Debates — Statement on the Long-Term Fiscal Position and the Investment Statement

I move, That the House take note of the report of the Finance and Expenditure Committee on the Statement on the Long-term Fiscal Position and the Investment Statement be noted.

If the National Party had an off week last week, isn’t Labour having a terrible week this time? The emperor has no clothes.

SPEAKER: Bad start.

CAMERON BREWER: Today—

SPEAKER: It’s a very topic-specific debate; you should at least start the speech with some address to the topic, not a reflection on the current political situation.

CAMERON BREWER: Thank you, Mr Speaker.

Hon Kieran McAnulty: Point of order, sir. Thank you, sir, and thank you for raising that, because it is a matter that I was reflecting on at that point. We have a situation where we have a report from the Finance and Expenditure Committee that covers, obviously, the statement on the long-term fiscal position and the investment statement, and that was what was moved by the member. In addition to that, the report also includes the Treasury’s long-term insights briefing, which I understand is not up for debate in this, and it seems like it might be a good time to provide clarification on that point.

SPEAKER: That is quite correct.

CAMERON BREWER: As chair of the Finance and Expenditure Committee, we are grateful for this debate, with the committee report titled “Three Stewardship Reports from the Treasury”: Treasury’s 2025 Long-term Insights Briefing, Treasury’s Long-term Fiscal Statement 2025, and the Investment Statement 2025. We reported back as a select committee on all three statements; we heard evidence, all at once, on all three statements; and, subsequently, I want to take the opportunity to reflect across three statements that we reported back to the House this week on.

Hon Kieran McAnulty: Point of order. Thank you, sir. You’ve just made it extremely clear to the House that the long-term insights briefing is not part of this debate.

SPEAKER: That’s right.

Hon Kieran McAnulty: The member indicating to the House that he intends to report back on that is in direct contradiction to the guidance you’ve just given the House.

SPEAKER: It is, and it risks termination of the speech. The motion for the House is very clear, very explicit, and can’t be expanded. It’s a two-hour debate on the two topics in the statement.

CAMERON BREWER: Mr Speaker, point of order. The advice I got was that we were debating our report with the three reports.

SPEAKER: Good. I’ll stop you there, because what’s in front of me is what you just moved—that the House take note of its report on the statement of the long-term fiscal position and the investment statement—and nothing else.

CAMERON BREWER: OK, well, that’s fine. I want to take the opportunity to focus on these long-term statements. I want to focus on, frankly, some of the damning information that’s in it that reflects poorly upon others, and, subsequently, the significant and subsequent medium- and long-term economic impacts.

Let’s not just take my word for it. When these reports were released last week—last year, at least—the reaction was swift, and the reaction was severe. One New ZealandHerald headline read: “Government overcooked spending during pandemic, against official advice, harming economy - [says] Treasury”. At the same time, our own Minister of Finance described Treasury’s language as “polite” but its conclusions “damning”. In his foreword to one of the statements, Treasury secretary Iain Rennie noted that increased use of fiscal support during shocks had contributed to public debt ratcheting up over time.

Hon Dr Deborah Russell: I’d just like to point out that that particular quote comes from the long-term insights briefing, not from the Long-term Fiscal Statement 2025.

SPEAKER: Yeah, well, you’ll be surprised to know I haven’t read any of them, and neither am I meant to, nor am I meant to judge them. But in the context of the wider debate, I think allowing the member to actually make his point in relation to—and I’ll state it again—the statement on the long-term fiscal position and the investment statement doesn’t seem unreasonable if he refers to something that was said somewhere by the Secretary to the Treasury.

Hon Dr Deborah Russell: May I speak to that point, Mr Speaker?

SPEAKER: No, you’re arguing with me.

Hon Dr Deborah Russell: It’s because the point is that it was from the long-term insights briefing, which you have explicitly ruled out.

SPEAKER: Well, thank you for that information. Carry on.

CAMERON BREWER: As—

Hon David Seymour: Point of order, Mr Speaker. I think there is a wider point here that members of Parliament have freedom of speech to speak on behalf of the constituents that they represent. Now, if we’re going to start being pedantic about what can and can’t be referred to in a debate that is set down about a report from a select committee, then there’s going to be an enormous amount of difficulty upholding that much more important principle. I think we should just let him actually say it as he sees it, rather than have this censorship.

SPEAKER: Well, what did I just say? That’s exactly what I just said.

CAMERON BREWER: Thank you, Mr Speaker. It is hard to delineate when we had the Secretary to the Treasury before us, as a select committee, talking about all three statements. Iain Rennie, the Secretary to the Treasury, also warned that if nothing changes, this leaves future generations with less financial capacity to respond to shocks.

Thank goodness this National-led Government is now in charge and our finance Minister is squarely focused on three things that have been loud and clear in all three reports: returning the operating balance to surplus; placing net core Crown debt on a downward track towards 40 percent of GDP; and, rebuilding fiscal resilience so that future Governments have options when the next shock inevitably arrives.

While none—and we talked to Mr Rennie about this in the select committee—of this COVID spend was our responsibility, the National Party has taken full responsibility for fixing the mess and putting New Zealand in a stronger position, as these reports demand and as Treasury has told us we and future Governments have a responsibility to do, whether that shock be a major event, a natural hazard, or—God forbid—another global pandemic.

As time went on, it became increasingly clear that spending during the period under investigation and reported on in these reports was a Trojan horse, simply to fuel Labour’s unfettered largesse and spending, which we are now all paying the price for. While the royal commission was talking $60 billion yesterday, Treasury papers actually formally calculate the total cost of the COVID-19 pandemic at $66 billion.

A staggering 20.4 percent of the country’s GDP was spent on the pandemic, making the response one of the largest among advanced economies, according to page 49 of one of the reports. Worst of all, about half of the spending was directed at pandemic, economic, and health initiatives—here we go; wage subsidies, health response—but nearly another half was completely unrelated to direct core expenditure on COVID responses. What was that spent on? Well, that was spent on shovel-ready projects that weren’t ready and saw no shovels. That was spent on welfare increases, benefit increases, and Jobs for Nature programmes. That was spent on school lunches for middle-class kids, training schemes, and tax changes.

Of the $60 billion-plus, $30 billion was spent on non-core COVID spending—that is what these reports reveal. That is what the royal commission revealed last time, and it’s absolutely disgusting.

Don’t let them gaslight you that the National Party voted for and supported their more than $60 billion spend-up. Yes, we supported the core and immediate health and wage support response, but, no, we never supported the billions of dollars in subsequent wastage, additional spending, and forgone tax revenue, and guess what! There’s nothing to show for it but just unprecedented Government debt and a huge $8.9 billion interest bill, and growing. No bridges, no roads, no busways, no new hospitals—nothing.

In its long-term insights briefing—and it is also reflected in the other two reports—Treasury also outlined a history of advice it gave on the pandemic, and it made it explicitly clear that it advised the Labour Government to ease up on the spending. But guess what!—and page 16 reveals it in one of the reports. Despite Treasury’s mounting advice against any further stimulus and to, at the very least, get much more targeted, Labour ignored that advice. Labour, as these statements reflect, has favoured undisciplined spending and opted for large operating allowances in its Budgets. It pushed up inflation, eroded New Zealand’s previously low debt position, and fuelled a cost of living crisis that many families are still suffering from. Despite Treasury’s firm and frank advice and analysis, Labour’s spending was too high and it went for too long. Now, that is what is inside these reports.

In total, Auckland spent more than six months in lockdown. It was the longest lockdown of any region in the country, and, as we know, Aucklanders and Auckland businesses continue to pay a huge and disproportionate cost. As the royal commission reported yesterday, Auckland’s lockdown went on longer than the official advice recommended.

Hon Dr Deborah Russell: Point of order, Mr Speaker. I was, unsurprisingly, in the Finance and Expenditure Committee when we were discussing this with the Secretary to the Treasury. There was very little mention of COVID. There is very little mention of it in these reports; in fact, there is only a glancing mention of it in the report we are supposed to be discussing. This is not supposed to be a free-for-all debate. It is supposed to be on the long-term fiscal—sorry, on the—

SPEAKER: Sorry, stop there. Thank you for your advice. It would be very difficult to discuss the long-term fiscal position of the country if you could not discuss the current fiscal position of the country and how we got there.

CAMERON BREWER: Thank you, Mr Speaker. As we know, Aucklanders and Auckland businesses continue to pay a huge and disproportionate cost, and, as the royal commission reported yesterday, Auckland’s lockdown went longer than official advice had recommended.

Weren’t they quick to fire out the media statements and offer up media interviews yesterday, but where were they when the New Zealand public demanded accountability for them to front up in person to the royal commission? “Chippy” turned into “Zippy” and was gone—

SPEAKER: Point of order. The first point I’d make is that you don’t refer to members of this House by nicknames or anything else. Refer to them by their full name or nothing else, and so withdraw the last remark you made.

CAMERON BREWER: I withdraw “Chippy”.

SPEAKER: The second thing I’d say is that reflecting on something that is not mentioned in this report, or not even tangentially relevant to the report, is also not helpful in this debate. Resume.

Hon Kieran McAnulty: Point of order, Mr Speaker. Thank you. Recognising your guidance there—and there’s no dispute from me—I think part of the problem that we have here is a report from the select committee that includes three statements. If we look at the relevant Standing Order around the statements that the select committee can debate in an instance like this, it actually uses the word “or” rather than “and”. Normally, it would be the investment statement or the fiscal statement that can be a debate, and, obviously, if there is a report back from the committee that combines two, then that then makes it a debate about both. But it is extremely difficult for you, as the presiding officer, to determine what is in and out of scope when the insights briefing—which is actually much of the basis of what the member’s speech is—is included in this. So, whilst I recognise that that makes it difficult, in moving forward, I wonder if some reflection on, potentially, an instruction to the committee to stick to what is actually in the relevant Standing Order, which is Standing Order 344—

SPEAKER: Yeah, yeah—yeah. Look, I think the Clerk’s Office will have already worked out that perhaps there could’ve been a different recommendation to the committee and that the committee itself might then have made a different recommendation to the House for the debate. But bring it back to the relevance as much as you can.

Hon Kieran McAnulty: Sorry, sir, but further to the point of order.

SPEAKER: Well, a further point of order.

Hon Kieran McAnulty: Thank you for that. So, just for absolute clarity, this is not an opportunity for members to relitigate the royal commission report that was released yesterday—

SPEAKER: That’s what I’ve just said—I’ve already covered that.

Hon Kieran McAnulty: Well, now everybody knows, don’t they?

SPEAKER: Yeah, thanks very much. I’d just assumed that everybody hangs on my every word—but Cameron Brewer.

CAMERON BREWER: Thank you, Mr Speaker. What is in scope in these three reports is the impact—

SPEAKER: No, no, hang on—here’s the problem.

