Source: New Zealand Parliament – Hansard
ORAL QUESTIONS
QUESTIONS TO MINISTERS
Question No. 1—Prime Minister
1. CHRISTOPHER LUXON (Leader of the Opposition) (remote) to the Prime Minister: Does she stand by her response when asked if New Zealand has a cost of living crisis that “I wouldn’t describe it that way”, and is she considering adjusting income tax brackets to help Kiwis struggling with rising prices?
Rt Hon JACINDA ARDERN (Prime Minister): I stand by the entirety of the interview, where I stated that—
Chris Bishop: Ha!
SPEAKER: Order! The member’s going across the top of their own leader.
Chris Bishop: What? No I’m not. She’s answering the question.
Rt Hon JACINDA ARDERN: —where I—
SPEAKER: Order! The Prime Minister will resume her seat. I will remind members of the comments that I made last week, and that is that we are in a more sensitive time as far as members who are participating remotely, and excess noise is something which interferes with their ability to hear the answer. I will ask members to control themselves and especially Mr Bishop not to argue from his seat.
Rt Hon JACINDA ARDERN: I stand by the entirety of the interview, where I stated, “There is an impact that people are feeling undeniably.” The debate is not whether inflation has increased and is impacting people. The debate is what we should do about it. The Opposition has proposed cuts to the top tax rate and getting rid of policies to help first-home buyers. We, on the other hand, have worked consistently to increase focused support for low and middle income earners. That’s why we’ve overseen a $5 increase in the minimum wage, benefiting around 300,000 workers. We’ve increased Working for Families changes that will lead to 346,000 people better off by an average of $20 each a week. We created the winter energy payment, starting again from 1 May, benefiting over a million New Zealanders during the winter months. We made the largest across the board increases in benefit incomes since the 1940s, and we’ve increased the pay of new police officers by 19 percent since 2017, 16 percent for primary teachers, and 21 percent for new nurses. The Government’s plan is providing targeted support to New Zealand families to deal with the costs of living, whilst also investing in critical services and, importantly, keeping a lid on debt.
Christopher Luxon: Why won’t she admit that New Zealand has a cost of living crisis when rent is up $140 a week and food prices are up more than 13 percent under Labour?
Rt Hon JACINDA ARDERN: This side of the House absolutely acknowledges the increases that families across New Zealand are currently experiencing—as many other countries are—as we see the COVID recovery mean that demand is often outstripping supply. We also have the issue, of course, of the pressure on fuel prices, which have gone up over 500 percent since April 2020 in terms of a barrel of crude oil. That is having an impact. But what I would contend is that the National Party’s proposal, for instance, to take away essentially $26 per week from someone earning under $40,000—because they voted against our increases to the family tax credit—and instead replace it with $2.15 is simply not the way to support families who need it most.
Christopher Luxon: Does she accept that with petrol now above $3 a litre in some places, Kiwis are having to pay as much as $60 more to fill up than when she took office, and if so, why won’t she admit we have a cost of living crisis?
Rt Hon JACINDA ARDERN: I again will bring the member back to where we are having the debate currently, which is that the member is proposing to, for instance, cut policies that will make it easier for first-home buyers to get into the market, and to get rid of the top tax bracket, instead of focusing on support for low and middle income New Zealanders. Now, again, I would also point out that the member, at the same time as he is raising what is essentially the impacts of international fuel prices and the fact that we have now a conflict in energy-rich countries with Russia invading Ukraine—yes, it’s having an impact at the pump. But the member is well short on his proposals, because he essentially is not answering the question of how he would pay for some of the things that he is proposing. There are two options: he’s cutting health, he’s cutting education, or he’s increasing debt.
Christopher Luxon: Mr Speaker—
SPEAKER: Before the member goes on, I think I’m just going to do a reminder, and that is that when using the remote system, members are, after a couple of supplementaries to their primary question, still required to call. I think the member received some training—I hope the member received some training—on that. If he hasn’t, I’ll just run through until he’s finished, except if someone else goes to it. But a reminder to all members who are participating remotely: if they have a question, they automatically get two supplementaries, and then we go to other members or we finish, unless they indicate through the chat function that they want the call.
Christopher Luxon: Does she accept she could provide tax relief to more than 3.2 million Kiwis by simply adjusting the tax brackets for inflation, and the $4.3 billion she had left for new spending would still be the single biggest increase in new spending in New Zealand’s history?
Rt Hon JACINDA ARDERN: The member is proposing a change in policy that would essentially see someone, for instance, as I’ve said, who would be on a wage of $45,000 receiving $2.15 per week. At the same time, he has rejected and voted against the family tax credit increases that we proposed that would mean that they were more than $20 a week better off. He does not support increases in the minimum wage. He wants to get rid of the top tax bracket that we have introduced. He’s proposing $3 billion worth of cuts to health, education, and all of the services that New Zealanders value; either that or he wants to increase debt. We stand by our policies. They are focused on low and middle income earners, whereas his will give $2.15 instead, where people could be better off by over $20.
