2. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
What new policies has he announced as Prime Minister over the last month to ensure that the cost of living does not rise faster than wages?
Rt Hon JOHN KEY (Prime Minister) Link to this
Over the last month I have restated many times the Government’s economic programme to get faster growth, higher wages, and more jobs. The programme is far too wide ranging to list in one go, but for a starter for ten here are a few: personal income tax cuts, company income tax cuts, lower taxes on savings, finding billions of dollars of savings in the public sector, capping the bureaucracy, getting Government debt under control, reforming the welfare system, raising literacy and numeracy standards in schools, increased roading investment, upgrading the national electricity grid, streamlining and simplifying the Resource Management Act, employment law reforms, investing in—
Hon Darren Hughes Link to this
I raise a point of order, Mr Speaker. Apart from the answer being a very long answer, the Leader of the Opposition asked what new policies had been announced in the last month. Clearly, the policies mentioned by the Prime Minister in his answer were not new policies that had been announced in the previous month.
Mr SPEAKERWell, one thing is for sure: we heard enough about them, anyhow. I invite the honourable Leader of the Opposition to ask a supplementary question.
Why has the Government continued to push up prices and the cost of living through, for example, increased GST, accident compensation increases, increases in taxation on rental property, and road-user charges, when the Department of Labour shows quite clearly that the majority of New Zealanders got no wage rise at all over the last year?
Well, there are a couple of things. Firstly, the CPI rate, the inflation rate, average increase under the 9 years of the previous Labour Government was 2.9 percent. Under—
I raise a point of order, Mr Speaker. In the light of the answer to the last question, which the Prime Minister did not answer, I ask you to bring him to the specific question I actually asked, which is, why has the Government continued to increase things like GST and road-user charges, when nobody has had a wage rise?
I think the member has a legitimate point of order. The answer should not start with what the previous Government had done, when the question asked what this Government is doing. I think it is fair enough that the answer should address that.
I am on my feet. We will not have that. Question time is not a time to abuse other members. The question asked was a perfectly fair question. It does not deserve that kind of response to be made, at all.
The reason I answered the question like that is that it was an inaccurate question, because we have not raised GST yet.
I raise a point of order, Mr Speaker. How can that answer possibly be right, when we have legislated to raise GST?
The Prime Minister answered the question. Exactly when the impact of legislation comes in is clearly a technical matter. I think the Prime Minister answered the question.
How can the Prime Minister’s answer possibly be right, when under his leadership the Government has legislated to raise GST, even though National promised before the election not to do so?
I think the salient point here is what the rate of inflation in the economy is at the moment. The answer is that under the National Government it has averaged 1.2 percent; under the previous Labour Government it averaged 2.9 percent.
I raise a point of order, Mr Speaker. The question was very specific. It asked how the Prime Minister’s answer could possibly be right—that is, that the Government has not raised GST—when the Government has legislated to raise GST. [ Interruption]
The House is being very noisy today, and we have to try to bring it under control. There is a dilemma when a member asks another member how an answer can be right. I invite members to think about that question. It invites a member to say a whole range of things when answering such a question, because there is no one answer as to how that answer can be right. The question almost expresses an opinion. If the questioner doubts whether the answer that was given is right, then, naturally, the Minister who is being asked to answer such a question will express a different opinion from the questioner’s. It is something that I alert members to think about. When questions ask for opinions, there is no way that I can insist on the answer being given that the questioner might have wanted. Asking for opinions is not tough questioning. I do not believe I can insist on a more precise answer from the Prime Minister, but I am sure the honourable Leader of the Opposition has further supplementary questions.
How will a majority of New Zealand wage and salary earners be better off when they got no wage rise last year, but the latest figures from Barfoot and Thompson show that in the last year average rents have gone up in Auckland by over $20 a week?
That is very simply answered with this graph, which clearly indicates that in the 9 years that Labour was in office, real wage growth was 3 percent—
I raise a point of order, Mr Speaker. You know well that question time is a time for accountability by the Government. Therefore, this House expects that Ministers will answer specific questions when they are asked. That question was very specific. He is now giving us a lesson in history. [ Interruption]
On this occasion the right honourable Prime Minister knows that he should not interject while a point of order is being considered. I invite the honourable Leader of the Opposition to reflect on his question. If I recollect it correctly, it contained an assertion that wages had not increased in the last 12 months, and he asked how people could be better off. As I saw it, the Prime Minister was pointing out the pattern of real wage changes over recent years. If one looked at the graph he was holding up, one saw that it showed the pattern of real wage increases over recent years—at least that is what I could see from where I am sitting. I am a bit closer to him, so I accept that it is easier for me to see that. I think the Prime Minister was going to dispute the assertion in the honourable member’s question about wage increases. The Prime Minister is perfectly entitled to do that in answering the question, because he is entitled to challenge the assertion of fact in the question when answering it. Clearly, he does not agree with the statement contained in the question, and he is about to dispute it. When a question is structured like that, I simply come back to my fundamental point that some questions are very hard to answer, but, by and large, questions that seek opinions are not hard to answer.
Let us go back to Economics 101. Here is the graph. After 21 months of this National Government we have real wage growth of 8.7 percent, which is three times what we had under the previous Labour Government after 9 years in office. But let us go into some of the individual things. The cost of fruit and vegetables, which is an interesting topic of debate at the moment, rose by 5 percent, on average, under that Labour Government; the figure was minus 6.5 percent under National.
I seek the leave of the House to table a document showing that the majority of workers in the last year did not receive any wage increases. The document is an ANZ data review based on Department of Labour figures.
I seek the leave of the House to table a document from Barfoot and Thompson, licensed real estate agents, which shows that in the year to June 2010 rents on average in Auckland have gone up by $20 a week.
