 2017 figures. In 2018, net debt decreased to 3.8 percent under a Labour administration before COVID, and net debt, excluding the super fund, decreased to 17.2 percent. It’s the same the next year again: in the year ended in 2019, net debt, excluding the super fund, was 16.4 percent—again down—and net debt, including the super fund, was down to 1.8 percent. Then COVID hit, and COVID is the reason why—

Hon Members: No.

Hon DAVID PARKER: Oh, they say no—you know, the biggest increases in governance expenditure during those years were the expenditure on COVID support payments. There were lots of other supports that were necessary in the economy as well, but the biggest one was the wage supports that were paid through businesses. Those businesses were saved, partly because their employment costs were defrayed without laying off their staff. To this day, this country benefits from that, because even in the midst of a technical recession, unemployment is low—is it 3.4 or 3.3?

Hon Rachel Brooking: 3.4.

Hon DAVID PARKER: —3.4 percent unemployment: very low by the standards of New Zealand and lower than a lot of the countries that we compare ourselves to. Now, what happens going forward? Well, core Government expenditure as a percentage of GDP did go up to 34.6 percent of GDP in the year ended 2022. It has since dropped 33 percent of GDP this year, and drops further to 32.3 percent the year following, 32 percent the year after that, and 31.5 percent. And I again compare that to 2013—when it was 32 percent. What exaggerated rhetoric that we have from the Opposition, trying to present those facts as irresponsible spending on the part of a Government—

Sam Uffindell: Very irresponsible.

Hon DAVID PARKER: Oh, “very irresponsible”, we hear from the member for Tauranga. You never hear them talking about these percentages of GDP, because they’d rather talk about the gross numbers, and, as I say, those gross numbers are hard for people to interpret given that GDP has risen from 2017, $275 billion to $415 billion forecast for this 2023/24 year.

In respect of the Supplementary Estimates, other members have covered those in detail. I do note that the Supplementary Order Paper which has been presented—which I’m sure that Minister Robertson has spoken to or will speak to—has a single item in it, which is unusual, but it relates to the storm events and there is $500 million set aside for Crown payments to local authorities and other eligible stakeholders. That, of course, is something that is not the fault of the Labour Government, although it is our responsibility to help.

Thank you. I rise on behalf of the ACT Party on the Appropriations (2022/23 Supplementary Estimates) Bill. The key thing with a bill of this nature is the key word, “appropriate”. That’s what it’s about, and this mechanism allows the Parliament to authorise Government expenditure and expenses of Government. But is this actually appropriate, given how it’s being done? We accept that the goal of a Budget and this bill is to change things—no Budget is perfect, but, jeez, there’s some spin going on today about what’s actually happening, and we wanted to punch a few holes into that.

We are in a background today where Minister Woods, Minister Parker keep talking about labour and unemployment. Westpac today published that the dream is coming to an end, where unemployment rates are going up and job ads are going down. We just aren’t moving, and we have a situation where now we have to interpret a 1,200 page document—the Robertson Da Vinci Code. Then we’ve got the—and I’ve always wanted to say this—the “pickety pocket or two” approach by our Minister of Revenue, who seems to tax us further and harder and deeper, and the harder we work the more we’re going to get taxed. There isn’t a lot of empathy or sympathy on that side of the House for rising costs and rising interest rates.

You know, if you look at this amount of cash, it’s big bags of cash. If you took it as US$100 bills, I just wonder, on those three planes that are going to China like some sort of narco deal, would you be able to fit this cash in the plane and get it out of here, and then just drop it on the economy and add to inflation? But let’s look at those bags of cash: $30 billion of expenditure in advance of the appropriation bill to many departments’ operating expenses. Another $9 billion in capital expenses is what we’re facing. It’s essentially to keep the lights on for the months between the start of the financial year until the appropriation bill is eventually passed. It shows the impact of inflation under Grant Robertson.

In 2017 and 2018, the similar imprest bill was only for $7 billion, and capital spending of $5.5 billion. It shows how this Government is so spendthrift and how Minister Robertson is one of the most extravagant finance Ministers in New Zealand history. The sheer margin of this bill is notable. We’ve just had a Budget, and already its estimates and assumptions are incorrect. How does that work? And as an example of that, the 20 hours free for two-year-olds was a promise that looked good for the media, only no policy work had been done before they rushed out with it. If the Government had spent half as much time doing the policy work and engaged in the early childhood education (ECE) sector as they did on the political communications, then the Budget announcement wouldn’t have been such a debacle. So, really, we don’t know how much that 20 hours of ECE policy would cost, because the Robertson Budget was just numbers on the back of an envelope.

Since the Budget, we’ve had another big hole, a fiscal hole in the Government’s finances, with the collapse of the second emissions trading scheme (ETS) auction. At least half a billion dollars down the drain because the Government got the ETS estimates so bloody wrong, not once but twice. Labour said that climate change is the challenge of our generation, but they’ve crashed the ETS not once but twice. To crash an auction once is a sign the seller got the market wrong; to do it twice requires a special level of incompetence. But because the credits unsold will transfer over to the next auction, it’s likely that this crash as well will have, within five weeks of this Budget, a likelihood of a billion-dollar hole. How can we have, within five weeks of this Budget, a billion-dollar fiscal hole?

The falling student enrolments, as mentioned earlier, and efficiencies of many New Zealand universities, have been known for a while. It was obvious that some New Zealand universities were under financial pressure, yet within five weeks of the Budget the Government runs out with a $128 million bailout—and it is a bailout. Let’s call it what it is. This was on top of a massive $180 million initiative for new enrolments to 2025, and $521 million for tertiary tuition fees for providers. Thankfully, we’re not being expected to undertake further funding of the disastrous public amalgamation which has already burned up another $220 million in the Budget. There’s another billion.

The Budget, just five weeks ago, forecasted the economy would grow. I would like to put it on the record in the House today, because it needs to be said, we now have the “Robertson recession”. With what appears to be long-term stagflation because of this Government’s addiction to spending and debt, the Budget’s predicted that the Government would be $7 billion in deficit. It’s safe to say that this estimate was wildly optimistic and that debt levels are already looking to go well past that.