CAMERON BREWER: Two reports. Two reports; three that we reported on—

SPEAKER: No, you might have, but for some reason your committee did not ask the House to debate three of them; it asked for two. So that somewhat constrains the way in which the debate can be conducted and allowed, and it doesn’t matter if you’re annoyed about that. It’s just the way it is, and it might be a good thing for the chair to ask the select committee clerk how we got to this position.

CAMERON BREWER: Thank you, Mr Speaker. One thing that we looked at that continues to exercise the minds of this House is the huge weight of superannuation as we head through the coming decades, as the cost of universal superannuation goes from about $25 billion to over $70 billion in the middle of this century.

I know that the Treasury has exercised its views on what needs to be done. I know that the Treasury wants future Governments—this and future Governments—to be singularly focused on getting us in the strongest position so we can fund all our commitments, going forward this century, and we are in a stronger position when there’s another shock, inevitably, whether it be natural hazard or pandemic. I commend the committee’s report.

Ryan Hamilton: Point of order. Mr Speaker, seeking your guidance: obviously new to this process [Interruption], but if the chair was to seek leave—

SPEAKER: Just a moment. There is a convention that no one else speaks in the House other than person moving the point of order.

Ryan Hamilton: Mr Speaker, seeking your guidance: obviously there’s been a clerical error. If leave was sought to correct that statement and add the long-term insight briefing—which was clearly the intention of this special two-hour debate through the Business Committee—would that be acceptable to the House?

SPEAKER: No, there has not been a clerical error; that would be a wrong analysis. However we got to this position, this is what the select committee sent to the Business Committee to set down the time for the debate. So we’re not relitigating that, nor are we placing any blame on the clerical assistance that’s provided and the advice that’s provided to the committee. What happens in the future is a different matter, but it’s always open to any member to seek leave of the House.

I’m here as part of the Finance and Expenditure Committee to discuss the long-term fiscal statement which we received last year, which set out a number of concerns for the long-term future of New Zealand and the New Zealand economy.

In the previous speech, we’ve heard that perhaps the long-term future of New Zealand and the New Zealand economy might have been in some way compromised because of what was needed to be done to get through COVID. There are a number of things stated in that speech in terms of how much was spent to get us through COVID. Let me give you some quotes of the House—some quotes—from what people said at the time when the Labour Government was proposing spending money in order to get through COVID. Here’s one, in April 2020: “it is necessary for the Government to go further in terms of offering relief to those businesses most affected … So we support the Government in this bill and we encourage them to go further.” That was Paul Goldsmith.

In August 2020: “So we’re very conscious that this is a time for extraordinary measures, and that’s why National has been broadly supportive of a very significant increase in Government spending outlined in this Budget and the need to go further into debt.” That was Paul Goldsmith—

SPEAKER: Yeah. Look, in June, we had numerous points of order about the relevance—

Hon Dr DEBORAH RUSSELL: I’ll move on, Mr Speaker.

SPEAKER: I would do so, very quickly.

Hon Dr DEBORAH RUSSELL: There was contention, too, that spending during COVID-19 has created the problems that are now here sitting in the long-term fiscal statement. Then it was said, “Well, what do we have to show for it?” Twenty thousand New Zealanders are still alive—the lowest excess mortality rate in the world—businesses have survived; livelihoods that were protected. That’s what we have to show for it.

Finally, there was the contention that there was a lot of spending that was not necessary for COVID-19 itself, that the shovel-ready projects weren’t worth it. I bet you Mark Patterson will be there when the Hood Aerodrome reopening goes ahead, next week in the Wairarapa, and I bet you Mike Butterick will be proud to be there with him, too—a project that was built with shovel-ready money. I’ve noticed that Christopher Bishop has been very proud of the RiverLink project in the Hutt Valley, the interchange, and the flood protection. Well, that was shovel-ready money.

That’s something to show for it: long-term projects that have benefited New Zealand. So to say that the COVID spending was irresponsible is simply wrong, and to say that they’ve had no benefit to New Zealand is simply wrong. I’m pretty sure that my dad is still alive because we spent money on COVID, and there would be many people in this House who could say the same thing or that even that they themselves did not run the risk of death or long-term illness because this House—right across the House—supported spending money on COVID.

Let’s have a look at what this long-term fiscal statement actually talks about. What it does is it raises a number of concerns about New Zealand in terms of New Zealand’s income; the revenue it raises, in terms of what the Government raises; and the money it spends. It says there’s a long-term problem, here; we have a growing problem, it asserts, with superannuation, with the increased cost of healthcare, and with the challenge that is posed to us by climate change. That’s setting aside the individual shocks that come our way, from time to time: things, like earthquakes—I know you’re very familiar with that one, Mr Speaker—things, like pandemics; things that are not caused by climate change, and we do need to prepare for that.

Now, again, the long-term fiscal statement quite clearly points out that we need to keep our debt levels reasonable and that we need to ensure that New Zealand is well placed to meet the next shock, as well as out setting ourselves up, long time, for our future security. So let’s think about that: keeping debt levels reasonable. Despite the huge shock of the pandemic, debt levels were kept amongst the lowest in the OECD at around about 40 percent of GDP. Debt levels have increased since that Government has come to power.

There were lots of fine words and rhetoric about decreasing them, but we haven’t seen that happen yet, and I get that. It’s because we were coping with a shock, but this is on all of us to help make those debt levels come down over time, so that we can cope with the next shock.

Let’s think about superannuation: we know that our population is getting older, but, again, our spend is round about middle of the way through the OECD. In terms of health, we know we need to do better there. I’d like to point out that the infrastructure report recently released has pointed out that we do need to spend more money on hospitals, and less on roads.

If I am to take one message from this long-term fiscal statement, it is the message that we need to think longer term than the short three years of the electoral cycle; that we need to engage in that long-term planning. I would like to point out here that Labour has been the party that in the past has done that long-term planning and has put the measures in place to ensure the future prosperity of New Zealand. Labour is the party that introduced KiwiSaver, that has enabled New Zealanders to build their own savings for retirement. Labour—and thank you, Sir Michael Cullen—is the party that set up the New Zealand Superannuation Fund, that sovereign wealth fund that will enable us to stay prosperous into the future. Labour is the party that put together the New Zealand National Resilience Plan, scrapped by that Government. Labour is the party that set up the New Zealand Infrastructure Commission so we could engage in that long-term planning. Labour is the party that set up Kiwibank, so we now have, actually, some competition in the banking sector, and a bank that is owned by New Zealanders. Labour is the party that set up Working for Families so that we could redistribute wealth so that children were not impoverished and living in poverty. These are all the things that Labour has done over the years and years. The long-term history of our party points to a party that does do the long-term thinking for this country.

If we think about what is going to be the best predictor of the future, it’s typically what’s happened in the past. That’s why we are confident in saying to the country that the country can rely on us to engage in that long-term thinking. But if we think about the past being the best predictor of the future, that party over there is the party that way, way back in the 1970s scrapped the first attempt to set up a long-term savings plan. That is the party that sold off State assets. That is the party that is setting up a failed electricity market. That is the party that has prioritised private actors over social need. That is the party that is engaged in short-term, three-year thinking.

The classic example of that is that party coming in in 2023 and, for who knows what reason, just flipping up everything that Labour had done and deciding they had their own better ideas, instead of trying to build on what was already in place. We had a fast track. There was no need to abandon that fast track; it could have been built on. We had Resource Management Act reform under way. There was no need to scrap that; it could have been built on.

If we are going to go down the bipartisan route and if we’re going to try to plan for the future, it needs to be done properly by both sides of the House, and not just by one side standing up and saying that it needs to be done. So I’m saying to New Zealand that the choice this year simply could not be clearer. We have promised a Future Fund for a future made in New Zealand. We’re hearing every day that the system is not working for ordinary New Zealanders. They are working hard, but not getting ahead, and because of choices that that Government has made and that Christopher Luxon has made, unemployment is up, the cost of living is up, and the economy has shrunk. That is what that party has brought to us.

On this side of the House, Labour has a plan for action on the cost of living. We have a plan for good jobs at home that pay enough to get ahead. We have a plan for healthcare that you can actually afford and for homes that do not take up all your income. Our plan is built on long-term investment, shared prosperity, and good jobs that keep young people building their futures here, in New Zealand.

E te Māngai, tēnā koe. Tēnā koutou e te Whare. We are, of course, debating the Finance and Expenditure Committee’s report on three of the Treasury’s stewardship reports. The one that I would like to focus on in particular is the long-term fiscal statement.

What we know and what is represented is that we have in front of us an unsustainable future. What that means and what is identified in those reports is that we are confronted with the challenges of an ageing population. In the 1960s, there were seven New Zealanders aged 15 to 64 for every New Zealander over the age of 65. Now, it is the case that it is one in four, and in 2065 it will be one in two. What that tells us is that the cost of superannuation is going to escalate, and with all other things remaining equal, that cost, if we are not to end up with more revenue to pay for it, is ultimately going to become unsustainable.

So too Treasury points to the challenges confronting us with climate change. Notably—and this is a question which I put to the Minister of Finance in question time today—they state that not only climate change is going to see us confront more frequent and severe extreme weather events but also higher average temperatures and sea-level rise, all of which puts our infrastructure at immense risk, not to mention our communities that are so frequently now being hit by the these so-called one-in-a-hundred-yearweather events. Also, and importantly, I here quote from one of those reports: “Costs associated with achieving New Zealand’s commitment under the Paris Agreement are one of the most material fiscal risks.”

I think it is really important to unpack this. The Government cannot say that it is committed to meeting our nationally determined contribution under the Paris Agreement out to 2030 while simultaneously saying that it will not be sending any money offshore in the form of purchasing offshore mitigation. The reason for that is that we have known as early as the beginning of the 2020s—when both the Ministry for the Environment and Treasury produced a report looking at the costs to meet our nationally determined contribution under the Paris Agreement—that we would be looking at a quantum anywhere between $3 billion and $24 billion in offshore mitigation.

The major determinant of how big that scale is, how much that bill is, and how many billions we have to send offshore is, effectively, what the Government of the day chooses to do in the form of domestic mitigation, and, unfortunately, what we have in front of us is a Government that has shredded domestic mitigation. That has simultaneously, on the other side of the ledger, meant that we have got on a bigger and bigger hook to pay more and more money—billions and billions of dollars more—to meet that nationally determined contribution. So I just really want the Government to stare the truth and the reality of that in the face, because you cannot simultaneously say that you are going to meet our nationally determined contribution but then not be willing to pay for that offshore mitigation which you put us on more and more of a hook for every time you shred domestic policy to meet mitigation targets.

