2. Question No. 2—FinanceNICOLA WILLIS (National) to the Minister of FinanceQuestion No. 2—Finance2. NICOLA WILLIS (National) to the Minister of Finance: Does he agree with ANZ Chief Economist Sharon Zollner's statement that Conditions are ripe for a wage price spiral" and is he confident that in 2022 New Zealanders' wage growth as measured by the labour cost index will exceed inflation as measured by the CPI?Hon GRANT ROBERTSON (Minister of Finance): I agree that inflation has spiked significantly due to global factors including the war in Ukraine and COVID-19 supply-chain disruptions and that it is important for wages to grow to help New Zealanders with the cost of living. What Ms Zollner points out is that because of the strength of the labour market low unemployment and a strong economy wages will continue to grow to help New Zealanders deal with the cost of living. I don't agree with the specific characterisation of the situation that the member has chosen to reference. On this side of the House we believe wage growth is a good thing. With regards to the second part of the question the Government's economic forecaster the Treasury does not forecast the labour cost index so I am not in a position to express an opinion on that. What I am confident about is that wages will continue to rise in the face of the cost of living. The Treasury's most recent forecast in the Half Year Economic and Fiscal Update is for average ordinary-time wages to rise by 4.5 percent compared to Consumers Price Index inflation of 3.5 percent in the year to December 2022.Nicola Willis: Is he concerned that surging inflation means New Zealanders are having to work harder just to maintain the same standard of living?Hon GRANT ROBERTSON: As I've expressed a number of times in this House over the last couple of weeks I am concerned about the impact of inflation on New Zealand families and households and that's precisely why this Government has made sure we're targeting support to those most affected by that particularly through initiatives such as the family tax credit increase increases to the minimum wage and increases to benefits all of which have been opposed by the National Party.Nicola Willis: Why does he think inflation is higher in New Zealand than in many other countries including Australia Canada the United Kingdom Singapore and Germany?Hon GRANT ROBERTSON: There are a wide range of reasons for why inflation is at a particular level in a particular country. If we just pick out two one of those is the place that New Zealand has in the global supply chain where we are more greatly affected by increased costs in areas such as shipping and so on and the other is the increase in demand that occurred in New Zealand as we emerged from the COVID-19 pandemic.Nicola Willis: Does he agree with the Prime Minister's statement in relation to the cost of living "What we see at this moment is an exception at this period of time." and when does he expect the cost of living crisis will end?Hon GRANT ROBERTSON: I always agree with the Prime Minister and in answer to the second part of the member's question as I said in my answer to the primary question forecasts are for wages to come back ahead of inflation just as they have been in the period leading up to this situation and just as they will be in the future.Nicola Willis: Does he agree with economist Brad Olsen's statement that "At the moment households are feeling the economic outlook is worse for them now than even during the depths of the global financial crisis." and why in this context is the Minister planning the biggest ever Budget operating allowance in history a record $6 billion increase to Government spending?Hon GRANT ROBERTSON: In answer to the first part of the question yes I continue to remain concerned about the impact that high inflation is having on households and that's why we're taking the initiatives we are. In answer to the second part of the question unless something's changed in the last few days where there's been a changing of the deck chairs across the way here the National Party is currently proposing a $6 billion allowance at Budget 2022. That's exactly what they're doing so the member is now arguing against her own policy.Nicola Willis: Well then does he believe that someone earning $60000 a year who is not eligible for Working for Families may find the soaring cost of living tough and if he does think so why won't he adjust tax brackets to give them $800 in tax relief in this year's Budget?Hon GRANT ROBERTSON: This matter was covered extensively in the House yesterday. Of course we're concerned about making sure that everyone in New Zealand has what they need to be able to meet the cost of living. That's why on this side of the House we've continually promoted initiatives that lift wages. At every single turn the National Party has opposed those measures and now they come forward with a set of tax cuts that would mean those on the highest incomes in New Zealand benefit the most. On this side of the House we're focused on making sure we support low and middle income earners not only with the wages they get but also with the public services they require be it the health system the education system or anywhere else.Nicola Willis: Why is the Minister so opposed to tax reduction for everyday Kiwis and is it because he believes he can spend their money better than they can?Hon GRANT ROBERTSON: I had high hopes for the member that she would shed the cloak of negativity that her six predecessors have had in that role but alas it is not the case. On this side of the House we will continue to remain focused on making sure that we support all New Zealanders not only through how we lift their incomes but also in making sure that the health system and the education system are going well that we build public housing and that we invest in research and development. All of these things are needed. Putting a Budget together requires a lot of balancing and a lot of trade-offs but I'm confident we have the balance right."