4. Question No. 4—Prime MinisterDAVID SEYMOUR (Leader—ACT) to the Prime MinisterQuestion No. 4—Prime MinisterDAVID SEYMOUR (Leader—ACT): My question is to the Prime Minister and reads as follows: does she stand by all of her Government's statements and actions?SPEAKER: Order! I think the member might want to try reading it again. 4. DAVID SEYMOUR (Leader—ACT) to the Prime Minister: Apologies Mr Speaker. My question actually reads: does she stand by all of her Government's statements and policies?Rt Hon JACINDA ARDERN (Prime Minister): Still yes in particular our ongoing response to the Russian invasion of Ukraine. As I said yesterday the reports of war crimes and crimes against humanity committed by Russia are beyond reprehensible. Russia must answer to the world for what they've done. New Zealand alongside other Rome Statute States Parties has already referred the situation to the International Criminal Court and we continue to support prosecutors in their investigations into all international crimes committed in Ukraine. As a Government we're continuing our response against Russia and last night issued further sanctions. This was the second run of sanctions since the passing of the Russia Sanctions Act just three weeks ago and builds on the sense of sanctions we've implemented to date our visa supports and the humanitarian aid we have provided Ukraine. All New Zealanders have been shaken by what we've seen in Ukraine and as a Government we're continuing to condemn the actions of Russia and support Ukraine. David Seymour: Does she accept that the global security situation is changing rapidly and if so will she commit to a pathway where New Zealand spends 2 percent of GDP on defence as Australia has? Rt Hon JACINDA ARDERN: Yes in answer to the first question I do absolutely accept that the dynamic has changed considerably. These events only demonstrate the changing strategic environment that New Zealand is operating in. I would say that our response both at a bilateral level to this conflict but also the spending decisions that we've made on our defence estate—including for instance the purchase of P-8s additional assets for the navy and so on—demonstrates our ongoing focus on ensuring that we have the capability and the kit that's required to respond within the Pacific to the changing threats that we face. David Seymour: So will her Government commit to a pathway towards spending 2 percent of GDP on defence or not? Rt Hon JACINDA ARDERN: As I've said we've committed to ensuring that our Defence Force have the capability that they need to ensure that we are a responsible and responsive player within our region and we demonstrate that time and time again—whether it's a response in the Middle East the fact that we even have people on the ground supporting the response in Europe to what's occurring now or our purchases that we've made. I'm not going to pre-commit to spending decisions for the Budget at this point in time but I would ask the Minister to demonstrate where we have not pulled our weight in this international environment. Hon Chris Hipkins: Would it be possible to increase defence spending cut taxes and not cut public services all at the same time? Rt Hon JACINDA ARDERN: This does appear to be the proposal from some members in this House and I think it would be an interesting environment to see for instance the member opposite propose that we cut some of the very most basic safety net that we have in the country while dramatically increasing defence spending. But that is the member's prerogative. David Seymour: Does she accept that tax revenue is up $17 billion per annum in the last two years alone and if so does she stand by her statement that this is not the time to cut taxes? Rt Hon JACINDA ARDERN: I stand by this Government's response which is to put additional support in to make sure that those who are feeling the effects of the cost of living are well supported as much as we can. So the changes to for instance fuel excise comes at the cost of $350 million; the $270 million that we put into making sure that the family tax credit is increased; and of course the additional spending going into lifting superannuitants' incomes and acknowledging that our students and others on low incomes are doing it tough—1.4 million New Zealanders have benefited from those boosts. We know it doesn't solve everything but that's what we are able to do at this point in time. I would also acknowledge though what we're seeing in the Crown accounts is yes that we still are facing deficits but we have also seen of course a change in what we've previously forecasted as a result of more people being in employment.David Seymour: What does the Prime Minister say to the dozens of people who have commented on her Facebook page on Friday to say there was nothing in those 1 April changes for middle-class working New Zealanders who aren't receiving benefits such as Amy McKenzie who said What about all the Kiwis paying taxes for this 'extra support'? How does this help us help our own families while we're working hard to try and keep up with the rising costs of living also?"Rt Hon JACINDA ARDERN: Well the first thing I'd say is that 60 percent of families actually are impacted by the changes that are made to the family tax credit. So that is a large number of New Zealanders as a result of the changes made through Working for Families which of course does go to working families. The second point I'd make is that the response to fuel excise was one way that we can very quickly see a change that depending on fuel costs—anything from $11 to $17 a week potentially for everyone. That was a way that we could quickly respond also. But what I would also say is one of the most important things we can do is make sure incomes—not just of course what can be done through tax bracket changes which often deliver the least to those who need it the most. Rising incomes is what makes a significant difference and up until now we have seen under this Government incomes outstrip the cost of living and it is projected to be the case again soon.David Seymour: Does the Prime Minister accept that with tax revenue having risen $17 billion per annum in just two years one of the easiest things she could do to help New Zealanders with their after-tax income is let them keep more of their own money by cutting income taxes?Rt Hon JACINDA ARDERN: The member speaks as if we have done nothing of course to change for instance tax credit regimes that make a significant difference to those on low and middle income families. The member well knows that tax bracket changes—for instance such as those proposed by the Leader of the Opposition—for those on the lowest incomes delivers something like $2 a week. If you use the more sophisticated system that we're able to operate in New Zealand on account of our size—use the family tax credit system for instance—you can deliver a much greater benefit to those family members than just changing tax brackets. That is what we did from the moment we came in in addition to things like the winter energy payment.David Seymour: Can the Prime Minister explain to the New Zealand public how the Government's policy of fair pay agreements (FPAs) will increase worker productivity and if so why does she think the OECD says the policy would "cut both labour and multi-factor productivity growth in the covered sectors."?Rt Hon JACINDA ARDERN: Of course those countries that are often held up as examples of demonstrating better rates of productivity than New Zealand include the likes of Germany and Australia who operate fair pay agreements. Look there are often from time to time policies where the member and I are just going to fundamentally disagree. On this side of the House our view is that if we want New Zealanders to be better off we do that by ensuring for instance that they have decent wages and decent conditions and that is exactly what fair pay agreements are all about now. Now not every for instance employer and every workforce will necessarily see an increase in their wage bills as a result of an FPA. What it's designed to do is lift those who are operating at the very bottom and who are sometimes driving the sector down to come up to an agreed standard and some employers support the role that FPAs can provide in that regard.David Seymour: Can she tell New Zealanders how many fewer COVID cases we will have due to her decision to keep the country at red yesterday and if so how does she justify the acute costs of that decision to hospitality operators?Rt Hon JACINDA ARDERN: The changes that we made yesterday were all about ensuring that our hospital system and our healthcare system are able to cope with the number of people that are currently in there as a result of COVID. So that's not directly aligned to cases but it can be. Roughly half of our hospitalisations at the moment are in the Auckland region. So whilst cases are coming down even based on the modelling that we have we're still tracking above the peak of what would have been a medium transmission scenario for hospitalisations. We don't take those decisions lightly. We know they have an impact. But on the flip side hospitality will equally be hit if people don't come out because they don't have the confidence to be out because case rates are too high and the health system isn't working. That is the balance that we have to strike."