2. Question No. 2—Prime MinisterCHRISTOPHER LUXON (Leader of the Opposition) (remote) to the Prime MinisterQuestion No. 2—Prime Minister2. CHRISTOPHER LUXON (Leader of the Opposition) (remote) to the Prime Minister: Does she stand by her statement The debate is not whether inflation has increased and is impacting people. The debate is what we should do about it"; and if so will she adjust the income tax brackets to account for the last four years of inflation?Rt Hon JACINDA ARDERN (Prime Minister): I do stand by the statement. I also said "The Opposition has proposed cuts to the top tax rate and getting rid of policies to help first-home buyers. We on the other hand have worked consistently to increase focused support for low and middle income earners. That's why we've overseen a $5 increase in the minimum wage benefiting around 300000 workers. We've increased Working for Families … [which] will make around 346000 families better off by an average of $20 each a week. We created the winter energy payment starting again from 1 May benefiting over a million New Zealanders during the winter months. We've made the largest across the board increases in benefit incomes since the 1940s and we've increased the pay of new police officers by 19 percent since 2017 16 percent for primary teachers and 21 percent for new nurses." Our Government is choosing to target support to those on low and middle incomes who need help the most through raising wages and increasing support. Families earning between $40000 and $70000 will benefit by an average of $21 per week through our proposed increase in the family tax credit rather than the Opposition's proposal to cut taxes for property speculators and the highest earners.Christopher Luxon: Does she accept that with prices rising twice as fast as wages it's clear we have a cost of living crisis under her Government in New Zealand?Rt Hon JACINDA ARDERN: As I have consistently answered in this House: from the moment we took office we worked very hard to ensure that we saw wages increase at a faster rate than inflation—and we did that. Right now though I absolutely accept that New Zealand alongside the UK alongside the United States Scotland Ireland are all reporting the impact of the increase in the cost of living as a result of an increase in inflation—and add to that the war in Ukraine which is putting pressure on energy prices. So we're all experiencing that. The debate we're having in this House is whether or not a cut to the top tax rate as the member is proposing which would come at a cost of $600 million is the answer or whether or not as we propose continuing to support low and middle income earners across a range of areas is the answer.Christopher Luxon: How does she reconcile her claim that she's just made—that wages have grown faster than prices under Labour—when actually since she became Prime Minister we've had total inflation of 11.5 percent but total wage growth of less than 9 percent?Rt Hon JACINDA ARDERN: Because since quarter one of 2018 wages have increased at an average annual rate of 3.5 percent and Consumers Price Index inflation has averaged 2.2 percent over the same period. What we're of course acknowledging is the experience we're having right now—as a result of the simultaneous COVID recovery that is going on around the world the extra demand the shortages in supplies supply constraints and add to that a war—is causing a range of pressures for households. We are committed to continuing to try and ease that pressure—1 April you see those family tax credit changes; 1 April you see the increase in the minimum wage; and in May you see the winter energy payment. In contrast the Opposition is proposing for some of those families to get a grand total of $2.15 whilst top-income earners would receive a substantial tax cut.David Seymour: If the Prime Minister believes that the National Party's proposed tax cuts would be inadequate for helping middle New Zealand deal with a cost of living crisis would she then consider ACT's proposal of cutting the middle-income tax rate affecting those on $48000 to $70000 giving the average working family $2000 or $40 a week more in the pocket?Rt Hon JACINDA ARDERN: Again our proposals around the family tax credit changes—as I've said—for many of those low and middle income earners outstrip what has been proposed by National and doesn't at the same time come at the great cost of reducing the taxes for the highest-income earners which inevitably means then you see cuts to things like health and education. But what I would point out to the member is that he's not only proposed as he said changes for middle income earners; he is also proposing changes that will see costs increase for them in other areas. We are not. We want free lunches in schools we want under-14-year-olds to still be able to go to the doctor for free we want to see a continued investment in healthcare. Those are all things the member's policies do not support.David Seymour: Is the Prime Minister saying that if ACT can demonstrate it's possible