5. Question No. 5—FinanceNICOLA WILLIS (Deputy Leader—National) to the Minister of FinanceQuestion No. 5—Finance5. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: Does he agree with ANZ that high inflation is likely to remain with us for some time yet"; if so does he still stand by his May statement that "the short term challenge of inflation is significant"?Hon GRANT ROBERTSON (Minister of Finance): The context of ANZ's comment was in a note that said that the 7.3 percent Consumers Price Index (CPI) reading for the June quarter would be the peak in inflation and that the annual CPI would fall back to within the 1 to 3 percent target band in the December 2023 quarter. I do agree that this is generally where various forecasters including ANZ currently sit. In response to the second part of the member's question I repeat what I said to her when she asked that question of me previously: "The challenge of inflation is particularly harsh in the short term because we are seeing a spike that is decades high. The Treasury forecast that the spike will come off in the second half of 2022 and then as the member states go back to the 1 to 3 percent band by 2025. None of that takes away from the pressure that puts on households now and into the future and that is why the Government is supporting them." and I do stand by that. It is worth noting that we can take away from these two statements that ANZ's latest CPI forecast has inflation coming back into the 1 to 3 percent band a year earlier than the Treasury was forecasting in May.Nicola Willis: Does he agree with the Governor of the Reserve Bank that the Monetary Policy Committee's decisions over recent years have influenced a 32-year high in New Zealand's inflation rate and will he endorse calls by MPs across Parliament for a select committee inquiry into the economic response to COVID-19?Hon GRANT ROBERTSON: It is not my practice to comment particularly on the specific statements of the Reserve Bank Governor. Obviously he is a member of that Monetary Policy Committee and he is speaking on behalf of them.Nicola Willis: Does he stand by his statement in September last year that a more comprehensive evaluation of the economic response to COVID-19 should be considered and if so why won't he support an inquiry into the response?Hon GRANT ROBERTSON: I do stand by that statement and as the Prime Minister indicated yesterday there will be a time and a place for a comprehensive overview of the Government's response. Right now however is not that time and place. What I would however note to the member is the many many occasions on which the Reserve Bank and others have been in front of both her on the Finance and Expenditure Committee and also the Epidemic Response Committee. There are many occasions—perhaps more than a dozen occasions—when that has happened so it's not that the response has been without scrutiny. At some point an overview will be warranted.Chlöe Swarbrick: Does the Minister stand by his statement in December 2021 in response to my questions at the Finance and Expenditure Committee that a review of the COVID economic response is "an ongoing process" and if so does he think that that process could benefit from being transparent and open in say a parliamentary inquiry in front of a select committee with representation from all parties?Hon GRANT ROBERTSON: I do stand by that statement. There are a number of organisations and entities that have looked at the Government's response both from an economic and a fiscal point of view. As I noted the Finance and Expenditure Committee has had many opportunities to do that over recent times and will have more. There will be a time for an overview of the whole approach and that time will come soon I'm sure.Nicola Willis: When will it be the right time and place for a full evaluation of the economic response and can he confirm that he intends to kick for touch until after the election?SPEAKER: Order! The member had at least four questions in there.Hon GRANT ROBERTSON: As I've already said I'm sure that time will come but the committee that the member is part of has had numerous opportunities. If she doesn't feel that she's been able to get across the points that she wanted to on for instance 9 December 2020 10 February 2021 25 February 2021 27 May 2021 19 August 2021 3 November 2021 25 November 2021 15 December 2021 24 February 2022 5 May 2022 or 26 May 2022 the member will have other opportunities.Nicola Willis: Doesn't the Minister think it's a little disingenuous to say that a 45-minute session with the Reserve Bank Governor dominated by questions from Government members is a full evaluation of the Reserve Bank's response and when will he kick off a full evaluation?Hon GRANT ROBERTSON: I have full confidence in the Finance and Expenditure Committee to do their job.SPEAKER: Order! This member has at least another three supplementaries on this—two extras—as a result of the noise from the Government backbench.Nicola Willis: Does he agree with Treasury's assessment in March that while there are one-off elements to inflation there is also a widespread inflation dynamic that risks becoming persistent and what is he doing to stop it becoming persistent?Hon GRANT ROBERTSON: I certainly agree that the way that inflation has been playing out over the course of this year does bear the scrutiny that the Reserve Bank is giving it. The member knows that monetary policy is the main tool by which any administration looks after inflation. From a fiscal policy point of view we stand by the responses we made to COVID and we stand by the fact that as we move forward from here Government expenditure as a percentage of GDP will return to the long-run average of 30 percent. We had to do what we had to do during COVID and the member and members opposite asked us to do that and on occasion asked us to do significantly more than that.Nicola Willis: Does he agree with Treasury that inflation accelerates the process of fiscal drag where workers are dragged into higher tax brackets even if their real incomes haven't increased and will he take action to stop Kiwis being fleeced twice by inflation—once by high prices and again by the tax department?Hon GRANT ROBERTSON: What we will do is ensure that Government spending continues to support New Zealanders through a very difficult and challenging time and balance that about making sure that we keep levels of net debt as they are—among the lowest in the developed world—and that we return the books to surplus in 2024-25 year a year ahead of when National did that after the global financial crisis and that Government spending will return to 30 percent of GDP. These things need to be balanced out.Hon David Parker: Point of order Mr Speaker. You awarded the National Party three extra supplementaries. Given that there were five legs to that last supplementary could you provide guidance as to whether they've been used?SPEAKER: I'm living in hope that members will work out that supplementary questions should only have two legs and that Ministers only need to answer one of those two legs. I think in an earlier five-legged question the Minister managed to give a very full answer to one of them so I'll leave it to him. The member has one more supplementary. I would just love it if she could get it in order.Nicola Willis: Has he seen a recent survey of New Zealand business owners which found that 70 percent said they had no confidence in the current Government and its ability to steer the country through the economic downturn and will he listen to those businesses or will he continue to reject their concerns?SPEAKER: Again three at least.Hon GRANT ROBERTSON: I don't believe I've seen that particular survey. What I have however done over the course of the last 2½ years is work very closely with New Zealand businesses to make sure that we as a Government supported them to get through one of the most difficult times in New Zealand's economic history. I know that that has been appreciated. I know that they have been hard through that period—they've been tough—and we've supported them to do that. They definitely haven't been soft Mr Luxon."