1. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
Does he stand by his statement to the House yesterday: “The reason that families should take some comfort is that, by and large, for the most part, their wages are rising faster than the rate of inflation.”; if so, what is the proportion of families that is expected to receive above inflation wage rises between March 2010 and March 2011?
Rt Hon JOHN KEY (Prime Minister) Link to this
Yes, and I will explain carefully to the member why the quote in the first part of his question is correct. Over the seven quarters from September 2008 to June 2010, Statistics New Zealand data, which happens to be the same data used to calculate New Zealand superannuation, shows the following: wages have risen 7 percent before tax, which equates to 11 percent after tax. Interestingly enough, over the same period prices have risen by 2 percent. Now, for the purpose of the education of the Leader of the Opposition—
Mr SPEAKERThat comment was unnecessary. The Prime Minister was fine until that point, but he should have answered the question as a straight question. He does not need to educate the Leader of the Opposition at all.
Hon Trevor Mallard Link to this
I raise a point of order, Mr Speaker. Yesterday we had considerable discussion about members on both sides of the House not being seated when you asked them to sit. I think there were three times when you called “Order!” to the Prime Minister before he stopped speaking.
With respect, I think the Prime Minister resumed his seat reasonably promptly when I got to my feet.
As we can all see, 7 percent and 11 percent are higher than 2 percent, so whichever way we look at it, whether pre-tax or after tax, wages have risen faster than inflation. I know that the Leader of the Opposition may not like the facts getting involved with a good story, but that is the way they are. With regard to the second part of the member’s question, I am not aware of any such projections.
I apologise, but I did not hear the last part of the right honourable Prime Minister’s answer. I ask him to repeat that.
I seek leave of the House to table, for example, the BNZ predictions that show inflation will be hitting close to 5 percent by the beginning of next year.
There will be no further comment. The honourable Leader of the Opposition saw me deal with the Prime Minister, and I will deal with the Leader of the Opposition in exactly the same way. That kind of gratuitous comment will not be allowed.
Is the Prime Minister, therefore, telling New Zealand families that they are wrong when they believe that the cost of everything is going up, which is leaving them less well off than they were a year ago because most of them have not had wage rises?
If New Zealand families are saying the cost of everything is going up, then yes, they are wrong. The price of petrol in the last 2 years of the previous Labour Government went up by 43 percent; it has gone down by 13 percent under this National Government. The price of vegetables in the last 2 years of the previous Labour Government went up by 21 percent, and under this National Government it has fallen by 6 percent. The price of eggs in the last 2 years of the previous Labour Government went up by 19 percent, and under this National Government it has fallen by 6 percent. Interestingly enough, the price of cheese in the last 2 years of the previous Labour Government went up by 50 percent, and it has now fallen by 3 percent.
If the Prime Minister is right, why is it that Veda Advantage, the country’s largest credit agency, reports that “Tens of thousands of New Zealanders are finding they just can’t pay their bills,” and that consumer defaults have leapt by a massive 18 percent since January of this year?
It is because consumer defaults are a lagging indicator, and unfortunately these people have to deal with the mess that the previous Labour Government left the country in.
I seek leave to table a document from Veda Advantage showing that this is not a lagging indicator. This information is from January this year.
Now listen. I say again to the honourable Leader of the Opposition that he is a very experienced member. He knows the rules of the House. When he seeks leave to table a document, he does not make those sorts of comments. I ask him to seek leave properly.
I seek leave of the House to table a statement from Veda Advantage showing that tens of thousands of New Zealanders are finding they cannot pay their bills, and that the rate of defaults is at an all-time high. It has risen by 18 percent since January.
Jo GoodhewNo, that is not always the case. I give the House just one example, purely for the purposes of comparison. I have chosen the seven quarters from December 2006 to December 2008, in which after-tax wages rose by 6 percent and inflation rose by 7 percent. So in that period wages fell behind inflation, leaving workers worse off. I contrast that with my answer to the primary question, in which I said pre-tax and after-tax wages rose by 7 percent and 11 percent, inflation was 2 percent, and, as everybody in the House knows, seven and 11 are greater than two. [ Interruption]
Before I call the honourable member, I say the habit of clapping endlessly is getting a little tiresome.
Can the Prime Minister tell the House when the last time was that median wages fell in New Zealand, as they did in the year to June of this year?
The member will resume his seat right away. He knows that he does not need to do that when he raises a point of order—in fact, he must not do that. I have warned members, and I spoke to the whips yesterday afternoon. After yesterday everyone is aware that there will not be a repeat of what happened yesterday, and that includes the member who interjected. The Deputy Prime Minister will not do that sort of thing. However, I do have to be careful where members have questions on the Order Paper. I do not want to punish other parts of the House through evicting a Minister who should be answering a question, but I will do what I have to do. I will find another way of penalising Ministers if they think that the Speaker will not penalise them. If they want to keep the supplementary questions that they think some of their colleagues will ask them, then they had better behave, and so too had the member who raised the point of order.
