On Newshub Nation: Simon Shepherd interviews Finance Minister Grant Robertson

Simon Shepherd: It's the highlight of the political year, for the government and one man in particular, the Finance Minister. I asked Finance Minister Grant Roberson if he was disappointed that the unauthorised early release of budget details overshadowed his first wellbeing budget.
Robertson: I don’t think that it did. The reaction that we’re getting from New Zealanders to the budget is that they’re really pleased that we’re focused on a big, long-term issue like mental health. I don’t think New Zealanders are focused on the political games in Wellington.
But there were so many of them. There was the leak of the documentation, the allegations of a hack — you sort of seemingly linking the National Party to that, and then it wasn’t a hack. It was shambolic.
Look, I’ve expressed my disappointment in the fact that the Treasury system could be infiltrated this way and also that the Treasury didn’t do more to find out what had happened before they referred it to the police. The reality is that that’s now in the hands of the State Services Commissioner, who is doing an inquiry, and we’ll await the outcomes of that.
Well, how do you think you handled it all?
Look, I invite you to put yourself in my shoes. On Tuesday night the Chief Executive of the Treasury arrived in my office and said about an hour ago I have referred to the police 2000, of what he called, hacks into the system. I said to him, ‘Do you know how that’s happened?’ He said, ‘No, I don’t.’ I said, ‘Do you know if any other areas of the Treasury system have been compromised?’ He said, ‘No, I don’t.’ So at that point, I’m going to take that matter pretty seriously. That’s what we did. Obviously more information has now come to light. That’s what the inquiry will cover.
Do you think you acted too quickly? Do you think you should’ve waited and got some more information before you put out that press release just then, which seemed to indicate that National was linked to the allegations of a hack?
Like I say, I think most people in my shoes, having received the information I did, would react and say, ‘Well, we need to make sure, regardless of how the National Party might’ve got the information, that they were aware of what the Treasury had advised me. We all now know that the situation is somewhat different. The inquiry will look into how that happened.
When were you told that the situation was different — that it wasn’t a hack, and that it was just a search bar problem—
Look, I learned very late on Wednesday night that the Treasury Secretary would be putting out a media statement on Thursday morning.
Has the Treasury Secretary apologised to you over this?
He said sorry on the first day that this had happened.
And since then?
But otherwise he’s been leaving me to focus on the Budget, which as I say, I think most New Zealanders would want me to be doing.
You named it the Wellbeing Budget, but mental health aside, what is actually transformational about it?
I think the work that we’re doing in domestic and sexual violence is absolutely transformational. We’re talking there about breaking a cycle that has bedeviled New Zealand for many years. $320 million going into that. We’re going to transform the lives of people who are on benefits by indexing that to the average wage. That’s going to lift their incomes consistently.
Okay. Well, let’s talk about that. Obviously the Welfare Expert Advisory Group said 12-47 per cent boost to benefits is needed, something like $5 billion. You didn’t go near that. You’ve done $300 million. Why not?
Well, because we’re doing this in phases. And we’ve actually done three things —we’ve done, not only the indexation of benefits, but we’ve also lifted the abatement rate — the rate at which your income drops if you’re working while you’re on a benefit. And we’ve got rid of the sanction that was on mothers who didn’t identify the fathers of their children. That’s stage one. We absolutely acknowledge that there’s further work to do in this area.
Do you think that you missed a chance to be transformational by not implementing a capital gains tax?
Well, as you well know, I would’ve like to have implemented a capital gains tax. That, of course, would not have come into force until after the election. That was always the plan, but the realities of coalition government are we didn’t have the numbers for that.
What about a greater focus on business? If you lift them and provide incentives for business, that changes the whole economy, doesn’t it? So why didn’t you do that?
Well, we are. There’s a great deal of focus on supporting business. One of the things I’m really excited about in this budget is the $300 million fund for venture investment in those businesses that have got past the start-up phase and are looking to grow to be international companies, and Peter Beck from Rocket Lab has raised this issue with us and said, ‘Too many of these companies head offshore because there isn’t investment here.’ The government’s now got $300 million of skin in the game.
But I would say to you, that this country is made up — the backbone — is small to medium enterprises, and the businesses you’re talking about there are start-ups that want to go internationally. You’re not addressing the small to medium enterprises.
Well, I’d argue we are. The biggest issue raised with me by business is skilled staff, infrastructure, making sure we get those trade agreements going so people can export. They are the issues we are working on.
Could you have been more transformational if you’d relaxed your debt rules earlier? Is there a chance you could look back at this and say, ‘I wish I hadn’t played it so safe’?
