Public Enemy Number One: Inflation

Nicola Willis March 24, 2022 Share

New Zealand: we have a new public enemy and its name is inflation.

Inflation is a thief in your pocket. In 2022 no household will escape its grasp. Kiwi households are now in a world of pain in which your money will be worth increasingly less tomorrow than it is today.

Living costs are rising and wages can’t keep up. In fact right now living costs are running laps around wages. It’s not just fuel, it’s food, rent and rates too. If you feel like you’re slipping a bit further behind at the end of each pay cycle that’s because you probably are. It’s a cost of living crisis.

Economists predict typical household costs will rise $150 per week this year. That’s not because you’ll be buying more - sadly you’ll be paying more for less. Your purchasing power is dropping and that leads to declining living standards. So much for working hard to get ahead. Increasingly New Zealanders will be working harder just to stand still.

How did we get here?

It’s convenient for the Government to blame the war in Ukraine. But let’s not forget, even before Putin invaded, New Zealand inflation levels had already hit a 30 year high - topping out at 5.9% for the year ending December 2021. That’s a higher rate of inflation than Australia, the UK, Singapore and a host of other countries experienced over the same time period.

So the impact of the Ukraine tragedy is adding fuel to a fire that was already burning strong in the New Zealand economy.

You might remember Grant Robertson crowing about the strength of the economy during the election campaign.

New Zealand had gone to war on covid, using every pump-priming tool in the kit- borrowing big, dropping interest rates and spending-up large.

The sugar-hit kept the economy going at a difficult time. But the underlying fundamental productive capacity of the economy hasn’t kept up. Things overheated and inflation set in. Now the pump-priming punch-bowl is being packed away and the hangover has begun.

So what next? The Reserve Bank now has no choice, to combat skyrocketing inflation it must prescribe the medicine of higher interest rates. Meaning your mortgage gets more expensive, it’s costs more for businesses to borrow and growth gets harder. Tough times lie ahead.

Where is the Finance Minister now? He was happy to take responsibility for the performance of the economy while the sugar-hit was coursing through its veins. What’s the bet he’ll find someone else to blame now that the hangover has set in?

SPEECH: Debate on Budget Policy Statement

Nicola Willis March 09, 2022 Share

Here we are with the Minister of Finance presenting his Budget Policy Statement, and the most animated he got and the most excited he got about spending billions of dollars of New Zealanders' money was when he talked about National's plan. Is it any wonder, because that finance Minister is now in a position where he is defending his right to take billions of dollars out of New Zealanders' back pockets at a time when they are doing it tougher than ever, and he says he has to make tough decisions. He has to make difficult calls. Well, I'll tell you which side he has come down on when he's gone to make those difficult calls. What this Budget Policy Statement sets out very clearly is that he has decided to take New Zealanders' money and spend more of it than ever. That's the tough decision that he has made.

So what is the context in which this Budget Policy Statement is published? We are facing a cost of living crisis in this country.

Kiwis are doing it extraordinarily tough, and Duncan Webb may agree with the Prime Minister that there's no crisis, but let me tell you that the everyday New Zealanders I meet with and the everyday New Zealanders I speak to when I say, "What are the financial concerns you have?", they don't say, "I'm really concerned about how I really want Grant Robertson to put billions of dollars into a health restructuring fund and a climate change pet project fund." That's not what they say to me, Duncan Webb. What they say to me is, "I'm really concerned that every time I go to fill up at the pump, I feel like I'm being fleeced. I feel like it's more expensive every time." What they're saying to me is, "Every time I go to buy my groceries, they seem like they're more expensive, and every week I seem to have less money in my bank account than I did the week before."

Do you know why they feel that way, Duncan Webb—and you should have asked the Treasury about it when they came to brief you about this Budget. The reason New Zealanders feel they are doing it tough is because they are.

