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: Does she stand by all of her Government's statements and actions?Rt Hon JACINDA ARDERN (Prime Minister): Yes in particular the Government's recent work to reconnect with the world including recent trade missions and business delegations to Japan Singapore Australia and the United States of America. Supporting New Zealand businesses to access these large and important international markets has helped to promote a number of trade and tourism opportunities that will support our trade recovery strategy. Trade delegations have included representatives for New Zealand's dairy Māori businesses food and beverage technology tourism and energy sectors. In addition during a recent trip to Europe the Government signed a major free-trade deal with the European Union which will see export revenue to the EU to grow by up to $1.8 billion annually on full implementation. This free-trade agreement (FTA) builds on the UK FTA the Government recently signed which will see a boost in New Zealand's GDP estimated between $700 million and $1 billion. This work by the Government is key to supporting our economic development and trade agenda.Christopher Luxon: Can she confirm that inflation has now been above the 1 to 3 percent target for 15 straight months?Rt Hon JACINDA ARDERN: Obviously the member himself can see where inflation levels are sitting but I would also point out that there had been periods where not only has it sat within those bounds we've also seen—importantly for us as a Government—wages consistently outstrip inflation. That of course remains an important goal for us and we are set to see that trend return in the incoming period.Christopher Luxon: When should Kiwis struggling with record increases in the cost of living expect inflation to be back below 3 percent?Rt Hon JACINDA ARDERN: Again this is all forecasting. It's incredibly difficult at this period of time to with specificity determine where inflation is likely to land. Because as much as there is a crystal-ball gazing and a lot of revisionist history on the other side of the House we all remember that it wasn't that long ago that we expected double-digits unemployment and a potential collapse in the housing market. That is not what has occurred and instead we see the world over significant increases and inflation. The member will see the same forecasts I do—the predictions that we will see it begin to decline but still remain higher than we usually have it in New Zealand but it will then continue to trend down. But again they're forecasts.Christopher Luxon: What impact if any does she believe Government spending of $127 billion in the coming year—$50 billion more than just five years ago—will have on inflation and interest rates?Rt Hon JACINDA ARDERN: Again here I just again point the member to the fact that New Zealand is not alone in this experience. The fact that the member keeps coming back to the decisions made by the Labour Government in New Zealand in my mind tends to lend itself to an argument that we are the only ones having this experience currently. Canada the UK the United States Australia's on the up; you even see in the likes of Korea in parts of Asia very similar increases in inflation either at the same rate we are or higher or trending up. Again I refer back to my earlier answer on what Treasury has said around the Government spending and I would also point the member to the fact that a large amount of our spending in the last Budget was on cost pressures. And I ask him again what will he cut?Hon Grant Robertson: What goes? What goes? What goes?Christopher Luxon: We can give you a list.Hon Dr Megan Woods: Well do—we're waiting.Christopher Luxon: Does she agree with—SPEAKER: Order! Order! Order! Two things: one there shouldn't be any chipping from over here. But two the Prime Minister shouldn't ask someone who is not in the position to answer questions.Christopher Luxon: Does she agree with former Reserve Bank Governor Graeme Wheeler who said global supply chains and the Ukraine war are not in any way the main drivers of inflation"; if not why not?Rt Hon JACINDA ARDERN: I've seen a number of opinions and reckons on the current global situation and I've seen a number of views on what different central banks should be doing.Christopher Luxon: Was former Reserve Bank Governor Graeme Wheeler wrong when he said "The main reason why we've had this surge in inflation is the extraordinary monetary and fiscal stimulus that's been applied"; if so why?Rt Hon JACINDA ARDERN: Again I've also seen a number of different views on the contributing factors to what we are currently seeing. What I can see now is the member is now acknowledging a global set of circumstances. Again our job is to make sure we can do what we can to support New Zealanders through this period. I also do not resile from the decisions that we have made to support businesses who went through an extraordinary time—extremely tough—and I totally reject any suggestion that they showed anything other than resilience.Hon Grant Robertson: Can the Prime Minister confirm that there was widespread support for the fiscal measures to support businesses and households through COVID-19 including calls from some for more support than what the Government gave?Rt Hon JACINDA ARDERN: Yes I absolutely recall that and of course I stand firm on the view that the decisions for instance around monetary policy and the decisions by the Reserve Bank are their decisions—they are independent. But the line of questioning from the member Christopher Luxon today suggests to me that he believes we should have had higher interest rates through that period. Christopher Luxon: Will she back National's call for an independent public inquiry into the Reserve Bank's monetary policy response from March 2020 until late 2021; if not why not? Rt Hon JACINDA ARDERN: I mean firstly the first principle here I would argue of course is the independence of the Reserve Bank. The second point I would argue is that the member's question suggests that there isn't the possibility to scrutinise the decisions of the Reserve Bank and the governor at different points. The governor goes to the Finance and Expenditure Committee if I recall every three months. Every decision is subject to scrutiny and of course separately. The remit has a statutory review currently under way which there is the possibility for submissions on. There are ample opportunities to raise these kinds of questions. Chlöe Swarbrick: Would the Prime Minister welcome a review into the economic response to COVID-19 say by the Finance and Expenditure Committee that I've been calling for for the past five months? Rt Hon JACINDA ARDERN: I actually refer here to an answer that was given by at the time the Minister for COVID-19 Response: there have been ample inquiries reviews and analysis across the COVID-19 response. Does that mean that there isn't more that we should reflect on in what has been one of the most significant health and economic crises that we as a nation have experienced? Yes there will be. But I think it's about making sure we do it at the right time in the right and most effective way. We are still in the middle of a response—particularly through winter—so it is about making sure that we choose the most appropriate time. Christopher Luxon: Is she concerned that relying on the Reserve Bank to review its own performance is unlikely to be as robust as an independent inquiry and don't Kiwis deserve to understand how Government policy has contributed to the cost of living crisis? Rt Hon JACINDA ARDERN: Here I believe the member is asking me: do I think that we should maintain the independence of the Reserve Bank? Yes we should. Christopher Luxon: Is she really saying it's impossible to assess the performance of the Reserve Bank without compromising its independence? Rt Hon JACINDA ARDERN: The board of course has a role here as does a number of other opportunities for the Parliament to add the scrutiny. Again there seems to be—also the other point that I would make here is that there seems to be a lot of hindsight and revisionist positioning here. Christopher Luxon: It's costing us a lot of money. Why won't the Government agree to look critically at its own mistakes and do everything possible to prevent a repeat of the current situation where Kiwis are suffering because—SPEAKER: Order! Order! I'm going to ask the member to rephrase his question right from the beginning. Christopher Luxon: Why won't the Government agree to look critically at its own performance and do everything possible to prevent a repeat of the current situation? Rt Hon JACINDA ARDERN: Because the member is asking us to resile from all of the support that kept people in jobs that kept businesses operating and that made sure we supported our health system and there are always things we could do better and we will always be willing to reflect back on them. But do I resile from the support that was provided to the New Zealand businesses who kept our people in jobs? No. And will I ever call them soft? Never."