1. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
Has the tax switch, which he promised would leave no one worse off, fully compensated all New Zealanders for the rise in the cost of living over the last year; if not, which groups are worse off?
Rt Hon JOHN KEY (Prime Minister) Link to this
That was not the point of the tax switch. In most cases the tax switch more than compensated people for the increase in GST by reducing income taxes across the board and by increasing benefits, Working for Families, and superannuation. The truth of that can be shown by the fact that no party is campaigning on reversing the tax switch, unless Mr Goff intends to adopt about his eighth position on this topic.
Are parents on average wages, like Debra Bullock and Gemma Greig, who each have two children in early childhood education and who respectively are paying $70 a week more and $60 a week more for their children’s early childhood education as a result of his cuts, worse off?
Obviously, I do not have the details of those individuals, but I would say that the bulk of early childhood facilities did not need to increase their fees, and the reason for that is they are not 80 percent teacher-led. Depending on where those individuals live, they may choose to take their children to another early childhood facility. I might add that when the Leader of the Opposition was asked yesterday about when he would restore funding for early childhood facilities, what he started talking about was in the never-never, and that it was desirable, not necessarily something that was going to happen.
Now that petrol prices have reached $2.18 a litre, does he stand by his position that the Government should do something to help the consumer with the price of petrol, taken 3 years ago when he was Leader of the Opposition?
We are doing everything we possibly can, but even the member will accept that we are not responsible for what is happening in Libya or other parts of the world. What we have done is keep control of rising prices, as is demonstrated by the fact that the CPI has been running at much lower levels than it did under a Labour Government.
If he claims that he is not responsible for petrol prices, why was he demanding 3 years ago that the Government do something to bring down petrol prices, when he has only added to it by putting GST on the tax that people are already paying on petrol and making them pay still more?
As I have said, those who are paying more for petrol because of higher GST, which is correct, are also those who are getting more through the tax switch. If the member wants to reverse the position, then he should fire up the bus, get a petrol one, and really make his point.
Chris Tremain
Mr SPEAKERI apologise to the Prime Minister. A member has the right to ask a question and the House does have the right to hear an answer.
Funnily enough, to hand I have an example. It is that between September 1999 and September 2008, prices rose by a total of 29 percent and there were no income tax cuts whatsoever—
—none. That means if Mr Goff is being consistent, then he would have to admit that the Labour Government left people 29 percent worse off after its time in office. Actually, the truth is that Labour left them much worse off than 29 percent, but he should admit at least that bit.
Does he believe that middle-income families will be rationing milk for their children, as he alleged 3 years ago, when a litre of Home Brand milk from Foodtown was 20 percent cheaper than it is today?
What people do in their individual homes is not something I can be responsible for. But what I can say is let us take someone on the average after-tax wage. In the last 12 months it has risen from $39,518 to $42,214, which is a rise of 6.8 percent in real terms. Even including the GST increase, prices rose by 4 percent.
Do I take it from the Prime Minister that he disagrees with the Salvation Army, which has said that right across the country there is unprecedented demand for food parcels from people who are in work, because incomes for people on low to middle incomes are rising much slower than the price of goods?
On balance, yes, I do disagree with the last bit of it. I am not disagreeing that there are more people using food banks. I think that is the result of a recession that has bit pretty deeply in New Zealand. I can say that if one looks at average after-tax wage increases in the time this Government has been in office, one can see it has risen 10 percent. In the entire time Labour was in office it rose 4 percent.
Is the Prime Minister aware that of the people being referred by Work and Income for budget advice today, 30 percent of them are in jobs but they are being referred because they cannot cope with the rising cost of living on everything—the highest increase in the cost of living in 20 years—under his Government?
The best measure of rising prices in the economy is Statistics New Zealand’s representation through the CPI. It rose in the last 12 months by 4 percent. That included a 2.2 percent increase for GST. So, net on net, it was 1.8 percent, because the rest was compensated for. The last year of the Labour Government alone was 5.1 percent. So how that can be the highest in 20 years is beyond me.
Is he denying Statistics New Zealand’s figures that show the cost of living has risen by the highest level in 20 years and, at the same time, for last year, the year to June 2010, medium weekly income actually fell by 1.7 percent?
The member has his numbers wrong, as he so often does, so let us go back to the illustration of economics. Statistics New Zealand, over the past 12 months, has said that, overall, prices in the whole economy rose by an average of 4 percent. That included a 2.2 percent increase for GST, which was on average a 1.8 percent increase. In the last year of Labour, food prices rose 10.8 percent and prices across the economy rose 5.1 percent. If I go to Statistics New Zealand again and look at after-tax average wages, they increased in the last 12 months from $39,518 to $42,214, which was an increase of 6.8 percent. You see, the reason Labour does not want to look at the numbers is that that would tell them the truth. The truth is that, yes, times are tough, but the Government is making quite a lot of concessions in terms of tax rates, and that is helping—
No, we do not table documents from Statistics New Zealand; they are available to all members. The Standing Orders—
Hon David ParkerI raise a point of order, Mr Speaker. That was a very, very long answer with lots of assertion in it, and I would hope that the Leader of the Opposition is given as much latitude—
The member should reflect on what he just said. For a start, it was not a point of order. He claimed that the Prime Minister had made assertions in his answer. Answers are always—well, good answers should contain some facts, and that is what—
And the Prime Minister appeared to be quoting from a Statistics New Zealand release. There is absolutely nothing out of order about that. If he is complaining that the Prime Minister went on a little long, then perhaps I think I was getting a little concerned about that. Is there a supplementary question from the honourable Leader of the Opposition?