1. Question No. 1—Prime MinisterCHRISTOPHER LUXON (Leader of the Opposition) to the Prime MinisterORAL QUESTIONSQUESTIONS TO MINISTERSQuestion No. 1—Prime Minister1. CHRISTOPHER LUXON (Leader of the Opposition) to the Prime Minister: Does she stand by all of her Government's statements and actions?Rt Hon JACINDA ARDERN (Prime Minister) (remote): Yes—and particularly this Government's swift action to secure our economic recovery in response to the COVID-19 pandemic.Christopher Luxon: Does she accept that record inflation is pushing more people into higher tax brackets even though their real incomes aren't increasing; and if so will she address this at the Budget?Rt Hon JACINDA ARDERN: Obviously as a Government we have acknowledged the impact that inflation is having on the cost of living. Of course we've canvassed in this House many times before the global reasons why we are seeing that increase in inflation in New Zealand. The Government has responded by taking targeted action. The 1 April changes mean that 60 percent of families have seen an increase in their family tax credit. On 1 May the winter energy payment is also acting as cushion for superannuitants and those on Government support. We have repeatedly said though it's not our intention—as it has been the National Party's—to have a response that includes tax cuts for those on top tax brackets including those on incomes over $180000 because we've wanted to target our support.Christopher Luxon: Will there be any tax relief in the Budget for middle-income households?Rt Hon JACINDA ARDERN: Obviously I'm not going to speak to the specifics of the Budget. But the member in seeing our response as a Government will already have seen that we have moved proactively with the changes that we made on 1 April to cushion the impacts of inflation on households. Not only did it include the family tax credit increase it's also included orphan benefit support increases in main benefit rates and increases in the minimum wage. So you've already seen us be very proactive in this area.David Seymour: Does the Prime Minister stand by her Government's action of requiring household contacts of COVID cases to isolate for seven days even if they themselves test negative for every one of those days and does she accept that might have an impact by disrupting supply chains and putting more pressure on the cost of living crisis?Rt Hon JACINDA ARDERN: Where there is an impact on critical services obviously we've had the ability through for instance things like the return to work scheme to enable that. But the reason we have the requirement over isolation for household contacts is just the prevalence and the high level of incidents where those contacts do translate into COVID-19 cases. I know the member will wish well all those who may be isolating in those circumstances.David Seymour: Why wouldn't New Zealand follow Singapore and have a simple workable and sensible isolation policy that after 72 hours if you've tested negative you can go back to work?Rt Hon JACINDA ARDERN: For certain industries we've had a policy which has allowed people to return to work with daily rapid antigen tests—so we have had the ability in those critical areas for that to occur. But I'm not sure the member would necessarily promote that we mirror every part of Singapore's regime. Until recently of course they were still limiting gatherings for individuals in private households to 10. Every country has had their own approach; ours has been very heavily based on the evidence. We still know the area of greatest transmission is in households where there are COVID-19 cases—unfortunately.Christopher Luxon: Does she believe middle-income households struggling with the cost of living crisis deserve tax relief; if not why not?Rt Hon JACINDA ARDERN: Again our focus as a Government has been on using those tools that we have to be targeted and it's not just in this particular period of time. When we first came into office we used a package of support which ran into the billions to ensure that New Zealanders were seeing an increase in their incomes—but we target it—as I say: the Best Start payment the winter energy payment and those increases to the family tax credit way back in 2017. We've also focused on seeing increases in people's wages. Right up until this year you consistently saw wage increases that outstripped cost of living increases.Christopher Luxon: What in her view is so wrong with just lifting the tax brackets to adjust for inflation so that middle-income Kiwis get a break from the cost of living crisis?Rt Hon JACINDA ARDERN: Well of course it all depends on the circumstances and the situation that you're in at the time that such a proposal is tabled. I would note that the member's proposal not only gives tax cuts to those on the highest incomes—and those on the lowest a mere $2 a week—but also has the potential to be inflationary which is exactly the issue that the member complains about.Christopher Luxon: Is she ruling out any income tax relief at this Budget?Rt Hon JACINDA ARDERN: As I've already referenced in my answers I'm not going to speak directly to a Budget that the member only needs to wait a few sleeps for. But we've already said countless times that our focus is on health services and for instance the other challenges facing New Zealand and our economy including climate change. I note with the member's proposal of taking out for instance up to a billion dollars from the economy for speculators that the ability of a National Party in the future to invest in services like health would be seriously constrained.Hon Chris Hipkins: Supplementary question?SPEAKER: Yeah I am going to call Chris Hipkins but I am going to ask members on both sides to stop the exchange while the Prime Minister is answering questions.Hon Chris Hipkins: Has she seen any credible commentary suggesting that middle-income earners are those earning over $180000 a year?Rt Hon JACINDA ARDERN: Again I think you will have seen from many New Zealanders who have heard the proposal of tax cuts for those on over $180000 a year—and at the same time a tax proposal that delivers others on much lower incomes $2 a week—I think they themselves have expressed a view on the likelihood that that is helping those who need it most at this time.Christopher Luxon: Does she accept that every dollar this Government chooses to spend is a dollar less for Kiwi families struggling with the highest cost of living increase in a generation?Rt Hon JACINDA ARDERN: You can see in the actions of this Government that we have been consistently focused on spending that lifts the services that New Zealanders value the most: education and health our COVID response our investment in income support and making sure that the wage subsidy existed and kept people in work. When you compare therefore the economic outcomes that we've had in the wake of COVID-19 relative to the global financial crisis (GFC) you see the impact that that targeted spending has had. Our GDP sits at 5.6 percent growth whereas relative to the GFC you saw a decline of 1.2 percent. Unemployment at 3.2 percent; post-GFC it was 6.6 percent. And even the proportion of people on main benefits is lower now than it was post the GFC. We stand by our response in the wake of this economic crisis.