8. CHARLES CHAUVEL (Labour) Link to this
to the Minister of Finance
Has he received any reports on the patterns of wage growth in New Zealand and Australia?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
Yes. I have seen a report that shows the gap in average weekly earnings between Australia and New Zealand grew from 18.9 percent in 1990 to 28.4 percent in 1999 and since then has barely moved. Under the last National Government average real weekly earnings increased by a total of $1.31 a week in 1990 dollars over that 9-year period. Under 8 years of a Labour-led Government, the rate of increase has been 30 times that level.
Has the Minister seen any other reports on the merits of pursuing higher wages for New Zealand workers?
Hon Dr MICHAEL CULLEN Link to this
Yes. Last week I listened on the radio to a strange interview from the leader of the National Party, who called for higher wages, then said he really meant tax cuts. Much more concerning was that he told a business meeting in Northland late last year: “We would love to see wages drop.” We know from question No. 2 today that Mr Key likes to tell audiences what they like to hear, but that is going a bit too far. However, it is consistent with what happened in the 1990s, when in 5 out of 9 years average real earnings fell in New Zealand
Hon Bill EnglishIs that the best that the Minister of Finance can do, in the face of the fact that in the last 5 years estimated real net disposable income per person—that is, the measure of the income each person has available to him or her—grew twice as fast in Australia as it did New Zealand?
Hon Dr MICHAEL CULLEN Link to this
The fact is that despite the minerals boom in Australia, average weekly earnings in Australia are moving barely faster than they are in New Zealand. Under National in the 1990s, average real weekly earnings in New Zealand went from $463 when it became the Government to $464 in 1990 dollars when it left the Government. That is National’s record on earnings growth.
Peter BrownFrom that response, can we take it that the Minister shares the New Zealand First view that the Employment Contracts Act introduced in the 1990s had a huge, adverse impact on wages and conditions, from which we have never caught up; if he does agree with that, will he ensure that such legislation will never occur again in this country?
Hon Dr MICHAEL CULLEN Link to this
Yes, I do agree with that. The difference between then and now is that in 1990 National promised not to cut wages and conditions, but it did. This time National is promising to cut wages.