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Source: New Zealand Parliament – Hansard

Question No. 5—Finance

5. Hon MICHAEL WOODHOUSE (National) to the Minister of Finance: Does the Government intend to restrict new spending in Budget 2021 to the operating allowance of $10.5 billion and capital allowance of $7.8 billion over the four-year period, as set out in the Budget Policy Statement 2021; if not, what are the new operating and capital allowances for Budget 2021?

Hon GRANT ROBERTSON (Minister of Finance): As I said yesterday, our better-than-expected economic recovery does provide us with more options. There is a bit more space in our operating and capital allowances to support the recovery, but this will be balanced against keeping a lid on debt and allowing us to start reducing debt from the middle of the decade, as outlined in the Budget Policy Statement. This approach is in line with what we said at the time of the Budget Policy Statement—and I quote—”The allowances are subject to change, as economic and fiscal forecasts are updated for both the New Zealand economy and the global economy.” In answer to the second part of the question, the member has to wait just nine more sleeps, not counting his afternoon naps.

Hon Michael Woodhouse: Does he agree it is important to keep the legacy of debt our children and grandchildren will struggle to repay as low as possible?

Hon GRANT ROBERTSON: I think the record of this Government shows that prior to COVID-19, we had managed to continue on what previous Governments did of keeping New Zealanders’ debt low relative to other countries. That has continued. Debt remains very low relative to other countries, and we will continue to keep a balance on investing in our future, which involves both the investments we make to build public services but also in keeping debt under control.

Hon Michael Woodhouse: So why does he think a marginal improvement in Crown accounts is a reason to increase spending in money the Government doesn’t have when we’re still on track to be over $100 billion more in debt than projected before COVID?

Hon GRANT ROBERTSON: As I’ve said in my first answer, this is all about striking the right balance between investing in the things that New Zealand needs to do now, the things that many of the member’s colleagues raise in this House around issues like housing or around issues like climate change or around issues like child wellbeing. They all require investment. What is important is keeping a balance to make sure that we do that alongside keeping a lid on debt.

Hon Michael Woodhouse: Does the Minister regret the 10,000 new bureaucrats hired during the Government’s pre-COVID recruitment binge now that they have to freeze their pay?

Hon GRANT ROBERTSON: I reject the latter part of that member’s question, and in answer to the former part of it, I pick up what the Minister for the Public Service said in the House the other day. The people he’s talking about are the people who’ve been keeping us safe at the border, the people who keep us healthy, the people who educate our children. I’m sorry the member doesn’t think that those things are important, but on this side of the House, we do.

Hon Michael Woodhouse: Why can the Government fork out more than $100 million for private media organisations but has to recommend that teachers, nurses, Police, and the Defence Force get a pay freeze?

Hon GRANT ROBERTSON: Again, I reject the second part of the member’s question, and I well recall in the last term the enormous pay increases we gave to teachers and nurses because the previous National Government had failed to back them.

MIL OSI