4. Question No. 4—FinanceNICOLA WILLIS (Deputy Leader—National) to the Minister of FinanceQuestion No. 4—Finance4. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: Does he stand by his statement that many New Zealanders will be facing increased mortgage payments over the coming year" and has he sought advice to quantify the financial impact record interest-rate rises would have on New Zealanders?SPEAKER: And that's to the Minister of Finance the Hon Grant Robertson.Hon GRANT ROBERTSON (Minister of Finance): I stand by my full statement that "As we've discussed before when the member has raised these kinds of examples it would very much depend on the specific circumstances of that household. What we do know is that many New Zealanders will be facing increased mortgage payments over the coming year. That's why it is a good thing that average hourly earnings are tracking just above inflation at the moment. That's why it's a good thing that we've increased the minimum wage. That's why it's a good thing that we've provided additional support for low and middle income households—things that the National Party has opposed." In response to the second part of the question there is no need for me to seek this advice as I regularly receive reports on the financial system its stability and its impact on New Zealand households. In response to these kinds of reports the Government is providing additional support to New Zealand households through the family tax credit higher minimum wage higher benefit payments lower fuel costs and encouraging more people into work than ever before.Nicola Willis: Will the Reserve Bank's record interest rate hike today worsen the cost of living crisis that New Zealanders face?Hon GRANT ROBERTSON: Well again in answer as I answered to the primary question New Zealand households experience these things differently. Certainly for those people—Christopher Luxon: Are you seriously not going to say "no"?Hon GRANT ROBERTSON: —who will be re-fixing their—I'm not Mr Luxon; just listen. Mr Luxon just listen. For those households—for those households—who experience the need to re-fix their mortgage over the next couple of years they will be facing significant increases in their costs and cost of living pressures. That's why as a Government we've committed ourselves to making sure that we relieve that cost of living pressure particularly on those who feel it the most: low and middle income households. That is the policy's prescription that we prefer. The member may well prefer to give tax cuts to the wealthiest New Zealanders as a response to this—tax cuts that even Don Brash thinks are a bad idea.Nicola Willis: Does the Minister think it's appropriate to choose this moment to engage in political point-scoring—[Laughter from the Government side of the House]SPEAKER: Order! Yeah silence when questions are being asked.Nicola Willis: Shall I start again?SPEAKER: Yes if you like.Nicola Willis: Does the Minister think it is appropriate to choose this moment to engage in political point-scoring when across the country today tens of thousands of New Zealanders have learnt that in the next year they will have to find thousands of extra dollars to make their mortgage payments each week?Hon GRANT ROBERTSON: Lessons on political point-scoring from the Olympic champion in that regard are not ones that I'm going to accept. On this side of the House we take the plight of New Zealanders seriously. That's why we have stepped up continually to support New Zealand households through what is a very very difficult time. If what the member wants is to avoid political point-scoring let's have a proper debate about a global inflation crisis where every central bank in the world had to deal with it; where every Government had to undertake fiscal policy to deal with it at the end of which on fiscal indicators we find ourselves with one of the lowest levels of debt in the OECD; where we have the lowest level of unemployment on record here; and where on an inflation measure we're the 10th lowest out of 38 OECD countries. That would be a proper policy debate not political point-scoring.Nicola Willis: What does the Minister take more seriously: name-calling his political opponents or the fact that the Reserve Bank has just forecast that New Zealand will go into negative growth next year and stay there for four quarters spelling a deepening of the cost of living crisis for every single New Zealander?Hon GRANT ROBERTSON: I take seriously the fact that New Zealand as an open trading economy will always suffer the impact of what happens around the world. I take seriously supporting New Zealanders through that to make sure that those who are the most affected—on low and middle incomes—get support; not those who are on the highest incomes. As I have said in this House many many times 2023 will be a difficult and challenging year for New Zealand. Our starting point is better than most other countries: New Zealanders are in work while facing these issues; New Zealanders are seeing their average hourly earnings rise ahead of inflation. This will be a challenging time—as it happens the Reserve Bank are forecasting that growth in the last two quarters of this year will be very very strong and yes there will be a period where it comes off from there but New Zealand overall remains resilient and strong in the face of this. Nicola Willis: Does the Minister understand that non-tradeable domestic inflation here in New Zealand is currently the highest it has been since records began and that this measure is something he can't blame on Vladimir Putin?Hon GRANT ROBERTSON: As we've discussed numerous times in the House non-tradeable inflation is not a direct corollary with domestic inflation. I've already worked the member through the issues around the construction sector and the imported inflation that occurs in what is something that is largely seen as a non-tradeable item. What I do acknowledge is that we are now in a period of time where inflation is much higher than we have experienced in recent years; it is an issue that all New Zealanders will feel the consequences of. What I would say is that a responsible Government strikes a balance between making sure that we do the things we can to reduce that but also to continue to support the low and middle income New Zealanders most affected by it—that is not the member's policy.Nicola Willis: Is the Minister aware that unlike in many of the countries he likes to compare New Zealand with the Reserve Bank is forecasting that inflation is yet to peak here at home and will hit 7.5 percent in the coming months—right at the same time as New Zealanders will be paying record mortgage payments and when will that Minister present a plan to address it?Hon GRANT ROBERTSON: Those countries around the world that we seek to compare ourselves to have inflation—in the case of the UK up over 10 percent. They've had inflation in the case of Australia likely to reach at 8 percent by the end of the year. We continue to find ourselves in a position where we have the tenth lowest inflation out of 38 countries in the OECD. The cost of living pressures that we see are strong. Now the member might like to think about the fact that actually the actions that the Government has taken—for example reducing the fuel excise duty and having half-price public transport—have contributed to lowering the Consumers Price Index.David Seymour: Does the Minister of Finance accept that the problem with inflation is now much worse than anticipated say six months ago and if so what changes in policy is the Minister prepared to make that he hadn't announced six months ago?Hon GRANT ROBERTSON: It's certainly true that the forecasts around inflation have been worse now than they have in the past. The member will also be aware that we are heading towards a Budget where our percentage of spending as a GDP will continue to go down. That is the approach we're taking; the fiscal consolidation that's needed. The member doesn't get to rewrite history. New Zealand was able to get through COVID by making sure we looked after lives and livelihoods; I stand by that approach. The period of time now in front of us is one where we do need fiscal consolidation and that is what will occur.Nicola Willis: Why is it that in this moment—when millions of New Zealanders are now worrying about how they are going to afford their mortgage repayments while other costs continue to grow—all that Minister can offer is excuses no accountability and no solutions?Hon GRANT ROBERTSON: What this side of the House is able to offer New Zealanders is record low unemployment wages growing faster than inflation an economy that has actually grown through COVID—and when we do have to deal with the economy slowing down we are in a much stronger position than almost any other country. On this side of the House we understand it's a balance: we've got to look after New Zealanders we've got to invest in public services and we do need to return to some form of fiscal consolidation. All of that's a balance. The member's policy of tax cuts for the wealthiest New Zealanders will make that situation much much worse."