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 the Reserve Bank Governor Adrian Orr who said yesterday that we've got too much home-grown inflation"; if so what additional steps if any is the Government considering to reduce pressure on home-grown inflation?Hon GRANT ROBERTSON (Minister of Finance): I agree with the statement in its full context. It was in an exchange where the Governor said in relation to Government spending that "Over recent times it's been broadly neutral if not slightly negative fiscal impulse." To answer the second part of the question: the Government is taking a number of steps to both reduce pressure on inflation and reduce the pressure on households from inflation. This includes running a contractionary fiscal policy while making sure we are targeting investments to where they are needed most such as increasing childcare assistance the family tax credit benefit levels superannuation and the minimum wage. We will of course continue to look at our fiscal policy to ensure that it does support monetary policy while balancing that with taking pressure off New Zealand households as we all face this global inflation crisis together.Nicola Willis: Will he be heeding the Reserve Bank Governor's call for the Government to spend more sensibly this Christmas or is it just Kiwi families that will have to do without?Hon GRANT ROBERTSON: As I said in answer to the primary question and indeed in answer to question No. 1 the Government understands the importance of disciplined fiscal policy. That is why there is a contractionary fiscal impulse into the future and why our spending as a percentage of GDP returns to the long-run average of 30 percent.Nicola Willis: Was Adrian Orr right to suggest this morning that the Government's immigration settings are a handbrake on our economy?Hon GRANT ROBERTSON: I'm not sure that's a completely fair depiction of that. But what I would say is that immigration is an area where I know that New Zealanders are looking to see some improvement in terms of the number of people who can come in for jobs. That's the reason why the Government did the immigration reset that we did. I note within that immigration reset currently the job-check process of that has seen 85943 New Zealand positions approved but work visa applications sit at 24031. What that indicates is that employers have been given the right to bring someone in on a visa but they are in a very competitive global employment market that makes it tough. We will continue to look at our immigration settings so that they can support the workforce that we need in New Zealand.Nicola Willis: Does the Minister understand that a job check and a visa process does not amount to a nurse working in a hospital a worker on a farm or someone helping a small business through the cost of living crisis?Hon GRANT ROBERTSON: I absolutely understand the importance of getting people here into New Zealand to fill the skill gaps we've got. The point that I was making in that answer was to be clear that there is everywhere in the world global labour shortages. What New Zealand is doing is competing in that market. We have a process now that is far more effective and efficient than what we have had. But as I said we will always continue to look to ways to tweak our immigration settings to make sure they can fulfil their goals.Nicola Willis: Does he agree with economist Brad Olsen in reference to the Reserve Bank that "They're quite clearly saying there that the Government is contributing to inflation" or will the Minister continue to dodge responsibility and keep playing the blame game?Hon GRANT ROBERTSON: Again I don't think that's a fair depiction of what the Reserve Bank has been saying. Yesterday in the press conference they also discussed the issue of the fiscal impulse and the chief economist at the bank talked about the fact that it shows that basically the fiscal impulse has been flat as far as consumption goes and that is what they feed into their model. It is a challenging time in terms of how we can contribute and manage within fiscal policy. I do note that the member's party consistently over the last couple of years as the Reserve Bank has been increasing the official cash rate (OCR) have been calling for stimulus. In October 2021 they did this then again in late 2021 then again in February 2022. As the OCR was being increased the member's party was calling for more stimulatory activity in the economy. The member cannot have it both ways. Chlöe Swarbrick: What specific fiscal policy if any will the Government undertake to support low-income New Zealanders who will be disproportionately impacted by the upcoming recession that the Reserve Bank Governor admitted they were engineering in response triggering questions this morning?Hon GRANT ROBERTSON: What we have done is what we will continue to do: make sure that our middle-income New Zealanders are properly rewarded. That includes the changes we've made to childcare assistance and the increases that are happening with the family tax credit. As we have shown over the last couple of years we will seek to find opportunities to support low and middle income people while not unnecessarily exacerbating inflation. Nicola Willis: Why should New Zealanders trust his assertion that Government spending will fall one day in the future—maybe—when that Minister has blown every single operating allowance he has ever set in a Government Budget and will he confirm that the operating allowance he will announce in a few weeks will be the same as he projected in the Budget?Hon GRANT ROBERTSON: I challenge the assertions that the member has made because the way that we measure our Budget and our fiscal policy in New Zealand is whether or not for example we keep debt under control. We have debt at one of the lowest levels in the OECD. We have a pathway back to surplus; we have seen economic growth. New Zealanders know that in difficult times—and in a crisis—this is the Government that has their backs and takes a balanced approach. That is what we will continue to do.Nicola Willis: Will he follow the lead of the Reserve Bank Governor who today apologised to New Zealanders for the role the Reserve Bank had in allowing inflation to be higher and to persist longer than it might have otherwise and to therefore contribute to the interest rate rises we're experiencing or does that Minister continue to believe he has nothing to feel sorry for?Hon GRANT ROBERTSON: I heard what the Reserve Bank Governor said this morning and I join with him in saying that I am very sorry that New Zealanders are in the circumstances they're in. What I also know is that we have worked very hard as a Government to ensure that those circumstances are significantly better than those of people in other parts of the world. I would much rather be facing this particular crisis with unemployment at 3.3 percent with an economy where our debt is among the lowest in the OECD. They are the things that we have done to prepare ourselves for this moment. We do not need knee-jerk reactions because we have taken an approach that is balanced and careful and puts New Zealand in one of the strongest positions of any country in the OECD to deal with this situation.Nicola Willis: Why when domestic inflation is forecast to keep climbing to 7.4 percent early next year does he persist in trying to hoodwink New Zealanders into believing that this is all global factors?Hon GRANT ROBERTSON: The point I was making in that answer—and obviously I reject all of the assertions in the member's question—was that this is a difficult and challenging time for every country in the world. What New Zealand is in the position of is being able to face that with unemployment low with people in work and with wages rising. It doesn't stop it from being a challenging time; it doesn't stop it from being a time in which we as a Government have to take seriously our fiscal responses. But what I'd invite the member to do is think about the fact that every central bank in the world is needing to deal with this. Every Government in the world is needing to deal with this. We as a country have got ourselves to a strong position. It will be tough but at least the country knows that they've got a Government that will back them."