The Government is now planning to borrow more than $10 million—more than forecast in the half-year update to December just seven months ago. Unemployment’s rising. Job ads are going down. Inflation is going nowhere. And housing rates are happening for longer. Meanwhile, we’ve still got the problem children that are inside this Budget: Auckland Light Rail, KiwiRail, our health system, our COVID response and the tail end of that, and this is having an effect on our coffers. How much “Mr Piketty Pocket or Two” can bring taxes in, it’s not going to balance the books—

DEPUTY SPEAKER: Mr Smith, this is a broad-ranging debate, relatively, but you have gone beyond the parameters. Could you come back, please, to relating it to the appropriations.

Camilla Belich: Point of order, Mr Speaker. This is the second time the member has referred to the Minister of Finance as a “pickpocket”, which I think is out of order.

DEPUTY SPEAKER: Look, this has been a relatively robust debate. I will ask Mr Smith—I’ve now brought you back to the bill, please, and so if you just reflect the comments that have been made today, and just reflect back to the bill, please. I won’t order on that, but just—decorum of the House.

DAMIEN SMITH: Point of order. I would like to clear up that I did not call the finance Minister a pickpocket.

DEPUTY SPEAKER: Well, rather than get into who said what, can you just continue with your speech, please, under the parameters that I’ve laid out.

Matt Doocey: He just steals it from the front; he doesn’t bother hiding it in the pocket.

DEPUTY SPEAKER: Mr Doocey, I’m ruling on a point of order. You will stand, withdraw, and apologise.

Matt Doocey: I withdraw and apologise.

DEPUTY SPEAKER: Right, has everyone had enough? Right, Mr Smith, under those guidelines could you continue your speech please.

DAMIEN SMITH: So with the appropriations bill, ACT will not support this bill, but it will support the expenditure in the Supplementary Order Paper to provide certainty for those affected regions. The Government can have confidence in us from that point of view.

Back to my earlier point, which is that an appropriations bill is about appropriate spending. Within five weeks of this Budget, the whole spending profile has been thrown out the window, and it’s not over yet. We would like to see some fiscal discipline injected into this Government’s approach in the next six weeks, to really ensure that New Zealanders can be confident in the expenditures of the Government—that it’s all appropriate and that it’s not just a Budget for the sake of it; it’s a Budget that actually means something, because it has been a Budget that has let the nation down.

E te Māngai, tēnā koe. Tēnā koutou e te Whare. As the Hon Megan Woods said earlier—I believe, in the second or third speech in this debate this afternoon—what we’re not debating is the Budget. What we are debating is, of course, the Appropriation (2022/23 Supplementary Estimates) Bill. To that effect, what it is that we’re talking about is not anticipated spending but adjustments that have to be made in light of particularly unprecedented events such as, for example, as highlighted, flooding and cyclone events.

However, I think it is important to note, as many other speakers have in their contributions thus far, that all of the decisions made in here with regard to spending, and actually also the decisions that have been made to not spend in certain areas, are, of course, fundamentally political decisions. And to that effect, to those following along at home who may not be particularly familiar with the work of the Finance and Expenditure Committee—the wonderful committee that it is—and the levers that are available to us as a Parliament and the levers that are available to the Reserve Bank—because there’s been much made of, for example, increasing mortgage rates—I think it’s really important to kind of outline what those levers are that are available and how they work hand-in-glove, or are supposed to work hand-in-glove, together as economic levers at our disposal through requisite authorities that, of course, are empowered by the legislation of this place, our Parliament.

So fiscal policy is, of course, the stuff that the Government does. It is largely tax and spend. And even for members of the Opposition, I think they would agree and understand that Governments of all stripes do that thing of taxing and spending, and that again belies the kinds of behaviour that we want to incentivise inside our economy. As the Minister, the Hon David Parker, has made much of over the past few years, actually subsequent to the former National Government’s tax switch of increasing GST and decreasing income rates, that has resulted in changes in behaviour inside of our economy and some of that distortionary impact, which in turn has perhaps seen that aggregation of wealth in fewer and fewer hands.

However, Madam Speaker—just noting for those following along at home that we have the change of Speaker—fiscal policy is the stuff that the Government does. Monetary policy is the stuff that the Reserve Bank, our central bank does, and of course the main lever at our Reserve Bank’s disposal is the official cash rate (OCR), the ability to raise or to lower that. And we saw throughout our time in the Finance and Expenditure Committee, in the many hearings that we have had with the Reserve Bank, on record from the Reserve Bank Governor at the end of last year, an intention, as noted by Adrian Orr, to aggressively pursue the increasing of the official cash rate to—what he said in his own words, when I put that to him—“manufacture a recession”.

That is why it was a little bit confusing when we had seen those projections from the Treasury off the back of the Budget documents released a few months ago now—that we had a projection from Treasury that we would see the OCR remaining stable at that point. Obviously, just subsequent to that, we saw an increase of 0.25 basis points—but there was going to continue being this aggressive line pursued by the Reserve Bank of New Zealand (RBNZ).

RBNZ, of course, has a mandate that is twofold. The first is around financial stability and the second is around maximum sustainable employment. Just on that point, I think it would be remiss of me not to address the points made by the honourable member from the ACT Party Damien Smith about hard work and about who is rewarded for hard work in this economy and the society and the rules that we have put in place. And to that effect, I’d just really like to make it really, really clear that what we’re talking about, when we’re talking about hard work, is those who were at the front lines during our COVID-19 response throughout the pandemic, those who are out there working hard every single day and actually don’t necessarily see the benefits of it in terms of the income that’s afforded to them—our teachers, our nurses, our firefighters, and our front-line emergency workers. So when we’re talking about hard work in the context of the high-wealth individuals report, I’d just really like for members to be really explicit about what it is that they’re talking about and define what it is that they mean when they’re talking about hard work.

