Parker David: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeParker David: Questions for Oral Answer — Questions to Ministers[Sitting date: 14 May 2014. Volume:698;Page:17822. Text is incorporated into the Bound Volume.]4.Hon DAVID PARKER (Deputy Leader—Labour) to theMinister of Finance: Will Budget 2014 continue the trend of widening inequality between the wealthy and poorer areas of New Zealand as shown by the University of Otago 2013 index of deprivation?Hon BILL ENGLISH (Minister of Finance): The answer to that is you will have to wait and see when you get the Budget. I do notice that the Opposition used to talk about income inequality across the country but because the national measures show that income inequality has not got worse in New Zealand those members are now looking at disaggregated measures and of course it is not surprising that there may be some suburbs somewhere where incomes have risen less than in other suburbs. On average across New Zealand income inequality has not got worse. In fact we are one of two developed countries where the OECD as recently as yesterday has said that it has been stable since 1994—and the Opposition should take some credit for that.Hon David Parker: Are three-quarters of New Zealanders wrong to say that the gap between the haves and the have-nots has grown after five of his Budgets then?Hon BILL ENGLISH: On the measures that are used generally through the Government publication three-quarters of New Zealanders are not correct in their assumption that the rich are getting richer and the poor are getting—Grant Robertson: Ah! He was going to say they were wrong.Hon BILL ENGLISH: Well the facts as laid out in the annual report issued by the Government agency initiated by the previous Labour Government and now backed up by the OECD show that income inequality in New Zealand has been flat to falling in recent years and on average it has remained unchanged for the last 15 years.Hon David Parker: Why after five of his Budgets has homeownership dropped to its lowest level in more than half a century and is this not one of the most important measures of rising inequality?Hon BILL ENGLISH: You would need to talk to homeowners and renters about the choices that they make but the Government has noticed that each of the measures it has taken to undo the damage of the doubling of house prices under the previous Labour Government has been opposed by the Labour Party in this Parliament. We have moved consistently over 3 years to improve supply to the housing market because that is the best long-run solution to rapidly rising house prices and the Labour Party has opposed every single measure this Government has taken because I presume it feels guilty about house prices doubling while it was the Government.Hon David Parker: Does the Perry income inequality figure that he likes quoting exclude capital gains?Hon BILL ENGLISH: The definition of it is income inequality as set up by the previous Government to be published every year as a measure of progress on these issues and on that measure New Zealand income inequality is flat to falling. That is very clear from the official statistics put out by the public agency. Because the Opposition members do not like that measure they have now tried to move to others such as wealth. I agree with the member that the housing market can be a driver of wealth inequality so the Opposition should be supporting the Government’s measures which are thorough and assertive to change the dynamics of the housing market where we can influence them.Hon David Parker: I raise a point of order Mr Speaker. That was a long and interesting answer but my question was very specific and asked whether that measure included capital gains and that has not been addressed.Mr SPEAKER: It is a marginal call to be honest. I think it probably was addressed. The Minister talked about income and then talked about the creation of wealth. On that occasion the Minister has addressed the question to my satisfaction. It may not be to the member’s and I accept that. He can ask further supplementary questions.Hon David Parker: I seek leave to table the Perry report’s definition of income and the datasets which show that it excludes capital gains.Mr SPEAKER: Leave is sought to table that particular document. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Louise Upston: According to the Salvation Army in 2008 in what direction were social measures heading and what does this say about fiscal management?Grant Robertson: I raise a point of order Mr Speaker. I may have missed the very first words of the question but the finance Minister is not responsible for what happened in 2008. He was not the Minister then. We are not allowed to ask him about things that he did in 2008.Mr SPEAKER: Just because he was not the Minister does not mean he has no responsibility for reports that were tabled at about that time or published at about that time. The difficulty I have is that I could not hear the question because of the noise coming from both sides of the House. I ask Louise Upston to repeat the question.Louise Upston: According to the Salvation Army in 2008 in what direction were social measures heading and what does this say about fiscal management?Hon BILL ENGLISH: When I became the Minister of Finance in 2008 one of the first things I did was get out the Salvation Army report on social progress. It was a frank report and what it pointed to were rising numbers of children in Child Youth and Family Services care rising youth offending rising teenage pregnancy and rising levels of serious crime. I can confirm that each of these measures has seen significant improvement despite the fact that we have had a major recession and despite the fact that we have had much tighter Government spending than under the previous Government. In fact the Salvation Army said this: “What is perhaps most disappointing … is that as a country we have invested hugely in areas of core social spending over the past five years … and it seems to have contributed very little to our social progress—”Mr SPEAKER: Order! I think the answer now is long enough.Hon David Parker: Is he aware that according to the OECD income inequality in New Zealand is in the worst half of developed countries in the world and is that not one of the reasons that overall inequality including home ownership rates gets worse every year in New Zealand under his watch?Hon BILL ENGLISH: I just do not agree with the member. Now that he realises that income inequality in New Zealand is not getting worse he says that it is in the second half of the OECD which is actually not correct. It is about the middle. So we can have a debate about whether that should or should not be the case but it certainly does not avoid the fact that income inequality in New Zealand according to the OECD has been roughly flat since 1994 and in fact in the last few years there is some indication that it has fallen slightly.