6. Question No. 6—FinanceHon BARBARA EDMONDS (Labour—Mana) to the Minister of FinanceQuestion No. 6—Finance6. Hon BARBARA EDMONDS (Labour—Mana) to the Minister of Finance: Does she stand by her statement that The Budget we delivered in May was a careful combination of investment in frontline services whilst also continuing to do our bit to keep inflation down"; if so what specific initiative in her Budget if any can she point to that will reduce inflation?Hon NICOLA WILLIS (Minister of Finance): Yes. And to the second part the member seems to fundamentally have a misunderstanding because the significance of the impact of the Budget on inflation is not about individual initiatives but rather the overall impact of spending and revenue decisions taken together—for example the more-than-240 savings initiatives progressed by this Government in the Budget. I refer the member to Treasury's analysis in the Budget Economic and Fiscal Update which says—and I quote—"The decisions taken through Budget 2024 will on balance reduce the contribution fiscal policy is making to inflation pressure."Hon Barbara Edmonds: What specific initiative if any can she point to in Budget '24 that will reduce rates that are up an average of 9.6 percent?Hon NICOLA WILLIS: I can point to the fact that this is a Government that is spending wisely and that therefore the overall impact of our Budget is to reduce pressure on inflation.Hon Barbara Edmonds: What specific initiative if any can she point to in Budget '24 that will reduce insurance that is up 14 percent with some families paying an additional $2000 per year or $45 per week extra?Hon NICOLA WILLIS: Well as with the answer to the previous question I do not set rates nor do I set insurance levies. And if the member thinks it would be appropriate for the Minister of Finance to set insurance levies then there's a much broader discussion we can have about that. However what we are seeing across New Zealand is that many insurers are introducing risk-based pricing and are looking at the risks which exist in our insurance market. One of the most significant risks is the risk of climate change and the more extreme weather events that are created by it. A specific initiative in Budget 2024 is the establishment of the Regional Infrastructure Fund. And the first set of projects that that fund will support are flood-mitigation projects including stop banks across our regions which is intended to reduce the risk of major climatic events which in turn will help the context in which insurance rates are set. And to the earlier question in terms of rates again we do not set rates but we are a Government that is ensuring we are providing uplifts and support for local roading projects for many of the projects that local government are trying to carry out and we are supporting growth in our regions.Hon Barbara Edmonds: What specific initiative if any can she point to in Budget '24 that will reduce rents that are up 4.8 percent—and the medium rental is $600 a week?Hon NICOLA WILLIS: I do think it's important that the member continues to reflect on my answer to the first question which is that we know the cumulative impact of the initiatives in Budget 2024 in Treasury's advice is to reduce inflation pressure. In answer to the question specifically about rents I can tell you this: increasing costs on landlords through removing their interest deductibility increased pressure on rents. And so the corollary is this: in an environment where interest deductibility was not restored I guarantee rents would have increased faster.Hon Barbara Edmonds: Why have rents increased by 4.8 percent when she said her $2.9 billion tax break for landlords would put "downward pressure on rents"?Hon NICOLA WILLIS: As I just said I am confident that it has put downward pressure relative to the alternative which was ratchetting up costs on landlords. What that Government had budgeted for was to grossly increase costs on landlords which I believe would have been passed on to tenants in the rents that were charged. But furthermore what we are doing as a Government is the most fundamental thing we can do which is move our levers to increase housing supply. Ultimately we want a situation where landlords are competing much more robustly in the rental market so that actually there is maximum downward pressure on rents and that's about fixing the Resource Management Act it's about fixing constraints on land supply and it's about the changes Chris Penk is making in the building and construction portfolio to make it cheaper to build a house. And I'll tell you want we're not doing: we're not going around New Zealand promising people we'll build 100000 KiwiBuild homes.Hon Barbara Edmonds: Will she continue to claim responsibility for the decrease in inflation as set out in her media release last week when her actions have done nothing to cause it?Hon NICOLA WILLIS: I once again point the member to the Treasury analysis an institution she used to speak very well of. The decisions taken through Budget 2024 will on balance reduce the contribution fiscal policy is making to inflation pressure. I would also point her to market analysts who agree that inflation is now lower than it had been forecast to be at this point in the cycle. The plan is on track and New Zealand is getting back on track."