2. Question No. 2—Prime MinisterTODD MULLER (Leader of the Opposition) to the Prime MinisterQuestion No. 2—Prime Minister2. TODD MULLER (Leader of the Opposition) to the Prime Minister: What is the Treasury's most recent estimate of unemployment in the third quarter of this calendar year and what is the Government's specific plan to arrest the sorts of job losses we've seen over the past two weeks?Rt Hon JACINDA ARDERN (Prime Minister): Firstly to acknowledge Samoan Language Week I say talofa lava to the House and I also congratulate the member opposite on his new position as Leader of the Opposition. To answer the second part first of the member's question we've gone hard and early on both our health and economic response. We are implementing our plan to respond to recover and to rebuild. Treasury has forecast up to 140000 jobs saved as a result of that plan and employment growth of 370000 jobs supported over the next four years and that is because of a range of measures including the wage subsidy small business loan scheme record investment in infrastructure and so on. In relation to the first part of the question forecasts contained in the Budget Economic and Fiscal Update which is obviously publicly available include a high point of unemployment for the period the member asks of 9.8 percent—that is for September 2020—before returning to 6.4 percent the year following.Todd Muller: Does she accept that more direct cash support for small businesses will help prevent job losses?Rt Hon JACINDA ARDERN: I do accept that there is a role to play for Government; on that I agree. We have of course placed a huge amount of emphasis on the wage subsidy not least because small business have told us what a difference that makes for them; the vast majority of course then going to those with 20 or less employees. And a survey where we have just the interim results that has gone out to those that have accessed the wage subsidy says for the vast majority it's made a difference to them being able to retain their staff. Of course alongside that we have had the loan scheme which has been well accessed as well by small business. That is interest free for the first year and I am hearing anecdotal evidence that some small businesses are taking on that extra buffer not necessarily because they need it immediately but just to provide that extra certainty over the next 12 months. I add to that of course the work that we're doing investing in putting cash back through our tax system through IRD and of course within the Budget we also had a number of programmes around e-commerce which I could happily go into.Todd Muller: Why has the Government not delivered any direct cash support to small businesses other than the wage subsidy or more debt to reduce the number of job losses?Rt Hon JACINDA ARDERN: I would dispute the premise of that member's question.Todd Muller: Could she please inform the House: where over the last three months has she provided direct cash support to small-business owners?Rt Hon JACINDA ARDERN: The wage subsidy scheme has put out—[Interruption]SPEAKER: Order! Both sides.Rt Hon JACINDA ARDERN: —over five billion directly into small businesses and it is the most significant part of that wage subsidy scheme. I would also add to that the work that has gone into tax loss carry-back through IRD that has improved cash flow as well. Many small businesses will be able to access that as well. That is just a small handful of the initiatives that we've put in place to help with cash flow for small businesses immediately.Rt Hon Winston Peters: Is the Prime Minister saying that unlike some she and her Government see businesses as being not just the owner or the boss but the staff being critical as well to any business enterprise?Rt Hon JACINDA ARDERN: My strong takeaway from the period at which I both worked in small businesses but also as a small business spokesperson was that small businesses do see their staff—and I know the member will agree with this—as their family and in fact the number of letters that I receive from small businesses saying the fact we prioritised the wage subsidy meant a huge amount to them because one of their biggest concerns was of course the ongoing cost of payroll and hanging on to their workforce meant a huge amount to them.Todd Muller: I'll ask the Prime Minister again. In addition to the wage subsidy which goes directly to the workers which is fine what direct support has gone to the small-business owners?Rt Hon JACINDA ARDERN: I would again re-emphasise that the wage bill for small businesses is one of the most significant costs outside of course things like rental costs. And keeping in mind that many businesses are now operating again this support continues to make a huge difference for that fixed cost of their staff. Alongside that we have of course through our tax system billions of dollars enabling small businesses to access refunds now to help with cash flow.SPEAKER: Before the member goes on I just want to remind Louise Upston that while the Leader of the Opposition is asking his series of questions his mike is open and her voice is coming through it very very strongly.Todd Muller: What proportion of small to medium sized businesses over the last two months have experienced negative cash flow?Rt Hon JACINDA ARDERN: I would be happy to answer where we have the data available such questions. Our survey work that we've put out may give us some insights but what I can tell you from the interim results is that well over 80 percent have said that the wage subsidy has made a difference to them keeping their doors open.Hon Stuart Nash: Is the Prime Minister aware of the $29 million of consultancy services through the regional business partner network that has been accessed by thousands of businesses up and down this country?Hon Member: Consultancy services? That won't pay the bills.Rt Hon JACINDA ARDERN: Absolutely and members would not wish to be dismissive about something that we are getting incredible feedback from. Those services are providing business support and advice on the ground around payroll around reducing fixed costs around consultancy services to access the money that they are able to access through IRD without having to use accountants that they may not be able to afford.Hon Grant Robertson: I raise a point of order Mr Speaker. I have noticed over the course of this question that you have reinstated