Finance Minister Grant Robertson can’t resist seeing the sunny side of the economy. When Parliament resumed this week, he was first up at question time to tell New Zealanders that – thanks to a strong export performance – the economic recovery is going well.
But Robertson didn’t sound quite so ebullient when later he faced some harder questions from the Opposition benches.
Clearly the party’s internal polling has shown rising dissatisfaction on issues outside the Covid realm, a trend reflected in polls like those of Newshub Reid Research, which indicated support for Labour had fallen nearly 10 points from the previous sampling.
Even inside Labour there have been rumblings, as indicated by its elder statesman Sir Michael Cullen contending the $15bn Auckland light rail project could be a disastrous waste of taxpayer money. And it has been followed by suggestions the government itself is backpedalling on the proposed $700m Auckland bridge for cyclists and walkers.
So here from Hansard, edited, is the Finance Minister first in his triumphant guise, and then sounding less ebullient:
Hon GRANT ROBERTSON: The economic recovery is continuing to be supported by the export sector. Last week, Statistics NZ reported that exports recorded their strongest June month on record, rising by 17% on a year earlier to $6bn. This came off the back of record export values for logs and beef, while dairy products and kiwifruit also experienced strong gains. Nevertheless, there are volatile conditions for our exporters and still challenges. The government continues to fund the airfreight subsidy scheme to ensure that our exporters can get goods to market in a COVID environment. So far, that scheme has underwritten more than 7,000 flights, carrying over 136,000 tonnes of airfreight, worth around $10bn.
Dr Duncan Webb: What other reports has he seen on the economy?
Hon GRANT ROBERTSON: Well, the economic recovery is also being supported by the manufacturing and services sector. The BNZ-BusinessNZ Performance of Manufacturing Index (PMI) is firmly in expansionary territory, rising by 2.1 points to 60.7 in June. Production and new orders were particularly strong at 64.5 and 63.6 respectively. The BNZ-BusinessNZ Performance of Services Index (PSI) rose 2.3 points to 58.6 in June, driven by expansion in sales and new orders. The BNZ economists noted that combined, the PSI and PMI point to an annual GDP for the June 2021 year of around 4 percent. While our economy is performing strongly, the ongoing COVID-19 pandemic means we cannot be complacent.
Dr Duncan Webb: What other reports has he seen on how business is faring?
Hon GRANT ROBERTSON: The Government’s efforts to secure the recovery have been reflected in the performance of small businesses. Xero’s Small Business Index for June, which was released last week, hit a record monthly high driven by sales and jobs figures. For the fifth successive month, the index remained above 100, rising 17 points to 127, signalling stronger than average small-business activity. Sales across New Zealand jumped 11.7% in June, led by retail trade, manufacturing, construction, and hospitality. Jobs growth rose 5% with the strongest regional growth in Northland and the Waikato. Wage growth also continues to increase, rising 3.7 % year on year in June, its strongest growth rate since January 2020. Xero said, “seeing the … Index reach new heights [was] an encouraging sign that New Zealand’s small business economy [was headed] in the right direction”.
Later in question time, National MP Michael Woodhouse asked Robertson whether he was satisfied that the government’s investment of taxpayer funds reflects its priorities.
Hon GRANT ROBERTSON (Minister of Finance): Yes, the Government’s policy priorities for the three-year term are continuing to keep New Zealanders safe from COVID-19, accelerating the recovery and rebuild from the impacts of COVID-19, and laying the foundations for the future—including addressing key issues such as climate change, housing affordability, and child poverty. The investments we are making are focused on addressing these priorities; at the risk of testing the Speaker’s patience, I’ll run through just a few examples. We’re continuing to keep New Zealanders safe from COVID-19, through the nationwide vaccination programme, with nearly 2 million doses of the Pfizer vaccine being administered to New Zealanders, while our investments in the managed isolation facilities continue to keep New Zealanders safe from the virus and our economy able to operate with fewer restrictions than nearly any other country. We’re accelerating the recovery through our record investments in infrastructure, training record numbers of apprentices—
SPEAKER: Order! Order! The member’s answered the question.
Hon Michael Woodhouse: Is funding $2.75m for a meth programme run by a Mongrel Mob member a higher priority than giving money to a successful mental health programme?
Hon GRANT ROBERTSON: The member knows that the programme he’s referring to is about getting people off methamphetamine. The most important thing we can do in that space, in this House, is undertake programmes that work. It is not about funding a gang; it is about funding getting people off meth.
Hon Michael Woodhouse: Does he consider spending of up to $15bn on light rail in Auckland a higher priority than the plethora of New Zealand upgrade roading projects now delayed or cancelled?
Hon GRANT ROBERTSON: I think that light rail in Auckland is a very important investment in making sure that we have transport moving around our city. But the member doesn’t need to see this as a zero-sum game. There’s about $6.8bn of funding there—
Hon Member: But the people of Mill Road do.
SPEAKER: Order! Order!
Hon GRANT ROBERTSON: —in that programme, plus another $2bn that have been added. We are able to do both of those things, Mr Woodhouse.
SPEAKER: I just want to say that the member doesn’t have a gentle voice—the Minister answering the question—but the volume of interjection has got too much. I think I’ve told members that I have received in the last sitting block quite a lot of correspondence about noise that’s come from one party in particular that has meant that people who are at home have trouble hearing the response. [Interruption] It’s good to have all the premature pleas of not guilty.
Hon Michael Woodhouse: Is $486m on a new health bureaucracy a higher priority than spending $486m on front-line services to clear the waiting list backlog?
Hon GRANT ROBERTSON: I’m pleased to say that the Government’s investing significant resources in both of those things. The first of those is about making sure that we’ve got a health system that is actually fit for purpose. It’s about creating a Māori health authority that will deliver—for the first time, probably, in New Zealand’s health system’s history—outcomes that will be more positive for Māori. It’s about making sure that wherever you live, you get the services that you deserve, and, also, we can deliver on front-line services. The member needs to understand that these are not zero-sum games.
Hon Michael Woodhouse: Do his comments regarding the proposed Northern Pathway this morning indicate he has had a cycleway to Damascus experience and that the priority of that project over other harbour crossings is now being reconsidered?
Hon GRANT ROBERTSON: No. What it means is that this government is getting on with the job of making sure that the second harbour crossing is under way. Around $50m is dedicated to that—including completing the business case.
David Seymour: So is the Government backpedalling on the bike bridge?
Seymour had another go later in question time but again without much luck He asked:
Does the Government stand by its policy of building a bike bridge across the Waitematā Harbour with a benefit-cost ratio of 0.4, and how will that help solve the very real problem of a shortage of housing?
ROBERTSON: The government stands by its policy of ensuring that we have strong linkages between the North Shore and the isthmus of Auckland. That is a multimodal solution. It includes making sure that we build a second harbour crossing with a public transport – centric focus; $50m has been allocated for the business case of that. It also includes making sure that we can have walking and cycling access between North Shore and the isthmus.
Subsequently the NZ Herald reported that Robertson wants the government to bring forward work on a second Waitematā crossing, likely to be a tunnel.
The report in the Herald said it understood that the government is also considering scrapping its $785 million walking and cycling bridge over the harbour.
On Tuesday, Robertson would not confirm that the walking and cycling bridge would definitely be going ahead, only that the bridge was the current proposal.
When asked whether he would renege on building the bridge, Robertson said “we continually look at the network and the programme to make sure that it works well”.
As Point of Order sees it, those eager Auckland cyclists and walkers anticipating a daily crossing might be in for a repeat of the history of the first harbour bridge.