2. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
Does he stand by the accuracy of his answers to Oral Question No 1 in the House yesterday; if not, in what respect were his answers inaccurate?
Rt Hon JOHN KEY (Prime Minister) Link to this
Yes, and, in particular, I stand by my statement that the distribution of income in New Zealand is more even now than at any time under the previous Labour Government. The assertion is based on actual data, which is the very latest data available, and on very rigorous analysis of that data—something that I know is a foreign concept to Labour.
Why did the Prime Minister claim that the gap in incomes had widened under Labour, when the report he quoted states precisely the opposite?
Because the member is wrong. If one looks at the report and takes, for instance, the 80:20 ratio as a measure, one sees that the report shows that inequality increased from 1998 to 2001, and increased again from 2001 to 2004.
I seek leave to table page 2 of the report entitled Household incomes in New Zealand, which states that inequality declined from 2001 to 2010, precisely—
Mr SPEAKERDid the report that he quoted from yesterday attribute the decline in inequality to Labour’s Working for Families package, which he described as “communism by stealth”, and does he regret that comment, given that the report’s finding was that Working for Families had halved child poverty rates for those in working families?
No, I do not regret those comments, and there were a number of factors. The reason for my comment was that the original design of Working for Families actually showed a situation where people could lose over 100 percent of any income they earned. If that is not communism by stealth, I do not know what is. There were a number of factors in the report that showed why inequality changed.
Chris TremainGood question. Treasury did some analysis of the distributional effects of the whole tax package, including the changes to property tax rules and the closing of loopholes around Working for Families and other income assistance. The analysis was, again, based on actual data from the household economic survey. It showed that the impact of the whole tax package was, effectively, distributionally neutral. In other words, it had almost the same impact on different household income groups. That is because although higher income earners received larger income tax reductions, they also bore most of the impact of the tax base broadening measures. In the end, the two of these cancelled out each other. If members are interested, they should look at the Treasury analysis. We do not make things up; we actually have Treasury do the work. Here it shows the effective distribution of the full tax package.
When he claimed credit for the reduction of inequality in New Zealand yesterday, was he aware that the figures that he was relying on in the household income survey contained all of Labour’s progressive income tax cuts in 2008 but none of the highly regressive tax changes of 2010, which gave him as Prime Minister over $1,000 a week but somebody on the median wage in my electorate just $13?
On so many fronts the member is factually incorrect. It would be useful if he listened to the last answer, which shows that the Treasury analysis states that the entire tax package was, effectively, distributionally neutral.
With the increase over the last year in the wealth of the top 150 rich individuals in New Zealand by 20 percent, or $7 billion, and the credible reports from a whole range of social agencies indicating a very steep increase in people relying on food packages, has the gap between rich and poor widened or narrowed in New Zealand in the last year?
It is impossible to know that at this point, but we will know next year when the Ministry of Social Development produces its report. But if Treasury’s analysis is correct, then the income tax package will be, effectively, distributionally neutral. There are, as the member probably knows if he has looked at the report, many factors that go into it, and at this stage it would be far too early to tell.
Why, according to the household income report, is wealth concentrated in a few hands in New Zealand—with 10 percent possessing 50 percent of the country’s wealth—more than in the United Kingdom or in Australia, and is it the case that the richest people benefit from the absence of a capital gains tax in this country but not in those other two countries?
It would be useful if the member read out what was actually in the report. I will quote it for him. It states: “NZ’s wealth inequality is not unusual for OECD countries.” In fact, it is lower, for example—
Hon David ParkerI seek leave to table the section of the household income survey that shows that the top 10 percent in New Zealand owns 50 percent of the wealth, but in Australia and the United Kingdom it is only 45 percent in each case.
Dr Russel NormanDoes the Prime Minister agree that when we have a significant proportion of children in our country living in poverty who struggle to get food and shoes to go to school, spending money to get those kids out of poverty should not be seen as a cost, but should be seen as a social investment?
Were the statistics produced by Statistics New Zealand yesterday that showed that wages and salaries had gone up by 1.9 percent when inflation was running at 5.3 percent accurate?
The member is mixing a number of different factors. He is looking at the Labour Cost Index, which, as I said yesterday—and I am happy to take the member through it again—is a static, like-for-like comparison. It does not look at all the factors that go into wages. If one looks at all of those factors—that is, the quarterly employment survey—one sees that in 2001 the then Labour Government changed the law to tell every pensioner in New Zealand—
I raise a point of order, Mr Speaker. The question, as you will recall, was very straightforward: were the figures produced by Statistics New Zealand yesterday accurate? There is a clear answer to that. I do not need a prolonged explanation—
I am on my feet, and there will be no comments from anyone. The House is too noisy altogether today. The member cannot expect the Prime Minister to answer the question exactly the way he wants. The Prime Minister was giving a very detailed answer to the question. He was not attacking anyone politically. He was giving informative information for the House, and I believe that he was not departing from the Standing Orders at all. I invite the Prime Minister to finish his answer.
