2. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
When he said New Zealand would catch up with Australia, has National since it became Government narrowed or widened the gap in average weekly earnings and levels of employment?
Rt Hon JOHN KEY (Prime Minister) Link to this
Because of the difficulties in comparing data on a consistent basis, last week I asked the Parliamentary Library for its annual series on average weekly earnings, which, I presume, is the same source as for the member’s figures. It shows that between 2008-09 and 2009-10 the weekly wage gap between New Zealand and Australia, if we measure this in absolute dollars, increased slightly from $213 a week to $219 a week. If we measure this as a percentage gap, as we always did in Opposition, it decreased from $30 to $29, and, in fact, it decreased from 35 percent. [ Interruption] Well, if the members want to talk about closing the gap, one gap that I know will be closing is the time between when he is—
Mr SPEAKERJust to assist the honourable Leader of the Opposition, because of that unnecessary additional part to the answer, maybe the Prime Minister might like to answer the bit about levels of employment.
I could not hear it. But if the Prime Minister assures me that he did, then I will accept his word for it.
I was getting on to that, but it was just getting a little noisy. None of this takes away from the fact that the average after-tax wage in Australia is now just over $50,000 a year, while in New Zealand it is just over $39,000, and there is a lot of catching up to do. In terms of employment, again, if we use absolute numbers, the difference in employment has widened by 200,000, whereas if we use percentages, the employment rate in New Zealand is actually higher than it is in Australia. As I have said before, catching Australia will never be easy.
In answering the question last week to the House about average weekly earnings for Australia and New Zealand, why did he not quote the figures for 2008, 2009, and 2010, and own up to the fact that, even on his statistics, since he became Prime Minister the wage gap between Australia and New Zealand has got wider, and not narrower as he promised?
No, it has not. Secondly, because for 2009-10, I did quote that number in the House last week. Thirdly, if the member is so hopeless that he cannot ask the right question or think on his feet, then it is no wonder that David Cunliffe is—
How does the Prime Minister explain the Statistics New Zealand figures out today that show that wage increases over the last year have increased at a slower rate than prices have gone up, that they have increased at half the rate that they were increasing at when Labour was in Government 2 years ago, and that they have increased at half the rate of Australian wage increases over the comparable period?
I think it is worth remembering one thing: the parting gift after 9 years of a Labour Government was a recession. That is what New Zealand inherited from those people over there. But if we want to talk about prices, let us do that for a moment. The price of electricity under a Labour Government went up by 72 percent—negligible claims here. Interest rates under a Labour Government went through the roof. The price of petrol under a Labour Government was $2.11 versus $1.75. An emissions trading scheme under a Labour Government was twice as expensive as one under National. I could go on and on—
Hon Darren Hughes Link to this
I know that the Leader of the Opposition in his question made a reference to the previous Government and the record of the previous Government, so there was a fair licence for the Prime Minister to make some comment about that, but we have now got to the point where the Prime Minister is reciting a whole lot of information that is unnecessary to the question. He should get on with the substance of the answer, which is the question that Mr Goff has put to him. [ Interruption]
A point of order is being considered. Regrettably, the question also asked how the Prime Minister explained something, and, of course, how the Prime Minister might explain something is the Prime Minister’s business. But the member is quite right with his point of order. I think we had heard quite enough.
With unemployment rates in New Zealand, under his watch, for the first time in more than a decade exceeding the unemployment rates in Australia, does he expect the household labour force survey this week to show an increase or a decrease in New Zealand unemployment at the same time as the Australian unemployment rate has been declining?
I am not going to make predictions about the household labour force survey, nor is it my job to do so. What I can say is that one way to get employment rates rising and unemployment rates down is to have flexibility in the labour markets. That is something the Leader of the Opposition believes in when he is on Jamie Mackay’s Farming Show, but not when Andrew Little is running the show.
Chris TremainWhat impact will the Government’s income tax cuts on 1 October have on relative after-tax incomes between New Zealand and Australia?
What an excellent question! When the Government’s tax cuts come in on 1 October the gap in after-tax wages between New Zealand and Australia will have narrowed a little since December 2008, factoring in Australia’s tax changes on 1 July. Based on average weekly ordinary-time earnings, and adjusted for effects like exchange rate changes, New Zealand’s average after-tax income will be about 78 percent of Australia’s, compared with 75.2 percent of Australia’s average after-tax income in December 2008. Tax cuts are just one of the Government’s policies to get faster growth and boost incomes. Other measures include investment in roads, broadband, and electricity; cutting red tape in science and investment; balanced employment law reform; Resource Management Act reforms; more money for tourism; aquaculture reforms; trade negotiations; and controlling debt.
Does he expect inflation in New Zealand over the next year to peak at a level of price increases more than double that of Australia; and is that because he is pushing up consumption taxes to 50 percent higher than consumption taxes in Australia?
Firstly, as we know, there will be a rise in inflation, caused in the first instance by a rise in GST. But of course the Reserve Bank Governor looks through that so that will have no impact. But I might add that inflation under this Government’s watch has been about half of what it was under the previous Government’s watch. Of course, one way to get inflation to go through the roof is to spend money like there is no tomorrow. That is what the previous Government did.
Can the Prime Minister confirm that this sheet showing what appears on the National Party website today under the heading “Building the Recovery” is totally blank, and that that is an uncharacteristically honest reflection of National’s plans and thinking in this area?
No, but I can confirm that it shows the number of people who have signed up their support for Phil Goff as Labour’s leader.
Does the Prime Minister have sufficient conviction in the promise he made to New Zealanders that he would close the wage gap with Australia by 2025 by committing to setting benchmarks against which his progress towards that goal can be measured year by year?
There are a number of things. Firstly, I stand by the goal of trying to close that wage gap by 2025. Secondly, I stand by the view that it is a very complex thing and will take some time; no one has ever argued that it will happen in one day. I stand by the data produced by the Parliamentary Library, which shows the gap is already closing. But if I could just take one moment, I want to read—
I raise a point of order, Mr Speaker. Before the Prime Minister takes another moment, you will recall that my question is quite specific. It is about whether he would commit himself to benchmarks to measure his progress towards his own objective. He has not touched on that at all.
The member has repeated his question and reminded the Prime Minister of what he asked about benchmarks. I invite the right honourable Prime Minister to answer the question.