4. Question No. 4—FinanceHon BARBARA EDMONDS (Labour—Mana) to the Minister of FinanceQuestion No. 4—Finance4. Hon BARBARA EDMONDS (Labour—Mana) to the Minister of Finance: Mālō e lelei Madam Speaker. Does she agree with the Prime Minister's statement we have delivered lower inflation"; if so what specifically can she point to in the August Monetary Policy Statement that supports the claim that her Government has caused lower inflation?Hon NICOLA WILLIS (Minister of Finance): Yes and I can point the member specifically to page 51 of the Monetary Policy Statement which shows annual Consumers Price Index (CPI) inflation of 6.9 percent in March 2022 7.3 percent in June 2022 7.2 percent in September 2022 7.2 percent in December 2022. Gosh! Those are high numbers. The table then shows inflation dropping to a much lower level with annual CPI inflation being 3.3 percent in the last quarter and forecast to be 2.3 percent in the current quarter which is within the target band.Hon Barbara Edmonds: Does she agree with the Reserve Bank statement that "Spending reductions in the public sector will reduce inflationary pressure and income tax threshold changes will increase inflationary pressure. The net impact for monetary policy is expected to be small and highly uncertain."?Hon NICOLA WILLIS: I agree that fiscal restraint and spending reductions in the public sector are reducing inflationary pressure and I agree that these were not things that were in place under the last Government.Hon Barbara Edmonds: Is the real reason why the Reserve Bank had to unexpectedly cut rates because as the BNZ chief economist Mike Jones has said the updated forecast reflected "extraordinary weakness" being seen in the economy?Hon NICOLA WILLIS: It's a little bit hard for New Zealanders to get a break with this lot isn't it? You've got inflation coming under control you've got interest rates coming down and somehow they've still got reason to complain about it.Hon Barbara Edmonds: What is her plan if any to mitigate the impacts of the forecasted recession given unemployment is now forecast to be even higher at 5.4 percent economic activity has weakened materially and weaker output gap that has been assumed in the August Monetary Policy Statement? Hon NICOLA WILLIS: On this side of the House we take economic management extremely seriously. We have viewed it as our job to get inflation under control and we are delivering ahead of schedule. We have taken it as our role to reduce inflationary pressure so that interest rates can come down and restore confidence in households and businesses and we're delivering that ahead of schedule too. And we are then taking steps to make sure that fiscal restraint and value for money are ongoing. We've already delivered $23 billion worth of reprioritisation over the next four years and there will be more to come. And then I would say this: every single Minister along this row behind me and over there thinks everyday about how we drive economic growth in this country how we get the barriers out of the way and how we enable people to have the confidence to invest to hire to innovate and to export. We believe in growth; you believe in red tape.Hon Barbara Edmonds: Is the real reason why inflation is lower because she is tanking the economy as described by the Reserve Bank as a "weakening in domestic economic activity observed in the July Monetary Policy Review has become more pronounced and broad-based."?Hon NICOLA WILLIS: Well the member needs to decide what her line of argument is. Is it that the Government cannot take any credit whatsoever for lower inflation and lower interest rates or is it the latter supplementary in which we have driven it down to levels that it shouldn't be? The member can't have it both ways. Choose a line of attack and stick to it.Rt Hon Winston Peters: Just to recap for the media and doubting Thomas's is it a fact that with the implosion of expenditure and hope and borrowing by the previous administration inflation more than doubled but it's come down dramatically under the coalition—yes or no?Hon NICOLA WILLIS: These are the facts. And if the Deputy Prime Minister will indulge me it is absolutely more than a yes or no answer because there are these facts: there were three years of out-of-control inflation of rising interest rates of wasteful spending of debt accumulation. Then a new three-party coalition is elected fiscal restraint comes on board inflation comes down interest rates come down and soon growth will revive—there's your story.Hon Barbara Edmonds: Why is the Minister taking credit for the lower cost of living achieved by a drop in the official cash rate when public transport subsidies for under-25s have gone up rates have gone up rents have gone up insurance premiums have gone up and her Government have done nothing to mitigate these?Hon NICOLA WILLIS: Well again here's the table—this is inflation coming down. Now what inflation did for the past three years was prices across the economy rose dramatically. For example when people went to the supermarket they faced higher and higher prices every time they went. Well in the past year food prices have actually fallen. And when I look at the Government's track record on delivering for the cost of living it's not just inflation it's not just reducing interest rates which free up incomes for mortgage holders; it's also that we have reduced costs. The regional fuel tax the ute tax tenant taxes personal income tax—we are a Government on the side of those who care about the cost of living.Hon David Parker: Point of order. It seems to be apparent in all of the answers today that the only thing that is inflating around this place is the length of answers. You've allowed extremely long answers from a number of Ministers today.DEPUTY SPEAKER: Well thank you for the point of order. And yes some of the answers have been longer than usual but we've actually been on some fairly tense topics as well so thank you for the suggestion."