Now, we’ve heard from many, particularly in the context of the Supplementary Estimates that we’re debating this afternoon, about unprecedented impacts. And here again, it’d be remiss of me not to mention what’s just been occurring on the East Coast just over this weekend with the state of emergency. Once again, we are seeing climate change - charged weather events continuing to ravage cities and towns and communities and homes and whānau across this country. And I think that that’s where it’s really the place of this House to actually reconcile with the reality that this stuff just is not unprecedented any more.

We have the science very clearly, as we have had for decades, that if we continue to behave and operate our economies in the way that we presently are, then we will continue to see far more greenhouse gas emissions put into the atmosphere, which in turn will continue to supercharge these already climate change - charged weather events. And to that effect, speaking about the quality of spending or the types of spending that we’d like to see undertaken, I’ve noted that many have spoken about how we need to shift the focus from mitigation to, for example, adaptation. To those, we in the Greens say that genuine mitigation is in fact adaptation, not least, as the Hon Michael Woodhouse put in his contributions, when we’re talking about transport, for example.

If we want a resilient transport network, it is one that decarbonises and provides those transport opportunities for New Zealanders across our towns and cities and, indeed, in our rural landscapes as well. To that effect, all spending actually has to be climate spending because, unfortunately, unlike many in this space who like to pretend there is a trade-off between the economy and the environment, it so happens that the economy exists within the environment and that jobs happen on the planet. We need to consider these things, of course, holistically.

And, again, to that effect, we’ve heard a lot in this debate about GDP, a metric which, obviously, was refined by Simon Kuznets in the early 1900s, who took it to the US Congress and was like: hey, here’s a really good way to measure economic transactions inside of the economy, but, God forbid, do not use it as a measure of what he called welfare, and what we now call wellbeing, of those who operate and live in our communities. The reason for that is that GDP is simply a measure of economic transactions. It doesn’t measure the distribution of those transactions, the quality of them, or if we even want them to occur in the first place.

GDP goes up when there is a natural disaster, such as we’ve experienced across the North Island over the first six months of this year. GDP goes up when there is a car crash, when somebody gets cancer, because there has to be economic transactions in order to undo that social ill. That perhaps is the underlying perversity in those very Treasury projections with regard to GDP and with regard to how they had projected, as the member from the ACT Party noted, that we would avoid the technical recession that we are now in—ironically and perversely, by virtue of those climate change - charged weather events and the Government spending that was necessary to do the clean-up and the wash-up subsequent to it. That, again, is why we need to be looking at all of this stuff far more holistically and why the Greens consistently plead for us to have this climate lens to all of that spending that we as a Parliament are undertaking. Of course, that is precisely what it is that we are debating this afternoon.

If I may, just finally in wrapping up this contribution, which is the sole contribution for the Greens in this part of the debate on the bill—earlier today throughout this debate, we heard from the deputy leader of the Opposition, Nicola Willis. She was prosecuting largely the same point inside of question time earlier today—making the point that in a recession, technical or otherwise as it may be, we shouldn’t be looking to redistribute wealth and making the point that now would be a terrible time to impose, for example, an asset tax or a wealth tax or capital gains tax or otherwise; of course, completely neglecting the history of this very country where fewer than 100 years ago, in the midst of a Great Depression, there was the introduction of the Social Security Act 1938, which led to a pretty much guaranteed—

Hon Judith Collins: It was actually at the end of the Depression.

CHLÖE SWARBRICK: —standard of living for most New Zealanders and decades of prosperity, the Hon Judith Collins. That was paid for off the back of taxes imposed on those who had profited handsomely during a time that was incredibly challenging for many. It was the foundation of the social contract to say that all of us are in this together and actually you don’t end up with freedom of choice inside of an economy, inside of a society, if you don’t have access to those basic economic means for all of those who live within it.

So when we have IRD research that’s telling us that the top 311 families in this country own more wealth than the bottom 2.5 million New Zealanders combined and that they also pay a lower effective tax rate, less than half of what the average New Zealander pays—all of this is exposed. All of this is exposed to be simply a matter of political decisions and a reflection of the values of this House. The Greens are incredibly clear that we stand for people and planet. And while the Government has made some good moves in some good directions, there’s far more mahi to do. Thank you, Madam Speaker.

I’m so glad that the previous speaker, Chlöe Swarbrick, mentioned Michael Joseph Savage, because my father was one of the first beneficiaries of that social security system. Their family home burnt down, his mother was looking after six children, and they were able to be housed. Later on, he was able to win a scholarship to go to university, and that transformed the chances for my family. So I’m really glad that the previous speaker raised that, but it’s time for some myth-busting, because some of the claims from the other side of the House have been, quite frankly, outrageous. First of all, let’s be clear: the appropriation bill that is going through today, the Supplementary Estimates, is business as usual. This is a normal course of events in the budgetary cycle.

The second myth: that somehow this Government is sloshing money around. We’ve heard from the Hon David Parker that the correct measure, and I agree, is core Crown expenses as a percentage of GDP. Let’s go back to 2013: it was 32 percent; 2023 it is 33 percent. But what really galls is the notion that National and ACT somehow care for struggling New Zealanders. The difference is that they say that they are astute financial managers. I could save $100 a week if I was on a low income and say that I was an astute financial manager and I could send my children to school without lunch and without shoes and put them to bed in a poor, cold house, or I could look after them. So the idea that they say that fiscal discipline is needed—their fiscal discipline, in my view, is negative, wet, whining, and actually rigid as well.

May I also refer to the point made by Chlöe Swarbrick around the official cash rate and some of the conclusions that she made there. It was raised in the debate. There have been official cash rate rises; that lever has been used, along with a number of levers, to take the pain out of inflation. Those levers are working. Treasury predicts that we will reach target inflation, by 2 to 3 percent, at the end of next year. So just a point, really, that those levers are working.

