1. Question No. 1—FinanceTIM VAN DE MOLEN (National—Waikato) to the Minister of FinanceORAL QUESTIONSQUESTIONS TO MINISTERSQuestion No. 1—Finance1. TIM VAN DE MOLEN (National—Waikato) to the Minister of Finance: What recent reports has she seen on the economic outlook?Hon NICOLA WILLIS (Minister of Finance): Yesterday the Reserve Bank released its February Monetary Policy Statement. The bank's monetary policy committee which makes its decisions about interest rates independent of the Government left the official cash rate unchanged at 5.5 percent. The bank clearly considers that inflation is coming down at an appropriate pace. Inflation has declined from a peak of 7.3 percent in mid-2022 to 4.7 percent in the December quarter and the bank's forecasts show it falling towards the 2 percent mid-point of the target band.Tim van de Molen: What did the Reserve Bank say about the state of the New Zealand economy?Hon NICOLA WILLIS: The Reserve Bank noted that capacity pressures have eased significantly over the past year largely as a result of restrictive monetary policy. Aggregate demand is now better matched with the supply capacity of the economy. These are positive developments but the Government is also conscious that New Zealanders with a mortgage or a business loan are feeling the effects of high interest rates. When inflation is under control and interest rates start to come down people can spend more of their money on things that make a difference to them and their families.Tim van de Molen: What did the Reserve Bank say about the state of the global economy?Hon NICOLA WILLIS: The Reserve Bank says that global economic growth remains below its trend. That has affected demand for New Zealand's exports but it also means that inflation in many of our trading partners has declined more quickly than expected reducing the global prices for imports to New Zealand. The bank highlights the fact that geopolitical and climate conditions remain a risk for inflation and mentions the recent conflict in the Red Sea and the drought affecting the Panama Canal as contributing to delays and increased global shipping costs.Tim van de Molen: How should monetary and fiscal policy interact?Hon NICOLA WILLIS: That is a very good question from the member. Fiscal policy which the Government determines should not trample across monetary policy which is set by the Reserve Bank. Unfortunately in recent years that is precisely what happened: the Reserve Bank was trying to fight inflation while the Government was busy fuelling it. Hon Kieran McAnulty: Point of order. Madam Speaker. The Minister of Finance knows that questions from the Government side should not be used to make an accusation towards a previous Government. It would be regrettable I think if she were to be trying it on because you happen to be in the Chair today.DEPUTY SPEAKER: Yeah I will uphold the Hon Kieran McAnulty's point of order. That is correct that there will be no—we'll make it clear to all Ministers who are answering questions this afternoon that it is not an opportunity to attack the Opposition.Hon NICOLA WILLIS: Madam Speaker perhaps I could—Hon David Seymour: Speaking to the point of order.DEPUTY SPEAKER: Is this speaking to the point of order?Hon David Seymour: Yes.DEPUTY SPEAKER: Because the Hon Nicola Willis was on her feet first.Hon NICOLA WILLIS: Speaking to the point of order. The member asked a very good supplementary question about how monetary and fiscal policy should interact—a very fair question for a member of the House to ask. I talked about the interaction between fiscal policy and monetary policy and in order to explain that fact pointed to contemporary events.DEPUTY SPEAKER: OK. So let me just say it wasn't a serious breach of the Standing Order but we'll give a general direction to the House for this afternoon and we will carry on with the—Hon David Seymour: Madam Speaker—DEPUTY SPEAKER: Is this a new point of order?Hon David Seymour: Well I would like to speak to it Madam Speaker.DEPUTY SPEAKER: No I'd like you not to speak to it thank you.Hon David Seymour: Well actually—DEPUTY SPEAKER: Mr Seymour I've said it wasn't a serious breach of the Standing Order. We're just making it very clear for today and I've made a ruling. Thank you.Hon David Seymour: It's a fresh point of order Madam Speaker.DEPUTY SPEAKER: It's a fresh point of order?Hon David Seymour: Yes. Madam Speaker there is a distinction between the question being asked and the answer given. The ruling actually applies to the question; it does not apply to the answer being given because otherwise it means that a Minister in theory can never actually criticise the Opposition and that seems incredibly unfair.DEPUTY SPEAKER: I think there's a difference between criticising policy and actually attacking the Opposition and we haven't gone over the line so we're not going to do it now. So I'll ask the Minister to—Rt Hon Winston Peters: Point of order. Madam Speaker the reality is that this is an environment which is a raging battle for political power and it's been that way for decades and decades in great democracies including New Zealand. I'm hearing—Hon Willow-Jean Prime: What's the point of order?Rt Hon Winston Peters: Excuse me will you hear me in silence? That's what the first rule is. So keep quiet.DEPUTY SPEAKER: Would the member carry on with his point of order please.Rt Hon Winston Peters: You know so little about this business for a start.DEPUTY SPEAKER: Is this a point of order?Rt Hon Winston Peters: No Madam Speaker but she was interjecting in a point of order and your job is to stop her.DEPUTY SPEAKER: Yeah I know that. We'll have silence during points of order. Please state your point of order.Rt Hon Winston Peters: Thank you very much. My point of order is that I believe your ruling is palpably and demonstrably wrong. You're saying that the challenge is not being taken up in terms of the point of order made; however you're saying nobody on this side of the House can attack the other side of the House today. That Madam Speaker is not going to be accepted whether it's your ruling or not.DEPUTY SPEAKER: I've actually made it very clear to the House that there is nothing wrong with answers to questions criticising policy of previous Governments but not doing the attack on the Opposition. So that is my ruling for today. Thank you.Hon NICOLA WILLIS: Can I complete my answer?DEPUTY SPEAKER: You can.Hon NICOLA WILLIS: Thank you.Hon Paul Goldsmith: What's the question? I can't remember the question.Hon NICOLA WILLIS: The question was relating to how monetary and fiscal policy interact Mr Goldsmith. Fiscal policy which the Government determines should not trample across monetary policy which is set by the Reserve Bank. Unfortunately by way of example in recent years that is precisely what happened. The Reserve Bank was trying to fight inflation with higher interest rates while the Government was busy fuelling it with its high spending and ever-growing debt. By way of metaphor there's no point in the Reserve Bank being asked to put its hand on the brake if the Government's hitting the accelerator at the same time.