Adams Amy: Questions for Oral Answer — Questions to Ministers Questions to Members 
Adams Amy: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:670;Page:16584] 
6. 
AMY ADAMS (National—Selwyn) 
 to the  
Minister of Finance 
: How did the Government’s tax package in October contribute to increasing New Zealanders’ real after-tax earnings? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The figures recently released by Statistics New Zealand show that real after-tax average earnings in New Zealand increased 3 percent in the December quarter reflecting the benefits of the Government’s tax package and ongoing wage increases. The tax cuts more than compensated for the rise in GST at every level of income which is why the vast majority of New Zealanders were better off as a result of the tax switch. 
Amy Adams 
: How have real after-tax wages grown since October 2008? 
Hon BILL ENGLISH 
: If we use the measure of wages that is used for calculating national superannuation which has been used in that way for quite some time now we see that real after-tax earnings have grown 10 percent since October 2008. Prices have gone up by 6 percent over that time while after-tax wages—that is wages after tax reductions—have risen by 16 percent. The strong increase in after-tax wages is a result of three rounds of tax cuts combined with the normal annual movements in wages. This is a big improvement—10 percent since 2008 is a big improvement—on the 4 percent growth in real after-tax wages during the previous 9 years. 
Amy Adams 
: How are the figures on real after-tax wages calculated? 
Hon BILL ENGLISH 
: The figures used are data on average weekly ordinary-time earnings from Statistics New Zealand’s quarterly employment survey issued last week. This is the official series used to calculate the wage floor for New Zealand superannuation. Householders do not do that calculation when they are out shopping. We understand the pressure that is on households but we are determined to continue with economic policy that will support them by lifting their real after-tax wages. 
Stuart Nash 
: Does he agree that inequality in New Zealand has increased due to tax cuts where someone earning $1 million a year received a tax cut of $930 a week yet someone on the median wage received about $15 a week; if not why not? [ 
Interruption 
] 
Hon BILL ENGLISH 
: Labour members need to decide on their numbers but that is not unusual. When the Government released the tax changes in the last Budget it published a number of different measures of income equality—including Gini coefficients and other measures—all of which showed that the impact was roughly equal across the income distribution taking into account all of the tax changes. As I recall it no one in the Opposition questioned any of that substantial analysis. 
Amy Adams 
: Has the Minister seen any reports on why real after-tax wages grew so slowly in the 9 years to October 2008? 
Hon BILL ENGLISH 
: I could sum up those reports as saying that they are “bad policy”. Under the previous Government in what was probably the most benign economic decade in about 50 years it managed to achieve negative real per capita income growth—that is real per capita incomes shrank. When people did get new jobs they were funded by debt and were unsustainable. So people who relied on the Labour Government in the belief that their incomes were going up have now been let down and we have to rebuild incomes and rebuild those families’ prospects.