Madam Speaker, I can see you looking at me, wanting me to go to the Supplementary Estimates, and can I just say it is a wide-ranging debate, but what I feel is that this is around a Government that listens versus a very rigid, negative, and whiny approach. We have seen it before, because the Opposition refuse to acknowledge that things happen in life after things have been budgeted for. Any household knows that, any mother who runs a household budget knows that, any business owner knows that, and that is why the appropriations are “estimates” and that is why there is a clean-up at the end: to account for the money, to explain the change, and also to explain any change in performance indicators.

Now, the Opposition may like to pretend things haven’t happened but, in fact, there has been COVID, there has been a pandemic of inflation, there has been cost of living pressures, the war in Ukraine, and look what difference that made. The war in Ukraine directly led to the petrol excise reduction of 25 percent; that would not have happened without the war in Ukraine. That is why we need the Supplementary Estimates.

If we look at the Provincial Growth Fund (PGF), which was raised by Nicola Willis in her contribution, I sat in the select committee that did the scrutiny of that, and it is fair for the Auditor-General to say that there needs to be adequate accounting for money, but the system itself does not allow for a quantifiable opportunity cost to be measured. It is very easy to sit with the benefit of hindsight and look at the systems that were used, without taking into account what would have happened to those communities if the money have not gone out the door.

Now, the Auditor-General’s office said, “Yes, you know, that’s why we haven’t been so tough in our comments.” There is no way, currently, in the system to numerate and quantify that. That is one of the issues with the system, and I can guarantee you that there were communities that would have fallen over, that were really struggling, where that PGF money made a significant difference, particularly to marae around the areas, and certainly in my own electorate in Taieri, where PGF funding has contributed to projects that are going to make a significant difference to those communities, kept people employed, kept the construction sector going, and kept unemployment low.

Now, if we look at what National would do, the last time there was a cost of living crisis National said they needed austerity. In 2012, instead of being flexible, instead of being able to provide flexibility to support struggling people, they imposed privatisation, job cuts, a tax on welfare and education; they gutted the Hillside Workshops in my own electorate of Taieri, which led to job loss; they actually gave tax cuts to the rich, which significantly impacted on poorer New Zealanders; and they increased the GST rate, which is regressive. All of this had a massive—

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Order! If the member can just come back to this appropriations bill, please.

INGRID LEARY: Sure, thank you, Madam Speaker. My point, really, around this appropriation is there needs to be flexibility in the system, and the flexibility does need to be applied with discipline, as it has been, but if there is a rigid approach taken, as there was by the National Government in 2012, it leads to austerity and the social scarring that our finance Minister has spoken about so often.

Somebody has raised the fact that the universities have received $128 million of funding today. That is fantastic. That is an example of a supplementary appropriation that has been brought about by need, and it is an example of a Government that has listened. I just want to acknowledge, today, all those in my electorate and the electorate of the Hon Dr David Clark who have been grappling with the spectre of redundancy. I am hoping that this will put their minds at ease, because, actually, somebody said that this was foreseeable—I think it was Damien Smith—in fact, the Budget gave the university sector a 5 percent budget increase, which is a significant increase. What wasn’t taken into account when that Budget appropriation was happening was the numbers that would drop off, both from COVID, from inflation, but also the very tight labour market that we find ourselves in. So it is absolutely appropriate to be able to respond flexibly and provide additional funding so that those thought leaders in our community, those institutions of thought leadership, can continue.

If I look at Otago University, it is the jewel in the crown of Otago and it will, with the new Dunedin hospital, remain the jewel in the crown because it positions our city as being a leading city for medical leadership and education. So it’s really important that we do have those institutions. I was listening this morning to Andrew Geddis on national radio do a really interesting piece around electoral reform and the work that he’s done sitting on that panel. Now, that is the sort of thought leadership that universities can provide. We need to look after them, and in this case the Government has done that. But it is not doing that in an undisciplined way. It has also introduced a review on the higher education funding system. That’s entirely appropriate given that we find a number of universities in the same boat.

So, just to re-emphasise, really, this is business as usual. This is about Budgets being disciplined but having enough flex to respond to situations like pandemics, like weather events, like foreign wars, like inflation, which is being felt globally. That’s what this appropriation does. If we look at the alternative, which is to think that budgeting is somehow a perfect mathematical science—that there should be no flex, no wiggle room; only austerity, only cuts as a way to respond—that is going to leave not only struggling New Zealanders but middle New Zealanders behind.

So there are two choices, and our side of the House has very clearly shown that an ability to listen, and to budget in a disciplined way but listen to the electorate and respond where it’s appropriate, is the right way to approach the Budget and the Supplementary Estimates. That’s exactly what we’re seeing here now. The amount budgeted in the Supplementary Estimates is actually lower than it has been for a number of years, for the reasons that other speakers have said. So I just hope that listeners out there realise this is business as usual, that it suits the National Party to try to say that they are astute fiscal managers when their astute fiscal management, in my view, takes no account of wellbeing, takes no account of whether a child is sent to school with shoes on or whether they live in a warm, dry home. So there’s nothing more to say. It’s a great bill. I commend it to the House.

The next call is a split call. I call on Sam Uffindell.

Thank you, Madam Speaker. I would refute that last comment by the previous speaker, Ingrid Leary.

Hon David Bennett: Refute the whole speech.

SAM UFFINDELL: I would probably do that as well—thank you, Mr Bennett—around this Government and their astute approach, as it was called! Let’s make sure the Hansard includes the sarcasm on that—that they are astute managers of the economy and looking after people. The way you look after people is to run the economy properly, keep inflation down, and keep the cost of living down, and it’s through a growing economy that you can then deliver the services that people need. We’ve seen six years of blown Budgets under this Government, and this is another one.

As we look through the Appropriation (2022/23 Supplementary Estimates) Bill and Imprest Supply (First for 2023/24) Bill—it’s a bit of a mouthful—what do we see? We see another blown Budget under this Government. And we haven’t seen anything in here to address the issues that are coming up. We don’t see any attempts to address the significant spending that this Government is undertaking. We don’t see anything to address the significant Government spending—the back-office spending. There’s no public service delivery targets. There’s a continuation of what I would call poor spending after poor spending. And we’ve seen operational spending up 80 percent since 2017, and I would challenge anyone in New Zealand whether they have seen an 80 percent lift in public services.

