5. Question No. 5—FinanceHon BARBARA EDMONDS (Labour—Mana) to the Minister of FinanceQuestion No. 5—Finance5. Hon BARBARA EDMONDS (Labour—Mana) to the Minister of Finance: Does she stand by her statement that our tax cuts will reduce inflationary pressures"?Hon SIMEON BROWN (Minister for Energy) on behalf of the Minister of Finance: Only seven sleeps to go till the Budget and yes as the member knows I was paraphrasing an ANZ preview of the Budget that said "We think that the net impact of tax and spending cuts are likely to be marginally contractionary on balance in so far as households save a portion of their tax relief or spend a greater proportion on imports than the Government would have." I agree with ANZ's economists. I wouldn't want to overstate the impact but since tax relief will be fully paid for it should at the margin take a bit of pressure off inflation given that households may save some of their tax relief rather than spend it all.Hon Barbara Edmonds: Does she agree with the Reserve Bank that "Interest rates may have to remain at a restrictive level for longer than anticipated in the February Monetary Policy Statement."; if not why not?Hon SIMEON BROWN: Well on behalf of the Minister I agree with the Reserve Bank which said in their Monetary Policy Statement "Any impact of potential changes in the forthcoming Budget to Government spending or private spending due to tax cuts remains to be assessed." It's seven more days till the Budget. Not long to go.Hon Barbara Edmonds: Does she agree with the Reserve Bank that the reduction in Government spending from her job cuts is less deflationary than expected; if not why not?Hon SIMEON BROWN: On behalf of the Minister the Reserve Bank made it very clear in their Monetary Policy Statement that the impact of the forthcoming Budget is yet to be seen because it hasn't yet been released. So I just say to the members on the other side of the House: seven days to go. Seven more sleeps. And I have great news for the hard-working taxpayers of New Zealand that tax relief is coming in this year's Budget.Hon Barbara Edmonds: Point of order Mr Speaker. The Minister spoke in relation to Reserve Bank comments made in relation to the fact that they hadn't included the Budget information as part of this Monetary Policy Statement. My question actually was in reference to fiscal policy that they have decided and to comments that the Reserve Bank conveyed about those past policy decisions the Government has made.SPEAKER: Well in so much as the Minister is able to answer he might like to elucidate a bit on that answer.Hon SIMEON BROWN: Well on behalf of the Minister as the Monetary Policy Statement has said a number of the decisions that have been made in the Budget have not been assessed yet because ultimately the Budget hasn't yet been released. And in relation to the issues that have been the ANZ has made it very clear that when it comes to tax relief which is what the purpose of that question was it's likely to be contractionary.Hon Barbara Edmonds: Is she aware that the higher inflation expected by the Reserve Bank doesn't even factor in her inflationary tax cuts?Hon SIMEON BROWN: Well I don't know whether the member has read the Monetary Policy Statement. I'll quote it again on behalf of the Minister: "Any impact of potential changes in the forthcoming Budget to Government spending or private spending due to tax cuts remain to be assessed." Only seven more sleeps to go.Hon Barbara Edmonds: Does she agree with Treasury advice that a revenue package that is fiscally neutral "may still have an inflationary impact given lower-income individuals are likely to have a higher marginal propensity to consume out of additional income"; if not why not?Hon SIMEON BROWN: Well on behalf of the Minister Treasury has been advising that their modelling suggests the impact of tax reductions on surplus spending is likely to modestly reduce pressure on interest rates due to the fact that not everybody will spend all of that money. Some of it may be saved. That is in line with exactly the statement I made at the beginning from the ANZ. But what I just want to point out to the House is that that party on the other side of the House hate tax cuts and will always vote against them.Hon Barbara Edmonds: Why must New Zealand families pay higher interest rates for longer because of her bad decisions?SPEAKER: I'd invite the member to re-ask the question and bring it into line with the Standing Orders.Hon Barbara Edmonds: Why must New Zealand families pay higher interest rates for longer because of the information provided to the Reserve Bank on which they have provided the Monetary Policy Statement?Hon SIMEON BROWN: Well it's seven days to go—seven sleeps to go—until the Budget. But what I would just say to members on the other side: they will say and do anything to oppose tax relief for working New Zealanders. They cancelled the last tax relief in 2017 that was last legislated. They hate the idea of letting New Zealanders keep more of what they earn and New Zealanders rejected that at the last election."