Cunliffe David: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeCunliffe David: Questions for Oral Answer — Questions to Ministers[Sitting date: 25 June 2014. Volume:699;Page:18855. Text is incorporated into the Bound Volume.]1.Hon DAVID CUNLIFFE (Leader of the Opposition)to the Prime Minister: Does he accept inequality including asset inequality is increasing in New Zealand?Rt Hon JOHN KEY (Prime Minister):No. The best evidence shows that income inequality is not increasing in New Zealand and I am advised that there is no reliable time series on changes in wealth inequality. As the Minister of Finance noted yesterday the OECD has reported that New Zealand was one of only six developed economies in which both income inequality and disposable income inequality were flat or slightly better between 2007 and 2011. This is quite an achievement through one of the worst recessions in decades.Hon David Cunliffe: How does the Prime Minister feel about the Oxfam report that shows that the top 10 percent of wealthy New Zealanders own more than the other 90 percent put together?Rt Hon JOHN KEY: I suspect that is probably similar to lots of parts of the world but what I can say is that under a Labour Government with its announcements today every single New Zealander in KiwiSaver will be worse off when they have a capital gains tax on their KiwiSaver account.Hon David Cunliffe: How can he be so relaxed about the growing gap between the rich and poor when the median income in say St Heliers has increased by $6700 a year since 2006 to $42700 while the median income in Māngere has fallen by $200 to just $19700?Rt Hon JOHN KEY: I did not actually say what the member said that I said. What I would say is that at a time when the economy is in surplus when it is earning more than it is spending putting a tax on every farm on every business and on every KiwiSaver will simply make the situation worse for so many New Zealanders. No wonder they will not vote for that.Hon David Cunliffe: In light of that answer does the Prime Minister agree that a 35 percent increase in luxury car sales over the past 2 years while at the same time the number of children living in poverty has grown to 285000 shows that inequality is rising or does he not?Rt Hon JOHN KEY: No that is not a reliable measure of income inequality. What would be worth noting though is that households that earn $60000 or less—that is 50 percent of all New Zealand households—pay $2.5 billion in tax and they receive over $7 billion in benefits. Through the worst of the economic times this Government has supported those most vulnerable New Zealanders.Hon David Cunliffe: How does the Prime Minister feel about the fact that homeownership rates are at their lowest levels in 50 years and does he think it acceptable that half of the pupils in schools in our lower income areas are changing schools once a year or more? So we have declining homeownership dislocated children and growing inequality—how does he feel about that?Rt Hon JOHN KEY: One thing I do know is that if you put a capital gains tax on rental properties as the member is suggesting—because in fact virtually all property is excluded under the Labour plan—what that will do is put rents up. So those who are renting a property and watching parliamentary question time today better know that under a Labour Government they will pay more. In other words they will have less to spend. No wonder they will never support that policy.Rt Hon Winston Peters: If New Zealand is doing so well and Australia is doing so bad how is it that the income gap between New Zealanders and Australians has grown not shrunk since he has been the leader of this country?Rt Hon JOHN KEY: The member is utterly wrong.Hon David Cunliffe: Does the Prime Minister think it is fair that the incomes of the top 1 percent of income earners in New Zealand have risen 10 times faster than the bottom 10 percent and does he think that a capital gains tax might just help equalise some of that growing gap between the rich and the poor?Rt Hon JOHN KEY: In answer to the last part of the question no. What is really important that New Zealanders understand is that a capital gains tax in the way that Labour has described today will be on every small business in New Zealand every business in New Zealand every KiwiSaver account in New Zealand and every part of the productive sector of New Zealand. If we want people in poverty then we should cancel their jobs and that is what Labour would be doing—putting a tax on prosperity for New Zealand.Hon David Cunliffe: Since the Prime Minister opened by quoting the OECD report and then went on to criticise our capital gains tax could he confirm to the House whether his and the OECD’s measure of income inequality that he just cited includes capital gains as income or would he accept that his credibility is now down the “Liu”?Rt Hon JOHN KEY: I would need to check the paperwork on that and it would have been quite helpful if David Cunliffe had as well.Rt Hon Winston Peters: Seeing as Mr Liu has been put into contention how is it Prime Minister that just 6 weeks ago according to Maurice Williamson Mr Liu did not speak a word of English so he could not have a relationship but now he is singing like a bellbird to the Prime Minister in the best of English?Mr SPEAKER: If the Prime Minister considers there is any prime ministerial responsibility—Hon David Cunliffe: I raise a point of order Mr Speaker. The Labour Opposition would like to yield a question to New Zealand First to enable Mr Peters to re-ask that question so that the Prime Minister can recover his memory.Mr SPEAKER: Order! The member can resume his seat. I know we are in an exciting time of the year but members still have to abide by the Standing Orders. Question No. 2—Metiria Turei. [Interruption] Order! Show some respect to Metiria Turei whom I have called for question No. 2.