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 agree with BNZ that The New Zealand economy is currently in peak stagflation: two quarters of negative growth; a labour market that is unsustainably tight; and inflation miles above the Reserve Bank's target"; if not why not?Hon GRANT ROBERTSON (Minister of Finance): In answer to the first part of the question no I would not characterise the New Zealand economy that way. The answer to the second part of the member's question is in the qualification provided by the BNZ economists immediately after the quote the member used for the first part of her question. That quote is "But the worm is turning. Inflationary and labour market pressures are easing and interest rates have probably peaked. The outlook is brightening with a solid bounce in activity expected in the second half of next year." I acknowledge that for those who are affected at the moment by the slowdown these are challenging times. However as a country we face this period of slowdown from a strong starting point of high employment growing real wages and low public debt.Nicola Willis: Well does he agree with the BNZ's comments immediately following those comments that "The New Zealand economy has stalled." and "there is more pain to be felt as the economy bounces along the bottom torn between rising immigration and [higher] interest rates." and isn't it actually the case that the worm for our economy will only turn when there's the election of a National-led Government?Hon GRANT ROBERTSON: No in answer to the second part of that question because the election if it were to happen of a National Government would see unaffordable tax cuts and massive cuts to public services and the member needs to explain how all of that adds up because at the moment they can't even cost a basic policy let alone have an economic plan that ends up.Nicola Willis: Would the Minister care to explain why the Australian economy is performing so much better than New Zealand's with no recession; inflation 110 basis points lower at 5.6 percent; official interest rates 140 basis points lower at 4.1 percent; and both the current account and Government Budget in surplus?Hon GRANT ROBERTSON: Many many answers to that member's question there. We'll just take the very very last point. The member might want to go back and look at the way that surplus is measured in the Australian economy and the New Zealand economy in that they have a one-year surplus this year and then go back into deficit next year so questions like that would need to be answered. But I guess the point that the member needs to think about is that the two economies are both doing well relative to the rest of the world when we compare to pre-COVID times. The difference in terms of GDP to the same quarter last year—New Zealand had 2.2 percent growth Australia had 2.3 percent; so it's close. We work well with our neighbours. I do however given the members interest in Australia look forward to her advocacy of a capital gains tax and a 45c top tax rate.Christopher Luxon: Oh that's coming.Hon GRANT ROBERTSON: From you is it?Nicola Willis: Is it Labour Party policy to increase the top tax rate to 45c and deliver a capital gains tax or is that just the proposal discussed at Cabinet to be deferred to later?Hon GRANT ROBERTSON: As the member well knows I'm in this role as the Minister of Finance. I'm not answering questions about what the Labour Party policy is or isn't. But what I can say is that once again at this election we'll be there with a fully costed economic plan. The member's got a couple of options: she could leave out a few billion dollars like Paul Goldsmith or she could front up to New Zealanders about how she's going to pay for public services with her unaffordable tax cuts.Nicola Willis: Does he agree with Westpac that "it's clear the New Zealand economy is losing momentum" or does he prefer BNZ's characterisation that "economic momentum has ground to a halt"?Hon GRANT ROBERTSON: We can all play "pick-an-economist" if we want to and I could also pick out Sharon Zollner the chief economist who makes the point that the recession that we have at the moment doesn't look much like a normal recession with unemployment still at a near-record low and the low levels of public debt that we have. Clearly she also stated that we would have had positive growth in the last quarter if the cyclone hadn't hit. Nicola Willis: Why does he refuse to take any responsibility for delivering the biggest current account deficit since records began in New Zealand a recession exploding Government debt sky-high inflation and interest rates—but he will happily stand in this House and take credit for any blip on the horizon that he can spin as positive today?Hon GRANT ROBERTSON: Over the course of the last six years I have taken responsibility for the full picture of where we have gone as a Government from an economic perspective. We got through COVID better than most other countries; our economy is 6 percent larger than it was. Does that mean that every single thing that's happened along the way has been perfect? No it doesn't but I will stand by our record of having low unemployment low public debt an economy that's bigger than it was before COVID and having looked after people—and being able to produce an economic plan that actually adds up unlike the National Party. Nicola Willis: Is he concerned that his economic mismanagement has delivered New Zealand the biggest current account deficit in the developed world with BNZ's head of research Stephen Toplis pointing out that "the last time we experienced such heights was back in the 1970s when New Zealand was referred to as a 'banana republic'"?Hon GRANT ROBERTSON: The nature of New Zealand's current account deficit challenge is long-running. As the member knows that the direction of travel here is the right one and that it has now come down to 8.5 percent. I know the member wants me to take responsibility for high global interest rates; for a supply chain affected by COVID. I'm sure if the member stopped and thought about it for a minute she would realise that those aren't matters that are in the control of the Government. I'd also point the member to the fact that New Zealand's net international investment position now means that actually the impact of that current account deficit over the last few years is effectively neutralised. This is very different from periods of time in the past when the current account deficit has been high.Nicola Willis: Has he been advised what the impact for New Zealanders will be when the Government rips off its fuel tax band-aid at the end of the week leaving New Zealanders to struggle on with the ongoing cost of living crisis and no permanent tax reduction; and does he agree with Gareth Kiernan Chief Forecaster of Infometrics that "households are now paying the price for the Government's inability to cut its spending from higher pandemic-era levels now that we're out the other side"?Hon GRANT ROBERTSON: Of the four or five questions that the member put up there I'll comment on a couple of those. The first is the very interesting notion that it appears the National Party is going to magic up another couple of billion dollars to keep the fuel tax subsidy going because that's the clear implication of that member's question. We put that measure in to support New Zealanders as inflation rose. Inflation is now coming down and that measure is coming off."