8. Question No. 8—Prime MinisterDAVID SEYMOUR (Leader—ACT) to the Prime MinisterQuestion No. 8—Prime Minister8. DAVID SEYMOUR (Leader—ACT) to the Prime Minister: Does she stand by her statement A lot of the advice we're receiving is that if we are not careful we're not targeted we can make inflation worse"; if so can she explain whether her Government has followed this advice?Rt Hon JACINDA ARDERN (Prime Minister): Yes I stand by my full statement. I note that the second half of the statement the member is quoting was "That's why things like general tax cuts aren't the answer because … they don't deliver much to the majority of people who need a bit of relief and secondly they can make inflation worse." To the second half of the question the Government needs to weigh up a range of considerations. We considered Treasury analysis that inflationary pressures have almost double the immediate impact on lower and middle income households versus higher income households and their advice to target support to those who need it the most. In doing so we needed to get the balance right between providing support through this challenging period while not unnecessarily exacerbating the issues of inflation. This is why our cost of living payment is targeted to those earning $70000 or less and why we've rejected the Opposition's plans for untargeted tax cuts that disproportionately benefit the most wealthy New Zealanders.David Seymour: Did the Treasury advise in respect of the $350 cost of living payment "A broad-based one-off payment of this magnitude would add to inflationary pressures in the short-term … This makes a one-off payment a poor mechanism for supporting households with a longer-term problem" and if so why didn't the Government follow that advice as she just claimed?Rt Hon JACINDA ARDERN: The member is selective in what he is choosing to share with this House as he was with my quote in the primary question. Treasury also said "although the risk to longer-term inflationary pressures is relatively small assuming any interventions of this nature were temporary." Temporary and targeted—that was the approach the Government took. I note that the member is somewhat contradicting himself though because his own proposals are not temporary nor targeted.David Seymour: How can the Minister seriously stand there and argue that her policies will not create long-term inflation because they won't solve the problem in the long term either?Rt Hon JACINDA ARDERN: That was not the statement I was making. I was reading the statement from Treasury which was that because they are temporary and targeted that minimises the inflationary impact in the long term.David Seymour: Does the Prime Minister believe New Zealanders are able to see the blatant contradiction between taking advice that giving $350 to a whole lot of people is inflationary and trying to claim that her policies are not inflationary?Rt Hon JACINDA ARDERN: What I'm reflecting in the answer is that Treasury is differentiating from different types of payments and pointing out—because of course they recommended using the benefit system for a one-off payment—that there are ways to do this that have less of an inflationary effect than say for instance broad-based tax cuts. The other point I would make is that the member seems to be implying that that specific decision is the cause or will be a significant contributing factor to the inflation that New Zealand is currently experiencing. The member only need look at what is being experienced globally. OECD inflation is averaging 9.2 percent. The EU is roughly 8 percent. New Zealand at 6.9 percent yes is high and we must do what we can to support New Zealanders through this period but to argue that it is Government spending decisions that are driving those increases in inflation is patently wrong.David Seymour: Is the Prime Minister aware that the Government of the United Kingdom just increased spending by around 35 percent to exceed a trillion pounds for the first time in the history of that country that President Biden just brought out US$1.9 trillion of stimulus and her own Government just increased expenditure from $87 billion a year pre-COVID to $128 billion a year now and has it occurred to her that maybe all this Government spending and all this inflation in all of those three countries might somehow be connected?Rt Hon JACINDA ARDERN: The alternative proposal I can only assume from the member is that we should have had no support mechanisms through COVID and that as a result of that likely we'd be experiencing right now much higher levels of unemployment which has its own significant economic impacts. I stand by the decisions that we made."