To just recap that point, Statistics New Zealand itself says that the quarterly employment survey is the best indicator for what is taking place in terms of wage growth. If one looks at it, one sees that that was the assumption adopted by Labour when it changed the law in 2001 to say that the survey would be the basis for New Zealand superannuation. If the member wants to reject it, he needs to go back and apologise to the New Zealand pensioners who had their entire pension for the period of time that Labour was in office based off it. Now, if one looks at—
I raise a point of order, Mr Speaker. I am asking the Prime Minister whether or not figures produced by one of his departments are accurate. I have not heard an answer to that question.
The Prime Minister is actually explaining. It is not often that the House actually gets a detailed answer of some quality. The Prime Minister is—[ Interruption] Unless some members want to leave this House, they will desist immediately. I say to the honourable shadow Leader of the House that his interjections have been inept today. The member asked a question about a couple of statistics. The Prime Minister was explaining why he believed that those statistics were not accurate measurements of what he believed the member was asking about. [ Interruption] I say to the House that I am on my feet. If someone wants to leave, then they will very soon—very soon. I believe that the House ought to value answers where there is no attempt to attack the questioner. The Prime Minister was simply giving valuable information to the House, and I think that is something that should be valued. I think the Prime Minister’s answer has been longish, and I think we should perhaps go on to the next supplementary question.
Hon Trevor Mallard Link to this
I raise a point of order, Mr Speaker. I invite you to review the tape and the comment you just made, to think about whether it is your role to comment both positively about the Government and negatively—
The member will resume his seat right now. The member may review the tapes as well to see how inept his interjections have been today. I should have stopped him earlier, because other members of the House asked questions, and they deserved to hear answers. That member was making it very difficult for them to hear the answers to the questions they had asked. They have a right to hear those answers. I have heard sufficient. There will be further supplementary questions.
I raise a point of order, Mr Speaker. I think, with respect, that Mr Mallard’s point is that—and I do not impute any improper motive to the Speaker—to editorialise whether an answer is valuable for the House is not the role of the Speaker.
I have to do this every day as members—normally Opposition members—seek my assistance to get answers from Ministers or to stop Ministers from abusing the questions asked. Every day I have to make judgments about the questions asked and the answers given, and the House has actually benefited enormously from most of those judgments. I do not pretend I get them all right. The member may recollect one of his own questions from yesterday. I stopped the Minister of Finance, because I believed the Minister was not fairly answering a very fair question that had been asked. I was listening very carefully to the answer, and I would have stopped the Prime Minister had he sought to play politics with the question. He gave what he believed was a genuine answer to the question. As Speaker, I support attempts to give genuine answers to questions. I cannot support members if they wish to turn questions into political games. I cannot support them in getting political answers, but for genuine answers I can.
Hon Rick BarkerI raise a point of order, Mr Speaker. I realise this is a difficult area, and I do not want to challenge you as the Chair of this meeting, or your authority. But I do want to raise a point that was referred to by the Hon Trevor Mallard, and that was the reference you made to his interjections. I have sat here and listened, and I concur with you on this: for a number of interjections that he made, you could have, with good grounds, challenged and called him to account immediately at the time. I would have supported you 100 percent on that, but, in the interests of the flow of the House, you let them go, and I thought that that was your call. The point I make to you is that once you have decided to let the matter go, I do not think it is appropriate for you to come back and make reference to it again later. The decision was made; you let it go. It is a little bit like the referee on the football field. If there is a penalty and the referee has not blown the whistle, then they cannot come back some time later, blow the whistle, and say: “I am sorry, I should have penalised you back here.” I think your role is to ping him at the time, but if you do not, then I think he has got a free run at that point. That is my point. I do not think it is right for you to then come back and make some other comments about it. You made your judgment, you let it go, and that is the end of it. I think that is the point Mr Mallard was making about the review of the tape. I just want you to think about that again.
I accept that the member’s point is made in good faith. The dilemma I have as Speaker is that were I to intervene all the time, I would disrupt the House too much, yet if I let it go totally, it can get into an unfair situation. That is why at times I do intervene. Today I thought the provocation, though, was pretty extreme. Otherwise I would not have mentioned it.
I raise a point of order, Mr Speaker. I actually thought you were playing the advantage rule for the Prime Minister there. On the question, you said that during the answer the Prime Minister was not attacking the Opposition. In fact, he was saying that the member should apologise, so he was actually directly criticising the Leader of the Opposition, who was asking the question. It was a pretty straight question. You were right; he was giving a good answer. But then he did start to attack the Leader of the Opposition during his answer.