I just want to run over a few figures so it’s perfectly clear for everyone—and I’m sure there are many—watching at home around the situation here. Pre-COVID, net debt—which is a term that’s often used these days—was $5.4 billion. The Treasury forecast for 2024 is that it will be at $91.2 billion. That is a significant sum and interest needs to be paid on that.

When you’re Moody’s and Standard & Poor’s and you’re looking at how New Zealand is managing the economy—and they are looking at it, and they are starting to suggest that we need to get a little bit of a wriggle on and take the situation seriously or we may face a downgrade. The way things are looking, interest repayments will be our fourth-biggest expenditure going forward—after social welfare payments and super, after health, after education, it will then be interest repayments. That’s a really poor place to get to. Kiwis work really hard and they didn’t get a lot out of this Budget, and they certainly don’t want to see their hard-earned tax dollars going towards paying down a very big debt that this Government has built up.

We’ve been in deficit for a while now. We’re not expected to get back into surplus until 2026, under this Government—it’s only a minor one: half a billion. And I’m sure that won’t actually eventuate because we’ve seen it blown every time, too.

We heard core Crown expenses get mentioned today. I just want to go over some figures, here, because, in 2017, core Crown expenses, according to the Budget Economic and Fiscal Update, were $76.3 billion. The Estimates for next year are at $137 billion, and that is a significant increase in spending with very little delivery. This piece of legislation shows that this Government doesn’t have a plan to tackle the real issues, which is the cost of living crisis, it’s the inflation which we heard was transitory—it clearly is not; it is set in. We are in recession. The papers and the Government don’t like to talk about it much, but we are in recession. Our peer countries are not in recession, but New Zealand is in recession.

So National has a plan to get us out of recession. It has a plan to deal with the cost of living crisis. It has a plan to restore fiscal discipline. It has a plan to provide tax relief to hard-earning New Zealanders who are doing it really tough in the middle of a cost of living crisis. We’ve got a plan to lift incomes. And we know that sound economic management is what we need if we are going to be able to afford the healthcare, the education, the police, the justice, and the defence services that New Zealand desperately needs. If we are going to be able to build the infrastructure that we need, then we are going to have to get our books into order.

We’ve seen it six times in a row: this finance Minister and this Government are not capable of delivering the stability and the sound fiscal management that New Zealand needs. I thought Nicola Willis spoke extremely well in her speech earlier today—number two speaker—and I really look forward to her, hopefully, taking the reins soon, because we are in crisis at the moment. We are in a crisis under this Government, and I oppose this bill very, very strongly indeed. Thank you.

Thank you, Madam Speaker. I appreciate the opportunity to stand and speak on these extremely interesting bills, the Imprest Supply (First for 2023/24) Bill and the Appropriation (2023/24 Estimates) Bill.

This is the first time that I’ve been speaking on the imprest supply bill, and I hope that won’t be too obvious. This is a technical bill, as many people are not aware, and, in fact, to be completely frank, I needed a bit of revision on what this actually meant. The Estimates are a forecast on what’s about to be spent, as everybody here knows. But what the impress supply Acts are, are a regular part of the annual Budget cycle, with the emphasis on regular. This is, as my colleague Ingrid Leary said, business as usual. For every political party that has stood here post-Budget, the Crown, as we know, cannot spend public money or incur expenses or capital expenditure without appropriation or other authority from Parliament. And that’s why we find ourselves standing here today. In other words, this is utterly normal—I hate to say the word “boring”, because who could possibly think that anything we do here is boring! Every financial year—speaking to the regularity—there are at least two imprest supply Acts. On occasion, there are more than two. Every Government has had multiple imprest supply bills in each financial year, and they cover the period from the start of the financial year until the main appropriations Act is passed.

So that’s enough of the technical stuff, because we’ve heard members talking about recession, about interest rates, and about unemployment. And I have to say, I did feel the need for a little, teeny, tiny bit of fact-checking; I like a bit of a fact-check. Because it’s true that we are in a technical recession at the moment. The word here is a “technical” recession, and words to go with that are “very shallow” technical recession. And this very shallow technical recession has been, as Chlöe Swarbrick said earlier, or I may be paraphrasing, “intentionally engineered by the Reserve Bank”. Because a true recession would be accompanied by high unemployment, and that’s where a little bit more fact-checking comes in. A true recession would be accompanied by high unemployment, but we are currently, in New Zealand, close to historically low unemployment rates, at 3.4 percent. The UK is sitting at 3.9 percent. We heard conversation a little bit earlier in Prime Minister’s questions, from the other side of the House, about how poorly the Government was doing. And, frankly, that’s utter nonsense. The UK is sitting at 3.9 percent, Australia 3.7 percent, and New Zealand 3.4 percent; near-historic lows.

Matt Doocey: Not in a recession, though, are they?

SARAH PALLETT: Inflation, Mr Doocey. I know you’re absolutely desperate to hear me talking about how well we’re doing in New Zealand, and that’s not to say that things are not tough. We as a Government recognise that people are doing it tough—6.7 percent inflation, Mr Doocey, but falling. The UK: 8.7 percent, and rising. Australia: 7.8 percent. It’s interesting for us all to realise that the economy is 6.7 percent larger than it was before COVID.

We had a little bit of conversation a bit earlier about debt to GDP ratios. Well, in the UK, for the first time since 1961, they’ve reached 100.1 percent—100.1 percent, whereas New Zealand is sitting at 35 percent debt to GDP ratio, which I don’t—I think I must be sitting sometimes in an alternate reality.

Andrew Bayly: That’s right!

SARAH PALLETT: I gave you that one, Mr Bayly, I gave you that one. But when I listen to what you’re saying from the other side of the House, I have to say I am, but I’m in actual reality. Heaven alone knows where you are, where you say, on the other side of the House—not you, Madam Speaker, when I refer to “you”. On the other side of the House, when you’re talking about the economy doing poorly, I find that extraordinary when we’re looking at the UK at 100.1 percent.