Christopher Luxon: Is it fair that someone on the minimum wage who works 44 hours a week is set to face a marginal tax rate of 30c on the dollar, or that someone on the average wage is now in the 33 percent tax bracket?
Rt Hon JACINDA ARDERN: Or is it fair that that member asks that question whilst not supporting any increase to the minimum wage? Again, here I come back to the wider point: consistently, since 2017, as a Government we have been focused on lifting the incomes of New Zealanders. And here is the impact of those policies: a minimum wage worker working 40 hours a week in 2017, compared to now, is receiving an extra $218 per week. A new police officer graduate is receiving $12,292 more overall per annum. An experienced nurse—$16,431. The average pay for a secondary teacher—a $12,905 difference between now and 2017. That is a marked increase as a result of the focus we’ve had on lifting the wages of low and middle income New Zealanders, and we stand by that.
Christopher Luxon: What does she say to the mother of five, Krystine Nation, who told the AM Show, “This is something that is so embarrassing to say but I cannot afford to go to work … It’s cheaper for me to stay at home and not pay the extra petrol, not pay the huge daycare costs, and the extra food for lunches.”; and how does she think struggling Kiwi families feel when they hear her refusing to even admit we have a cost of living crisis?
Rt Hon JACINDA ARDERN: We have always been very careful to ensure that we’ve done things like increase the minimum family tax credit, that we have the in-work tax credit, and that we make sure that those keep pace to ensure that families are always better off in work, and that’s where increases in the family tax credit also make a difference. But, sadly, the member who asked the question has often not supported any of those increases.
Christopher Luxon: How can she say with a straight face that Kiwis paying an extra $5,000 a year for basics like food, power, petrol, and rent doesn’t count as a cost of living crisis?
Rt Hon JACINDA ARDERN: Again, the member is not hearing anything that I’m saying in acknowledging that, right now, yes, there are increases that are impacting on New Zealand families. As I said, it’s undeniable. But the debate here is whether or not the member’s solutions or the Government’s are the ones that will benefit New Zealanders the most. Now, we haven’t even got to the fact that what the member is proposing is highly inflationary. So it wouldn’t take much for that $2 that the member is proposing to be absorbed. I come back to the point: consistently, since 2017, we have focused on putting hundreds of millions of dollars back into the pockets of Kiwis, and it stands true—
Nicola Willis: Defensive, much?
SPEAKER: Order! Second warning, Nicola Willis.
Rt Hon JACINDA ARDERN: —that they’ve seen an increase in incomes that has outstripped the increases in the cost of living. Right now, though, there is an impact, and the whole world is seeing it, and that’s why we will continue to take measures like those I’ve already spoken to today.
Hon Chris Hipkins: Given concerns that have been raised about the cost of food, has she seen any reports of increased support for the Government’s free and healthy school lunches programme?
Rt Hon JACINDA ARDERN: I would expect all members in this House to support a programme that has seen tens of thousands of children now receive free lunches in schools, and we made that a universal policy for those schools that are in the programme to ensure that all families receive the benefit of having one less thing to worry about. When it comes to the increase in the cost of food, I have seen one other report: the Leader of the Opposition complaining about a potential increase to the cost of his coffee as a result of the increase in the minimum wage. That is where that member’s priorities lie.
Christopher Luxon: Does that mean it’s her view that, if the Government spends an extra $6 billion, it won’t be inflationary, but giving Kiwis less than a third of that in tax relief would be?
Rt Hon JACINDA ARDERN: Of course, the Treasury has consistently given advice over what has inflationary impacts, and if you increase demand in the economy, then yes, that would have inflationary impacts, but that doesn’t stop, of course, the Government continuing to look to ways to support those who feel disproportionately the impact in the cost of living, which is exactly why we have created targeted spending—$270 million worth—into families by increasing the family tax credit.
Christopher Luxon: Is the reason she won’t admit New Zealand has a cost-of-living crisis simply because that would mean admitting she has a responsibility to do something about it, but she’d rather increase spending than give more than three million some much needed, inflation-adjusted tax relief at the Budget?
Rt Hon JACINDA ARDERN: Actually, the opposite—actually, the opposite. The point that I have been making throughout my entire time in office is that we’ve been working to ease the cost of living and increase wages from the time we took office, not just right now, and that’s why, when you look back, for instance, overall, at the increase in incomes for families that we’ve worked on since 2017, if you take a newly trained secondary school teacher, not only have their wages increased, they’ve also had an increase in the family tax credit; they’ve continued to receive the in-work tax credit. If they have a newborn in their family, they’d receive the Best Start payment. Their weekly in total, before wages are taxed, would have increased by $224. A sole parent working 30 hours at the minimum wage, again, would have received an increase in their wages, accommodation supplement, family tax credit, minimum family tax credit—in all, an extra $336. The point I’m making is that the member opposite may only have started talking about the importance of increasing wages against the cost of living now; we’ve been talking about it since 2017.