Now, all of these problems that have been identified—particularly the one around the ageing population—have been exacerbated by so many of this Government’s decisions, which are now seeing more than 200 New Zealanders, with the majority of them young New Zealanders, leave the country every single day. There are recommendations that Treasury has put in front of the Finance and Expenditure Committee for how we may go about potentially grappling with some of these increased challenges in the form of climate change, an ageing population, the cost of superannuation, and the associated extra costs that we will see in the healthcare system.

Treasury propose that we could potentially look at reforming superannuation by, for example, instituting means testing or raising the threshold. The Greens would make it really clear that we’re opposed to both of those things because we do not think it is fair that future generations end up not being allowed the same rights, privileges, and entitlements that the current generation is enjoying, but also means testing oftentimes ends up being a sham, and an administratively costly sham, because those that have the means are able to use their lawyers and accountants to put their means in a place that is difficult to look through.

Treasury also recommended restraining expenditure, but, notably, made the point—and I think this is a really important one—that there is an opportunity for meaningful investment in early prevention. That is precisely what we’re proposing in Green Party policies like ensuring that everybody has free access to GPs and to dentistry but also to early childhood education. This is the social investment that the Government talks about but is not willing to invest in.

So what is the Government doing and what is the Government talking about? Well, the Government is talking a heck of a lot about debt caps, and I’d, here, like to again point to something that Treasury themselves say specifically when they are talking about having a prudent level of debt. They say—and I quote—“This specific benchmark is less important than the rationale behind it of ensuring that the Government has the economic flexibility necessary to respond to shocks.”, and what is kind of being alluded to there is the fact that not all expenditure is simply a cost. It has the opportunity to be an investment and to do the likes of that social investment that we’re talking about, which reduces costs in the future, and, more than that, it builds our resilience and our real-world productive capacity to lower New Zealanders’ cost of living, to rapidly reduce our climate-changing emissions, and to improve our quality of life—to actually build this country, as opposed to shredding it or selling it for parts, as this Government seems intent upon.

You cannot treat all forms of Government expenditure the same, and just to run through some examples of that, this Government has chosen to spend billions of dollars in tax cuts that have been funded by debt, which produces precisely zero jobs. In fact, it has probably created the economic doom loop that we are currently experiencing, whereby we have record unemployment, lower than projected income tax off the back of that, and then the Government says that we therefore need to cut spending more. It is now proposing asset sales, and so on and so forth we circle the drain. We need a fuse-breaker, and that looks like an active Government willing to put its hands on the wheel and not leave the future of our country to monetary policy and to offshore shareholders.

So too this Government is choosing to spend billions of dollars on roading projects with a low return on investment—riddle me that! Parties of the right, who talk a lot about economic responsibility and evidential basis and return on investment—well, they’re not following their own rule book, which I think, again, belies the fact that none of this is actually logical; it is ideological.

The same Government is choosing to shred billions of dollars from climate action, not only from mitigation but also from adaptation. The flood prevention that they so frequently cite as one of their proudest things that they’re doing in adaptation has, in fact, been cut by three-quarters by this Government if you look at the spending track and the commitments and the money that had been put aside by the former Government. Now, in question time, the Minister of Finance had the gall to say that by pointing out the lack of logic or the inconsistencies in the Government’s argument that it is somehow going to meet the nationally determined contribution but not undertake the offshore mitigation that is necessary in all of its official advice and the basic maths, that this is because we don’t support farmers on this side of the House.

In fact, quite the contrary: we actively do and did. One of the things that this Government has announced is a fund for farmers to transition to greater resilience. That is a fund that they reannounced which the former Government had committed to funding after this Government had shredded tens of millions of dollars from it. Honestly, I think part of the reason that it is so difficult for New Zealanders to follow just how many—I can’t say the “l” word in this place—pieces of information that do not track with the truth is because there is a barrage of them that this country is facing under the so-called leadership of this Government.

Now, on the healthcare piece, which, again, was one of these long-term risks that Treasury identified is going to cost us more into the future as a result of this ageing population—this is not abstract. We had it in the COVID report released yesterday, which obviously many have now used as an opportunity to insert into this debate, so I think it’s important to respond. The basic question that this Government has to answer is whether we now, two years into their stewardship, are in a better or worse place to respond to the next pandemic. Very clearly, we can see from their outsourcing to the private sector for 10-year contracts which ultimately gut the public sector, from their gutting of 1,800 jobs in data and digital—the IT infrastructure necessary to track and trace—and so many other cuts, that we are not.

But the key message that I want to get across today is that despite these challenges, a better future is possible. The Greens are proud to have put solutions on the table, such as our fiscal strategy.

Well, thank you very much, Madam Speaker. I’m very pleased to participate in this special debate on three stewardship reports from the Treasury. These are critical because we need to sometimes think about generations to come and how we ensure that New Zealand remains a place worth staying.

I’ve got to give credit to Sir Michael Cullen, the former Minister of Finance, who was in charge at the time that these 40-year forecasts of the Government’s statements began. He was a good man and did a very good thing. I’ve been following, perhaps tragically, these reports every four years—

Dr Vanessa Weenink: That is tragic.

Hon DAVID SEYMOUR: —since they came out first in 2006. There’s a voice behind me—I don’t know who it is—that just said, “That is tragic” that I follow them. Well, actually, it would be good if more MPs did read them. It’d be good if people took public policy more seriously, unlike this member behind me. I think it’s absolutely vital for New Zealand that we start to more closely follow the financial future that we will be leaving to the generations who come after.

I think it’s a real problem, when you open this long-term fiscal statement, that you see that debt will reach 200 percent of GDP. At the moment, it’s in the low 40s. It is the dark target of the Government to keep it under 50. But you imagine for a moment if the debt of the Government was 200 percent of GDP. Well, the truth is we’ll never get there, because what that looks like at the moment, is we’re paying $10 billion a year in interest payments alone. At 200 percent, let’s say that we’d be paying something like four times that. If we were to pay $40 billion a year in interest, nearly all income tax would be taken up by interest. Now, in that scenario, the reason we’d never get there is that the people who buy New Zealand Government debt, who buy Treasury bonds from the debt management office at the Treasury, would say, “No, we’re not going to keep loaning to you, unless you pay so much interest that, actually, your interest bill will be so much higher you can’t afford that so the spiral stops.”

What that tells you is that we’ve got to avoid what is forecast here. In order to do that, we’ve got to understand why it is that the Treasury has us forecast to go so high in debt over the next 40 years. One of the answers is that we have a 20th century welfare State set up for 21st century demographics. What I mean by that is that when we started paying pensions and running Government education and Government healthcare back in the 1890s and the 1930s, at that time it was quite normal for a family to have six, seven, eight, nine children. Barbara Kuriger, she’s from the Taranaki King Country, she still thinks it’s quite normal—but, for the most part, it’s not.

DEPUTY SPEAKER: Don’t bring the Speaker into the debate. However, I am from a family of six, so I’ll put that one out there.

Hon DAVID SEYMOUR: Madam Speaker, I made an exception because I thought it was relevant this time. But now it’s normal for people to have one or two children. That means that the number of people coming along as taxpayers is less.

It’s also true that people are living longer. I remember when a 70-year-old was ancient. Now, in my case—I was a lot younger, but it seemed that someone who was 70 might as well be 110. Now, 70-year-olds walk among us in the workplace. They’re just about everywhere.

Hon Nicole McKee: 70’s the new 50.

Hon DAVID SEYMOUR: “70’s the new 50.”, I hear Nicole McKee saying. But one of the things that this means is that where there were, only a few decades ago, 15 taxpayers or working people for every retiree; there’s now only four. In a couple of decades, there will only be two people of working age—and that’s defined as 15 to 64—for every person over 65. So the numbers worked in the 20th century but they don’t work now.

The second reason that this is happening that you need to understand, in my humble opinion at least, is that the Government has been too big and too inefficient. It has also had to deal with shocks. It’s just the nature of our small society. We’re pioneering people who moved to the edge of the earth for a better life, but every now and then, we have to hang together and it costs a bit. When our second-largest city was destroyed by earthquakes, when the great financial crisis hit, when the COVID-19 pandemic hit, the estimate is from the Treasury—and Iain Rennie has said this—that it takes about 10 percent of GDP every time that happens.

So you put these two things together. At the moment, Government is too big and it’s too inefficient, and we’re spending too much because the numbers of taxpayers to dependents don’t add up any more. Then you take these shocks that happen every now and then, and you start to think, “Well, what would it take to actually balance the Budget?” Well, if we have a shock every decade that’s about 10 percent of GDP, we need to run a 1 percent surplus every year just to catch up. That means 1 percent is about $4 billion of surplus every year just to get ahead. But the estimate from the Treasury is that we’re running a 2 percent of GDP deficit. So when you take away the overs and unders and good years and bad years, we’re about $8 billion behind. The gap is around $12 billion. That is the real hole. It’s not about Labour or National or ACT or the Greens; whoever’s in power is going to have to grapple with this for all New Zealand. That’s why I like these reports and I credit Michael Cullen with starting them.

But it does mean that we’re going to face hard choices. We are going to have to accept that with the numbers changing, our welfare State and our benefit system have to change. The Treasury paper says here at the moment we spend about 5 percent of all our income each year on benefits—not superannuation, but on benefits. If nothing else changes, that’ll have to come down to about 2 percent. So are we going to do that level of welfare reform? It sounds pretty tough. The alternative is to raise the pension age to 72—that would, basically, keep the pension costs level. I suspect not many people will be up for that, but that’s another hard choice.

The one thing that we absolutely need to do—and I talked about it in my state of the nation speech last month—is commit ourselves to a smaller, more efficient Government. We have too many Ministers, we have too many portfolios, we have too many departments and not enough drive for efficiency, and people ask themselves, “How is it possible? More money goes in, more people get hired, and yet the customer seems to be even less satisfied with the quality of the services they get.”

Now, I acknowledge my friend and colleague Cameron Brewer. I’m proud of what this Government has done to pull back some of those costs and make Government more efficient, but it’s not a $12 billion question. That’s the real issue. How do we answer the $12 billion question so we can balance the books and put enough aside for a rainy day: 1 percent of GDP every year, for a 10 percent shock every decade? That is why we need to fundamentally rethink the shape of Government, the number of Ministers, and the number of departments, and start having a really tight relationship between who’s responsible for minding the public purse, for getting the results, and for ensuring the efficiency. That’s the way we can get on top of the major drivers such as health. If we don’t have that, we end up paying too much for too little, and people are enormously frustrated as a result.

You can’t have a Government department that answers to 23 Ministers. I would argue you shouldn’t have a Minister that is trying to keep across several different portfolios. You shouldn’t have 30 members of an executive, 10 of whom aren’t actually in the Cabinet. If you’re prepared to go down to one or two departments per Minister so that you’ve got real focus, or only one Minister per department so that you’ve got real accountability, that is the first step we can take to taking on this $12 billion problem. A smaller, more efficient Government is the most important thing we can do in order to be honest with those who come after and leave them a place worth staying that is capable of delivering the services that New Zealanders expect and paying its way on fair terms. Thank you very much, Madam Speaker, and thank you for your indulgence of my including you in the debate—you and your many children.