I know we’re all very excited, but let’s have a little look at what other people say. Let’s not just talk to each other because we can get a bit tied up with our own little bell jar here. The ANZ: “it’s hard to diagnose this ‘technical recession’ as anything but part of the necessary adjustment towards putting the economy back on a sustainable path”. And Westpac: this is “an economy that’s in a transition phase rather than outright recession”.

So I’m going to return to what I said earlier: the economy is 6.7 percent larger than it was before COVID. People are doing it tough, we know, and that’s why every single dollar that we have is directed towards supporting them with the cost of living crisis. And on Saturday, I look forward to $5 prescription fees being scrapped.

Thank you, Madam Speaker. It’s a pleasure to take a call in the Supplementary Estimates debate—and not quite tail-end Charlie, but we’re getting down to the bottom end of this Supplementary Estimates debate, where the real quality comes out to play now. I want to really focus my comments in this debate on the Supplementary Order Paper (SOP).

Just for the sake of the folks at home who are watching, there are two bills that we’re debating in this debate. I’m going to focus my comments on one of them, which is the Appropriation (2022/23 Supplementary Estimates) Bill. Within that, we have an amendment to that bill, and it deals with the addition of half-a-billion dollars in appropriations specifically for the Government’s contribution to the extreme weather events recovery programme.

Now, just to say right from the outset, the Supplementary Estimates bill seeks appropriation by Parliament of the changes to the appropriations and the new appropriations for the 2022-23 year, the financial year that is just drawing to a close. It’s making changes to appropriations that were agreed by the Government between April 2022 and 2023 when the Supplementary Estimates were finalised. So that’s what we’re doing.

But I want to dig down a bit into this half a billion dollars that’s been appropriated for the cyclone recovery, why it’s been appropriated, and how that money will be spent. Cyclone recovery Minister Grant Robertson announced on 1 June that the Government’s entering into a funding arrangement with local councils in Tairāwhiti, down the East Coast, Hawke’s Bay, Auckland, and other places, like Coromandel and Northland that were so badly affected by Cyclone Gabrielle, and in Auckland, the anniversary weekend floods of 27 January. The payments are not going to be incurred, expenditure’s not going to be made in this financial year—there’s not much of it left—but the accounting rules stipulate that once the Government’s made a decision to do that, it becomes, essentially, a liability and it has to be accounted for in this financial year, hence the Supplementary Order Paper. This is a common occurrence, I should say. These events do happen. They must be dealt with within the Government’s accounting rules, and that’s what we’re doing here.

There is an historical parallel. In June 2011, the then National Government announced a buy-out scheme for the red zone properties in Christchurch, in the wake of the earthquakes there. Those costs were—

Hon Gerry Brownlee: Oh, that was quick!

Hon PHIL TWYFORD: —incurred, they were spent, but they weren’t appropriated, Mr Brownlee, because no parliamentary authority was sought. I make no judgment about that. But this SOP that we’re talking about today seeks to avoid a repeat of that unappropriated expenditure.

I wanted to make a point that this appropriation is very significant. It’s the practice in our country, after events like the anniversary weekend floods, in the aftermath for homeowners and property owners dealing with the destruction of, in this case, catastrophic flooding, to pick themselves up and, with the help of their insurers, to get on with their lives, to repair and rebuild. Normally, what we do is we leave it to people and their insurers to get on and repair and rebuild and get on with their lives.

Credit to Grant Robertson that very early on, after the floods in Auckland and Cyclone Gabrielle, it was clear to him—and he said to me at the time that he was of the view that it was not possible, given the scale of the events; given, for instance, the multiple floodings that many residents had experienced in Auckland, for example; the intensity of the flooding down in the Hawke’s Bay—that we needed to treat this as an exercise in climate adaptation.

I took the Hon Grant Robertson to Candia Road in Swanson, in my electorate. I took him to Mayfair and Clover in Henderson, one of the neighbourhoods in Auckland that was worst affected by the January anniversary weekend floods, where people were waiting neck-high in water in the streets and in their homes after those floods. We walked around that neighbourhood and we spoke with local residents, and the Hon Grant Robertson heard their stories first hand. This was when it was very raw, in the days immediately after the flood.

Credit to the Minister: I think he’s taken an approach of great flexibility, of great compassion, and he’s really been able to see the big picture and the need for Government to work—and Cabinet chose to work in a way that was locally led, supporting and empowering local councils to deliver a recovery programme.

It is fair to say that the Government system thought that climate adaptation was something that was becoming increasingly urgent, we needed some legislation—Minister James Shaw is working on the climate adaptation bill right now—but the extreme weather events earlier this year made it clear that we needed to act now, that we could not wait six months, a year, or two years to put in place the legislation.

So this appropriation, half a billion dollars, is the Government’s down payment on a massive nationwide climate adaptation programme to make the neighbourhoods safe again where our people learn.

In my electorate in West Auckland, about a thousand people on anniversary weekend experienced catastrophic flooding, sometimes half a metre of contaminated flood waters inside people’s houses, and it’s clear that there’s a huge programme of work that needs to be done to make those communities safe again.

This appropriation, half a billion dollars, will go towards the category 3 homes that will be under the system that’s been put in place. I think there’s an estimated 700 property owners nationwide whose properties face such severe ongoing flood risk, or risk of landslip, I think, that there’s no practical options for risk reduction and remediation, and the only sensible option is to offer those people the prospect of a voluntary buy-out.

Category 2: there’s an estimated 10,000 property owners, and these are people who are living with ongoing serious risk of future hazards, future disasters, floods, and slips, where it’s judged that it may be possible to reduce the risk to an acceptable level. That could be anything from fixing some failing infrastructure, it could be clearing or reengineering the streams that flooded so many homes in Auckland, it could mean lifting those houses up above the level of likely flood, it could mean implementing a number of flood-resilient design features in the repair of those homes—10,000 property owners. They are going to need some kind of financial assistance to undertake those measures, as will the people who are eligible for buy-outs.

