Barry Maggie: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeBarry Maggie: Questions for Oral Answer — Questions to Ministers[Sitting date: 17 April 2013. Volume:689;Page:9429. Text is incorporated into the Bound Volume.]1.MAGGIE BARRY (National—North Shore) to theMinister of Finance: What steps is the Government taking to keep down the cost of living for New Zealanders?Hon BILL ENGLISH (Minister of Finance): The Government has taken a number of steps and assisted by general economic conditions is helping to keep interest rates at 50-year lows and annual inflation at around 1 percent. The steps the Government has taken are to maintain a track to surplus which will take the pressure off interest rates and reduce inflation pressures; responsible and orthodox monetary policy is helping keep inflation low; increased competition in the electricity industry has halved the 8 percent annual increase in electricity prices in the 9 years up to 2008; cutting red tape and increasing flexibility for businesses means better prices for customers; and investing in infrastructure and delivering better public services helps the economy become more competitive.Maggie Barry: What recent reports has he received on the cost of living?Hon BILL ENGLISH: One measure of the cost of living is the Consumers Price Index. Statistics New Zealand today reports that consumer prices rose by 0.4 percent in the March quarter and annual inflation—that is the inflation for the year up to the end of March—was 0.9 percent. This means that annual inflation has now been running at 1 percent or less for four quarters. This is well down on inflation of more than 5 percent per annum which was the rate when the Government took office in late 2008. The impact of low inflation on interest rates means that a family with a $200000 mortgage is around $200 a week better off in interest payments compared with late 2008.Maggie Barry: What reports has he received on recent food prices?Hon BILL ENGLISH: The food price index came out last week for March. Of course food prices fluctuate often for seasonal reasons as much as for cost and price inflation reasons. This report showed that food prices fell in the month of March. Food prices for the year to March which encompasses the whole seasonal cycle fell by 0.4 percent—that is on average food prices for the year to March went down.Maggie Barry: How do these moderate cost of living increases compare with increases in real after-tax wages?Hon BILL ENGLISH: Well these moderate increases and of course for some classes of expenditure such as food reductions in the cost of living compare quite favourably with wage increases in the last 5 years. Since September 2008 gross wageshave increased by 14 percent. After tax they have increased by 22 percent. Inflation has been 9 percent which means that real after-tax wages have increased by 12 percent since September 2008. In the 9 years up to September 2008 after-tax wages increased by only 4 percent.David Shearer: Is it correct that power prices went up by 5.2 percent to 31 March which is nearly six times the rate of inflation? Can he confirm that?Hon BILL ENGLISH: I will take the member at his word. That price increase is included in the collective CPI which went up by 0.9 percent for the year. So some households would have paid more for electricity and they paid less for food; on balance their cost of living went up by 0.9 percent. But all households are grateful the Labour Government is no longer in charge—Mr SPEAKER: Order! [Interruption] Order! That is quite a sufficient answer thank you.Sue Moroney: Well can he explain then how keeping ACC levies artificially high keeps down the cost of living for New Zealanders when the regulatory impact statement on this decision shows that the Government’s refusal to lower levies as recommended by ACC and the Ministry of Business Innovation and Employment is costing workers and employers up to $2 billion more a year than what is needed to cover the cost of injuries?Hon BILL ENGLISH: That is a bit rich coming from the party that expanded entitlement to ACC without increasing the levies but I agree with the member. If we can continue to reduce ACC levies it will reduce the cost of living. Two years ago we did decrease those levies by $600 million per year and we are looking at every opportunity to decrease them further.Iain Lees-Galloway: How does increasing fuel taxes by 9c a litre keep the cost of living down especially given that transport officials advised the Government that an increase of that magnitude would raise nearly $20 billion more than what is required to carry out their road-building programme?Hon BILL ENGLISH: Well I do not agree at all with the member’s last assertion. In fact the fuel tax is calibrated to the roading investment programme in a highly transparent manner. That fuel tax increase is part of the collective measure of price increases the CPI which shows that over the last year the cost of living went up by 1 percent. I hope Labour keeps going on about this issue because the more it complains about the rise in the cost of living the lower it seems to be.Iain Lees-Galloway: I seek leave to table two tables from a briefing received by the Minister of Transport from the ministry that indicate that fuel excise taxes of 9c a litre will generate nearly $20 billion more than required.Mr SPEAKER: Leave is sought to table those two tables. Is there any objection? There appears to be none. They can be tabled.Document by leave laid on the Table of the House.