2. TIM MACINDOE (National—Hamilton West) Link to this
to the Minister of Finance
What reports has he received on the economy?
Hon BILL ENGLISH (Minister of Finance) Link to this
More good news. This week we have seen reports of both jobs and wages growing. The household labour force survey released today shows that 43,000 jobs were created in the past year—43,000 new jobs—with unemployment at 6.5 percent. Earlier in the week the quarterly employment survey showed that even after adjusting for inflation, the after-tax average wage grew 2.1 percent in the past year.
Both the economy and New Zealanders have been remarkably resilient. The figures for the last quarter include the considerable impact of the Christchurch earthquake. But the numbers show that the economy has been growing moderately and unemployment has been slowly falling, from a peak of 7 percent in 2009. Since the peak in 2009, there have been 61,000 new jobs and total hours worked are up about 4 percent.
If we use the measure that Parliament has legislated as the basis for calculating national superannuation, the after-tax average wage rose by 7.4 percent in the past year due to a combination of wage growth and the 1 October tax cuts. Over the same year inflation was 5.3 percent, driven in large part by the increase in GST. The real after-tax average wage increased by 2.1 percent in the year to June, even after accounting for all consumer price increases, including food, petrol, and the increase in GST.
As the member may recall, in Budget 2010 the Government reduced income taxes and increased GST and the taxation on investment property, as well as closing a number of loopholes around Working for Families and other income assistance. The package helped to rebalance our economy away from excessive consumption and debt, towards savings, investment, and exports.