There’s been an estimate that the cost of those 700 category 3 homes will be around a billion dollars. Now, much of that will come from insurance payouts. Undoubtedly, those property owners will have to contribute something of their own to the value of the buy-out. But the Minister has made it clear that the Government is committing to work with councils to ensure that, in the case of those 700 category 3 property owners, they won’t be forced to walk away losing the shirts on their backs. I think that’s the right thing to do, it’s the rational thing to do, to make these communities safe and resilient again and to look after people who, in many cases through no fault of their own, may have been exposed to catastrophic risk.

Now, there are category 1 people who will be deemed to be able to repair and rebuild. I wanted to take this opportunity to say to the councils who are delivering these recovery programmes that the flood-affected residents are desperate for action, they want progress, they want certainty. Our Government has fronted up with a policy framework and half a billion dollars to make this programme work, and our communities affected by floods desperately need the councils to make quick progress to tell them what category they’re in, and start the work of actually reducing the flood risk in those places and getting on with the process of putting voluntary buy-outs in place.

So thank you, Madam Speaker. I finally just want to, again, give credit to cyclone recovery Minister Grant Robertson for his leadership in this really important area of work.

Thank you, Madam Speaker. It’s a pleasure to be talking on the imprest supply and the addition to the Supplementary Estimates, or appropriation, bills.

First of all, just in response to the member, the Hon Phil Twyford, who has just sat down—the previous Minister—when I was last in Hawke’s Bay, reviewing some of the flood-hit areas and talking to the people affected, they were crying out for leadership from the Government in terms of trying to deal with the events that have happened there. And when I saw my good colleagues Catherine Wedd, the candidate for Tukituki, and Katie Nimon, the candidate for Napier, in the weekend—again, there is an absolute need for clarity. Whilst the member has done their best to try and highlight what the Government is doing, it is now three months, four months since the flooding has occurred and there’s a desperate need. It’s no good and it shouldn’t be appropriate to just sit there and talk about the councils. It actually requires a Government-led response, and we’re not, unfortunately, seeing that quickly enough.

But I just returned from Christchurch this morning. I was meeting with between, I think, 80 and 100 business people, and they were talking about and asking questions about what was happening to the business environment, the economy in general. I think, apart from all of the general concerns they had—about a lack of staff, access to it, the rules and regulations, all those types of things that have been imposed on the business sector over the past six years—one of the underlying themes that came through is the level of wasted spending that the Government has undertaken. And of course that’s led to high interest rates which are feeding through and meaning that, for many customer-facing businesses—such as retail, the tourism sector—those types of sectors are still struggling. They were talking and asking about it and what we were going to do about it. We simply have a cost of living crisis, and to have one of the members stand up from Labour and say, “Look, it’s all down to excuses: it’s all down to COVID, it’s all down to inflation, it’s all down to Ukraine; nothing to do with us.”—actually, what about the Labour Government? Isn’t that the problem?

The issue is the Government has been on a spending spree, and these Estimates and supply arrangements enforce that even further. What we’ve seen is this Government dramatically increase expenditure over the past six years: from back in 2014, the Government spend was $71 billion; this year it will be $128 billion, a roughly $50-odd billion increase. And you would expect, even if you put COVID and say that had a major impact—what you would expect is the expense line of the Government to flatten off and be decreasing by now, because COVID is long passed from our shores. It is not affecting our businesses, it is not affecting the way people are going about doing their things.

But no: the Budget documents all highlight this continual extrapolation of Government spending, so that we’re going to see another $30-odd billion of spending increase each year by 2027—that is the issue that is driving high interest rates. And the worst thing about this is tax income from New Zealanders—paid by hard-earning, hard-working mums and dads out there, both in their businesses and people who are employed in New Zealand—is ripped from their pockets by this Government. We’ve seen this increase in tax take and it has been incredible. We’ve seen a massive increase in tax take, and what that’s led to is that we have continued to run deficits.

It’s interesting, just looking at the deficits. That’s where the Government is losing money, just like a household loses money and gets put under by their bank if they lose too much money. Over the last three years, the Government has piled up nearly $40 billion of losses—nearly $40 billion. Imagine what we could have done with $40 billion if we had spent it wisely. But $40 billion has been lost and we’re still projecting another three years of losses if Labour was to continue in this Government, and let’s hope it doesn’t.

The worrying thing about this in the Estimates is that the IMF recently did a review of the New Zealand economy, Mr Robertson, as you well know, and it said that the management of the pandemic had been very good, but it said the economy had been overheated because of a “generous”—inverted commas—financial monetary support and was now going through a necessary slow-down. “Macroeconomic policies should retain a restrictive bias.”—that means stop spending the excess money and get our Budget back in order, Mr Robertson. And that is what has been happening: it has never been back in order, we just keep spending everything we get. And what we’ve got in here is more money. And then it says: “A well-designed tax reform could allow for lower corporate and personal income tax rates.” Well, we know that’s not going to happen, don’t we, Mr Robertson? Nor do we know it from the Greens, who’ve come out with the most absurd wealth tax proposal that will still defy even just ordinary New Zealanders with just a reasonable home in Auckland. It will be the worst thing that could ever happen in New Zealand. But let’s hope that the Labour-Greens coalition never comes to pass, because that would be devastating for New Zealand.

But the worst thing about this is when I look at the Budget Economic and Fiscal Update, the documents states that “return to surplus … in 2025/26”—that’s a few more years away, unfortunately—“is underpinned by expected decline in … expenses and stable growth in revenue”. Well, there’s two issues with that. First of all, we’re now in recession—and all this stuff about a technical recession is garbage. On a per capita—when Mr Robertson was the Opposition finance spokesperson, he used to ask repeatedly about per capita, because it suited his argument. The last quarter, when we had this so-called technical recession quarter of 0.1 percent, on a per capita basis is 0.7 percent, and we had a previous quarter that was even worse. We are in recession. Just talk to any business owners—as I did this morning in Christchurch—and they will tell you that is the case.