your questions being taken off and added—that you hadn't been in the last couple of weeks and it might just be valuable for members on all sides of the House to know you've reinstated your scoring system.SPEAKER: I want to thank the member to indicate to him that in the previous couple of weeks members were generally better behaved than he's been today. David Seymour: Does the Prime Minister agree with Treasury's estimate that spending the full COVID-19 response and recovery fund would save about 30000 jobs a year compared with Treasury's baseline forecast?Rt Hon JACINDA ARDERN: Well the member is correct that the forecasts that were relied upon in the Budget did allow for around $20 billion worth of the fund to not be spent over the forecast period. Of course their predictions are that if the full recovery fund is spent over the forecast period we see growth returning by next year we see unemployment back down to the rates it was pre-COVID within the next two years. So that demonstrates that that level of investment will make a difference. Where I caution the member is of course we don't want to prescribe the answer before we know what the biggest difference we can make will be with that fund. I've seen many commentators supporting the approach of the Government and what we've taken in that way.David Seymour: Does she then agree that this represents nearly $260000 of taxpayer funding for each job saved?Rt Hon JACINDA ARDERN: Again I think that's an overly simplistic analysis and of course taking into account that Treasury themselves have endorsed an approach of investing versus austerity and of generating the kinds of jobs that the Budget package does which is in the number of over 370000.Todd Muller: Does she accept that businesses with high levels of debt and who are yet to receive direct cash support—other than the wage subsidy—will be most likely to be letting workers go?Rt Hon JACINDA ARDERN: Again the survey work suggests that actually the wage subsidy has made that difference. I can see that the member is advocating for straight grants. We made a deliberate decision that that wasn't where we were going. And let's be just open and honest about that. Instead we have targeted through the wage subsidy we have used interest-free loans and we have worked very hard to support those businesses which may be vulnerable but are viable. We've also said this is a one-in-100-year global pandemic. We will not be able to support and save everyone. But thus far looking at our job seeker numbers relative to other countries yes we are seeing a hit but not nearly the scale in some other places.Todd Muller: So the Prime Minister is saying to the House that what small to medium sized businesses need right now is not direct cash support—is that what she's saying to the House: no cash support is what small business are asking?Rt Hon JACINDA ARDERN: I have acknowledged that we did not implement a generic grant scheme keeping in mind that we saw that on a small scale in Australia and they have seen a higher rate of individuals going on to their version of jobseeker than what we have. So they took a different path. They also took a month to pay out their equivalent of the wage subsidy. We got ours out the door within five days. So yes we took a different approach but we stand by it and it has never been about one answer. It's been about multiple support mechanisms for small businesses and we believe that there will be more to do. But that is the path we have chosen.Todd Muller: So what does the Prime Minister say to the businesses of Pāpāmoa and around the country who say in a single voice We need more cash now to survive or our people go."?Rt Hon JACINDA ARDERN: Again I'm speaking not only from the anecdotes that the member's speaking to as well; I have received emails I've talked to small businesses I've seen the survey results. The wage subsidy—the member should not discount the impact that it has had in keeping the doors open. The member obviously advocates general cash payments. We've decided to be more targeted. We stand by that decision and we will continue to look for other avenues to keep up that support for small business.Hon David Parker: Can the Prime Minister confirm that sole traders receive that wage subsidy for themselves?Rt Hon JACINDA ARDERN: Absolutely. Again 54 percent of those who have applied are made up of the self-employed; small businesses 44 percent—so the total small business and self-employed in terms of numbers equates to 97 percent. That is vastly who has been supported. And again as I say interim results from those surveys but it suggests not only have they kept their door open but the vast majority have been able to prevent job loss as well and that's what many were seeking.Todd Muller: On behalf of the half a million small businesses in New Zealand would the Government consider adopting National's proposal to give businesses direct cash support in the form of GST cash refunds of up to $100000 to help them cover their ongoing fixed costs?Rt Hon JACINDA ARDERN: I notice other members of his party have been quite dismissive during this question time of using the tax system to get cash flow to small business so perhaps not everyone is of one voice. But again the tax loss carry-back scheme $3.1 billion; tax loss continuity support $60 million; tax deductions for assets again a massive part of our first tax package through Minister Nash. We raised the provisional tax threshold. We allowed depreciation on buildings and we also have allowed loans for R & D - intensive businesses as well. That's before we head into the $10 million for e-commerce the $30 million for the digital economy and also the New Zealand Trade and Enterprise work. Again we've used the tax system too.Rt Hon Winston Peters: Has the Prime Minister received any reports that the so-called throw cash at the problem $100000 was announced by the previous leader of the National Party whereupon they threw him out?SPEAKER: Order! Order! Rt Hon Winston Peters: What's wrong with that?SPEAKER: Well the member knows that there's no responsibility.Rt Hon Winston Peters: Well we're here for politics sir.SPEAKER: You might be here for politics but I think you also know that you have to get some prime ministerial responsibility and neither the announcement of the previous Leader of the Opposition or what happened to him are directly the Prime Minister's responsibility."