Hon Trevor Mallard Link to this
It is a straightforward point of order. It was a very straightforward question, using your advice. It was a direct question, and the Prime Minister abused—
Hon Simon PowerWe are probably at the stage now where this issue needs a little more clarification. The understanding that we had through a discussion yesterday was that the matter of the straight question and answer, without any reference to politics—oddly enough—would occur from the primary question, and when supplementary questions followed, there would obviously be a bit of toing and froing. If that matter is to be refined further, then it would be worth letting the House know how well refined it is to be.
I am very happy to let the House know, because it is clear that I was misunderstood. Where supplementary questions are perfectly clear and do not contain political statements or any such comment, I expect to hear a straight answer. Where they contain political statements, the member who asked the question should know not to expect my help if he or she gets a political statement in response. What is more, if members who ask political questions interrupt the Minister’s answer by raising a point of order, I will deal severely with them too, because I will not accept a situation where members know that they are asking a political question and get their political statement away to the House, and then interrupt a Minister who is giving a political answer. I will not tolerate that, either.
I do not want to rule out the questions that members want to ask, but it should not be beyond the wit of members to know when they are asking a straight question. Ministers should listen, and when they hear a straight question, they should answer it. But if it contains political views or political statements or claims, then the Minister is free to respond in whatever political way he or she wishes, within reason. As long as it is not outside what is reasonable in the House, the Minister is perfectly free to respond to it, and a member who then interrupts the Minister will be dealt with severely by me, because members should know when they have asked a political question.
I ask the honourable Leader of the Opposition to repeat his question so that everyone can hear it, and if it is a straight question, I expect a straight answer to be given.
When was the last time that median wages in New Zealand fell, as they did in the year to June 2010, as reported by Statistics New Zealand?
Let us answer the question as we did last week. The member is quoting from the New Zealand Income Survey. It is exactly the same question that was asked last week. As I pointed out last week, the New Zealand Income Survey is a very broad index, which looks at all sorts of things, including investment income. It does not look at wage income. The member knows this, because he knows that by far the best way to measure median income in New Zealand is by using the quarterly employment survey. It has gone up by $31 a week.
I think I can anticipate the point of order, because a question was asked, and even though there may be all sorts of issues around the question, I do not believe the Prime Minister really attempted to answer it. The question was, when did the median income for New Zealanders—if I remember the question correctly—last fall in a 12-month period, as it did, the member claimed, to a particular date in 2010? The Prime Minister may not have that information with him, which is a perfectly acceptable answer, and I have no problem with the explanation that the Prime Minister gave. But there should be some attempt to acknowledge that he does not have that information, because it was a straight question, and I think that the House should hear that.
Last year, which is the last period for which I have data, some data showed it went up and some showed it went down.
Do I take it from the answer that the only two times in the last 12 years that median wages have fallen is in the last 2 years, under a National Government?
In recent periods after-tax wages have been struggling to keep up with inflation. For example, the Statistics New Zealand data that is used to calculate New Zealand superannuation shows that over the 9-year period between 1999 and 2008 real after-tax wages rose in the entire period by 3 percent. This shows what a diabolical mess the previous Labour Government left New Zealand workers in.
Is it correct that the Department of Labour reported that last year more than half of New Zealanders did not receive a wage increase, although prices kept on rising?
The member, again, is quoting from the labour cost index. The labour cost index is again a measure that looks at a specific job, not the movement—
Hon Darren HughesYou obviously do not understand it, “Dazza”, so I need to take you through it very slowly, in words of one syllable or fewer, son.
Hon Trevor Mallard Link to this
I raise a point of order, Mr Speaker. I think that if the member was addressing another member as “son”, it might be an interesting claim, but not factual. But he did say “you”, and I think we can look at both of you and work out that that is impossible.
The member’s point is quite correct. The Prime Minister did refer to the Speaker then. At my age it is certainly not possible to be the right honourable Prime Minister’s son.
It is not true, and even though you do look a lot younger than me, Mr Speaker, I accept completely the point made by Mr Mallard. The labour cost index looks at a specific job in time. It does not look at changes that occur to jobs for a variety of reasons. For instance, over the last decade the labour cost index on average has shown 40 to 50 percent of all people have had no change. That was exactly the same right through the period when the Leader of the Opposition was a member of the Labour Government.
Is it correct that the Minister of Finance showed in the Budget this year that in fact price inflation would be well ahead of wages right up to 2014, which is obviously another 3 or 4 years out?
I cannot comment on the exact details; I do not have them to hand. But I can say that in the 9 years that Labour was in office, wages rose by 3 percent on a real basis in total. Under a National Government, they have risen by 9 percent in 2 years. That is why New Zealand workers are happy and why they do not want the “Goff-father”.
I raise a point of order, Mr Speaker. Could I table an extract from the Budget showing that what I have just said was absolutely correct, so the Prime Minister is aware of that?
Normally I would not seek leave to table something from the Budget. However, given the last comment made by the Prime Minister, I will seek leave. Is there any objection? There is objection.
Hon Trevor Mallard Link to this
When he claimed that real after-tax wages rose in the period from September 2008 to June 2010, was he using the average wage for employed people for his calculations and ignoring the massive income reduction for the extra 61,000 families who have unemployed members?