DEPUTY SPEAKER: No, that’s my brothers and sisters.

Well, given that my dad was one of 17 children, I’ll avoid talking about whānau. Greetings, Madam Speaker. I’ve read several of these documents going back a number of—well, dare I say, decades, and, yes, there are some deep, fundamental challenges in terms of how we fund the future costs, given that we have inherited a very egalitarian set of traditions as Kiwis. I rather suspect that one day, if future Governments are not capable of growing the economy, the bond market may very well impose changes on us. I have to agree with the Deputy Prime Minister that there’s a constant need for us to trim the sails of the State and demand better results from the people who are there ostensibly to work on behalf of Kiwis, and we are meant to be a proxy for Kiwis, holding them accountable, but, in my view, this report does miss a deeper challenge.

As society changes, demography is altered through a range of migration decisions. In some parts of New Zealand, the faces of the schoolchildren are changing in the sense that there’s a growing proportion or percentage in a number of the schools where I hail from—Te Tai Tokerau—which are of Māori descent. But, sadly, their political leaders are leading them astray. Sadly, we have gifted far too much power and far too much authority to stakeholders in society whose narratives and whose motivations are actually to worsen the prospects of future Governments from being able to meet these costs. Why? Because we seem to have lost our commitment to prioritise growth and development.

Yes, we can shrink the cost of welfare, and, yes, we can continually have debates—it won’t be happening much while I’m around—related to the pension age. But the deeper problem is an economy that’s static, an economy that is not exploiting its resources, an economy that does not put an accent on security, and an economy and a society and an administration that sells resilience short. You will never have the surplus to meet the expectations of a new generation wanting a higher quality of education. Well, I say to that generation and their parents, ensure that you hone the ethic of service and you teach at the kitchen table yourselves and your children that obligations and duties are just as important as rights.

Now, of course, nowhere do we see this craziness more widely acclaimed than in the “Gretarisation” of New Zealand politics, with that foolish juvenile Greta Thunberg across the other side of the world, believing, with her tiny amount of experience in New Zealand—and, of course, that young girl has analogies on the other side of the House—that, somehow, New Zealand is going to save the planet. Somehow, New Zealand is single-handedly going to conquer this imaginary taniwha called “climate change” and that we’re going to have to tax every cow, close down every mine, and regulate excessively every quarry. That is never ever going to happen, and fortunately, in my view, what that report shows is that without a clear commitment to growth and a clear commitment to development, we’re going to struggle to find the wherewithal to maintain our infrastructure.

So what holds us back there? Yes, at one level, it’s a distorted philosophical understanding as to how we should interact with our environment. The environment is made up of multiple opportunities and, in most cases, it’s self-healing. For those who want to actually threaten New Zealanders with the thought that somehow we are inert, impassive, and incapable of dealing with weather, they don’t understand the history of New Zealand. The Treaty was hardly signed and there was a massive flood up in the Hutt. That generation adapted.

We’re always going to have adverse weather. Each generation, as we’re seeking to do with our stopbank resilience, which can do with a lot more money—but where’s the money going to come from? It will never ever go to the Congo, as promoted by the Green Party today during question time, for as long as the good matua is in this House. There will never be a dollar spent on buying credits overseas from the Congo when we would then suffer an inability to build hospitals, to recapitalise our military, or to maintain our infrastructure. It’s that type of ideological folly and it’s that type of juvenile, performative nonsense that is actually undermining the capacity of Kiwis to work together, or, indeed, to find the strength and the risk management to begin to use our resources.

Of course, this report does talk about fiscal vulnerabilities, and those fiscal vulnerabilities can be seen in the scale of our welfare bill and they can be seen in the scale of our health needs, but we’re never going to overcome those particular problems by continually supporting unfettered migration. We are overdue for a pruning of our welfare appetite, we are overdue for a pruning of our welfare expectations, and it’s about time that we saw more amongst the hapū and iwi of an embodiment of that old line out of the Good Book “By the sweat of thy brow”. That is done not by going to Wellington, not by importuning politicians, and not by coming to the House in some sort of performative iwi way and guilt-tripping everyone that somehow colonialism is responsible for our current woes. Happily, at the next election you’ll see an end to that performance of rubbish, because people will now accept that unless we grow, expand, and develop at every opportunity, we are going to continue to lose too many young people going overseas.

Now, it could be said that we’re not doing enough to shrink the scale of government, but that means also shrinking the opportunities for law to be weaponised—weaponised by small groups like the deluded hapū that went to Australia from Taranaki recently. They were standing over some fake bit of paper, pretending that they had the sovereignty of Māoridom and the sovereignty of New Zealand to stop international investors following the law and investing in our country. I say to them, “Hapū leaders, stay home and shoot all the feral dogs that blight your neighbourhoods. Make your children lunch and take them to school every day, week. Ensure that you go and volunteer, that you join your community and uphold the ethics, the ethos, and the values, rather than jumping up and down, cuckolded by green groups whose interests are inversely related to the regeneration of economic opportunity in our regions.”

Now, of course, you will not see language of that character in this report, because it is composed in windowless rooms, people who don’t want to offend anyone for fear of being cancelled when they speak the truth. Of course, the truth, in a political sense, is a debatable concept and I look forward to that debate, as the Deputy Prime Minister has averted to, as we move towards the end of the year.

But the key point that I hope Kiwis take from this speech: underlying the economic challenges is the challenge of social cohesiveness, is the challenge of accountability, is the challenge of self-responsibility. It’s also the challenge to stand up and support, in the way our forefathers and their wives and mothers did, and create opportunity, wealth, and security out of our natural resources. It’s actually a heartening experience to be one of the minority voices amongst te ao Māori who has that view—oh, but wait! Every time I go to Australia, I meet the rangatahi, the young men and women from Taranaki, who quietly say to me, “Matua Shane, when are we going to develop our own resources so we can stay in New Zealand and enjoy the ability to dig up Taranaki, to use our own natural resources?”

Papatūānuku is not some inert figure that you sit there stroking, singing “Kumbaya”; Papatūānuku, in terms of our tūpuna, was a figure that created nourishment and opportunity. It’s about time we stepped away from mythology and stepped up to the plate and used our resources to sustain our economic security and opportunities for the future.

Tēnā koe e te Pīka. Well, it’s really important to talk to this kaupapa, especially when we have matuas that are so busy stroking different parts of their tinana they don’t know when to stop.

Every four years—for our whānau who are titillated with this conversation—Treasury must produce this 40-year outlook. So it’s fair to say most people debating this today won’t be around in the next 40 years. Hana will be 63. So the outlook that we’re expecting to hear in this debate is way beyond triennial thinking, Governments, and twilight-setting politicians. It’s meant to help the debate for big-picture thinking. You’ll note that not much of the debate has been that way. because there’s not a lot of big-picture thinking in this place.

The fundamental question that we are debating and asking ourselves, as a country, is: will we be able to hand it over to our mokopuna in a stronger position or a more unequal position? That’s what’s fundamentally come out of this report. This isn’t normally the space that I talk to, so I’ve been able to sort of really look at it from a grassroots perspective: what is it that we are debating here, why does it even come into the House, and what are we looking for out of it? If you’re looking for anything new, fresh, dynamic, innovative, this isn’t the show to watch. If you’re looking for something that’s actually addressing the issues that we have, which they have identified—ageing population, climate change costs, global instability and economic shocks, and rising health costs—you won’t see a lot of change in the discussion, particularly from the Government. Effectively, from what we’ve just heard, it’ll be about “mine, mine, mine”, and in 40 years, who knows what’s going to be left, and it will be about continuing on the same way that we do now.

Growth should absolutely be an agenda, and growth in a responsible way is something that we all support, but what we’re not hearing—and it’s interesting that this report is actually called He Tirohanga Mokopuna; you only see “mokopuna” written in it once. That’s how short-sighted this report from Treasury is. There’s actually nothing in it to actually have any foresight for the next 40 years.

Probably the biggest question that we should be asking is—so we know that we have an ageing population. We all care. We should all be responsible for looking after our pāhake, whether they are kaumātua or other cultures. The reality, though, is that we have a growing Māori and Pasifika population, so we have a shortfall and we are now being asked to have the same obligations for everyone, community-wise, even though the growing rangatahi and those who have been cut short of jobs and of equity are actually the Māori and Pasifika population. It’s a really interesting quandary to sit down and listen to. What we aren’t hearing from this, politically, is about wealth and inequality. We’re not hearing about housing affordability. We’re not hearing about corporate tax settings; we’re not hearing about economic power imbalance in society; we’re not hearing about climate equity—none of those solutions because, guess what! They are just too hard to handle.

One of the things I was really interested in understanding in this whole portfolio is that there is this continuation of accepting that billionaires pay lower tax rates. They pay lower tax rates than workers. This Treasury report assumes that. It assumes that it continues on—that large property speculation can continue to be lightly taxed. It assumes and carries on that wealth can grow tax-free across generations, and that, actually, we will never ever address the fact that we need to redistribute wealth and we need to have a different tax system. Nowhere in any of this report can we see anything different. It proposes status quo.

The real issue is—and what Te Pāti Māori will continue to say about—is that we need to have net wealth tax on the very richest households, on the very super-rich, not the mediocre rich that you’ll all jump up and down about around this House. We need to continue to talk about how we systemically redistribute wealth. None of that is coming from anyone that is benefiting from the existing tax system. I know it’s really hard to imagine, but I can guarantee those generations 40 years from now are talking and thinking this way because they believe in equality and fairness for all.

The other side that we didn’t see is real climate security, which must mean us addressing, as a nation, energy sovereignty, solar on homes, solar on marae, solar on community centres, solar on libraries, solar on schools. These are all about us addressing the issues and addressing them at scale, but nowhere in this report do we see anything that is aspirational and truly thinking how those who are Hana’s age today would be addressing and wanting to move in 40 years.

It’s been an interesting kaupapa to be a part of. I’m glad that I’m not in this committee all the time because, sorry, I’m really disappointed in the calibre of this type of reporting. Kia ora rā.

Tēnā koe, Madam Speaker. This report is all about understanding the long-term challenges our country faces and there’s a lot of useful observations in it. The most obvious one is we actually do need to take action on climate change. Ignore the speeches from the dinosaurs who are currently in the Cabinet at the moment, who are completely in denial about the reality of human-caused climate change. It is literally a threat to human life and all other life on the planet in a relatively short period of time. If we continue digging up fossil fuels, we’re in trouble. There is no future.

But Minister Shane Jones, I think, really suffers from projection. Basically everything he says about the Opposition can be said of himself.

Hon Judith Collins: Point of order.

