1. Question No. 1—Prime MinisterCHRISTOPHER LUXON (Leader of the Opposition) (remote) to the Prime MinisterORAL QUESTIONSQUESTIONS TO MINISTERSQuestion No. 1—Prime Minister1. CHRISTOPHER LUXON (Leader of the Opposition) (remote) to the Prime Minister: Does she stand by her response when asked if New Zealand has a cost of living crisis that I wouldn't describe it that way" and is she considering adjusting income tax brackets to help Kiwis struggling with rising prices?Rt Hon JACINDA ARDERN (Prime Minister): I stand by the entirety of the interview where I stated that—Chris Bishop: Ha!SPEAKER: Order! The member's going across the top of their own leader.Chris Bishop: What? No I'm not. She's answering the question.Rt Hon JACINDA ARDERN: —where I—SPEAKER: Order! The Prime Minister will resume her seat. I will remind members of the comments that I made last week and that is that we are in a more sensitive time as far as members who are participating remotely and excess noise is something which interferes with their ability to hear the answer. I will ask members to control themselves and especially Mr Bishop not to argue from his seat. Rt Hon JACINDA ARDERN: I stand by the entirety of the interview where I stated "There is an impact that people are feeling undeniably." The debate is not whether inflation has increased and is impacting people. The debate is what we should do about it. 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 changes that will lead to 346000 people 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 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. The Government's plan is providing targeted support to New Zealand families to deal with the costs of living whilst also investing in critical services and importantly keeping a lid on debt.Christopher Luxon: Why won't she admit that New Zealand has a cost of living crisis when rent is up $140 a week and food prices are up more than 13 percent under Labour?Rt Hon JACINDA ARDERN: This side of the House absolutely acknowledges the increases that families across New Zealand are currently experiencing—as many other countries are—as we see the COVID recovery mean that demand is often outstripping supply. We also have the issue of course of the pressure on fuel prices which have gone up over 500 percent since April 2020 in terms of a barrel of crude oil. That is having an impact. But what I would contend is that the National Party's proposal for instance to take away essentially $26 per week from someone earning under $40000—because they voted against our increases to the family tax credit—and instead replace it with $2.15 is simply not the way to support families who need it most.Christopher Luxon: Does she accept that with petrol now above $3 a litre in some places Kiwis are having to pay as much as $60 more to fill up than when she took office and if so why won't she admit we have a cost of living crisis?Rt Hon JACINDA ARDERN: I again will bring the member back to where we are having the debate currently which is that the member is proposing to for instance cut policies that will make it easier for first-home buyers to get into the market and to get rid of the top tax bracket instead of focusing on support for low and middle income New Zealanders. Now again I would also point out that the member at the same time as he is raising what is essentially the impacts of international fuel prices and the fact that we have now a conflict in energy-rich countries with Russia invading Ukraine—yes it's having an impact at the pump. But the member is well short on his proposals because he essentially is not answering the question of how he would pay for some of the things that he is proposing. There are two options: he's cutting health he's cutting education or he's increasing debt.Christopher Luxon: Mr Speaker—SPEAKER: Before the member goes on I think I'm just going to do a reminder and that is that when using the remote system members are after a couple of supplementaries to their primary question still required to call. I think the member received some training—I hope the member received some training—on that. If he hasn't I'll just run through until he's finished except if someone else goes to it. But a reminder to all members who are participating remotely: if they have a question they automatically get two supplementaries and then we go to other members or we finish unless they indicate through the chat function that they want the call. Christopher Luxon: Does she accept she could provide tax relief to more than 3.2 million Kiwis by simply adjusting the tax brackets for inflation and the $4.3 billion she had left for new spending would still be the single biggest increase in new spending in New Zealand's history?Rt Hon JACINDA ARDERN: The member is proposing a change in policy that would essentially see someone for instance as I've said who would be on a wage of $45000 receiving $2.15 per week. At the same time he has rejected and voted against the family tax credit increases that we proposed that would mean that they were more than $20 a week better off. He does not support increases in the minimum wage. He wants to get rid of the top tax bracket that we have introduced. He's proposing $3 billion worth of cuts to health education and all of the services that New Zealanders value; either that or he wants to increase debt. We stand by our policies. They are focused on low and middle income earners whereas his will give $2.15 instead where people could be better off by over $20.Christopher Luxon: Is it fair that someone on the minimum wage who works 44 hours a week is set to face a marginal tax rate of 30c on the dollar or that someone on the average wage is now in the 33 