1. Hon ANNETTE KING (Deputy Leader—Labour) Link to this
to the Prime Minister
What recent reports has he received on the impact of rising prices on families in light of his statement that “no one is worse off”?
Hon BILL ENGLISH (Deputy Prime Minister) Link to this
I have seen reports showing that the true test for the cost of living is the rate at which wages, benefits, and superannuation are rising compared with prices. We do not know the situation of every New Zealander, because their circumstances will be different. However, it is a fact that main benefits have to increase each year by the same rate as prices. New Zealand superannuation has to increase each year by at least the same rate as prices, and often increases by more. The after-tax average wage has increased by 7.1 percent over the previous year, which is considerably more than the increase in prices over that time. In fact, real increases in wages over the last year have been 2.5 percent.
Has he seen the report in the Dominion Post yesterday quoting the principal of Porirua East School, who said that she had taught for 30 years in Porirua and the situation was “probably at the worst it’s been.”; if so, does he still stand by his statement that no one is worse off under a National Government?
Yes, I did see those reports, and they concern me. We know that the parents of those children have received full compensation for inflation and GST, in their incomes.
Chris TremainSince September 2008 the after-tax average wage, which is the measure used to set the rates of New Zealand superannuation, has increased by 10 percent in real, inflation-adjusted terms. That is very solid growth in historical terms; for example, over the entire 9-year period between September 1999 and September 2008 real growth in wages was only 4 percent. That was a 4 percent increase over 9 years, compared with a 10 percent increase over the last 2½ years.
Is he aware that half of the 200,000 children now living in poverty are from working families whose wages are so low they cannot adequately care for their kids, and why is increasing the minimum wage to $15 an hour not as important to him as tax cuts for those earning $192.55 an hour?
I contest the member’s first statement, about children in poverty, because most of the measures I have seen show that by any measure of poverty most of the children affected by it are those whose parents used to be on benefits. As the member may be aware, the Government has increased the minimum wage each year. It has also implemented neutral tax cuts. We have reduced income taxes and increased GST, across the board.
As I said before, the real after-tax average wage, which is a calculation based on how this Parliament has set New Zealand superannuation rates for the last 20 years, has grown by 2.5 percent in the last year. In Australia the real after-tax average wage grew by 0.6 percent over the last year. From year to year those growth rates are likely to fluctuate but in the last year New Zealand’s has grown 2.5 percent and Australia’s by 0.6 percent.
Has he been told that thousands of children are now going hungry each day, and charitable organisations are struggling with the demand, with one organisation saying that poverty in New Zealand is a hidden shame; if so, why are people worse off, rather than better off, after 2½ years of a National Government?
I will make two points. First of all, through the recession the Government has protected the most vulnerable. We have ensured that both the core benefit rates and the child payment rates have been increased for inflation and for GST. Secondly, that member had 9 years to deal with that issue. If, after the expenditure of many billions of dollars extra, the situation is worse, then she should look at whether the kinds of solutions she put forward actually worked.
What does he say to a constituent in the Te Tai Tokerau electorate who told Kelvin Davis that she had to sell raffle tickets to pay for her power bill and that she is worse off under a National Government—has she not got the message from the Government that she is supposed to be better off?
I would be fascinated to hear what Kelvin Davis said to her. Did he apologise for the 9 years under Labour, when that person might have been promised a job that turned out to be unsustainable, or she thought the Labour Government was going to increase her benefit rate and it never did?
Te Ururoa Flavell Link to this
Kia ora tātou. What impact has there been for low-income families as a result of the emissions trading scheme negotiations with the Māori Party, which halved the price increase of petrol and power?
Actually, it has been a very significant impact. As a result of those negotiations, the impact of the emissions trading scheme on households was halved. I understand that the Opposition intends to double it at the same time as it claims it wants to get the cost of living down. We also boosted the home insulation fund to insulate 8,000 homes of low-income New Zealanders to give them warmer houses and healthier lifestyles. Those were the results of the discussions between the Māori Party and the National Party.
What impact does he think the 7.1 percent increase year on year in food prices will have on struggling Kiwis?
Many Kiwis, particularly those on lower incomes, struggle every week to pay their bills. The fact is that overall inflation—as the overall increase in prices according to the official measures, even including GST—is around 5 percent. As I have pointed out to the member, real after-tax wages have risen by more than inflation. That is a fact.
John Boscawen
Mr SPEAKERI can understand what it is. The member should address his supplementary question to the Prime Minister, not the Minister of Finance.
How much lower would the price of electricity and petrol have been if National had accepted the advice of the ACT Party and scrapped the emissions trading scheme totally, rather than doing a deal with the Māori Party in which the price rise in electricity was halved rather than being scrapped totally?
I think it demonstrates just what a balanced and considered approach this Government takes. We did not take the advice of ACT to scrap the emissions trading scheme altogether; we did take some advice from the Māori Party that helped to reduce its cost. But the fact is that in countries like Australia, where they do not have an emissions trading scheme, power prices are going up much faster than in New Zealand, because they are trying to achieve climate change policy with a mixture of bureaucratic whim and excessive regulation, so their consumers are suffering from much higher increases in electricity prices.
I take it the Minister does not have the figures that were asked for. The Prime Minister was asked how much lower prices would have been.
Hon Trevor Mallard Link to this
Does he understand that real average wages go up when high-income earners get massive tax cuts—$1,000 a week, in his case—and low-income workers lose their jobs?
No, I do not understand that, because it is not true. But I am interested to know whether the Labour Party in Te Tai Tokerau is making promises to those voters that it knows it cannot pay for. My bet is that it certainly is. It will be promising to cut GST, promising to control power prices, and promising all sorts of stuff—