Ardern Jacinda: Questions for Oral Answer — Questions to Ministers Questions to MembersText is incorporated into the Bound VolumeArdern Jacinda: Questions for Oral Answer — Questions to Ministers Questions to Members[Sitting date: 02 July 2013. Volume:691;Page:11418. Text is incorporated into the Bound Volume.]8.JACINDA ARDERN (Labour)to theMinister of Finance: Does he agree withThe Economist that “inequality is one of the biggest social economic and political challenges of our time”; if so what is his Government doing to address the fact that New Zealand now has the widest income gap since detailed records began?Hon BILL ENGLISH (Minister of Finance):No I have not seenThe Economist piece so I cannot comment on that but I can tell the member that her assertion about the situation in New Zealand is wrong. The widest gap between incomes in New Zealand actually occurred in the mid-2000s and peaked in 2004. Incomes were more unequal in the mid-2000s than they are today and more unequal than they were in the 1990s. That information is from the most recently available Ministry of Social Development incomes report which also shows that income inequality in New Zealand is close to the OECD median similar to that in Australia Ireland and Canada and that redistribution through transfers which we have maintained like benefits Working for Families and accommodation subsidies reduce inequality significantly.Jacinda Ardern: Can he confirm that despite his claim that New Zealanders are better off in the last year 44 percent of people’s incomes did not increase but the cost of living continued to rise?Hon BILL ENGLISH: Surveys of the labour force have always shown that in any given year a proportion of the workforce does not receive a wage increase. Given that we have been in a period of relatively high unemployment and emerging from a recession it is not a surprise that a proportion of the workforce did not receive a pay increase. However over time disposable incomes in New Zealand have risen consistently each year and that is unusual among developed countries.Jacinda Ardern: Based on that answer is the Minister saying that the 80 percent of Kiwis who when recently surveyed said that they were either no better off or worse off than they were 2 years ago are in fact wrong about their own circumstances?Hon BILL ENGLISH: It is almost always the case that New Zealand households feel the pressure of constrained budgets. Whether they get pay rises or they do not it never feels like a lot more than the expenditure. However the facts are reasonably clear and that is on average disposable incomes have risen moderately in the last 4 or 5 years. The factors behind that are pretty well understood—the lowest interest rates in 50 years and the highest purchasing power of the New Zealand dollar in 30 or 40 years. That has helped to sustain household incomes through a period when across most of the developed world household incomes have dropped.Jacinda Ardern: Does he agree with the IMF that inequality limits growth by denying low-income families the money they need to invest in their children’s futureand by allowing top-income earners to influence politicians to pass laws that favour their interests not those of the wider economy?Hon BILL ENGLISH: Yes I do and that is why the Opposition should be supporting two particular Government policies. The first is the implementation of national standards in our schools to ensure that every young New Zealander gets the proper rewards of a public education system and that is the social mobility that goes with educational achievement. The Labour Party should also be supporting our changes to ensure a greater supply of housing particularly in the Auckland market because planning rules there reinforce the wealth of those who already own expensive houses and lock out those who want access to the housing market. I look forward to support from Labour on both of those policies to prove its integrity on these issues.Jacinda Ardern: How do national standards or Resource Management Act reforms help the 63-year-old woman who cleans the Prime Minister’s office and is still on just $14.60 an hour after 19 years of cleaning at Parliament?Hon BILL ENGLISH: In the ways that I outlined—to ensure that her children or grandchildren actually get the social mobility that a public education system promises them and I hope that the Labour Party does not agree with the teacher unions that her grandchildren cannot learn because they are poor and schools cannot do anything about it. But I understand that that is the Labour Party position—that if you are the grandchild of the cleaner of the Prime Minister’s office then you probably cannot achieve because it is the family’s fault and not the schools’ fault.