It’s always about a balance. We have to make sure that we do keep our debt under control. We’re a small country. We’re susceptible to significant economic shocks and natural disasters. We are actually borrowing more money in this Budget. The economy is growing as well. That means the percentage of GDP stays steady, but we are borrowing to invest in those areas like infrastructure, building up KiwiRail, building more schools and hospitals. But it is all about a balance, and I think we’ve got it right.
Well, what about the balance — you’ve just mentioned shocks like natural disasters or international shocks. You are actually borrowing more. You are running down the projected surpluses. Are you leaving us vulnerable to something like that?
No, I don’t believe so. I mean, we still have a surplus of $1.3 billion here. We still have debt at a relatively low level. We are creating that balance, but we made a decision in this Budget to spend more than we had originally allocated, and that’s because the need was there. The need was there in infrastructure, but the need was also there in services like mental health. We always said, Simon, is that a sustainable surplus would be one where we’d met the needs that were there, so therefore this Budget that surplus is a bit lower, but it still exists.
Are you meeting the health needs though? Because National’s Amy Adams points out that policies for midwives, no free health checks for seniors, reduced GP fees — those kinds of things are not addressed in this particular budget. And in fact, figures from the Child Poverty Action Group show that spending on public health is forecast to be the lowest in a decade by 2023.
Well, what we’ve done is prioritise mental health, and we’ve been completely upfront about that from day one. We have a mental health crisis in New Zealand. It’s been ignored, but there’s still significant resources going into the rest of our health system, around $2.9 billion into supporting DHBs, more money for ambulances. There are other areas, within our coalition agreement, within our confidence-and-supply agreement that we’ll look to address in next year’s Budget, but we made mental health a priority.
Such as?
Well, you’ll have to wait till next year.
What about teachers, though? They’re crying out for some more love from the government, and they’ve just announced more disruptive action. So why couldn’t you address that in this Budget?
We believe we’ve got a fair offer on the table, the $1.2 billion offer. The Budget also addresses some of the non-pay-related issues that teachers have been raising. Six hundred learning support coordinators for what we used to call special ed. 2480 more teachers—
And yet they’re still unhappy?
Well, that’s the reality of the world. What I hope is happening, and I’m pretty sure it is happening right now, is that the Ministry of Education and the unions are sitting down together to say, ‘Look, how can we resolve this?’ We want it resolved. We understand the frustration of teachers after 10 years of not getting supported. Let’s take these first steps together now.
What is there in this Budget for middle New Zealanders? Sort of, those low to middle income families. There doesn’t seem to be anything.
Well, I’d give you one example. We’re removing school donations for decile one to seven schools.
But in the hip pocket there’s nothing like tax bracket creep or anything like that.
Well, look, we’ve made a commitment not to change tax rates in this term of government because we believe that we need the resources that are there to meet the needs that are there.
Well, let’s talk about housing. There is nothing actually, really, apart from the Housing First — the transitional housing — there’s nothing else for housing in this Budget. You’ve got KiwiBuild, which has stalled at the moment because it’s not delivering.
We put $2 billion in last year’s Budget for KiwiBuild for the life of the programme—
And it’s not delivering.
And as you know, there is a housing reset coming forward, and actually in the Budget documents we state that we’ve put some money aside to help manage that housing reset.
How much?
You’ll see the details of that when the reset’s released.
What about the policies that you agreed with the Greens, like a shared equity scheme to get more people to be able to afford to buy into our houses. What happened to that?
As I say, you’ll have to wait for the housing reset that Minister Twyford’s going to announce, but clearly we’ve got a large-scale building programme for housing that’s not just about KiwiBuild. It’s about state housing, transitional housing. Mr Twyford’s now going to come back with that reset, and you’ll be able to see—
But there’s 11,000 people on the state housing list, and there’s nothing extra in this Budget for them.
Well, we made a significant investment in the building of 6000 state houses in the last Budget. We’ve got an integrated programme with transitional housing and affordable housing. Phil Twyford’s going to announce a housing reset. We’ve set some money aside to support that.
What would you say to business-owners, teachers and say, middle income, low-income earners — some of those feel left out by Budget 2019. What would you say to them? What hope will you offer them for next year?
Look, I’ve always said that the three budgets of this term are a trilogy. Last year we did the foundation-building of making sure we got spending back into those core areas. This year we’ve targeted areas like mental health that all of those people will benefit from. We’ve got a third Budget to come as well.
So is that going to be the blockbuster for these people?
No, I see them all as part of an attempt to start turning around a decade of neglect in a lot of important areas in New Zealand. Two-thirds of the way through, I think we’re making good progress.
Finance Minister Grant Robertson, thank you for your time.
Thanks, Simon.

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