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): Yes particularly the Government's consistent efforts to increase wages and support for low and middle income earners. We cannot control the war in Ukraine nor the continued volatility of fuel prices but we can take steps to reduce the impact on New Zealand families. That's why we have reduced fuel excise duties and road-user charges by 25c and halved the price of public transport. This builds on a comprehensive package due to come into play on 1 April which increases Working for Families for 346000 families ensuring they are better off by on average $20 a week. Of course that coincides with further benefit increases and increases for superannuitants and also student support. On 1 May the winter energy payment restarts again benefiting over a million New Zealanders during the winter months including superannuitants. There is no silver bullet that will fix the cost of living but we have a plan and are implementing a range of measures that together will help to make a difference. That stands in stark contrast to the idea from the Opposition of reducing taxes for those earning over $180000 a year.Christopher Luxon: Does the Prime Minister accept that with weekly rents up a staggering $150 a week under Labour the largest four-year increase in New Zealand's history her Government's housing policies have made the cost of living crisis much much worse for the one in three Kiwi households who rent?Rt Hon JACINDA ARDERN: First if I could just give the context that according to Stats New Zealand rental price index the rental increases we've seen from for instance 2013 to 2017 in terms of percentages is actually the same as for instance the period that we've seen while we've been in office. Where there is a difference is the approach that we as a Government have taken relative to the previous Government. We have worked hard to try and tip the balance in favour of renters and first-home buyers. The combination of interest deductibility the extension of the brightline test the work that we have done to incentivise new builds to increase housing stock has led to for instance record consents. We know that this is an issue of supply and demand because in those areas where we have increased supply we've seen lesser increases in rents relative to those areas of constrained supply. The big difference is we are working hard to build houses whereas on the opposite side they worked hard to sell off Government houses. Christopher Luxon: Why did she introduce additional taxes on rental housing last year despite Inland Revenue Department officials clearly warning her it would drive up rents?Rt Hon JACINDA ARDERN: As has been the case time and time again in this House I do want to correct the member. The member is referring to advice that was provided before the additional changes that we made. That's meant that we are phasing out interest deductibility over a four-year period—Nicola Willis: You were warned.SPEAKER: Order!Rt Hon JACINDA ARDERN: —and importantly including an exemption on new builds. The whole goal is twofold. We want to make it easier for first-home buyers to buy. On the opposite side of the House they are proposing to remove the brightline test and interest deductibility which would not improve the housing market for first-time buyers; and secondly to improve supply we've created a carve-out for new builds to incentivise the building of houses. This stands in contrast with the Opposition who actually have no proposals whatsoever. Christopher Luxon: So why have rents increased by an additional $50 since she introduced those taxes? Rt Hon JACINDA ARDERN: There is no evidence to suggest it has been as a result of those changes and I remind the member again the increases that we've seen actually mirrored the increases we saw from 2013. Nicola Willis: Incorrect.SPEAKER: Order!Rt Hon JACINDA ARDERN: That demonstrates—that is a statement of fact based on Stats New Zealand—that we've got a decades-old problem that in contrast to the Opposition we have policies that are working hard to solve the problem. On the opposite side they intend to get rid of everything that will make it easier for first-home buyers.David Seymour: Can the Prime Minister explain to the people of New Zealand just why she thought raising taxes on landlords in a tight rental market wouldn't lead to an increase in rents? Rt Hon JACINDA ARDERN: The CoreLogic data shows that investors still remain active in the market: 36 percent of transactions are going to multiple property owners. What we want to do for those investors is steer them towards new builds so we can expand supply rather than operating in the same market as first-home buyers. Christopher Luxon: Does she accept that with rents up an additional $50 a week since she introduced those taxes—the largest one-year increase in rents we've ever seen in this country—her tax increases have clearly made the cost of living crisis much worse just as she was warned they would? Rt Hon JACINDA ARDERN: Here again I will point the member back to what the increases have shown. However the contrast that exists between this side of the House and the opposite is rather than just seeing those increases and doing nothing we have invested heavily in supporting low and middle income earners: first the package of changes we've made to try and improve the housing market for first-home buyers and renters—and there is still