We have rampant, record inflation at the moment—a record in 30 years—running at 5.9 percent. So prices are getting more and more expensive, but are wages keeping up? No, they are not. Wages have increased at only 2.6 percent, so the truth is that New Zealanders are spending more and getting less. They are facing a cost of living crisis, and it's not just these costs. It's things like rents, which under Labour have increased, on average, by an additional $140 a week, so that your typical renter in the past year has seen their rent go up by $50 a week. That is the gift that this Government has given working New Zealanders renting their own homes.

The prospects look even bleaker, because what New Zealanders are faced with over the months that this Budget Policy Statement relates to is not only continuing inflation, continuing increases in the petrol price, and continuing increases in the price of groceries but also ratcheting interest rates. So those people who have saved hard and who have struggled to get into a home will see that their mortgage payments will get ever bigger and will eat more and more into their disposable income and into the savings they are making for their family. So we have ahead of us, Labour members, difficult times for everyday New Zealanders.

What does the Minister of Finance think is the right response to that reality? Well, he thinks that this is the time to have a record spend-up. He thinks that this is the time to have the biggest operating allowance ever in a New Zealand Budget in history. So I want to ask Dr Webb whether he's understood where that money comes from, because we on this side of the House understand where Grant Robertson gets his money from. He gets it from hard-working New Zealanders, who, under this Labour Government, have been paying $12.5 billion more in tax than when Grant Robertson came into office. Every dollar that they give Grant, the Minister of Finance, is a dollar that they don't have to spend themselves, and yet at this time, when they so badly need to keep more of their own money, Grant Robertson's priority is to put half a billion dollars into restructuring the health system—that's right; in the middle of a pandemic, he wants to spend half a billion dollars on a back-office restructure—and then he wants to put together some funds for some pet projects for climate change. That is his priority.

Now, he spent four minutes of his speech being very animated about National's plan, so I'm sure that the Speaker will engage me to suggest an alternative approach to this Budget Policy Statement. That is to actually focus on putting more money in the pockets of New Zealanders who are doing it tough, and National would focus on doing that—it is their money.

Inflation has meant that people are in higher tax brackets. They are paying more and more tax, and Grant Robertson is collecting more and more of their money. So National has said, "Well, let's be sensible. Let's make some adjustments to the tax thresholds through modest adjustments so that people who have been caught in higher tax brackets than we ever imagined they would be get some relief.", and we have put forward a package that would achieve that.

Now, it's a modest package. Actually, Grant Robertson has given himself a $6 billion operating allowance. We've said, "Look, you could achieve this with just $1.7 billion of that allowance—so less than a third of your allowance." Grant Robertson would still have $4.3 billion left over, which, by the way, would still be the record highest spend-up by a finance Minister in a Budget operating allowance ever.

Our package would achieve meaningful relief for New Zealanders. It would mean that a family with two adults on the average wage would benefit from about $1,700 a year. Now, I'm the first to admit that that's not going to make anyone rich, but what I also know is that when you're a struggling family, every dollar counts, and $1,700 is more meaningful than a restructure at the Ministry of Health. For someone on $55,000 a year, on a more modest wage, they would be paying $800 less tax. That is the benefit they would get.

For a couple on New Zealand superannuation—and I don't know whether members opposite have actually spoken to a superannuitant lately, but I'll tell you what they have been saying to me. They have been saying, "It's really hard, Nicola, because super is actually paired to after-tax average wages, and my super is not keeping up with inflation. It is not keeping up with the growing cost of living. I'm on a fixed income. I'm finding it harder to afford the bills each week." So our tax plan would give them relief. They would see their superannuation payments increase, if they were a couple, by $546, and we think that that shows where our priorities are and where our values are.

So you have to ask yourself what's the alternative approach that Grant Robertson is suggesting, and we had this hackneyed response today—actually quite intellectually moribund—in which he tried to hoodwink New Zealanders into believing that the choice they face is between having some relief in their material circumstances and having some tax reduction, but the only way that that can be achieved, according to Grant Robertson, is through a slash-and-burn of the health and education systems. I find this despicable, because Grant Robertson knows that these tax reductions that we propose can be achieved and still maintain every dollar that's being spent in New Zealand right now.

