Source: New Zealand Parliament – Hansard
ORAL QUESTIONS
QUESTIONS TO MINISTERS
Question No. 1—Finance
1. GREG FLEMING (National—Maungakiekie) to the Minister of Finance: What recent reports has she seen about the cost of living”
Hon NICOLA WILLIS (Minister of Finance): Last week, the Reserve Bank’s Monetary Policy Committee published its Monetary Policy Statement where it discussed recent economic and financial developments and their implications. The Reserve Bank is confident that after three long years, inflation is now expected to fall back within the 1 to 3 percent target band in the September quarter. In other words, the era of extreme price increases is over.
Greg Fleming: What does this mean for Kiwi households?
Hon NICOLA WILLIS: Well, getting inflation under control for the first time in three years has a number of benefits for New Zealand households. With wages growing faster than prices for the first nine months of this year, real incomes are finally increasing again after three years of going backwards. With the cost of living no longer rising at such a frightening pace, including annual food prices actually falling for the first time in six years, Kiwi budgets will stretch just a little bit further. With the inflation genie finally back in the bottle, the Reserve Bank last week cut the official cash rate for the first time in four years, with more cuts projected, meaning lower mortgage costs for thousands of Kiwi homeowners.
Greg Fleming: How has the Government helped bring down the cost of living?
Hon NICOLA WILLIS: Well, the sky-high inflation we’ve seen over the last few years was caused by too much money chasing too few goods. That was a result of the Reserve Bank cutting interest rates to stimulate the economy during COVID, and despite the Opposition’s denials, from the previous Government increasing spending from around $80 billion in the 2017-18 financial year to $138 billion in 2023-24. Since coming into office, the Government has taken many steps. We’ve refocused the Reserve Bank on a single objective of fighting inflation. We stopped adding unnecessary costs on businesses, like the ute tax, the regional fuel tax, and tenant taxes. We’ve reduced economic bottlenecks and cut red tape by restoring 90-day trials, abolishing fair pay agreements, and fixing the Credit Contracts and Consumer Finance Act. More importantly, we are putting financial discipline back at the heart of Government spending. With our recent Budget being the tightest in the past five years, with an operating allowance of $3.2 billion and savings worth $24 billion over the forecast period, we are doing our bit to bring an end to Labour’s cost of living crisis.
Greg Fleming: What other support has the Government provided to Kiwi families dealing with this cost of living crisis?
Hon NICOLA WILLIS: In addition to playing our part in bringing down inflation, we were also able to deliver tax relief to hard-working Kiwi households, including the first reduction in personal income tax in 14 years, and 83 percent of New Zealanders will benefit from this Government’s tax relief package. For more than 100,000 low and middle income families who have childcare costs, we delivered FamilyBoost, which means those families can claim back up to 25 percent of their early childhood fees to a maximum of $150 a fortnight. An end to the era of extreme price increases, mortgage costs coming down, food prices stabilising, income tax relief, and more support for families with children—these are the things that can be achieved when a Government stops treating taxpayers like a bottomless ATM, reins in the wasteful spending, puts a stop to the fantasy projects and white elephants, and starts spending taxpayers’ money as carefully as households do.