Hon JULIE ANNE GENTER: Oh, sorry—Judith Collins is going to take offence.

Hon Judith Collins: Point of order, Madam Speaker. The member who’s just sat down has referred to the dinosaurs in the Cabinet. I’m a member of that Cabinet! I might be old, but I’m certainly not a dinosaur. I don’t want to refer to the member as being deluded or something like that—she wouldn’t like that. I think it is important to have some semblance of respect in this House towards each other. Every member is supposed to be an honourable member.

DEPUTY SPEAKER: Thanks for that point of order, the Hon Collins. Yes, it wasn’t pointed directly at anybody, but maybe we could lift the tone just a wee bit and maybe talk about the policies as dinosaurs rather than the people.

Hon JULIE ANNE GENTER: I would hate to offend anyone in the Government. They’re obviously very sensitive to criticism and use very colourful language all the time. Not that Minister, but the other Minister who was speaking earlier does use extremely loaded terms to refer derogatorily to the Opposition on a consistent basis. I don’t see why we shouldn’t be able to colourfully use language to describe the point of view that is completely outmoded. That is what is meant by fossil fools: fossil fools love fossil fuels. The people who believe that we can’t take action on change climate or that we shouldn’t take action on climate change are the biggest threat to the future of humanity. So I have absolutely no issue with referring to some people in the Cabinet as having views that—

DEPUTY SPEAKER: I’ll just ask the member to refer to the policies in that way, and that’ll be acceptable.

Hon JULIE ANNE GENTER: Thank you, Madam Speaker.

We have to take action on climate change, and of course the Government is doing the exact opposite. All climate action is basically action on cost of living, particularly when we look at the rising cost of oil internationally, so it simply makes sense for New Zealand to become less reliant on imported fossil fuels for transport. It makes sense for New Zealand to invest in distributed renewable electricity generation like home solar. Pair that with energy-efficient machines like electric vehicles, which can also be used as batteries, like hot water heat pumps—all of those things reduce costs for households and reduce our carbon emissions, so why wouldn’t we do them? It just makes sense.

The other interesting observation is, of course, that New Zealand does need to change tack when it looks at its overall investment. We have an ageing population. The National Infrastructure Plan that was released last week demonstrated that the country has not been sufficiently investing in hospitals and healthcare facilities and services. In order to cope with that, we need two things. We need to change our tax system so that we have options to broaden the revenue base in a progressive way. That means the wealthiest pay more than their fair share. When we have that, we have more revenue to invest in the services that everybody benefits from and the infrastructure that everyone benefits from.

What’s interesting is that if you look at page 66 of this report, it shows that New Zealand, far from being a high-tax country, is a country where we’re collecting lower than the OECD average in terms of Government revenue as a percentage of GDP. That would probably be partially responsible for the fact that people can’t access the same high-quality services and infrastructure that we see in many other OECD countries. So, while there is a myth that has been bandied about for the last 20 or 30 years in New Zealand that somehow New Zealanders are paying too much tax, the reality is our tax system disproportionately taxes lower-income people, doesn’t collect enough revenue at the high end of income earners and wealth holders, and as a percentage of GDP, we’re on the lower end.

Treasury itself mentions that while income and consumption taxes—this is page 68—are two of the most important sources of Government revenue, they’re all alternatives. Other papers from the Treasury have considered alternative labour tax schemes that are more and less progressive. They also consider adjusting capital income taxes. Those papers illustrate that taxable income in the upper income tax brackets and capital income tax bases could be a contribution. But we also need to have a better investment plan when it comes to infrastructure, and, of course, this Government needs to grapple with the reality that the Roads of National Significance it campaigned on are unfundable and not the best use of money.

Look, it’s great to stand and speak in regard to these bills—not bills, sorry; it’s a habit. The Investment Statement 2025 and the Long-term Fiscal Statement 2025: together, these documents give us a comprehensive view of the Crown balance sheet today and, obviously, the long-term fiscal pressures that will shape New Zealand over the next 40 years. What they show is that this is quite simple. We have a limited window of time to act, and acting early will cost us far less than delaying. It gives me privilege to be part of a Government that’s looking the tiger in the eye and is prepared to make policy changes that will address these long-term structural changes for the benefit of our country.

The state of the Crown balance sheet today: the investment statement sets out what the Government owns, what it owes, how those assets are performing, and how resilient we will be when shocks strike, and they certainly do strike, as we know. As at 30 June 2024, the Crown held $571 billion in assets, or roughly $107,000 per person, and $380 billion in liabilities. This leaves a net worth of $191 billion, but even that number needs context.

The balance sheet is larger than ever, more complex than ever, and under increasing pressure. There’s a clear amount of structural change required by this Government in the way we spend, monitor, evaluate, and restrain public spending. There has been a clear anomaly around the COVID area which cannot and must not go unnoticed.

I know the Opposition wants us to move on and say that there’s nothing to see here, but there was a significant amount of spending and it’s been related to these documents that show that it was wasteful, excessive, poorly controlled, and now has placed real strain on where we are today in terms of the debt situation. Treasury refers to it as the debt ratchet—crisis spending that never closes. Often around national crises, it says that we’ll spend about 10 percent of GDP, like the earthquake situation in Christchurch and other natural disasters.

But around COVID, the Labour Government spent $60 billion. Nearly half of that was not even related to the COVID pandemic—$60 billion was spent and not even half of that was related to the pandemic itself. These are eye-watering figures, and that’s why this National-led Government has worked so hard to control spending so as to create buffers and resilience that the Treasury says are so important to the ongoing sustainability of our balance sheet and to our cash flow.

Treasury gives us a simple test for responsible fiscal policy. It says temporary, timely, and targeted. Those three things work well to ensure that our spending is appropriate and is proportionate and is time-bound. Unfortunately, we’ve seen some uncomfortable clarity flow through these documents, which shows that some supports, particularly around COVID, were slow to deliver, were too broad, and proved difficult to unwind, even when circumstances changed significantly, such as some of the mandates which lasted much longer than were justified, shutting down Auckland for longer than was necessary, and without an adequate review of their effectiveness.

Weak monitoring and evaluation allowed waste to persist. Treasury’s documents show that we cannot evaluate what we do not measure and often the Labour Government failed to measure the impacts of its own decisions. That’s why we’ve been very clear as a Government to set up targets that are both public facing and hold us to account so that we can measure our outputs, and dare we be aspirational with some of those targets. We may not even be able to achieve them, but at least we’re being accountable to the public.

Hon Damien O'Connor: Rubbish.

RYAN HAMILTON: GDP is showing that we’re actually growing, Mr O’Connor, so I bet you wish you were on the other side of the fence.

The Labour Government failed to measure the impacts of its own decisions. Treasury’s analysis shows similar supply problems on the fiscal side. During the COVID response, some spending programmes lacked the value for money that should be standard. Fiscal reports were sometimes extended without strong evaluations. Scrutiny was weakened and transparency was diminished.

Hon Damien O'Connor: Money for your mates.

RYAN HAMILTON: Do you know anything about transparency, Mr O’Connor? Treasury also criticises the use of large infrastructure and investment programmes as crisis tools, noting that they were slow, poorly timed, and not reversible—the very opposite of what prudent, temporary—

Hon Barbara Edmonds: What are you talking about?

RYAN HAMILTON: —fiscal support should look like. I’m going to give you three examples very soon, Barbara Edmonds. If public money is spent but not monitored, if policies are introduced but not assessed, if major decisions are made without clear data, then waste is not an accident; waste becomes inevitable.

Infrastructure is essential. You know that we’re a Government that’s really proud of our history in terms of investing in infrastructure, and we’ve worked really hard to forecast a 30-year infrastructure programme, which is something that Treasury is really keen on in terms of good balance sheet management and projecting forward. Treasury’s long-term fiscal statement said that we often get low value for that spending, poor project selection, weak asset management, and cost overruns.

The example that Barbara Edmonds wanted was the so-called shovel-ready projects that were rushed out the door during COVID. In many cases, maintenance and renewal work was far less glamorous but actually more cost-effective. In fact, many of those projects—50 percent of those projects—didn’t even start until two years after the funding was approved, so they can hardly be called shovel-ready. Treasury also criticises the use of large infrastructure and investment programmes as crisis tools, noting that these projects tend to be slow, poorly timed, and, again, not easily reversible.

Interestingly, the International Monetary Fund and the OECD estimated the discretionary fiscal response was approximately 20 percent of GDP for our COVID response, and this is among the largest COVID-19 responses globally. This clearly has had a big impact in terms of the reports that Treasury was reporting on.

Three programmes which came out of it: the large asset programme—or the LSAP, as it’s more affectionately known—has shown losses of $10.5 billion as early as last year: $10.5 billion. Those reports warn that indemnities and guarantees running into the billions were approved without strong transparency requirements or clear public reporting. Treasury echoes the call for stricter rules and more rigorous assessment before such tools. Again, these are not small technical issues; they are huge fiscal exposures that bypass the safeguards designed to protect taxpayers. Two more programmes: the $3 billion shovel-ready project I talked about; most of the spending occurred two years after the Government decided to commence it. This one’s a pearler: the lump-sum programme—a Grant Robertson special. There are limitations noted in the insights briefing. For example, some payments were made to people who were not intended to receive them, such as—wait for it, Sam Uffindell—people who were overseas; think French backpackers or, in some cases, deceased people.

In conclusion, the reports show a clear message: wasteful spending cannot be primarily a priority of any Government. We’ve got to think about our long-term pressures. We’ve heard about the growing need for retirement savings across the country. We’re pleased that we’ve made some headway there with some incremental KiwiSaver investments across employers and employees. We will insist on high-quality capital investment focused on maintenance and renewal first—as Treasury indicated, they’re often better for stimulatory responses in the short term.

The path forward is clear and the stakes could not be higher. This is not just about accounting; it’s about a future we have to leave to our children and our grandchildren. It’s about whether Government serves the public with discipline and honesty, or about whether we will have the resources and the resilience to respond to the challenges of tomorrow. Over the last decade, our assets have doubled—a bit more than half of that increase, $119 billion, was not new capability; it was re-evaluations driven by inflation; rising land and construction costs, especially for State highways, rail, and public buildings. This means our balance sheet looks stronger on paper without delivering more or better services.

We know our social assets are ageing. Transport, health, education, and housing hold 81 percent of the Crown’s physical assets, and many are reaching the end of their useful life. The average hospital is 45 years old. Education: one-third of our school buildings are more than 50 years old, and nearly half are between 20 and 15 years old, many with deferred maintenance.

But we’re looking those challenges in the eye. We’re prepared to address them as a Government. It hasn’t been easy coming in with a high-inflated, high-interest environment, largely contributed by gross misproportionate spending during that COVID era, and now the chickens have truly come home to roost. National has a proud history of strong public finance and responsible stewardship, but that legacy must be earned again and again. We are fixing the basics and building the future.

