2. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
Has he reviewed table 1 in the latest report from the 2025 Taskforce; if so, does he stand by his statement that the wage gap with Australia is reducing?
Hon BILL ENGLISH (Acting Prime Minister) Link to this
Yes; and yes. If the member takes a look at table 1, he will see that it does not refer to wages.
Does he stand by his statement that a “fundamental purpose” of his Government is to narrow the wage gap between ourselves and Australia; if so, does he accept that the 2025 Taskforce actually shows that he is failing?
Yes, we do stand by that statement; and no, we do not accept that about the 2025 Taskforce. In the shorter term, the measure of real after-tax wages shows that the gap is closing, but the member needs to keep in mind that the Government has had to deal with two substantial issues. One is the economic mismanagement of the previous Labour Government, which left this economy in a mess. That was followed by a global recession. In that context, we have made a very good start.
How does the Prime Minister reconcile that answer with the explicit statement by the task force: “… we do not see any realistic possibility that the gap in real per capita income has narrowed in the past year.”?
Mr SPEAKERI say to the Minister that I have let him get away with an earlier answer that claimed that certain policies were the policies of the Opposition, then dumping on them. That question was a perfectly fair question, because the task force was established by the Government. There was nothing political in asking the Minister about statements contained in the task force’s report. The questioner was not being political, and the Minister does not need to give the questioner a lecture about those sorts of things. The Minister should answer the question.
I disagree with the task force. It has not taken account of the decade of damaging economic management by the previous Government or of the global recession. In that context, to achieve an increase in real after-tax wages has been quite an achievement. There is no doubt at all that if we followed the policies of the previous Labour Government, New Zealand’s economic performance would continue to drop like a stone.
Chris TremainBetween September 1999 and September 2008 real after-tax wages in New Zealand grew by only 3 percent in that 9-year period, compared with 19 percent growth in Australia. The wage gap blew out substantially. Since September 2008 real after-tax wages have grown by 8 percent in New Zealand, compared with 5 percent in Australia, so the wage gap has narrowed slightly. As I said before, we started a long way behind Australia, having been handicapped by a decade of economic mismanagement, and this is just one small gain.
Can he name any independent economic commentator who accepts his spin that the wage gap with Australia is narrowing?
The calculations that the Government has done on real after-tax wages are based on the statistical series legislated for by the Labour—
I raise a point of order, Mr Speaker. You will understand that the question was straightforward. I asked him whether he could name one independent economic commentator who accepted his view on the wage gap narrowing. He has not addressed the question.
I must say I have considerable sympathy for the honourable Leader of the Opposition. It is just unfortunate that he added the last bit about “spin” to his question, because if the member had cut his question short, to the first part, I would have insisted on the Minister answering. Once the last part was added, it makes my job hard.
Any commentator who looks at the statistics used to calculate national superannuation will come to the same conclusion as we have. I cannot name one commentator who believes that following Labour’s policies would do anything but send us to the bottom of the OECD table.
Can the Prime Minister name one independent economic commentator who agrees with his position that the wage gap with Australia is narrowing?
The member on this occasion asked a very specific question. The answer may be that the member cannot name a commentator, but he should not rabbit on about stuff that is not the subject of the question. [ Interruption] I am on my feet. The Standing Orders are very clear about that point; information should not be included in an answer that is not necessary to answer the question. I have been pretty generous to the Minister, and have allowed him to get away with a lot of comments about the Opposition’s policies. The Opposition has now asked a very straight question of the Prime Minister. The Minister is answering on his behalf; he should answer the question.
As I said, any commentator who looks at the facts on real after-tax wages will have to come to the conclusion that the gap has closed.
The member, if I heard the question correctly—and do forgive me if I am wrong—asked whether the Prime Minister could name any credible commentator who believed that the wage gap with Australia was closing. It may be that the Minister cannot name one, but he should answer the question that was asked. There is nothing wrong with not being able to name one, but it is not within the Standing Orders to include other information that is not the subject of the question that was asked. I have allowed a fair bit of licence. The Minister has dumped several times on the Opposition, and has made claims about the state the country would be in if Labour’s policies had been pursued. In fact, one of those answers was to a question from one of the Minister’s own colleagues. That is not, in my view, the way that questions from colleagues should be used—just to dump on the Opposition. The Opposition has asked a straight question; I believe it deserves to hear an answer.