Hon Annette KingI say to the Hon Annette King on this occasion that she must not interject while a point of order is being heard. Is there any objection to leave being granted for that document to be tabled? There is no objection.
Hon Darren Hughes Link to this
I raise a point of order, Mr Speaker. Given some of the disputes we have had about various statistics, if the graph that the Prime Minister was holding up was an official document, we request that he table that official document, with the figures he was just outlining.
Someone will be taking an early shower if a little more courtesy is not shown in the House. Let me alert members, though, that this will get serious, because the House may or may not go into urgency this week. If I put some members out of the House while the House is in urgency, they will be out for the entire period that the House is under urgency, and if those members want to speak in debates, they will not be able to. I just alert members to the fact that I am not happy with the way interjections are being made while points of order are being heard.
Can the Prime Minister tell the House how the 93,000 families who have had the funding by the Government to early childhood education cut—and who will be paying $20 to $30 a week extra for their children—will be better off when over half of them have not had a wage increase over the last year?
Well, there are a couple of things. Fortunately, they have had tax cuts and will have further tax cuts on 1 October. Fortunately, they have enjoyed an average wage growth of 8.7 percent. If I could just give the House one reassurance, it is that if there does have to be an early shower this afternoon, it will be cheaper under National than Labour, because electricity prices have gone up by half.
I seek the leave of the House to table a document from the Living and Learning Foundation, whose early childhood centre in Māngere was opened by the Prime Minister last year, which has said it will have to raise its fees to low-income families by a minimum of $20 to $25 per child per week.
Hon Trevor Mallard Link to this
I raise a point of order, Mr Speaker. The Prime Minister indicated, in the last part of his answer, that because power prices have gone up, showers are cheaper. My request is that he table his document that shows that—
I raise a point of order, Mr Speaker. I am more than happy to table this bit of my notes, which shows quite clearly that electricity prices have gone up by an average of 2.9 percent under National, and went up by 5.4 percent under Labour. [ Interruption]
I invite the Hon Trevor Mallard to reflect on how that interjection could have been within the Standing Orders. A point of order had been called, and it was being considered. To interject loudly like that, he knows, is totally out of order. I will not actually evict him from the House, because I suspect that he probably wants to be relieved of his duties this afternoon. I will not do that. I will make the honourable member stay here and suffer, and I will be very hard on him. I warn the honourable member that I will be tough on him. I do not think that a member’s scrawled notes constitute an official document; we will not be tabling that sheet.
If the Prime Minister wants to close the wage gap and living standards gap with Australia, why has he made consumption taxes more than 50 percent higher in this country than Australians pay in theirs?
Firstly, the Government is closing the wage gap with Australia. I am pleased to report that it has fallen from a peak of 38 percent under Labour to 29 percent under National. That is not bad, actually, given that we have had just 21 months in office. Secondly, we have a different series of taxes here. Australia has a capital gains tax; largely, New Zealand does not. New Zealand has much higher personal tax rates than Australia, which is why someone in New Zealand who used to earn under $229,000 in personal income used to pay more tax in New Zealand than in Australia. After 1 October, it will be $55,000.
Why did the Prime Minister tell the country that New Zealand had one of the lowest consumption taxes in the world, when on the basis of OED statistics—
—OECD statistics of consumption taxes as a percentage of GDP, his 15 percent GST rate will now be the fourth highest in the world, out of the 30 countries?
Well, I would have to see the quote in totality, but what I can say is that the right mix of taxes has been implemented by the Government. We will have a very effective balance between personal taxes and GST. But if the member does not like the idea of it, then he can campaign on changing it—and I bet he will not.
I raise a point of order, Mr Speaker. Maybe you can help me by telling me how in any way that answer addressed the question that I asked. I asked why he told the country that we have one of the lowest rates of consumption taxes in the world, when patently that is untrue.
The Leader of the Opposition must reflect on the questions he is asking. He asked the Prime Minister why he told the country something. I know that the member probably had an answer that he expected when he asked the question, but there is any range of answers when a member asks a Minister why he or she told the country something. The Prime Minister, if I recollect his answer, said he would want to see the quote in totality before he could comment further on it, but then he explained why he had a certain view on GST, and I do not think that is an unreasonable answer. I keep stressing the point that it is perfectly within the Standing Orders to seek opinions, but as Speaker it is extraordinarily difficult for me to insist on any particular answer when an opinion is sought, because there is no right answer when an opinion is sought. That is the dilemma I face.
This House is entrusted with the task of holding Ministers accountable for what they say. If a Minister says we have one of the lowest consumption tax rates in the world yet evidence can be tabled to show that that is untrue, I ask why it is that a Minister will not be held accountable to answer that question.
I can imagine all sorts of questions that could be asked from a range of questions to test the accuracy of the Prime Minister’s statement, asking him point-blank what certain GST rates are, and then comparing them. The whole idea of supplementary questions is not to make a range of political statements about an issue but to dig into an issue, to test a Minister’s answer. I could think of a whole range of questions that could be asked to test the Prime Minister on that issue, which were not seeking an opinion but actually challenging him on facts, not asking him why he was saying something. The dilemma is that as soon as one asks why or how, that is an opinion, and it is very difficult for me as Speaker to insist on any particular answer being given. I realise that members often want to make a political statement in asking a question, and that is perfectly legitimate, but it is very difficult then for me to insist on any particular answer being given. The political statement that the member was making with that—because I can see he is wondering why I am saying that—in a very subtle sort of way, was that the Prime Minister was not basically telling the truth over something. That is not the way to test out some of the facts through supplementary questions.
Does New Zealand, at 15 percent, have one of the lowest rates, as he alleged, of consumption taxes in the world as a percentage of GDP; if so, where does it range in the list of 30 OECD countries?