Thank you, Madam Speaker. Yeah, I’m not surprised to hear that sort of speech coming from Ryan Hamilton, the MP up in Hamilton, given his personal views in 2021, which are well reported in the media, in relation to COVID. I’m going to leave it there lest I embarrass that member with a number of quotes that he has in relation to vaccinations and mandates.

I want to indulge the House for a moment today, because one of the greatest privileges of being an electorate MP are the relationships you establish and develop in your time as a sitting MP. I acknowledge that in my community of Mana, we have lost four strong community leaders in the last week alone. Today, I attended the third funeral this week, of Acting Major Ioane Washburn, who was only 45. Major Washburn was a community stalwart. He was a boxing coach at the Cannons Creek academy, he was involved heavily in financial planning for the Salvation Army, he was a social worker at the Taeaomanino Trust, and he was a big brother to many people.

To Fuamoli “Molly” Fiso—“Queen”, as her brother Fiso John Fiso would describe her—she was one of the directors of the Fiso Group, which are friends to many in this House, not just here in the Labour team. She was a fierce protector of her family and her friends, she was an innovator, she was a carer, and she was my good friend, and I have the privilege of speaking at her funeral tomorrow.

To Levaopolo “Livi” Livingstone Finau—probably the best dancer that has come out of Porirua East—he was a coach for the Tawa rugby club. He was a huge advocate for gagana Samoa, particularly in Porirua East, where a number of his grandchildren attended schools, and he was a papa to many.

And, lastly, to Auntie Atilele Lauifi Baker: she was the matriarch of Tītahi Bay’s probably largest family. She was the mother of 11. She was a humble servant. She was one of the founding members of the Ekalesia Fa‘apotopotoga Kerisiano Samoa Samoan congregational church in Elsdon, the Ketesemane Church.

To all their aigas—to the Fiso, the Baker, the Finau, and Washburn aiga—my alofa to you all at this time. Your family members and our community leaders, they leave big shoes for our community to step up and to fill. Ia manuia lau malaga, my friends.

Each of these leaders used the platforms that they had within our community of Porirua to build a better community for future generations, and, effectively, what we are debating today in the long-term fiscal statement is about those long-term decisions that whether it be this Government, the next Labour Government come November, or future Governments—it’s about the choices that they need to make in order to make, basically, the public services that New Zealanders depend so much on sustainable.

From the actual report, it set out a number of the problems in relation to some of the bigger challenges we’re going to face. It assessed the long-term fiscal sustainability; it included spending, revenue, and debt trends over the last 40 years; and it informed fiscal strategies and wants to support long-term decision-making, something that we haven’t seen much of in the last two years. It sets out that we do have a strict structural fiscal deficit, meaning that even without the pressures of climate change, an ageing population, the demographics changing, and other long-term factors—despite what previous speakers have said—there are adjustments that will be required to bring expenditure and revenue into balance. Those are some pretty massive problems that Treasury set out in that statement, which we have the privilege of debating here in the House for the next couple of hours.

The other challenge that Treasury set out in their report is the rising geopolitical tensions. Now, that report was written perhaps about a year ago, nine months ago, and it had talked about how defence spending is doubling by 2 percent of GDP by 2032. Well, we’ve seen what’s happened in the last week, or so, that’s happening overseas. That setting out of that problem is even more pertinent today given the flowing impacts that’ll happen to the New Zealand economy in the next wee while.

Also, it talked about the weather and the natural hazard risks. These are, basically, costs that the Government, costs that local authorities, costs that Kiwis will have to deal with as we have more and more climate change and major disasters. I do want to note—I know there was a previous speaker who said that this stuff happens all the time. Well, the interesting thing is that the reinsurers who reinsure New Zealand insurance companies, they absolutely know that this is an issue; they forecast for this as an issue. There’s a reason why Florida is not covered by reinsurance but New Zealand continues to be, despite us being the second-highest amount of spending for natural disaster risks throughout the world. That’s how importantly both the reinsurers and the insurers in New Zealand are taking into account climate change risk.

Population ageing was also covered extensively in this report, including the increase to the cost of retirement, and probably most important, which most Kiwis are feeling today, are healthcare costs. They are also rising relative to GDP. I heard yesterday a report around the use of the private sector, and the good thing is that the Deloitte report said we don’t want to move towards a US-type of health system, but there is a role for the private sector to play. But, most importantly, these are the public services that Kiwis do absolutely depend on and want from a Government.

The long-term fiscal statement is about planning for the future. We here in the Labour Party have always considered those long-term decisions in planning for the future. We have the receipts. We had KiwiSaver set up by a Labour Government and the New Zealand Super Fund set up by a Labour Government. We set up the national resilience plan, which then the National Party scrapped as one of their first decisions coming into Government in 2023. We set up the Infrastructure Commission, and last week, we had a debate around the infrastructure plan—it’s good to see that work continuing. We also set up the Natural Hazards Commission. That was set up after World War II—again, that’s long-term decision-making that impacts on future generations. Actually, the Natural Hazards Commission was one of the reasons why reinsurers in the United Kingdom still supported to reinsure New Zealand, because they saw that we had some of the systems and some of the funds set up already to be able to deal with these huge costs.

We hear it every day. I heard it today when people were talking to me at the funeral. I heard it in the last few days as I’ve been sitting with my community as they grieve their loved ones. We are hearing it every day that things are incredibly tough for Kiwis—even more so when you have the extra financial burden of a funeral to pay for. Kiwis are working incredibly hard but they’re still not getting ahead. That is the key reason why we saw record emigration—why we saw so many of our Kiwis following the Government’s “Everyone must go” and go to Australia, where they can get paid better; where they can actually find a job.

We know that the cost of living is up, and we know that the economy has shrunk—it’s actually smaller than what it was two years ago when the Government took office. New Zealand is in a moment of urgency. We have an extraordinary opportunity, and the Treasury set that out in the report. It’s up to each and every one of the members of this House to be able to pay some serious attention to those long-term decisions that we need to make. Some of them we can make together. For some of them, quite clearly our values won’t align. When National’s answer to every fiscal challenge has been the same—and that’s been to sell off or to hand stuff overseas or to keep cutting public services, while at the same time investing in other parts of the economy like property speculation, those are the types of choices as to why they’re so unpopular and so out of touch with everyday New Zealanders.

We need to keep assets in Kiwi hands.

Andy Foster: Sounds like New Zealand First policy.

Hon BARBARA EDMONDS: We need to return those investments back into Kiwi businesses, which is why we suggested the future fund. I can hear Andy Foster—I know you agree with the future fund because you want one too, and that’s why. Labour’s plan is built on long-term investment, shared prosperity, and good jobs that keep young people building their futures here in New Zealand. Until you give our young people a reason to stay here, they will be on the next plane, even with the fuel charge, off to Australia, where they can feel they can get their first home, where they can get a job that pays them well, and where they can access the healthcare that they need.

This is not a New Zealand that we need right now. We need a Government who is serious about the long-term challenges. When Labour takes over in November this year, that’s exactly the Government New Zealand will have.

Thank you, Mr Speaker. It’s a pleasure to take a call to speak on the Finance and Expenditure Committee’s report on Treasury’s long-term fiscal position and the investment statement for 2025. These briefings have a really important purpose—it’s that they force Parliament to move from just the reactive day-to-day political noise and look at the longer-term challenges that our country faces. The reality is this: we will continue to face challenges, and some of the worst and biggest challenges that we have in this country are not the things that happen every now and then; they’re the long-term issues that build up quietly over decades.

Governments naturally focus on the urgent issues. Part of the debate this afternoon has talked about how we’ve ended up in the fiscal position that is the starting point for the next 40 years. It’s right that we acknowledge that part of that position did come from the debt position and from the fiscal attitude of the previous Government around COVID. I was on the front line during the COVID response, and I was very grateful for the initial phases of that. As the response wore on and the Government seemed to get more tired about making decisions, it was really clear that, actually, they weren’t considering all of the factors and they weren’t weighing up the long-term impact and the fact that the fiscal impact of their decisions was going to go on for years and decades and decades into the future. The impact that that would have on people’s health over time would massively outweigh the benefits of the time that they overspent—and they did overspend in that time. Whilst we’re not looking into, and talking about, the COVID-19 royal commission of inquiry report, it does highlight some of the same issues.

The long-term fiscal outlook shows that what we need to do is be fiscally resilient. We need to make sure that we have fiscal resilience, because that is our way of being able to respond. That is national resilience. If a country weakens its financial position in good times, it becomes so much harder to act decisively in the difficult ones. In a nutshell, you cannot just have ongoing taxation and spending with a small population of a diminishing number of taxpayers over time. This is the key message that comes out of the insights and the long-term briefings on fiscal matters.

These issues about demographics are not new. I remember studying population dynamics and seeing exactly where this was heading when I was a medical student. In fact, I remember having discussions about it in social studies—that was last century. Yes, New Zealand is ageing, yes it has greater demands on our health system, and we’ve got fewer people to pay for that. In the future, that will be even greater. The tragedy of this is that this has been coming for decades—we have seen this coming for decades. We’ve known that there’s going to be increased pressure on the health system. We’ve been talking about it in health for the entire time that I was studying medicine and have worked as a doctor.

We’re also going to have rising costs of superannuation. None of that should come as a surprise. We’ve also been talking about that. For me in Generation X, we know that we’ve been staring down the barrel of this population timebomb for a long time and not having the courage to stand up and deal with it, because of the political pressure. This is something that has been a failure of all sides of this House—it’s not one party or the other.

When we think about some of the ways in which we’ve de-risked our future, we can be grateful to those politicians in the past who made those decisions. What has been helpful is that both sides of the House have continued those on. We’ve strengthened them. National is strengthening and helping to shore up the future by increasing the default payments for KiwiSaver, for example—that’s one of the things that we will be doing. That’s an important measure.

The other thing that’s really important is looking at our investment portfolio, because that is another key part of these reports. The investment portfolio highlights that our health, our roading, our schools, and all of that infrastructure needs to be maintained and very carefully planned out over the future. We have also recently had the debate on the Infrastructure Commission’s report into that. It’s really important that we work together across the House to have an orderly pipeline for those investments that need to be made so that we can continue to do that for the future.

Too often those decisions are postponed. Too often they’re delayed or they’re deferred, and we have avoided hard conversations. One of the very disappointing things for me about the last Government was that they had the mandate. They had an absolute majority, which was a rare thing in this Parliament under MMP, and yet they didn’t address the things that we’ve seen coming for decades. For a generation, we have known that this is happening. My generation—our generation—was in charge at that time, and they avoided those hard conversations. They didn’t look at superannuation. They took that opportunity, and they squandered it. Now, we are left in a position where we have to fix up the mess that was left behind. We have to fix the fiscal fundamentals that we were left with—which we are addressing, and we’re getting on with—and, at the same time, we have to look realistically and ask the hard questions and start the hard conversations about our future.