What we have to ask ourselves in this House is: do we really believe that this Government is already extracting maximum value from every dollar of taxpayer money that it spends? I put it to you that the answer is absolutely not, and I want to just run you through the small example of what's been going on with housing in this country. Here we are with a Government that's given Kāinga Ora, the State housing entity, an $8.3 billion borrowing facility, and at the same time that State housing agency has overseen a quadrupling in the State house waiting list. We have more people in need than ever before.

This Government is spending the money—that's absolutely true—but is it getting the results for that money? I'll tell you where that money has actually gone: 1,300 new staff have been hired at Kāinga Ora, more than doubling the number of people getting a Government wage to work in that agency. I'll tell you where else that money has gone. Instead of actually into building houses, the Government is now spending $1.2 million a day on emergency motel rooms for people that it can't house because it hasn't built the houses for them, and what we see is that there are still 52,000 State houses that haven't been brought up to the healthy homes standards that the Government says every private landlord in the country must meet.

So what we see from those small examples is that Grant Robertson, in asking New Zealanders to believe that he spends their money better than he does, simply isn't supported by the facts. National can see that this is the time of a cost of living crisis, and we continue to urge the Government to give New Zealanders the tax relief that they deserve.

Youth Parliament 2022

Nicola Willis September 30, 2021 Share

Are you interested in political issues and debate?

Do you want to learn more about how Parliament works?

Do you have ideas that New Zealand needs to hear about?

Then Youth Parliament might just be the opportunity you’ve been looking for. 

Youth Parliament is a unique way for young people to learn first-hand about how our Parliament works. It only happens once every three years and gives you a chance to take the role of an MP and work with them to learn more about how our jobs really work.  It’s a special opportunity, with 120 youth representatives hand-picked by MPs to represent the best and brightest from communities up and down the country.

I am on the hunt for a young Wellingtonian to take my place.  I’m looking for someone who is interested in Parliament, has ideas about how we can make New Zealand better and wants to learn more about how they can put those ideas into action. If you’ve had a background in community service, have strong views on policy issues, enjoy advocacy and debate then this could be you.    

Youth Parliament 2022 will be the tenth New Zealand Youth Parliament event. The two-day event will be held on 19 and 20 July 2022, and the six-month tenure period running from March to August 2022.

Click here to find out more about Youth Parliament

I’m looking for a young person who: 

• Is engaged with their community.
• Brings a unique perspective to the issues facing our country.
• Is based in the Wellington Region.
• Is aged 16 – 18 years old (inclusive) on 12 November 2021.
• Is able to attend Youth Parliament on 19 and 20 July 2022.

FIVE IDEAS TO HELP FIX OUR HOUSING

Nicola Willis December 01, 2020 Share

I’m urging the Government to pursue innovative ideas to encourage a surge in new house building. Here’s just five they should seek advice on today:

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New Portfolios

Nicola Willis November 11, 2020 Share

Today Judith Collins announced National’s new line-up. We have an excellent team that I’m proud to be part of. I’m honoured to have been given responsibility for the portfolios of Housing & Urban Development, RMA (Housing) and Associate Economic Development.

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Thank you.

Nicola Willis October 18, 2020 Share

Thank you to everyone who supported me and National in this campaign. Despite a hugely disappointing result across the country I remain a List MP in the National caucus.

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National's Wellington Transport Plan

Nicola Willis August 07, 2020 Share

Today National Leader Judith Collins announced a multi-billion plan to deliver a suite of transport projects to bust congestion and future-proof Wellington’s transport infrastructure.

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The end of the 52nd Parliament... bring on the 53rd!

Nicola Willis August 06, 2020 Share

Today marked the last sitting of the 52nd Parliament, meaning the official 2020 campaign is a go! 

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Release the list!

Nicola Willis August 03, 2020 Share

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