So now we’re looking at our future tax revenues that are projected, and they will come under pressure because that is not what is anticipated in the Budget forecasts. That means that we’re more likely to have higher losses or deficits than is already projected in the documents, and then the other thing is about decreasing costs. Well, the one thing Mr Robertson has been good at—and it’s been consistent, and I’ve got to congratulate him for consistency, if anything—is his ability to spend even more money than even he budgets for. That has been the ongoing issue with this Minister of Finance, because, unfortunately, he spends, spend, spends and allocates stuff in Budget, and spends even more money.

The other thing that’s happening now is the current account deficit. The Budget projections thought we were going to have a reasonably high level of current account deficit, but it’s even much higher: $33 billion deficit just recently, 8.5 percent of GDP. We were at those levels miles ago, back in the seventies when we were really out of control and the IMF were worried about New Zealand. We’ve got this high level of current account, which means that, basically, New Zealand is not paying its way. Our exports are less in value than in terms of our inputs. So this imprest bill needs to be seen in this light: it continues spending, it makes generous allowances for even more spending that’s already provided for in the Budget, and we are just going to see this continued increase in debt—which I think is one of the most worrying things for New Zealanders. Our debt, back in 2014 when we left office, was $60 billion; now it’s about $150 billion. That is a staggering amount of increase over a mere 5.5 years.

The final bit is the lack of transparency of spending. We’ve had the Auditor-General come and talk to us, and the Finance and Expenditure Committee made public representations—actually being quite forceful, more forceful than virtually any other Government entity—and have made it clear that the transparency around Government spending, and particularly the slush fund called the COVID fund, which thankfully has now been disbanded, has been appalling. It has been very difficult to understand what the money has been spent on. New Zealand should be transparent about the way the Government is spending its money, but, unfortunately, that has not passed. We are going to have a big job to do if we were to win the election in October, but we’re up for it.

Thank you, Madam Speaker. What a pleasure to speak into this debate, based as it is around an important parliamentary process where the Budgets, Supplementary Estimates, and imprest supply funding are given scrutiny of the Parliament. Of course, we had a Budget not so long ago which introduced some really important new measures—20 hours free early childhood education for two-year-olds; $5 prescription fees scrapped; free public transport for under-13s, half price for under-25s; 100,000 more warmer Kiwi homes. Those kinds of things are things that we will all be familiar with, and I want to congratulate the Hon Grant Robertson on another superb wellbeing Budget that he has delivered.

But just today we had an announcement from the Hon Jan Tinetti and the Hon Grant Robertson of some changes to appropriations, and they related to university funding. Now, those changes will be reflected in the next set of Supplementary Estimates, as some of the appropriations were changed to make sure that the funding goes to the most appropriate purpose. These are the things which we as parliamentarians have a job to scrutinise—these kinds of measures—and I do want to congratulate them on their announcement today, especially the $48 million total that will end up at Otago University, all private and personal interests aside.

So this Parliament, of course, has the job of scrutinising what is spent and what will be spent over the coming year. I want to acknowledge not just the process itself and the importance of it but also one of the characters who has advised this debate over many years, and that is the late Peter Lorimer ONZM, who died earlier this year and who had advised many across both sides of the House on the importance of parliamentary processes like this one. It is a shame that Peter is not here to hear this acknowledgment in the House, but I think members of both sides of the House have been guided by him over the years and would acknowledge the wisdom he’s brought to parliamentary debates in drawing distinctions between the technical matters that are dealt with by officials and the important public scrutiny which politicians lead on. And this is one of those debates where we have the public scrutiny of decisions that the Cabinet has made to fund things like, as has been debated in this debate, the merit of responding to weather events. I think the whole Parliament will agree that responding is essential, and that is often done through imprest supply.

Imprest supply Acts are a regular part of the annual Budget cycle. Basically, the Crown cannot spend public money or incur expenses or capital expenditure without appropriation or other authority from Parliament, and spending that occurs outside of these categories then becomes unauthorised expenditure. As someone who was once a Treasury analyst, I received instruction from Peter Lorimer, who I’ve mentioned earlier, on the importance of getting appropriations right. As the Minister of Finance said at the outset of this debate, these are not targets but they are a licence to spend this money as appropriate, as required, in the interests of the citizens of New Zealand. I want to thank all members for participating in this debate because I believe it is truly an important debate that we have in Parliament. Appropriations are a licence to spend, and that includes, I think—just for those watching the debate—things like, for example, if departments charge fees for certain things and then recycle that revenue into other activities. These things are all monitored by the Parliament; all gathering of revenue and spending of revenue is to be scrutinised, and that is indeed appropriate.

So the imprest supply bill that we have in front of us seeks to provide sufficient authority for the Government to incur a maximum of $27 billion of expenses, $9 billion in capital expenditure, and $1 billion in capital injections. That total imprest in the bill—what’s called “imprest supply”—is lower than what was provided in the last three years, and I think people will understand that, given the events of COVID. At that time, it was necessary to ensure sufficient money was set aside in a very uncertain environment. Imprest supply bills are there, in a way, to account for in advance some of the fiscal risks that Governments sit with, those risks of expenditure that may be incurred, that we can’t be certain we’ll incur, but money has to be set aside—it’s normal in any budget. In a household, there are things we know we will incur and there are things we think we might incur, put in simple terms, and those things we think we might incur are called “fiscal risks” in parliamentary terms.

There’s another factor which imprest supply bills deal with and that is uncertain expenditure in terms of timing—we don’t sometimes know when we will incur certain things. We might know that the clutch is wearing out in our vehicle but we don’t know quite when we’ll have to get it replaced, to use a household example. But we do know that we should account for that spending because it will be ahead of us. And this has been a Government that has been incredibly responsible in terms of management of the books. We have a debt amongst the lowest of those countries we like to compare ourselves to across the OECD—again I want to thank and congratulate the finance Minister for his leadership on that matter, and for the very proud record this Government has in Budgets and in accounting to the public for expenditure, and delivering on that expenditure. I commend this bill to the House.

I declare the House in committee for consideration of amendments to the Appropriation (2022/23 Supplementary Estimates) Bill.