3. Question No. 3—Prime MinisterCHRISTOPHER LUXON (Leader of the Opposition) to the Prime MinisterQuestion No. 3—Prime Minister3. CHRISTOPHER LUXON (Leader of the Opposition) to the Prime Minister: Does she stand by all of her Government's statements and actions?Rt Hon JACINDA ARDERN (Prime Minister): Yes. Overnight New Zealand and the United Kingdom signed a historic free-trade agreement eliminating all tariffs on New Zealand's exports with duties removed on 99.5 percent of current trade from entry into force. This deal is expected to save our exporters $37 million per year on tariff elimination alone and boost New Zealand's GDP between $700 million and $1 billion and the agreement will be welcomed by key sectors across the country. The agreement is a major milestone in this Government's plan to accelerate our recovery from COVID-19 and grow our exports. This is also our first bilateral trade agreement to include a specific article on climate change and provisions towards eliminating environmentally harmful subsidies such as fossil fuel subsidies. I'm pleased to see that the other side of the House is celebrating this agreement with us. Christopher Luxon: Does she accept we have a cost of living crisis when Kiwis are paying hundreds more at the checkout and hundreds more at the pump compared to a year ago? Rt Hon JACINDA ARDERN: I of course keep a close eye on those petrol pump prices as members around me well know and that is of course one of the contributing factors that we've seen in recent times. We've heard much commentary around the impact on fuel prices—most recently Ukraine impacting the supply chains issues caused by COVID and increases in demand—and that is being felt here in New Zealand. We do expect of course as the Governor of the Reserve Bank has said for that to peak and then start to come away. But we are not the only country experiencing this at present. It's why we've made changes like for instance increases in benefit minimum wage changes and the increase in the family tax credit. Christopher Luxon: Does she agree with media reports that the average Kiwi is paying $5000 more a year for food petrol and housing than a year ago? Rt Hon JACINDA ARDERN: It's one of the reasons we keep a very close eye on what's happening with wages as well. You would have seen from last week the release of those household income surveys an increase in the median wage of over 5 percent. We've worked very hard as a Government to make sure that in terms of housing affordability we see incomes grow and that we see incomes grow over and above those increases that they see in the cost of living. That has been occurring until more recent times when we alongside many other countries have seen the impact of a simultaneous COVID recovery and its impact on inflation. Christopher Luxon: Is she honestly saying that Kiwis who have seen their real incomes fall over the past year shouldn't be concerned because inflation four years ago wasn't that bad? Rt Hon JACINDA ARDERN: No what I am pointing to is our record. Christopher Luxon: How are renters supposed to get ahead when annual rents have gone up by more than $7000 under her Government?Rt Hon JACINDA ARDERN: I'd note under that member's Government rents of course continued to increase as well. Of course over the last year rental costs have increased at about 5.4 percent; average household disposable income at 5.1 percent. Now of course we want to see that in reverse which has been a goal of this Government and continues to be. It's why we've taken the measures we have on housing. It's why also we have taken the measures we have to lift the incomes of low and middle income earners.Christopher Luxon: Does she agree with economist Brad Olsen who warns that costs are going to keep rising which means It's harder and harder to put food on the table and keep a roof over your head."; if not why not?Rt Hon JACINDA ARDERN: What I look to are the projections beyond what is an extraordinary period right now in our history—a one-in-100-year pandemic and the economic impacts from that. And you can see those who are looking ahead forecasting that we will come out the other side of that extraordinary period where constraints on supply increases in demand are having an impact on inflation and you've seen the Reserve Bank commentating on when they expect that to be. In the meantime we do have a job to do as Government to make sure that we're supporting families through that period in things like that increase in the family tax credit benefit increases and increases in the minimum wage which I note the Opposition have not supported and therefore I really question what it is the member is proposing that he would do to support families through this time.Christopher Luxon: What tools beyond interest rates does she believe the Government has to rein in inflation?Rt Hon JACINDA ARDERN: Well I note that the member believes that it all comes down to our spending in core areas. So my question to him would be: does he plan to cut the thousands of nurses we're invested in or does he perhaps intend to cut the teachers?SPEAKER: No no. Order! There's a one-way track for questions in this one and the member's not allowed to ask the Leader of the Opposition questions.Hon Simon Bridges: Point of order Mr Speaker. Are you going to make the Prime Minister actually answer the question the Leader of the Opposition gave?SPEAKER: Well some of us could just about take the inference from the question that there might be another tool which the Prime Minister was asking the Leader of the Opposition if he supported. It was wrong of her to ask about his support for that tool but not to mention it.Christopher Luxon: When she said "Look I acknowledge that there will be times when Government policies will have an impact on inflation." which specific policies was she referring to?Rt Hon JACINDA ARDERN: I certainly wasn't referring to cameras on boats which is the only thing the member has pointed to. Look to answer both this question and his previous one what we have continually pointed to is the international environment that we're in presently and the impact it's having on inflation—of course examples like fuel being a critical component of the inflation increases we've seen. But we're not alone in that and I would reflect on the comments that have been made by the Reserve Bank where "Global inflation is expected to peak during 2022 and then moderate as supply disruptions are gradually resolved." So we are referring to both those as having an impact right now but also when that abates we'll also likely see inflation come away. In the meantime the Leader of the Opposition seems to be suggesting that we should not have invested in the wage subsidy that we should not have invested in our health response or perhaps he's referring to our core Crown investment in things like teachers nurses and their wages. If he suggests that we should cut those he needs to be honest with New Zealand.David Seymour: Point of order. You have often cut off and restricted questions for going well beyond their relevance and scope. How is it possibly helping the House get answers to questions to have the Prime Minister speculate—SPEAKER: The member will resume his seat—[Interruption] The member will resume his seat. Judgment on the lengths of questions and answers is mine and mine alone and it is disorderly to bring it up by point of order. The member's had two warnings. If he is disorderly again today he won't be in the Chamber.Christopher Luxon: Are falling real incomes just the price that Kiwis have to pay for her Government's desire to spend billions on vanity projects like underground trams?Rt Hon JACINDA ARDERN: I completely reject the premise of that question—and what I point to is a record by this Government in making decisions that boost the incomes of particularly our low and middle income New Zealanders and where we have seen wages outstrip the increase in the cost of living. And the member's reference to some projects I've seen he's on the one hand said that he wants to cut transport projects; on the other he's had members out there at the ribbon cutting supporting them."