percent tax bracket?Rt Hon JACINDA ARDERN: Or is it fair that that member asks that question whilst not supporting any increase to the minimum wage? Again here I come back to the wider point: consistently since 2017 as a Government we have been focused on lifting the incomes of New Zealanders. And here is the impact of those policies: a minimum wage worker working 40 hours a week in 2017 compared to now is receiving an extra $218 per week. A new police officer graduate is receiving $12292 more overall per annum. An experienced nurse—$16431. The average pay for a secondary teacher—a $12905 difference between now and 2017. That is a marked increase as a result of the focus we've had on lifting the wages of low and middle income New Zealanders and we stand by that.Christopher Luxon: What does she say to the mother of five Krystine Nation who told the AM Show "This is something that is so embarrassing to say but I cannot afford to go to work … It's cheaper for me to stay at home and not pay the extra petrol not pay the huge daycare costs and the extra food for lunches."; and how does she think struggling Kiwi families feel when they hear her refusing to even admit we have a cost of living crisis?Rt Hon JACINDA ARDERN: We have always been very careful to ensure that we've done things like increase the minimum family tax credit that we have the in-work tax credit and that we make sure that those keep pace to ensure that families are always better off in work and that's where increases in the family tax credit also make a difference. But sadly the member who asked the question has often not supported any of those increases.Christopher Luxon: How can she say with a straight face that Kiwis paying an extra $5000 a year for basics like food power petrol and rent doesn't count as a cost of living crisis?Rt Hon JACINDA ARDERN: Again the member is not hearing anything that I'm saying in acknowledging that right now yes there are increases that are impacting on New Zealand families. As I said it's undeniable. But the debate here is whether or not the member's solutions or the Government's are the ones that will benefit New Zealanders the most. Now we haven't even got to the fact that what the member is proposing is highly inflationary. So it wouldn't take much for that $2 that the member is proposing to be absorbed. I come back to the point: consistently since 2017 we have focused on putting hundreds of millions of dollars back into the pockets of Kiwis and it stands true—Nicola Willis: Defensive much?SPEAKER: Order! Second warning Nicola Willis.Rt Hon JACINDA ARDERN: —that they've seen an increase in incomes that has outstripped the increases in the cost of living. Right now though there is an impact and the whole world is seeing it and that's why we will continue to take measures like those I've already spoken to today.Hon Chris Hipkins: Given concerns that have been raised about the cost of food has she seen any reports of increased support for the Government's free and healthy school lunches programme?Rt Hon JACINDA ARDERN: I would expect all members in this House to support a programme that has seen tens of thousands of children now receive free lunches in schools and we made that a universal policy for those schools that are in the programme to ensure that all families receive the benefit of having one less thing to worry about. When it comes to the increase in the cost of food I have seen one other report: the Leader of the Opposition complaining about a potential increase to the cost of his coffee as a result of the increase in the minimum wage. That is where that member's priorities lie.Christopher Luxon: Does that mean it's her view that if the Government spends an extra $6 billion it won't be inflationary but giving Kiwis less than a third of that in tax relief would be?Rt Hon JACINDA ARDERN: Of course the Treasury has consistently given advice over what has inflationary impacts and if you increase demand in the economy then yes that would have inflationary impacts but that doesn't stop of course the Government continuing to look to ways to support those who feel disproportionately the impact in the cost of living which is exactly why we have created targeted spending—$270 million worth—into families by increasing the family tax credit.Christopher Luxon: Is the reason she won't admit New Zealand has a cost of living crisis simply because that would mean admitting she has a responsibility to do something about it but she'd rather increase spending than give more than three million some much needed inflation-adjusted tax relief at the Budget?Rt Hon JACINDA ARDERN: Actually the opposite—actually the opposite. The point that I have been making throughout my entire time in office is that we've been working to ease the cost of living and increase wages from the time we took office not just right now and that's why when you look back for instance overall at the increase in incomes for families that we've worked on since 2017 if you take a newly trained secondary school teacher not only have their wages increased they've also had an increase in the family tax credit; they've continued to receive the in-work tax credit. If they have a newborn in their family they'd receive the Best Start payment. Their weekly in total before wages are taxed would have increased by $224. A sole parent working 30 hours at the minimum wage again would have received an increase in their wages accommodation supplement family tax credit minimum family tax credit—in all an extra $336. The point I'm making is that the member opposite may only have started talking about the importance of increasing wages against the cost of living now; we've been talking about it since 2017."