One of those hard conversations is, basically, we’ve got a choice: do we tax more so that we can continue to spend at the same amount, or do we look at how our spending is working and do we make some alterations in that spending? One of the ways of doing that might be to address Government spending on welfare. Well, I lived through the 1990s National Party “mother of all Budgets” welfare reform, and I don’t think any of us have got an appetite to be doing major reform on the welfare system, just carte blanche cutting benefits. That has a measurable impact on people’s wellbeing—but not only that; you could see in the 1990s and late early 2000s there was actually a measurable impact and dip in life expectancy because of those. I don’t see any reason why we would go in that direction.

We have to look at the other fundamentals, which is: how are Government departments working? Are they fiscally responsible? When we came into Government, it was clear that the culture that had been inculcated through the Government Public Service was profligate, it was irresponsible, and it wasn’t even putting in basic, fundamental, profit-and-loss, balance-sheet sort of stuff that I’d expect as a governor. Governance matters and proper management matters. If you’re a governor, you ask questions about how things are being done and how money is being spent—“Is that value for money?” It was clear that the previous Government failed to do any of that, and we’re having to change the whole direction of the Public Service because of that. It’s hard work, but it’s the right work to do, because cutting the Government’s spending just by cutting off services is not acceptable.

The other thing that we have to start to do, as a country, is we have to look at how we would spend money on services. I mean, specifically, we need to have a conversation, as this country, about what our expectations are for the health system, what is reasonable to expect that our public purse will pay for, and what is not expected or is unreasonable. But, at the same time, we have to say: is it reasonable that the taxpayer of the day are the only people on which the costs of the day fall? That’s the reality of our health system and ACC. What we’ve done is we’ve got a system where it de-risks the taxpayers of the day and has a fund and a levy system that helps to pay for and offset the taxpayers of the day. I think there could be more that could be done in the whole health system with a similar model, but it’s time we actually start looking and thinking about these things and talking about how we pay for things, and not just saying that “We’re going to raise tax and raise tax.”, because that actually will put more burden on the future populations, not on our current generation.

For me, I care about our future generations and setting things up so that it is actually going to be affordable and sustainable for my son and for any future grandchildren that I might have. For all of this—

Rima Nakhle: May they be many.

Dr VANESSA WEENINK: And may they be many—thank you. This is about fixing the basics and how we do that, and building the future.

Tēnā koe te Māngai o te Whare otirā tēnā tātou katoa. Nāku te whiwhi ki te tū i te kōrero i runga i tēnei kaupapa, i runga i taku pōtae kaikōrero mō te ōhanga Māori.

[Greetings Mr Speaker, greetings all. It is my pleasure to stand and talk about this subject, in my role as the spokesperson for Māori economics].

One of the issues we’re talking about in this debate is the ageing population, and, today, someone very dear to me is ageing—so to my sister Ruvae, happy birthday. I’m sorry I’m not there with you, but doesn’t this look like so much more fun?

Heoi anō rā, ka huri ahau ināianei ki tēnei taupatupatu, ki tēnei whaikōrero.

[So then, I turn my attention to this debate, to this discussion.]

The report highlights the ageing population and, conversely, the young population of Māori that we will have in about 20 years. In 20 years, Māori will be over 25 percent of the population and the median age for Māori will be mid-30s, compared to early 40s for the rest of the population. This is actually great news for Aotearoa, because the long-term fiscal statement has the name He Tirohanga Mokopuna. A mokopuna’s perspective—how wonderful. What isn’t really considered in the report is the impact the Māori economy can have on affecting the issues raised. That’s why I say that’s great news, is because “he tirohanga mokopuna” is exactly the basis on which the Māori economy is based and has grown, because every decision is an intergenerational decision, and intergenerational wellbeing is another key kaupapa raised in the report.

We’ve talked about investment, or options for investment. Again, this is an amazing area where the Māori economy and iwi organisations can have a massive impact—they already are. If we talk about keeping people here in Aotearoa, we all know that iwi and businesses involved in boosting the Māori economy are big players—key players—in areas such as forestry, fisheries, tourism, etc. They’re already on board in terms of boosting and enhancing employment opportunities to keep people here in Aotearoa—and not just Māori people; all people who desire to have a good job and earn a good living here in Aotearoa.

Housing is another thing that will keep people in Aotearoa—having access to good housing. We know—it’s been acknowledged across the House—that iwi are good partners in that sense, and have already established housing developments which range from whānau homes to intergenerational developments, which house our elderly right down to our mokopuna.

Health: investing in health is another key issue, and that’s why we know that hauora Māori around Aotearoa know their communities. They are already invested, and they want to keep the expenses in this area low by servicing the communities they know so well. That’s why the debate the other day about diluting the powers of iwi-Māori partnership boards was so important.

Climate change: well, they are kaitiaki. It’s their responsibility by birth, by nature of whakapapa, to maintain Papatūānuku, to maintain whenua, which their uri—their descendants—are connected to at conception.

So this is a great opportunity, not only to support some of the sentiments in here that this is our responsibility across Parliament—and I hope that, moving forward, we can share that sentiment a lot more frequently—but, in particular, it’s a great opportunity to consider how partnering with iwi and honouring iwi, hapū, and whānau is a great and a wise investment for Parliament, no matter who is in Government, because success of Māori, the wellness of Māori, will play a key part on the fiscal future of Aotearoa.

Tēnei te mihi anō ki a koutou katoa to everyone who has been responsible for growing that asset base, and be assured that a Labour Government are ready to work further, to work closely with hapū and iwi as partners in growing the fiscal future of Aotearoa. Tēnā koe, Mr Speaker.

Thank you, Mr Speaker. It’s an honour to speak in this special debate about the long-term fiscal position. I would like to focus on debt and speak directly to New Zealanders about why they should be worried about Government debt.

At its core, Government debt is about borrowing from future taxpayers to fund current taxpayers’ obligations. It has an impact on all Kiwis, through high inflation and higher interest rates, but, also, indirectly, through the opportunity costs from the interest paid on that debt. As a great economist—Adam Smith—once said in the 1700s, the payment of interest of public debt has become one of the most important articles of the expense of every State.

So the question is: how much debt is too much? Well, Treasury’s view is 50 percent is a prudent and practical level, but they also go on to say that 90 percent is the point of no return, the point at which the ability to service that debt becomes unserviceable, credit ratings are going to be impacted, the cost of new debt will increase, and there will be an endless spiral downwards from there. The quality of the debt is also important: about infrastructure, economic growth, things that power our economy out, not pet projects like the other side did when they were in Government.

Now, let’s turn to New Zealand’s current debt position. I want everybody in this House to be aware that the nominal debt of this country stands at just under $200 billion. We have never as a country had that much debt. It is second-highest, as a net proportion of the economy, in New Zealand’s history. The first-highest was in the 1990s under the previous National Government of that time. It grew 2.5 times under the previous Labour Government—2.5 times that debt increase. We heard from the Deputy Prime Minister that, actually, it’s pretty low. Yes, it is. We’re low relative to most other developed countries, but actually quite high when you consider small, developed countries.

Let’s turn to the interest on that debt. It is currently about $8.4 billion in this financial year. That goes up to $13 billion by the forecast period. That’s just servicing the debt. But let’s turn to what the next 30 years looks like: by 2040, we’re going to hit 90 percent of debt-to-GDP, and by the 2060s, debt-to-GDP will balloon to 200 percent. Don’t believe we’re going to get there? Well, Japan’s debt is 230 percent of gross domestic product.

Economists around New Zealand agree on the severity of these numbers. It’s driven by, really, three factors: superannuation, the cost of healthcare, and the cost to service the debt. These forecasts are conservative and don’t account for the likes of natural disasters, shocks, and other extreme events like war. What this will mean for Kiwis is that if nothing changes, we’re going to suffer higher inflation, there will be greater stress on our public finances, and a lower standard of living as a result.

What are the options? Well, thankfully, the option is to go for growth, which is what this Government is all about, increasing the productivity and the growth of the economy. The second is to get back to surplus as quickly as we can and stay in surplus, and that is not going to be an easy thing to do. Treasury’s own reports say that that’s going to be harder as the years go by.

In summary, this country has a choice: to confront the tough fiscal challenges that we face, to pay down the debt and ensure that New Zealand is a great place well into the future, or we can put our head in the sand, borrow more, tax more, and spend more, like the other Government and the other side wants to do. It is our purpose and mission in this Government to chart a great path for prosperity and fiscal restraint. Our nation’s future, our kids’ future, depends on succeeding in this endeavour.

Thank you very much, Mr Speaker. It’s a rare and great thing in this Parliament to be having a debate about the long game, and maybe we should do that more often because all too often, it is based upon the short term and those sugar highs or even dead cat bounces that we see from the side opposite.

The big challenges that we face ahead are going to require some long-term planning and some long-term solutions. Sadly, that’s what has been lacking from any policy we’ve seen from the Government. Some of the big changes, some of the big challenges that we face going forward that have been outlined in He Tirohanga Mokopuna are really clear and we know what those are. We know that climate change is going to continue to cause issues in our country. We know that, particularly up in places like in Te Tairāwhiti, where they get continually hammered by storms coming through. In Northland, up that way, we know it is also prone. There are parts of our country that we know now will continue to be a struggle for roading, for housing, for infrastructure, and we need to be planning now for those things. This would not be the time for a national resilience fund to be cancelled. This would be a time to be investing in those areas. It’s really sad to see that when we had, again, another recent incident happen up the coast that, you know—I mean, it couldn’t get any more vivid as a picture to be cancelling a national resilience fund and handing out buckets of KFC. I mean, how short term can you get it?

The other main challenge we see in the air is the ageing population. This is a significant issue that’s outlined in He Tirohanga Mokopuna. We know that healthcare will continue to be an area that we need to fund, and we want to make sure that we do that in a way that is accessible to all New Zealanders, so that you don’t have to be saving your entire life in order to get healthcare that you rely upon when you need it, and so that you can go to a doctor when you need to go to a doctor and you can do that for free. That is a critical way that we make sure that people get the health treatment they need early on and prevent those longer-term health problems, because our hospitals have broken systems and are unable to look after the people they need to.

We also see, outlined in the report, the rising geopolitical tensions which we are currently facing and which are now even more pronounced than when this report was written a few months back.

Those are things that we are going to have to continue to navigate no matter who the Government is in New Zealand. They will continue to put demand upon us, in the face of the fact that we currently still have a structural fiscal deficit. Those areas are where we need to have plans in place to make sure we are set up for the future.

