1. Question No. 1—FinanceNICOLA WILLIS (Deputy Leader—National) to the Minister of FinanceORAL QUESTIONSQUESTIONS TO MINISTERSQuestion No. 1—Finance1. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: Does he agree with CoreLogic chief economist Kelvin Davidson on rising mortgage interest rates that it's a big change so that's going to mean quite a big change for household finances"; if so what advice if any has he had on the impact rising mortgage interest rates will have on disposable household incomes? Hon GRANT ROBERTSON (Minister of Finance): I do acknowledge the impact that rising mortgage interest rates will have on households which is why this Government is focused on supporting New Zealanders both directly but also through maintaining economic growth low unemployment and higher wage growth. It is worth pointing out the context that Mr Davidson gave for his comments and I'll quote briefly from him: "Comparing the current downturn to the GFC one big wildcard is low unemployment and nobody's expecting it to suddenly spike higher. Strong employment should help to keep a floor under home values and be the difference between a correction and a more serious slump." I would note for the member that the last time mortgage interest rates were at the current levels was in 2015 when unemployment was 5.5 to 5.7 percent. To answer the second part of the question I certainly have received a range of advice. One report from Statistics New Zealand today said that household savings had increased in the latest quarter as incomes rose and expenses fell indicating the importance of maintaining a strong economy low unemployment and rising wages during a global inflation spike.Nicola Willis: So is it the Minister of Finance's position that families who are now going to be paying hundreds of dollars more each week in mortgage repayments while also having to find hundreds of dollars more each month for their grocery bills should just be grateful they have a job?Hon GRANT ROBERTSON: No absolutely not. As I've stated many times in this House I understand that this is a tough period for many New Zealand households. That's the reason why the Government has continued to step up with initiatives to support low and middle income people. All of those initiatives without fail have been opposed by the National Party.Nicola Willis: Has he sought any advice on how many people who purchased their homes in the past two years will be facing the prospect of default on their mortgage if the current projected interest rate increases occur?Hon GRANT ROBERTSON: Again as I said in my primary answer there is a wide range of advice. I would note the advice from the banking sector itself for the first half of this year that noted that the number of customers who were behind on their loan repayments was only just over 1 percent of borrowers. We do know that as part of the stress-testing exercise when people take on mortgages those are stress-tested at much higher rates than the rate that the person actually borrows at. I have no doubt that for a number of households this is going to be a very tough period. The Government has continued to support New Zealanders through this period and a low unemployment environment—i.e. people being in work—supports them to get through the situation.Nicola Willis: Can he confirm that a family borrowing a $500000 mortgage at the average two-year rate of 5.65 percent will now be paying—sorry it was 2.69 percent—$14300 more a year on the rate of 5.65 percent which is $275 more per week?Hon GRANT ROBERTSON: It will depend entirely on the specific circumstances. That calculation could well be correct for a household in a particular set of circumstances. I repeat: no one is denying that this is a tough period for many households in New Zealand. That's why they need a Government that is focused on making sure that we keep people in work that we support economic growth that is sustainable in New Zealand and that we look after the most vulnerable in our society.Nicola Willis: Can he confirm that for every additional 0.5 percent in rising interest rates that family with a $500000 mortgage will be $2500 a year worse off—nearly $50 a week in higher mortgage interest costs?Hon GRANT ROBERTSON: Well again without all of the information about the person it's hard to say exactly what will happen. I presume those people will fix their mortgage at some point in the process and so therefore won't be subjected to the increases in rates that follow on from that. Again none of this changes the point: there are many households in New Zealand who are finding things tough at the moment. That's why they need a Government that has fully costed policies and is focused on supporting New Zealanders and not on making tax cuts available for the wealthiest New Zealanders which is what the National Party would do.Nicola Willis: Does he accept any responsibility for rising interest rates and record high inflation or is it his position that his job as finance Minister is to try and convince New Zealanders that everything's just fine when they aren't only having to face rising living costs but they're now having to face rising mortgage costs at the bank? Hon GRANT ROBERTSON: It is my belief that it is my job as the Minister of Finance to continue to help shepherd New Zealand through the impacts of a major crisis in the global economy. For the last 2½ years this Government has stood alongside New Zealanders supporting them through the wage subsidy scheme supporting small businesses with the small-business cash flow scheme and with the resurgence support payment lifting benefits increasing the family tax credit lifting the minimum wage and making sure that New Zealand has got through a massive crisis with unemployment at 3.3 percent. There are no costless decisions when it comes to a pandemic but I stand proudly on this Government's record."