to give the average family $2000-plus in tax relief without reducing health or education spending then she would support it and if not why not?Rt Hon JACINDA ARDERN: I'm merely pointing out that the member's policies include cutting KiwiSaver support first-home buyer grants everything as well—our investment in research and development through Callaghan the investment we've made in regional jobs through the Provincial Growth Fund. The member even proposes getting rid of the Ministry for Women. So no I don't support his policy proposals.Christopher Luxon: Does the Prime Minister agree that for a family with two parents earning the average wage an increase in their living costs of $5000 in one year is absolutely a cost of living crisis; and if not what would she call it?Rt Hon JACINDA ARDERN: The member has continued to have a debate where there is none. We of course have acknowledged the increases that families are experiencing at this point of time. I think perhaps the reason the member is choosing not to hear my answers on that is because he does not wish to have a discussion over whether or not he is still promoting the policy he introduced to the country on Sunday when he said for instance "My commitment is I'll reverse Labour's tax policies. National will repeal each of these new taxes." On Newstalk later he said "We'll reverse them when we get into power in the first term." On Wednesday he said "What we're saying is in principle we're going to remove the tax increases." I'm happy to have a debate with the member if he will choose to stick with a policy proposal we can actually debate.Christopher Luxon: Why won't she adjust that same family's tax brackets for inflation so they actually get to keep more of what they earn given they've faced an increase in their living costs of $5000 in the last year?Rt Hon JACINDA ARDERN: Again as I've said we have chosen to take a much more focused approach on supporting families and I've already given the examples of where on 1 April the changes that we'd make for the family tax credit for many families would far outstrip that member's proposals and would not come at the cost of a fiscal hole that means National would not be able to fund adequately our health services and our education services. They also sit alongside for instance free doctors visits for under-14-year-olds; making sure that we have for instance 200000 children getting free lunches in schools; for instance the winter energy payment—the number of things that we have done across the course of our time in office where if the Opposition were in charge they would simply not be able to continue because none of their policies add up.Christopher Luxon: What is the Prime Minister's response to the 1.6 million Kiwis earning $48000 or more who would get an average gain of $820 in tax relief if her Government adjusted the tax brackets for the record inflation of the last four years?Rt Hon JACINDA ARDERN: Again as I have said with examples in this House before if you take a person earning $55000 per year who may have children they would receive an average of $21 per week under the proposals that we have that come in on 1 April. Under National's proposals it's $15. Someone on $150000 under National's proposals are nine times better off than someone around the $40000 mark. It demonstrates that again we have a different set of priorities here. We want to support our low and middle income families whereas on that side of the House they want tax cuts for those who are in the wealthier bracket. And my other message to those families would be that they must also ask themselves the question how National would fund the other priorities those families have. I quote from a report I see today: "This is a problem for the party as the 2024 Budget which would be National's first budget should [they] win [an] election currently has only $3 billion of new operating spending allocated to it. This would be totally absorbed by the tax package unless National plans to deliver no new services or cut spending elsewhere."Christopher Luxon: Doesn't she think that people on the average wage—the tradies and the hairdressers—deserve a break; and if not why won't she adjust their tax brackets at the Budget to give them some relief from the cost of living crisis?Rt Hon JACINDA ARDERN: As I've said and repeated in this House multiple times and again today I've talked about the efforts that we are making in that space and I would also again highlight that as I said yesterday whether or not it's a new teacher we've seen an increase since our time in office of them receiving an additional $227 a week if you take an example of a teacher with family. If you take the example of someone working 30 hours at a minimum wage with kids $336 better off. If you take for instance a primary school teacher $11000 better off; a nurse $16000. These far outstrip the examples that the member has presented in this House by some margins and none of those changes the member would be able to commit to in office because he has a massive fiscal hole."