Labour has always wanted to have a long-term plan. As Barbara Edmonds rightly referenced, we’ve got the receipts to show that we have a history of having a long-term plan. Michael Cullen in KiwiSaver is a big promise in terms of how we deliver on that, and KiwiSaver has been a critical part of how we do that. I’m incredibly proud that that was delivered by a previous Labour Government. The New Zealand Superannuation Fund is another excellent investment that we see. Sadly, it was paused under a previous National Government—they paused those Government contributions—and they were restarted again by the previous Labour Government. Again, an eye on the long term, an eye on the horizon to make sure that we have a long-term plan in place. The National Resilience Plan, as I’ve already referred to, is another example of long-term planning and what we’ve done in terms of that planning for infrastructure in the long term.

The Infrastructure Commission, with its report recently coming out, is another way of having, hopefully, a bipartisan approach to looking at the infrastructure investment that we need, instead of just promising a lot of roads without having them properly funded and then banking on a fuel tax when fuel prices are going through the roof. That would be a short-term way of looking at it.

The Future Fund is another one on that list. We want to see a Future Fund because we know too many Kiwi businesses have to go offshore and find the opportunities that they couldn’t find right here. We have seen company after company—great New Zealand businesses—who can’t get the backing right here and they’ve had to go offshore when they reach a certain size. When they go offshore because they get that extra capital they take with them their workers, their smart ideas, and all the benefits that New Zealand would have seen right here. Our Future Fund would back Kiwi businesses to stay here, invest in here, and give our people jobs that pay a decent wage. That’s what people are really crying out for now, more than ever before. The best banking on our future and for people to be secure is to pay people a decent wage for having a decent job right here and now, because the cost of living crisis is what’s biting people more than ever before, and that’s going to get worse under this Government. They promised they would make it better, but they’re actually making it worse.

If we can save for their retirement, if we have people that have a wage—enough where they can pay down their mortgage and own their own home—where they can put some money aside, then that is a benefit for New Zealand. We need to do that by having good Kiwi companies who invest here, back people here, and pay a decent wage right here, and not undermining workers’ rights and workers’ wages.

Tax can’t be the only Government source of income. It’s time to build new ways of generating national wealth for the benefit of everyone, and that’s exactly what the Future Fund will do: keeping opportunities in New Zealand by investing in our people, our ideas, and our industries. Nothing changes to this mind-set until the Government changes. New Zealand deserves a Government that has their interests at their heart, not just their mates. With a real plan, I believe New Zealand can make it affordable to live here and have greater opportunity right here in New Zealand. [Interruption]

I think it’s also important to note that while we’re hearing a lot of noise from the others, we haven’t actually heard any answers—we haven’t heard any answers from National in terms of some of the key problems that I’ve outlined that are in He Tirohanga Mokopuna. National’s answers are: property speculation. They are to sell off our assets; to look at overseas investments; and also mentioned is to promise roads that aren’t funded and don’t have a source of income; and offer things like $2.9 billion of tax cuts and additional millions of dollars for tobacco companies. I mean, short-sighted; that money is not staying in New Zealand, it’s not benefiting our people, and it’s not growing a future that our next generation can rely and build upon. That is why a lot of those challenges are made worse under a National Government.

Labour wants to be able to see wealth creation and aspiration and a future here in New Zealand. We agree that many of the things that we are facing, like climate change, like an ageing population, and like some of the geopolitical challenges we face—we want to be able to know that it’s secure here and that we’re making our future here secure. We do face some really serious long-term challenges. As I have said, we really believe that those challenges are made even more difficult and solutions made even further out of reach by National. Under this Government, debt is higher than Treasury has predicted, prices are rising, and productivity has stalled.

All the areas that we need to be making greater traction on have got worse under National. They have made it harder to fix the future of our children, not easier to fix. It is making absolutely reckless decisions, in the here and now, for some short-term sugar highs at the expense of things like national resilience in the face of increasing climate change. I could not think of a better example. National has prioritised tax cuts and other short-term measures at the expense of the next generation of New Zealanders, and we will not buy into that. We have no real tangible benefits and the Government can’t find or produce one single example of a family—

Hon Nicola Willis: Tax some more, that’s her solution.

Hon GINNY ANDERSEN: —that’s benefited from their proposals and their promises in the next election. The reality is that National has no plan, and that’s why they’re just yelling a lot, because they think that if they yell a lot, New Zealanders won’t notice that they absolutely have no plan at all. They just want to sell off assets, hope that there’s going to be some overseas investment by holding a big forum that no one really came and actually did anything out of. When talking about asset sales, we must reference our plan to keep Kiwi assets in our hands and to use that revenue to build Kiwi businesses, because we know a future made in New Zealand is the best one for Kiwis.

We’re here today to debate a very serious document which is the long-term fiscal statement produced by the Treasury, looking ahead to New Zealand’s future. It is a sobering report because what it outlines is the environment that successive Governments will inherit, and that environment will be shaped by an ageing population—a demographic trend that has already started—in which we will need to support more people in their elder years, with fewer taxpayers to support them.

Treasury is very emphatic in this report that we, as future Governments, will need to make decisions that allow us to face into those challenges effectively. What have we just heard from Labour as their response to those serious questions? Well, Labour has a plan, and it may be familiar to members of this House because it goes a little like this: spend more, tax more, borrow more. That is literally the response of our opponents to a sobering report that sets out the scale and magnitude of the fiscal challenges that New Zealand is facing. Their response is put your hands on your ears, pretend you haven’t heard what’s coming, and just dial up the spending, dial up the borrowing, and if you can’t get enough that way, tax some more.

Well, that is the wrong approach and Treasury, in this report, is emphatic, actually, on this point. I want to quote what it actually says in the report. It says as we face into these significant challenges that New Zealand faces: “An important first step is to create fiscal space for future shocks and choices by returning to surplus and bringing debt down to more prudent levels”.

Now, this makes logical sense because where we start from now will affect how hard it is to meet future challenges, and that is precisely why our Government has been working so hard to make savings now that set up this country—and indeed our children—better for the future challenges that they face. We have, of course, been making ongoing and significant investments in core public services like healthcare, like education, like law and order, but we have been funding those investments to a very large degree by making savings elsewhere in Government. We’ve had clear-sighted set of priorities.

This has been a very different approach from the approach of the Government that preceded us, because the Opposition have opposed every single savings measure that the Government has put forward. Let’s be clear about what that means in terms of New Zealand’s long-term fiscal position. All else being equal, if Government spending in the past two Budgets, including the significant investments in health and education; tax relief, which means that New Zealanders are on average $60 a fortnight better off than would otherwise be the case—if that had not been offset by savings, which it was, this year’s deficit track would be $25 billion and net core Crown debt would be on track to reach 59 percent of GDP by the end of the forecast.

Why does that matter in terms of our long-term fiscal position, which we debate here today? Because that would be a terrible starting point for dealing with the challenges of the ageing population; challenges no one has got up in this House to say aren’t real; no one in this House has got up to say they can somehow solve—challenges that are real and that are coming for us.

I want to call out the blithe denial that we have seen from Opposition members whose contributions to this debate, instead of grappling with that challenge of how do we tidy house now to make sure we’re ready for the things that are coming—instead of grappling with that issue, have instead said, “Oh, well, wouldn’t it be easier if we spent more now? I can think of a lot of things we could spend more on. Wouldn’t it be easier if we just borrowed more now? I can think of a lot of things I’d like to borrow for. And, look, actually, wouldn’t it be better if we just taxed people more?”

Well, that is not a sufficient answer to the challenges that New Zealand faces because, while members opposite like to say things like, “Well, the thing to do right now is to put in place the most extensive, most elaborate pay equity regime in the world.” What they don’t like to talk so much about is where they would find at least $12.8 billion to fund that. Why does it matter? Because with that $12.8 billion added to our already significant commitment, what you’re actually saying is we will indebt this country further. Far from the belief of those opposite that, somehow, if only you’re kind-hearted enough and can only identify enough things you want to spend money on, then a magic money tree will appear, that is not the case. What this report sets out very clearly is that it doesn’t matter how big our hearts are and how much we care—we all care deeply—we are going to face fiscal constraint.

The world doesn’t owe New Zealand a living. The world isn’t going to say, “Look, just keep borrowing more, we don’t mind; we’ll relieve the interest.” Well, actually, right now, we are paying interest on our debt that built up during COVID, and that debt comes with an interest bill this year of around $9.5 billion. Debt isn’t free.

Now, $9.5 billion—what is the opportunity cost right now that we’re facing for the interest bill on debt, which, by the way, hasn’t even reached the 59 percent that it would with Labour’s spending promises? What does that interest bill mean? Well, it means that that $9.5 billion can’t be spent on other things. Let me tell you what it could pay for. Members, $9.5 billion would pay for more than four Transmission Gullys, not just this year but every year; $9.5 billion would be enough to pay for the entire operations of the entire New Zealand Defence Force, combined with the entire New Zealand Police force, combined with the entire justice system, combined with every corrections facility and service in the country, combined with our Customs Service; $9.5 billion is a lot of money.

So the point that I thought would be self-evident to educated and learned members of the House is that when you keep dialling up the debt, it’s not free; the interest bill goes higher and higher and higher. What Treasury says in this report is that if we don’t start getting the debt under control now, our ability to deal with that interest cost in future will be extremely limited, because we know what’s coming at us: the superannuation bill will be going up, the amount of workers paying tax will reduce—that is coming for us.

How do we want to be positioned when that comes? Do we want to be in a position where we’ve already dialled the debt up to emergency levels, or do we want to be in a position where we’ve paid it down? The answer is self-evident, and yet we have the delusional response from members opposite, who say, “Well, actually, the thing to do now is to spend more. Actually, the thing to do now is to oppose every measure by Government to reprioritise, every measure by Government to make careful savings.”

What does Treasury say about the approach that members opposite have signed themselves up to—the “borrow more, spend more” philosophy? In this long-term fiscal work, Treasury takes the opportunity to very clearly restate the advice it gave former finance Minister Grant Robertson in 2022—advice, colleagues, that he accepted. This was back in the days when Labour seemed to have some sense of the limits of money. What they said was that New Zealand must keep net core Crown debt below 50 percent, because we faced ongoing risks from natural hazards, including a 75 percent chance that the Alpine Fault in the South Island will rupture in the next 50 years.

Treasury emphasised that that maximum prudent level of debt for New Zealand in normal times must be 50 percent of GDP, so that if those shocks happen, we can borrow to fix them. That’s what we did after the Canterbury earthquakes—and hear, hear to Bill English, who got it paid back. That’s what we had to do during COVID, but, the point is, if you keep spending hard now, you will not be in a position to face into those challenges when they arise.

So it is the case—and I again want to quote Treasury—that “Fiscal sustainability depends on good decisions and management around the assets and liabilities [and spending] that government [does] on our behalf.” We spend sensibly, we’re careful, we’re preparing for the future. They want to tax more, spend more, borrow more—a recipe for certain disaster.

Motion agreed to.