Cunliffe David: Questions for Oral Answer — Questions to Ministers 
Cunliffe David: Questions for Oral Answer — Questions to Ministers 
[Volume:667;Page:14337] 
9. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Does he stand by his statement in January this year that “as New Zealand emerges from recession the Government’s focus has firmly shifted towards significantly lifting our economic performance”? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes that is certainly the case. The accumulating evidence is that this economy needs significant structural renovation and that is what this Government is setting out to achieve. 
Hon David Cunliffe 
: Does the Minister accept Statistics New Zealand data that shows that New Zealanders on the median wage are worse off by at least $9 a week while at the same time prices have increased by almost 2 percent? 
Hon BILL ENGLISH 
: No that is not what those numbers tell him and in any case—and this has been discussed in the House for quite some time recently—real wages are rising. If the Labour Party believes that the increase in GST is the wrong policy then it should campaign to axe the tax as Mr Goff promised some time ago and to take back the income tax cuts that New Zealanders are now enjoying. 
Hon David Cunliffe 
: Why did he claim to the House on 19 August that incomes had increased by 8.7 percent when Statistics New Zealand data clearly shows that median incomes are going backwards for the first time since 1998? 
Hon BILL ENGLISH 
: The member is trying to be tricky with different statistical series. The fact is that the debate in the House has used the underlying wage numbers which all Governments have employed for calculating national superannuation—that is the average after-tax ordinary time weekly wage. But if the member does not like the policy of having the increase in GST and the cut in income tax he can campaign to roll back both the GST increase and the income tax cuts and so far he has not done that. 
Craig Foss 
: What steps has the Government taken to lift New Zealand’s economic growth? 
Hon BILL ENGLISH 
: We have had to take a large number of steps because the previous Government did so much damage to the basic settings of this economy. We have reformed the tax system and across-the-board income tax cuts were put in place just a couple of weeks ago. We have helped to reduce inflation and keep interest rates low. We have increased real take-home pay and we have taken steps to get Government debt under control. We have reprioritised $4 billion of low-quality back-office Government spending and put it into the front-line areas of education health and law and order. We have introduced national standards in schools and we have cut red tape in a whole range of areas including making it easier for businesses to hire new workers. We have invested billions in infrastructure such as broadband the electricity grid roads and schools. This has helped to support thousands of jobs during the recession. 
Hon David Cunliffe 
: Given that he has said that the Government inherited an economy that was “in good shape” and that he has taken all those steps why does the latest New Zealand Institute of Economic Research quarterly business activity data show that manufacturing is crashing and that the GDP statistics are extremely weak and why has Fitch Ratings noted that household savings are falling further; and if all this is true exactly what part of his rebalanced recovery is still on track? 
Hon BILL ENGLISH 
: All of it is. If there is any reason why the recovery is slowing it is that households are adjusting more quickly than we expected—that is they are being more careful with their spending they are increasing their savings and they are paying off their debts. That is an adjustment that needs to occur in New Zealand and if it means in the shorter term lower business confidence it will mean in the longer term a better balanced economy. 
Hon David Cunliffe 
: Does he agree with Statistics New Zealand that the 1.7 percent decline in the median wage “continues a decline in annual wage growth over the past 15 months”; if so how can his Government claim to be catching up with Australia? 
Hon BILL ENGLISH 
: Everyone knows that there has been a decline in wage growth. Wage increases have been relatively small whether they are in the private sector or in the public sector and that reflects the community’s broad understanding of the recession we are in. Of course it will require significant growth to close the gap with Australia and the Government is taking a 3 to 5 year view about the structural changes that are required to undo the damage his Government did and to lift our growth rates. We intend to persist with that programme regardless of how the economy performs quarter to quarter.