11. METIRIA TUREI (Co-Leader—Green) Link to this
to the Prime Minister
Does he stand by the statement made on his behalf “I do not accept the view that we are a deeply unequal country. I do not think the evidence suggests that, and people drawing that conclusion are wrong”?
Rt Hon JOHN KEYAre the following, who have all said inequality is a serious problem in New Zealand, all wrong: his own Treasury officials, the New Zealand Council of Christian Social Services, the OECD, and even his own Chief Science Advisor, who is one of the most trusted people in this country? Are they all wrong?
I think we all have to accept that there is a degree of inequality in New Zealand, as there is in every country around the world. The proposition the member is putting up is that New Zealand is more deeply unequal than other countries. That is a proposition that we reject.
I raise a point of order, Mr Speaker. The question, although it was long, was very specific. It asked whether they were wrong. The Prime Minister did not answer that question.
Mr SPEAKERMembers cannot expect a Minister to say yes or no specifically to whether someone is right or wrong. I think the Prime Minister, in answering that question, made pretty clear his view in relation to the issue. I think it was a reasonable answer.
Does he stand by a further statement made on his behalf last week: “Having had a very good look at the Welfare Working Group report, I do not see any recommendations there that will increase inequality.”?
Yes. The reason why the Deputy Prime Minister made that statement on my behalf was that one of the core fundamental issues and propositions put up by the Welfare Working Group is to encourage and have measures to enable people to go into paid work, if they possibly can. One of the reasons why there is tremendous inequality in countries and why there is inequality in New Zealand is that 13 percent of our working-age population are on a benefit. If as a country we can encourage people and give them the skills, the training, and the childcare needed to get them into work, then I believe we can narrow that inequality.
How does the fact that most beneficiaries will have less income under the Welfare Working Group recommendations impact on inequality?
Is it not the case that the Welfare Working Group recommendations on abatement rates would actually penalise a sole parent in part-time work, leaving her with less money to feed her kids than she has now?
No, because I think one needs to look at all of the factors. The member, I am sure, will be aware by now that Working for Families has an in-work tax credit. If one looks at all of the redistribution mechanisms that take place under the Government’s schemes, one will see that in totality—there is no question in my mind—someone would be better off in paid employment than on welfare. If they were not, that is a real indictment on the welfare system in New Zealand, because working New Zealanders should by definition have more income than beneficiaries.
Does the Prime Minister not realise that an estimated 65,000 invalids beneficiaries will lose 9 percent of their income under the Welfare Working Group recommendations; if so, how does this not increase inequality, particularly for the nearly 11,000 children in those families?
I think the member needs to wait to see the final recommendations from the Government. We have seen recommendations from the Welfare Working Group. As I have said, as a general proposition its proposition is that if one can work, one should work. It came up with 43 recommendations, only one of which the Government has said flatly it will not consider. We will go away and look at the other 42. As I said to the member, it is the Government’s view that if we can get people into paid employment, then we are making great strides for them. Not all people will be able to go into paid employment, for obvious reasons.
Will the Prime Minister now direct the ministerial group that is working on welfare reform to analyse the Welfare Working Group’s recommendations in terms of their impact on increasing inequality in Aotearoa?
I cannot say that that direction will be occurring exactly in the way that the member has said, but I can say that of course we will be asking the ministerial group, and also all the advisers, from Treasury down, to make sure that we get advice on the overall impact on individuals. The Government’s aim is to see people get into work if they possibly can, in order for their standard of living to increase, and for their choices to increase. We know, if we go and look at the approximately 360,000 working-age New Zealanders who are on a benefit—who are supporting, broadly, 220,000 children—that they come from, for the most part, the lowest-income homes. If that member was actually serious about trying to fix this issue, she would join the Government and celebrate the fact that we are doing something about it. But she seems to want people to be stuck on welfare for their entire lives. No wonder she will be stuck in Opposition for her career.
Hon Trevor Mallard Link to this
Is it the Prime Minister’s view that the increased number of formerly low-waged workers who are now unemployed and the disproportionately high tax cuts for wealthier people have helped or hindered inequality in New Zealand?
By definition, if someone goes from paid employment to a benefit, then that is negative for them. That is why the Government has worked so hard and delivered such an outstanding Budget, which will create, in our view, about 170,000 jobs. But I draw the member’s attention to this fact, and it is that the Tax Working Group, when it looked at this issue, reported that the top 10 percent of income earners pay 44 percent of all personal income tax. If the impact of Working for Families, New Zealand superannuation, and other benefits is included, the top 10 percent of taxpayers in New Zealand pay 76 percent of all net tax in New Zealand. If 10 percent of New Zealanders are paying 76 percent of all net tax, I would say that is a fair contribution from that 10 percent.
Hon Trevor Mallard Link to this
I raise a point of order, Mr Speaker. There was a lot of very interesting information in that answer, but the question was about the growth in inequality, which was not addressed by the Prime Minister.