3. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
What recent progress has he made on catching up with Australia?
Hon BILL ENGLISH (Deputy Prime Minister) Link to this
In terms of catching up with Australia, the biggest step we have taken is to return the economy to growth after five quarters of economic contraction, which started under the previous Labour Government. The second-biggest step we have taken is to start undoing the damage done by the wrong-headed economic policy of the previous Labour Government. As the member will know, the Australian economy did not go into recession at all, so we have been starting from some way behind.
How many net additional jobs does he expect to see created in New Zealand this year compared with the quarter of a million new, net additional jobs that Australia has, so far, created this year?
I cannot give the member that number, but I can say that as Australia has had its terms of trade double in 5 years because of the value of its resource base, up against our commodities, whose terms of trade have increased by about 50 percent, then of course there will be a challenge. Equally, we had a recession and Australia did not. That member’s party might be able to explain why New Zealand went into recession under his Government, before the global financial crisis, and Australia did not.
Will the first decline in the median income in New Zealand to take place in more than a decade, which Statistics New Zealand recorded over the last year, help close the income gap with Australia?
When the member was away we discussed in the House how useless the median income measure is, because it does not measure what happens to household incomes. That member ought to explain how the Labour Government managed to drive New Zealand into recession when the Australian economy did not go into recession. He was in the Government at the time.
Chris TremainThe history of this is quite interesting. Between September 1999 and September 2008 real after-tax wages in New Zealand rose only 3 percent. In contrast, in the same period in Australia, real after-tax wages rose 19 percent. So over the last decade wages in New Zealand fell a long way behind wages in Australia. Since that time, I am happy to say, we have made progress towards reducing the wage gap, but it is early days yet.
When will the unemployment rate in New Zealand, which has reached nearly one in two for Māori and Pasifika teenage girls and over one in three for Māori and Pasifika teenage boys, persuade him that he needs to give the same priority and focus to skill training and education to our young people at risk instead of cutting, as he did last week, $55 million out of skill training?
The member may not be aware that about 100,000 people who are participating in the industry training system were getting no credits whatsoever. With the agreement of the industry training sector, the Government has taken the unutilised and wasted money and shifted it to where it can be more usefully employed.
When putting together his tax package, what consideration did he give to ensuring that most of the benefit went to those on modest incomes, as they did in Australia, rather than the lion’s share of the benefit going to those on the top incomes, as it does in New Zealand?
The member is simply wrong, and the fact that he repeats that description and includes Australia does not mean that he is right. The Government published all the analysis in respect of the equity of the tax cuts after the Budget, and it showed that when we take into account the impact of the increased taxes on property and on foreign owners of New Zealand assets, the major income groups all got about the same positive increase in income. That is the analysis and in fact no one has challenged it.
Which of the policies introduced by his Government has done the most to widen the income gap with Australia?
As we pointed out, the real after-tax wage gap has actually closed. That is the measure that is used, and it was legislated by the previous Government as the wage measure that is relative to national superannuation. We believe that our whole raft of policies, including our investment in infrastructure, microeconomic reform, our tax switch, our reform of the public sector, our focus on education and skills, and our extension of innovation and business support are all adding up to a policy that will close the gap with Australia.
Has he passed the test that he set for himself to close the gap with Australia; or was that promise about as credible as his promise not to increase GST?
Yes. Our policies do pass the test. We have put together a six-point economic programme, which we are executing. Ours is a programme that his new friend Mrs Gillard would recognise, because she gave a speech a lot like ours, and his policies are heading in the opposite direction from where his new friend Mrs Gillard is going.