5. Question No. 5—FinanceHon BARBARA EDMONDS (Labour—Mana) to the Minister of FinanceQuestion No. 5—Finance5. Hon BARBARA EDMONDS (Labour—Mana) to the Minister of Finance: Fãiåk se'ea Mr Speaker. What reports if any has she seen to confirm that the economic conditions are right for delivering tax cuts and will she commit to them applying from 1 July 2024?Hon NICOLA WILLIS (Minister of Finance): To the second part of the question I will say what all Ministers of Finance say at this time which is that the member will have to wait for nine more sleeps. To the first part I saw an ANZ report on the Budget this morning which said We expect the net impact of discretionary fiscal policy changes (tax and spending cuts) to be broadly neutral from a fiscal outlook perspective." and "we think the net impact of tax and spending cuts are likely to be marginally contractionary on balance insofar as households save a portion of their tax relief or spend a greater proportion on imports than the Government would have." To make it simpler for the House our tax relief won't require additional borrowing and our tax cuts will reduce inflationary pressures. Those seem like pretty good conditions for tax relief.Hon Barbara Edmonds: Why is she choosing tax cuts rather than policies that will minimise job losses which many are predicting to go well over 5 percent?Hon NICOLA WILLIS: I would like to remind the member of the economic and fiscal conditions which New Zealanders face. We are in a situation where there have been no adjustments to personal income tax rates or thresholds for 14 years other than a new rate being added at the top. Now we are a country which is one of the few outliers in the OECD that hasn't adjusted thresholds for fiscal drag. We're a country where the average tax rate for a median full-time salary and wage earner—by definition someone right in the middle of the income distribution—has gone up more than five percentage points. And we are a country where someone working full time on the minimum wage is now facing a marginal tax rate of 30 percent. These conditions justify tax relief. It is a shame the Labour Party can't see it.Hon Barbara Edmonds: Why is she choosing tax cuts rather than policies that would increase productivity when business confidence is currently plummeting?Hon NICOLA WILLIS: I happen to believe that one of the greatest things we can do for productivity is send New Zealanders the message that there will be reward for their hard work. And that is what tax relief will do. Under Labour it may be that workers are always the last to get served but under this Government we're making sure they get what they deserve.Hon Barbara Edmonds: Why is she choosing tax cuts rather than the major infrastructure works like State housing schools and hospitals when the construction industry is facing significant uncertainty?Hon NICOLA WILLIS: How facile it is to suggest that it's one or the other. It will be both.Hon Barbara Edmonds: Does she agree with members of the Association of Economists that when the overall Budget is in structural deficit reductions in current income taxes shift the burden of current Government expenditures to future taxpayers; if not why not?Hon NICOLA WILLIS: I agree with the economist who wrote for the ANZ today saying that "pro-cyclical fiscal policy in recent years means fiscal consolidation is now desperately overdue." And I can confirm for that member that yes our Government is getting on with cleaning up the fiscal mess her party left us.Hon Dr Duncan Webb: Point of order Mr Speaker. The Minister was asked a straight question there relating to the movement of a liability to future taxpayers and simply quoted from an unrelated economic report.SPEAKER: Well actually it was a question about an economic report if the member likes to look at Hansard. So replying to that is not an unreasonable thing.Hon Dr Duncan Webb: It was an entirely different economic report. [Interruption]SPEAKER: Sorry we'll hear a point of order in silence.Hon Dr Duncan Webb: The Minister quoted from an entirely different economic report that bore no relationship to the question that was asked.SPEAKER: Well with all due respect it was contradictory and I think that's the way things work in here.Hon David Parker: Point of order—a different point of order. It goes to the earlier point of order that Mr McAnulty raised. I actually think that the Minister of Finance's retort referring to the earlier Government was actually in order but it also means that the question of the Prime Minister asking him to answer a question about an earlier Government's behaviour is also in order. It doesn't matter whether they were in Government or not; they still have to answer questions that contrast earlier records.SPEAKER: Well thank you very much for that advice. We'll move now to—Hon David Parker: Point of order. It was a point of order and it didn't deserve that retort. I asked you to take that into account when you reflect on the issue that you referred to earlier.SPEAKER: Well once again thank you for pointing out your position. Mine was that I would consider this and come back to the House at a later point—Hon David Parker: And mine was that I was trying to assist.SPEAKER: —I've made that very clear earlier. I beg your pardon?Hon David Parker: And mine was that I was trying to assist you in your role as the Chair of this House.SPEAKER: And I simply thank you for your advice.Hon Barbara Edmonds: Why is she choosing tax cuts over the livelihoods of the 4500 Kiwis that have lost their jobs because of her Budget?Hon NICOLA WILLIS: Well I would first warn the member that she's once again doing what she has done several times in this House which is making a statement of fact where she doesn't actually have evidence to support it. I'd note that the number that she is referring to is one that includes job vacancies that have been closed which is not the same as someone losing their job. The livelihoods of New Zealanders are paramount in the minds of every Cabinet Minister who has signed off our Budget and we think it is wrong for a Government to put those livelihoods at risk with irresponsible financial management that grows debt and fuels inflation without driving value for public money and we intend to take a very different approach."