I do not think any commentators have looked at those figures. When they do look at them, they will be forced to the correct conclusion: real after-tax wages grew by 3 percent in 9 years under the previous Government, and they have grown by 8 percent in 2 years under this Government.
Which of these apparently contradictory statements is correct: the statement in the National-ACT confidence and supply agreement that sets out the closing of the income gap with Australia as being a “concrete goal”, or Mr Key’s or Mr English’s more recent statements that this is merely an “aspirational goal”?
ACT and National both agree that New Zealand can achieve parity by 2025, and that we should take all steps to achieve that. We know that the first steps have been to undo the incredible damage done to this economy—
I raise a point of order, Mr Speaker. The question was again quite straightforward: is this a goal that is simply aspirational, or is it concrete?
The Minister should not be answering when he has not been called, because a point of order is being considered. If the Acting Prime Minister is prepared to assist the House, it would be helpful if he could now answer.
They are both correct. ACT and National both agree that the recipe followed by the previous Labour Government gave us reductions in real after-tax income, a shrinking export sector, and a bloated Government sector, and put us on a path towards the bottom of the OECD ladder.
Which promise is more credible: his promise to catch up with Australia, or his promise not to raise GST?
Both of those promises are promises that the Government is adhering to. If the member is opposed to the rise in GST, he is free to go out to Mana and announce Labour’s new policy: to cut GST and take away the income tax cuts. As far as I am aware, the member has not been brave enough to do that.
How is he adhering to his promise not to increase GST, when he has just increased it by 2.5 percent?
As the member knows, there was much discussion over those quotes, and as is usual with the Labour Party members, they are making them up. The Prime Minister answered a question—
I raise a point of order, Mr Speaker. My question was, again, quite straightforward, and a series of attacks were made on the Opposition but there was no endeavour to answer the question. [ Interruption]
I was dealing with the regular issue now whereby the Opposition manufactures quotes. We have the choice of either just ignoring manufactured quotes like this one today and one yesterday that was applied to me, or of trying to deal with them. It is in the public interest that there is clarity over whether the assertion made by the Opposition is correct or not correct. In this case I attempted to clarify it.
I hear the Minister, and that is a valid point. When a question contains a quote that gives a misleading impression, a Minister can certainly correct that—I have no problem with that, at all. But there is a difference between correcting that and just dumping on the questioner. Today, it is my view that the Minister has attempted to dump on the questioner a little too much on the wrong questions. Some questions invite a political response, and others do not. That last question, I believe, did have an element of politics in it. The reason why it had an element of politics is that anyone who has been around this House for a while would know the quote was taken from a wider context, and the wider context was left out of the quote. But the Minister, in answering the question, should deal with that and not just dump on the questioner. That is the way to handle that kind of question, if this House is to avoid excessive disorder.
Hon Trevor Mallard Link to this
I raise a point of order, Mr Speaker. I think there is one further point. I accept that there is always a context to quotes, but I think there is a difference between taking a quote out of context and manufacturing a quote, which was the accusation. That, I think, is the equivalent of misleading the House, and that accusation should not be made across the House.
I think, under the circumstances, we should let things lie where I have ruled, but I do understand the point that the member makes. There is a difference between manufacturing a quote and taking a quote out of context, and I think the Minister should not have alleged that anyone was manufacturing quotes. I understand the concern about taking a quote out of context, but the way to deal with that is to demonstrate the way in which it is out of context rather than just dump on the questioner, unless the quote is used in a highly political way. Then I will not protect questioners, and Ministers are free to deal with questioners in a reasonable way if they are foolish enough to make a question highly political.
Some time has passed, so I will invite the honourable Leader of the Opposition to repeat his question.
To the best of my memory the question was: how does he reconcile the statement that the Government is adhering to its promise not to increase GST, when he said “National will not be increasing GST”?
The Prime Minister never said that. He said he would not increase GST in order to close the deficit. What we did was to increase GST in order to pay for income tax cuts, because we had to rebalance this economy from excessive consumption, debt, and excessive Government spending, which occurred in the last decade, to a focus on savings, investment, exports, and a better reward for work, which will be the tone of growth in the next decade.
I seek the leave of the House to table both the video and the transcript in which the Prime Minister says National will not be increasing GST, and another quote that goes something like this: that a half-good Government—