Source: New Zealand Parliament – Hansard
Question No. 2—Prime Minister
2. CHRISTOPHER LUXON (Leader of the Opposition) to the Prime Minister: Does he stand by all of his Government’s statements and actions?
Rt Hon CHRIS HIPKINS (Prime Minister): Yes, particularly the Government’s actions in reducing greenhouse gas emissions. Emissions fell to the lowest levels in eight years during the September 2022 quarter. We’ve made a lot of progress, but there’s more work to do to ensure our emissions continue this downward trend.
Christopher Luxon: When does he expect inflation to return below 3 percent?
Rt Hon CHRIS HIPKINS: That’s ultimately a matter for the Reserve Bank. The Reserve Bank’s mandate is to bring inflation back down to within the target range, so that is a matter for them.
Christopher Luxon: Why do forecasts show inflation will stay higher for longer in New Zealand than in the US, the UK, Canada, and Australia?
Rt Hon CHRIS HIPKINS: I note that yesterday when the member was comparing inflation rates of countries, he was often comparing different time periods, so I think he needs to take care in those international comparisons. New Zealand’s economy is not identical to the economies of other countries around the world.
Christopher Luxon: How can he justify increasing spending by an extra $1 billion every week when Treasury advised his Government last year that more spending would fuel inflation?
Rt Hon CHRIS HIPKINS: I think the member should level with New Zealanders. If he believes the way to get inflation down is to cut Government spending, then he should be a bit more up front about what Government spending he’s going to cut, because the sorts of levels of reduction in Government spending required to make a meaningful impact on the rate of inflation we have would have catastrophic consequences to the public services New Zealanders rely on.
Christopher Luxon: Does he agree with the IMF that high Government spending means interest rates just have to go even higher to fight inflation?
Rt Hon CHRIS HIPKINS: There are a number of things that contribute to inflation, including the tax cuts that the member himself has been proposing.
Christopher Luxon: Isn’t it the case that this Government’s broken immigration settings have stoked labour shortages and fuelled inflation?
Rt Hon CHRIS HIPKINS: If the member is arguing that we should open up the border in order to repress wages, which was the strategy of the last Government, then he can mount that argument at the next election.
Christopher Luxon: Hasn’t his Government’s failure to control inflation driven up mortgage interest rates, meaning that a family with a $400,000 mortgage is now paying an extra $300 a week in interest?
Rt Hon CHRIS HIPKINS: No.
Christopher Luxon: How on earth is that family supposed to find an extra $300 a week extra for their mortgage, when real wages have fallen every quarter for 2½ years?
Rt Hon CHRIS HIPKINS: I do want to note, as I’ve indicated before, that this is a difficult economic period for New Zealand households. But if I look at wage growth, the claim the member just made is incorrect. According to the quarterly employment survey, average ordinary time hourly earnings rose 7.2 percent in the year to December, which coincidentally was the same rate as the rise in the Consumers Price Index.
