Key John: Questions for Oral Answer — Questions to Ministers 
Key John: Questions for Oral Answer — Questions to Ministers 
[Volume:631;Page:3628] 
5.  
JOHN KEY (National—Helensville) 
 to the  
Minister of Finance 
: Does he stand by his statement that “We cannot afford large wage and salary increases across the board.”; if so what level of wage and salary increases does he consider would be affordable? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 Yes in responding to a question yesterday from Dr the Hon Lockwood Smith. But it is just under 22 years since we had a Minister of Finance who thought it was appropriate that he set the actual levels of wage and salary increases across the economy. He was of course a National Government Minister of Finance. 
John Key 
: Does he agree that although oil prices may be beyond his control he does in fact have it within his power to improve after-tax wages by championing fair and across-the-board tax cuts or is he happy to sit back and see an overwhelming number of New Zealand workers take a real drop in their income? 
Hon Dr MICHAEL CULLEN 
: It is wonderful to respond to that question when this afternoon we have had at least three National Party members call for large increases in Government spending and when we have had a member say that a $1000-a-year grant to assist with housing is not worthwhile and that $10 a week is somehow worth more than $1000 a year. 
John Key 
: Is he aware that people earning the average pre-tax weekly income of $826 would have seen under National’s proposed tax plan their personal after-tax income increase by 4.2 percent—an increase well above the inflation rate? 
Hon Dr MICHAEL CULLEN 
: What I am aware of is that the cost of that was $2.2 billion a year which is more than the cost of the entire primary health care system to the Government plus the cost of all elective surgery. I am aware that junior doctors have had an 11 percent pay increase on average simply from the interest-free student loan policy which Mr Key opposes. 
John Key 
: Does he stand by his statement made in February that he will be taking a clear line with State sector CEOs on labour costs; if so does he think he has been at all successful in doing that given that at least one Government department—Te Puni Kokiri—has publicly announced that it plans to pay more attractive salaries? 
Hon Dr MICHAEL CULLEN 
: As I said yesterday in response to the repeated questioning from Dr the Hon Lockwood Smith who was very worried about inflationary pressures indeed we still have to ensure we do not lose highly skilled staff. On that basis of course we could afford a reduction in income for the members of the Opposition. 
John Key 
: Does he consider that private sector employees may find it just a little rich to be told that wage increases are unaffordable when under this Government’s big-spending policies wage growth in the public sector has been higher than wage growth in the private sector in every single quarter since 2001? 
Hon Dr MICHAEL CULLEN 
: I was not referring specifically to the private sector but I wonder whether the member took the earplugs out this afternoon as his colleagues Mr Ryall Dr Coleman and at least one other member called for large pay increases for public sector workers. National Party people say that as long as people go on strike they will give them whatever they want. What a Government that would make! 
John Key 
: What contact has he had with the unions on the issue of wage increases and what has he said to them given that the Council of Trade Unions says that his call for wage restraint is “unfortunate and misplaced” and the Amalgamated Engineering Printing and Manufacturing Union which is affiliated to the Labour Party says that calls for wage restraint are out of order and that it is pressing on with its campaign to lift real wages in New Zealand; does he think they will be supporting National in their drive for tax cuts given that National will be delivering a 4.2 percent wage increase if they do support it? 
Hon Dr MICHAEL CULLEN 
: It is interesting to note that the member continues to argue that we can afford whatever number of tax cuts one would like to think up with no impact upon social services and no impact upon Government borrowing no matter what the economy does and no matter what the Government has done in the meantime. But for his information I advise that I met the Council of Trade Unions this week. It has no intention of supporting Mr Key or anybody else in the National Party. 
Hone Harawira 
: Kia ora Madam Speaker; tena tatou te Whare. On this International Justice for Cleaners Day which recognises the below-poverty wages earned by cleaners what level of wage and salary increase would the Minister support for cleaners around the country including the people who clean our offices here in Parliament? 
Hon Dr MICHAEL CULLEN 
: I do not interfere as did a previous National Minister of Finance in individual wage settlements. Those are a matter between employers and employees. But in responding to Dr the Hon Lockwood Smith who was so worried yesterday about inflation I repeat for the benefit of National members that large across-the-board wage increases are inflationary in the current situation. If those members were a responsible Opposition they would not be winding up those kinds of increases.