3. Question No. 3—Prime MinisterCHRISTOPHER LUXON (Leader of the Opposition) to the Prime MinisterQuestion No. 3—Prime Minister3. CHRISTOPHER LUXON (Leader of the Opposition) to the Prime Minister: Thank you Mr Speaker. Welcome back to both you and the Prime Minister. Does she stand by all of her Government's statements and actions?Rt Hon JACINDA ARDERN (Prime Minister): Yes particularly the Government's work to increase incomes and support New Zealand families including bringing in a short-term cost of living payment for about 2.1 million Kiwis to help with the impact of rising prices as part of a cost of living package; increased income support and indexed to wages helping to make more than 100000 families an average of $175 a week better off since 2017; increasing the minimum wage by over a third; increasing the family tax credit and accommodation supplement; the introduction of the winter energy payment and Best Start payment; the introduction of free healthy lunches in schools; the removal of school donations; and the expansion of free and low-cost doctors visits. David Seymour: Speech. Rt Hon JACINDA ARDERN: We have consistently acknowledged that 2022 is going to be a challenging year for New Zealanders as the global energy crisis supply chain constraints and the ongoing pandemic push up inflation around the world. However this work puts us in a strong position to deal with this challenging and uncertain environment one that will improve. SPEAKER: Order! Before I allow the member to have his supplementary question I just want to make it clear that when members ask about whether someone stands by all of the Government's actions that's exactly what it means. Christopher Luxon: Can she confirm her finance Minister has overspent every operating allowance he has set himself for five Budgets in a row? Rt Hon JACINDA ARDERN: What I'd reflect on is what you've seen in the way that we have focused on our fiscal responsibility. It's not too different to what you've seen from previous finance Ministers when it comes to operating allowances. What I would also point out is that if you're looking for comparisons in terms of spending as a proportion of GDP the Labour Government has been very similar to a National Government through the global financial crisis (GFC). In fact we returned to surplus a year earlier despite what many would argue is the COVID pandemic having a much greater economic impact. Hon Grant Robertson: Can the Prime Minister confirm that despite the finance Minister being a particularly modest individual he has overseen—SPEAKER: Order! Order! Hon Grant Robertson: You can't have irony? SPEAKER: No irony here. Any further supplementaries? Question No.—no it's not. Christopher Luxon: Does she expect to overspend next year's operating allowance as well? Rt Hon JACINDA ARDERN: Obviously we have already set out the operating allowance so I would note that Treasury has already also stipulated that actually in terms of increasing costs that are likely to be seen by some of our agencies and departments we're looking at somewhere in the range of $3.5 billion that will be required to continue to operate as we stand. Christopher Luxon: What year does she plan to return to surplus? Rt Hon JACINDA ARDERN: As I've said—one year earlier than the National Government did with the GFC—in 2024-25. Christopher Luxon: Can she confirm that non-COVID Government spending has increased by almost 10 percent per year since 2020? Rt Hon JACINDA ARDERN: Again here I reflect on the traditional comparisons we use as a percentage of GDP. We spent less in 2021 and 2020 as a percentage than National did in 2009 and 2010 and that is in spite of what many would argue is a more significant economic crisis. I would also throw this back here because of course what members of the public will be interested in is how the Opposition intends to fulfil all of their promises to the electorate. We have set out that our priority is supporting New Zealanders as we recover from COVID. The cost of—SPEAKER: Order! Order! It's gone beyond what the Prime Minister is responsible for. Christopher Luxon: What does she believe is the relationship between record levels of Government spending and record increases in interest rates? Rt Hon JACINDA ARDERN: Obviously right now the focus has been from the Opposition side on whether or not the spending that we have put forward in our Budget—which has both focused on supporting New Zealanders through targeted measures around the cost of living so as not to have an inflationary impact and investing in health services. He will have already seen the Governor of the Reserve Bank say that what we have spent in our focus has been small beer" relative to what we are experiencing in the global environment and the inflation rates of other countries right now speaks for itself. New Zealand is sitting down closer to the lower quarter with our inflation rates relative to the rest of the world. The OECD is at 9.2 percent. The member cannot argue that this is specifically down to the New Zealand Government's spending. Christopher Luxon: Does she accept that record levels of Government spending when inflation is already at a 30-year high means higher interest rates and higher mortgage costs for tens of thousands of Kiwi families and if not why not? Rt Hon JACINDA ARDERN: Firstly the member himself has proposed tax cuts for the highest-income earners which are unquestionably inflationary and do not help the lowest-income earners. As an alternative we have focused on a cost of living package that because it is targeted not only offers higher levels of support for lower and middle income New Zealanders but also is less likely to have an inflationary impact. That is what you do when you're a Government focused on those who need support the most and on not making the problem worse. Christopher Luxon: What impact if any does she believe consistently spending more than promised and running deficits in an overheated economy will have on the cost of living crisis? Rt Hon JACINDA ARDERN: Again as I have referred back time and time again what the member is arguing does not square with what we are seeing internationally: supply chain constraints simultaneous COVID recovery the war in Ukraine. That is why we are having this experience and I again refer to the Governor of the Reserve Bank when asked specifically about Government spending: it's "relatively small beer compared to all the other drivers that are going on." The member on the opposite side ignores our international reality; we have not. That is why we are focused on New Zealanders and supporting them to get through the tough international environment we're in."