Jacinda Ardern avoids ruling out tax increases to fund COVID-19 debt in question time clash with Simon Bridges

The Prime Minister has avoided ruling out tax increases to pay for the Government's COVID-19 debt during a question time clash with Simon Bridges in Parliament. 

The Opposition leader repeatedly asked Jacinda Ardern to confirm if new taxes could be introduced to pay for the multibillion-dollar debt the Government has accumulated to finance packages to support the economy through COVID-19. 

The Prime Minister avoided the question, describing it as "bizarre", and suggesting it was inappropriate to ask during a time when the Government is "doing everything we can to support and increase the incomes going into families at this 1-in-100 year event". 

Ardern highlighted the Government's wage subsidy scheme which has so far paid out $10.6 billion to subsidise the wages of 1.7 million New Zealanders, during a time when many businesses have not been allowed to operate.  

"We've put in packages around tax rebates for businesses, we've put in place a small business loan scheme that's interest-free; we are doing everything we can to support New Zealanders at this time and it does come at a cost."  

Bridges asked the Prime Minister to rule out increasing Kiwis' personal income tax to help pay for the Government's COVID-19 debt, which has so far reached $20 billion with more expected next week with Budget 2020's release. 

Ardern did not rule it out. She criticised the previous National-Led Government for wanting to "bring in tax cuts that would have disproportionately benefited people in this House" - an apparent nod to the tax cuts cancelled when Ardern came into office.  

She also highlighted how Cabinet ministers and senior chief executives have agreed to take six-month 20 percent pay cuts to stand with Kiwis who are struggling during the COVID-19 crisis, although legislation to enact it has not yet been introduced.  

Bridges again asked Ardern if she would rule out introducing any new taxes or increasing existing ones to pay for the debt the Government is building up.

The Prime Minister again would not rule it out. She said the Government's focus is supporting workers who are losing their jobs. 

"That is our singular focus - support for them, recovery for industries, and making sure New Zealand is in the best possible position going forward," she said. "I'm simply not engaging in political hypotheticals."

Bridges asked again: "To be clear, will she not rule out increasing taxes?"

The Prime Minister responded, "What I'm pointing out is that at the moment we're doing everything we can to increase the amount of income going into households - people who are doing it tough."

Bridges has often criticised the Government for keeping New Zealand under strict rules compared to Australia. Despite industries like retail already opening up in Australia, the nation is considered to be handling the virus well.  

Australia, with a population of about 25 million people, has reported 97 COVID-19-related deaths, compared to New Zealand, with a population of almost 5 million people, which has recorded 21 deaths. 

Bridges pointed out that ANZ economists estimate New Zealand's economy will shrink by 10 percent this year while Australia's will shrink by less than 5 percent, seeming to suggest New Zealand has been too strict on businesses. 

Ardern said she's seen a "range of different" economic forecasts, and said even Treasury cannot pinpoint one that it feels certain about, because the COVID-19 crisis is still evolving. 

"What, of course, we can say is that New Zealand went in with a stronger position initially than Australia; we had lower unemployment, we have lower debt, and we had strong growth," Ardern said. 

The Government had net core Crown debt below 20 percent of GDP before the crisis hit, while the United Kingdom started with net debt above 75 percent, and the United States 90 percent. 

"We were well-placed then and that positions us well to come out of it."

The Prime Minister has announced details of alert level 2 and her Cabinet will decide next Monday if the country is ready to come out of alert level 3, which will enable retail and hospitality businesses to open again.