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 stand by his statement that There will be individual households who will suffer stress as the result of interest rates going up" and in what ways does he expect this will "feed through to the economy"?Hon GRANT ROBERTSON (Minister of Finance): I stand by my full statement "I get advice from a range of sources about the impact of the global inflation shock on New Zealanders. The Reserve Bank publishes regular material on the stability of New Zealand's financial system. What that material shows us is that New Zealand has a robust financial system. There will be individuals who will suffer stress as a result of interest rates going up. The Government is prepared to support them." in light of that answer. In answer to the second part of the member's question the Government's measures to support these households will provide them support and across the economy as we face this global inflation spike which is causing central banks around the world to raise interest rates.Nicola Willis: Does he agree with the Reserve Bank who stated in May that the proportion of risky lending increased sharply in recent years and is he concerned that recent house buyers with limited equity are particularly vulnerable?Hon GRANT ROBERTSON: I certainly accept the Reserve Bank's analysis of the numbers that came through and they do indeed say that recent borrowers are those who will be particularly exposed but they also say in the same report that most mortgage borrowers would be resilient.Nicola Willis: Has he seen an analysis published by Bloomberg that puts New Zealand at the top of the list of the bubbliest housing markets in the world and does he agree with Bloomberg's analysis that there are warning signs flashing?Hon GRANT ROBERTSON: I don't believe I've seen that specific report but I certainly have seen plenty of reports over the years expressing concern about New Zealand's housing market. I vividly remember reports about the fact that the previous National Government failed to build the houses that New Zealanders needed throughout their term in Government. I've also seen reports about the fact that this Government is building more houses than any Government since the 1970s.Nicola Willis: Well has he seen analysis published by Infometrics that says this is the worst time since 1957 for first-home buyers trying to get into the housing market in New Zealand and does he think his Government has lived up to its commitment to give Kiwis a better chance at purchasing a home?Hon GRANT ROBERTSON: I have indeed seen that report and without taking too much time out of the House the measure that the economists who've written that report put forward is essentially about the capital gain that a first-home buyer would get from purchasing right now. In terms of what this Government has done for first-home buyers what we've made sure is that we've levelled the playing field up by removing the interest deductibility for speculators and by extending the brightline test. It's all very well to get up in the House and support first-home buyers but actually this Government has taken initiatives to try to improve the lot of first-home buyers.Hon Stuart Nash: What role does the Minister directly have in setting the official cash rate and/or commercial bank lending rates?Hon GRANT ROBERTSON: That is indeed a very good question because actually as most members of the House I expect would know the Reserve Bank independently sets the official cash rate and it does appear from the line of questioning from the Opposition they are looking at a policy change where the Minister of Finance should set the official cash rate or if that isn't what it is that National if they were in Government would bail out people who had higher interest rates. The member might like to enlighten people as to what the policy is.Nicola Willis: Supplementary question Minister.Hon Dr Megan Woods: Oh good!Nicola Willis: Does he agree—SPEAKER: Order! Ms Allan was that—it was Megan Woods. Stand withdraw and apologise.Hon Dr Megan Woods: I withdraw and apologise.Nicola Willis: Does he agree that the rapid interest rate hikes occurring now are much more painful for the economy and New Zealanders than in the past because house prices under his Government are so much higher?Hon GRANT ROBERTSON: What I do know is that if the National Party when they had been in Government had built houses at the rate that this Government was building them we would not have the housing crisis that we have.Nicola Willis: What does he say to New Zealanders who are now lying awake at night worrying about how they will pay for the growing cost of their mortgage as inflation persists and interest rates continue to climb and is it really his position that they shouldn't worry because he thinks it's all National's fault?Hon GRANT ROBERTSON: What I would say to those members is that they have a Government that is looking after New Zealanders that has invested significantly in supporting households and businesses through COVID-19 and is making sure that we have a more level playing field in the housing market for first-home buyers and is making sure that we're building more houses.Simon Watts: No you're not.SPEAKER: I'm certainly not.Nicola Willis: Does he stand by his statement in Parliament this time a year ago that New Zealand has seen a "spectacular economic recovery" and how does he reconcile that analysis with the cost of living crisis and the growing instability in the New Zealand economy?Hon GRANT ROBERTSON: I stand by the statements I have made in this House and we have had the OECD the IMF Moody's Standard & Poor's all of the international agencies say that New Zealand's economic recovery is indeed among one of the best in the world. We also live in the real world and in the real world we're seeing inflation go over 9 percent in the United Kingdom just overnight. We are seeing the impacts of global inflation everywhere in the world. Of course New Zealand is not immune to that but what this Government has done is stepped in to support low and middle income households to make sure that they can get through this as opposed to the member whose party wants to give tax cuts to the wealthiest New Zealanders."