Appropriation (2022/23 Supplementary Estimates) Bill

Members, we now come to the debate on the amendments proposed in clause 5. The question is that clause 5 stand part.

Madam Chair, thank you very much, and I won’t take too much time over this. I did mention in the second reading stage that we did have a Supplementary Order Paper (SOP)—SOP 366 in my name. It creates a new appropriation to ensure that any potential expenditure in the 2022-23 year associated with the management of properties and land impacted by the North Island weather events is authorised by Parliament.

Colleagues will recall that on 1 June, the Government announced that we would enter into funding arrangements with local councils in cyclone- and flood-affected regions to support them to offer a voluntary buy-out for owners of category 3 - designated residential properties, as well as potential co-funding work to protect category 2 - designated properties. Payments are not actually expected to occur until the 2023-24 year, but our accounting rules mean that the Government must recognise this expense in this financial year because it links to the announcement that was made on 1 June. That, effectively, creates an obligation and, therefore, we need to deal with it in these Supplementary Estimates, even though the actual expenditure is not going to occur in the next week and will occur in the 2023-24 year.

Amendments to Supplementary Estimates aren’t common, but they also aren’t unheard of. Similar amendments have been necessary a number of times in the past decade, particularly for funding following adverse events. These include the Christchurch earthquakes in both 2011 and 2012, and in response to COVID-19 in 2020. The approach being taken here was informed by the 2011 red zone buy-outs. On 26 June 2011, the Government announced its voluntary buy-out scheme for red zone properties. Much of those costs were ultimately incurred as unappropriated expenditure because no parliamentary authority had been sought through the 2011 Supplementary Estimates. We’re trying to avoid that situation here, and so the SOP seeks to make sure that the appropriation exists, albeit that it will not be drawn on, I believe, in this financial year.

Thank you, Madam Chair. It’s just a question to the Minister on the Supplementary Order Paper, which the ACT Party supports. I do seem to recall, however, that the Prime Minister at one stage mentioned that this money was already there. The question I have is: was the money there or is this new money?

I thank the member for his question. The creation of an appropriation doesn’t mean that the money itself doesn’t exist somewhere in the system. I have indicated in comments that I have made that it is most likely that this funding would come from the National Resilience Plan funding that was in the Budget. What we didn’t have was a specific appropriation for this purpose, and so it’s to create the funding authority rather than to provide for the actual dollar amount.

That interpretation is what I understood, but Mr Twyford today mentioned another strategy, in terms of climate adaption programme moneys. Have I got that correct?

I’m sorry, Mr Smith, I wasn’t here to hear what Mr Twyford had to say, but what I’ve said is what we’re doing.

Yeah, just a continuation of colleague Damien Smith’s comments: so this a further amount of money. Just to understand the Minister of Finance’s response to him, is this—obviously, we’re setting aside this money, but where is the money coming from? Can he assure that it’s not going to be through additional debt but it’s going to come from existing redirection of resources—maybe in some other fund—and, if so, can he give us any more clarification on that?

As I said, the most likely source of the funding is in fact the National Resilience Plan, which we talked about in this Budget—so that’s some funding that has been set aside. What we have to do is create an authority to spend that on this. So that is where that funding is coming from. And specifically, to answer the member’s question, arguably, that’s debt in the sense that it’s part of a Budget in which there is debt, but this is, obviously, an unforeseen expenditure that we didn’t think, when we were originally setting up the Budget, we would have to do. As the member’s well aware, we managed to find around $4 billion worth of savings and reprioritisations for the Budget. That in turn created the National Resilience Plan. So you could also argue it that way round and say that it came from that. In the end, it comes from the money we have set aside.

Thank you, Minister, for that. Just to be clear, in the addition, which is the second part of the Supplementary Order Paper (SOP) because the first, (a), was already in the legislation, but you’ve—and when I say “you”, I’m saying the Minister of Finance, through his SOP—added (b): “Addition to the Supplementary Estimates of Appropriations for the Government … for the Year Ending 30 June 2023”. So the expenses identified here in this document—is this what we’re covering off in this appropriation?

Hon Grant Robertson: So, that document? Sorry, what are you waving?

ANDREW BAYLY: Well, there’s an addition to the Supplementary Estimates here. In terms of understanding what the totality of the breakdown of what we’re agreeing to in (b)—

Hon Grant Robertson: Yeah, OK. Yep, yep.

ANDREW BAYLY: Yeah, can you—you know what I’m talking about?

I do. I thank the member. Sorry, I couldn’t see the document that the member was waving at me. So the change we’re making updates Vote Finance, so this change falls within Vote Finance. The money that’s outlined here is separate to the additional $500 million that’s being discussed in the SOP—that gets added into Vote Finance.

So just continuing on that vein, if I look at the Vote Finance changes, so, for instance, there’s “Payments and Expenses in Respect of Guarantees and Indemnities … $1.094 billion”, this is on page—I don’t know what page it’s on. Anyway, first of all, is that being covered in this appropriation or not?

No, no. The discussion in the committee stage is only about the SOP, it’s not actually about the rest of Vote Finance. The rest of Vote Finance has been through the normal process. We’re simply updating the greater Vote Finance with this change. So “no” is the answer to the member’s question, but it’s also not within the scope of the debate, in my opinion.

Well, thank you for helping on defining the debate. So what is the scope of the changes that are here? But not in terms of legislative changes; in terms of the vote monetary amount.

Well that, as outlined in Supplementary Order Paper (SOP) 366, is $500 million—that’s it. The things the member is referring to are other matters contained within Vote Finance; they are not the subject of the SOP.

The question is that the Minister’s amendment to clause 5 set out on SOP 366 be agreed to.

Amendment agreed to.

Clause 5 as amended agreed to.

Clause 6 Appropriations for 2022/23 financial year