more to do—secondly lifting the incomes of low and middle income earners and on 1 April we have another tranche of changes again. That stands in contrast with the members opposite who want to get rid of all of those tax changes to try and help first-home buyers who stood opposed to some of our measures to stop increases on more than an annual basis for renters and who want to give those low and middle income earners $2.16 as a solution to the cost of living. We have a much more substantial package. Christopher Luxon: Does the fact she is now resorting to re-announcing policies that were already announced months ago show that her Government is simply running out of ideas? Rt Hon JACINDA ARDERN: Two points I would make there: firstly of course what we announced yesterday—the 25c reduction in excise—was in direct response to the war in Ukraine and the impact it is having on New Zealanders at the pump as was the 50 percent reduction in public transport to encourage and support those who do have the choice of public transport to adopt it. It was not a policy developed last year because there was no war last year. Christopher Luxon: Can the Prime Minister explain why someone should pay more tax because of inflation? Rt Hon JACINDA ARDERN: As I have already highlighted in the House our primary focus has been on giving back to low and middle income earners at a much larger rate than the tax cuts proposed by the member. It is because our long-term measures to support living cost impacts are long term and targeted. By being targeted they can be more generous and again I contrast what someone on $45000 would receive: over $20 on this side versus $2 from that side. Christopher Luxon: What is her response to ANZ economist Miles Workman that Inflation is now running laps around wage growth meaning households are going backwards at an alarming rate."? Rt Hon JACINDA ARDERN: I'm sure that commentator would also reflect that that has not been the case since this Government came into office and—as I've said many times—since 2018 wages have increased at roughly 3.5 percent; inflation has been at 2.2 percent. We are in extraordinary times. We have the wicked perfect storm of a pandemic the impact on supply and add to that a war. It is having an effect and that is why we have both the changes we announced yesterday to ease the pressure at the pump and also the 1 April changes both of which amount to a significant increase for low and middle income earners that is vastly different than what's being proposed by members opposite. Hon Chris Hipkins (remote): Can the Prime Minister confirm that the last time New Zealanders experienced a significant increase in the cost of living they also ended up paying significantly more tax because the then Government decided to increase GST?Rt Hon JACINDA ARDERN: I can confirm that the last time New Zealanders were experiencing food price increases was in from memory 2011 when the then National Government decided to increase GST which we know is regressive and hits those who can afford it the least the most. That is fairly consistent with their most recent tax policy where they have proposed to cut the top tax rate of those who earn—SPEAKER: Order! Order! The question itself was at the edge of the margin and I think the Prime Minister has taken it beyond. Christopher Luxon: Is she honestly saying that Kiwis who have seen their real incomes fall over the past year shouldn't be concerned because inflation four years ago wasn't as bad? Rt Hon JACINDA ARDERN: No. Christopher Luxon: How does the Prime Minister think Kiwis struggling with the cost of living feel when they see a Government that's increased spending by more than $50 billion a year but has still somehow failed to make progress on any of its signature promises and in areas like housing is actively making things worse? Rt Hon JACINDA ARDERN: By making that statement I can only assume the member does not support the measures that the Government took in the face of the pandemic to support businesses and keep people in employment the most significant of which of course was the wage subsidy to keep people connected to employment. Just as it was our job to help support New Zealanders through the pandemic it is our job to help them through the economic impacts that we've seen as a result: keeping unemployment at 3.2 percent as we have done and debt relative to other countries as low as we have; and now supporting them through the cost of living impacts of the pandemic and the war. We demonstrated that we could respond quickly in the face of a pandemic; we are doing the same now in the wake of the Ukraine war. Chlöe Swarbrick (remote): Is there any evidence tax cuts for landlords will pass on to rent cuts for renters? Rt Hon JACINDA ARDERN: We have consistently heard claims that when you increase for instance accommodation supplement that immediately is taken up in rental increases. We've consistently heard that making our homes warmer and drier will negatively impact on tenants rather than actually keeping them warm dry and healthy. There is no evidence to suggest the changes that we've been making in the areas the member has indicated and in fact all of those other areas have necessarily directly translated in the way the members across the House suggest. Again it tells me that they actually have very few solutions on how to make the housing market more affordable and to support first-home buyers."