2. Question No. 2—FinanceNICOLA WILLIS (Deputy Leader—National) to the Minister of FinanceQuestion No. 2—Finance2. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: Does he agree with Westpac that Consumer confidence has plummeted as household budgets have been squeezed by higher mortgage rates and increases in living costs" and when does he expect wage growth to catch up with price increases? I see you're raring to go.Hon CHRIS HIPKINS (Leader of the House) on behalf of the Minister of Finance: Buckle in! Given the increases in global inflation which is tracking over 9 percent on average across the OECD the ongoing disruptions to supply chains and the impacts of the war in Ukraine it's not surprising that consumer confidence has been affected. The report referenced by the member also notes the factors contributing to the resilience of the New Zealand economy such as the strength of the labour market with unemployment at just 3.2 percent. In answer to the second part of the question the global energy crisis that we are seeing has contributed to inflation outstripping wages in 2022. In terms of Treasury's most recent forecasts 2022 is the only year in which that is the case and wage growth is expected to exceed inflation from 2023 onwards.Nicola Willis: Is he concerned that far from showing resilience ANZ's headline measure of business confidence out today is approaching record lows and does he take any responsibility for the lack of confidence in the economy?Hon CHRIS HIPKINS: I think the member will be aware that around the world we are seeing consumer confidence reaching very low levels and New Zealand of course is in line with that trend. This is not unique to New Zealand.Nicola Willis: Can he confirm that according to the business survey from ANZ firms are increasingly pessimistic about the outlook for activity and profitability in New Zealand and does he share their concerns?Hon CHRIS HIPKINS: I have seen the ANZ study and as I've indicated before it is in line with surveys around the world that are showing an increased degree of pessimism and lower confidence both consumer confidence and business confidence something the Government does of course take very seriously. It's one of the reasons we are committed to addressing some of the underlying causes—for example the cost of living pressures that New Zealand households face. Those are issues that we are very much focused on addressing.Nicola Willis: Is he aware that according Westpac's consumer survey confidence in the economy is at its lowest level since 1988 and doesn't that show that working New Zealanders have run out of confidence in the prospects for the New Zealand economy while Labour is in charge?Hon CHRIS HIPKINS: If one scans across all of the different surveys out there at the moment you could also find examples of where consumer confidence was lower after the global financial crisis when the National Party was in Government. Overall there is no question that consumer confidence is lower at the moment. Most people watch the TV news at night and will see what is happening around the rest of the world and that of course is having an impact.Nicola Willis: Isn't it the case that far from being about what's happening around the world the reality is that inflation has outstripped wage growth in New Zealand for 10 of the last 17 quarters meaning New Zealanders' real incomes are falling and that's why they lack confidence in his Government?Hon CHRIS HIPKINS: I don't agree with the member's assertion in her question. In fact up until this year wage growth has been outstripping inflation. After the global financial crisis there were several periods where wage growth was being outstripped by inflation. That is not unusual when we see economic shocks of the type that we are experiencing at the moment. But the Treasury forecasts indicate that by next year we will be back into the position where wage growth will be running ahead of inflation.Nicola Willis: With mortgage repayment hikes looming for many Kiwi families what does he say to the New Zealanders who are tightening their belts and bracing for tough times yet are having to watch his Government spend up large at record high rates?Hon CHRIS HIPKINS: I say to the householders who are following interest rates very closely that they should be fortunate the ACT Party aren't part of a National Government because they're arguing for even higher interest rates.Nicola Willis: Has he seen the comment by Lance on the Labour Party Facebook page asking "Why no tax cuts then? It's well overdue. The middle class is bleeding." and if so why won't he commit to giving Kiwis back more of their money so that they can better weather the cost of living crisis?DEPUTY SPEAKER: Order! Before we go on there was quite a bit of murmuring on this side while this question was being asked and I'm going to ask members to stop it.Hon CHRIS HIPKINS: If that member thinks that giving the highest-income New Zealanders a huge amount of additional funding and giving most working New Zealanders very very little which is what the tax cuts being proposed by both the National Party and the ACT Party would deliver then I think she is utterly wrong.Nicola Willis: Has he received advice on whether his continuing to claim the New Zealand economy is strong will eventually make it true?Hon CHRIS HIPKINS: The underlying fundamentals of the New Zealand economy are strong. They are stronger now than they were after the global financial crisis when Bill English and John Key were calling it "a rock star economy". There is no question that the cost of living is biting for New Zealanders. That is an international phenomenon. It is one the Government takes seriously."