4. Economy—Productivity Wage Growth and InflationGRANT ROBERTSON (Labour—Wellington Central) to the Minister of FinanceEconomy—Productivity Wage Growth and Inflation4. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he agree with the statement New Zealand's productivity story is continuing to worsen relative to our previous history and relative to Australia and our major trading partners"; if not what specifically in that statement does he disagree with?Hon STEVEN JOYCE (Minister of Finance): No I do not agree with Mr Bernard Hickey in that statement. While New Zealand's labour productivity had been in decline since the early 1990s the recent OECD report on New Zealand shows that GDP per capita which is one indicator of productivity has increased since 2010 relative to the top half of OECD countries. What this means as the OECD has noted is that we have stopped the long-term productivity decline. We do of course still need to lift productivity if we are to close the gap with leading OECD countries and this is a priority for the Government. The good news for the member is that progress on many of the OECD's recommendations on how to lift productivity is in train.Grant Robertson: Is it correct that according to Statistics New Zealand and Treasury figures output per hour worked has been falling for the last 2 years and is now at a record low?Hon STEVEN JOYCE: Well knowing the member I would have to go away and check those particular numbers but all I can do for him is quote the OECD which is a definite dispassionate observer of the New Zealand economy unlike some. The OECD points out that New Zealand has stopped the long-term productivity decline and that we are now working to lift productivity to close the gap with OECD countries.Grant Robertson: Is it correct that GDP per hour worked fell by 1.3 percent over the last year?Hon STEVEN JOYCE: I do not have GDP per hour worked but I do have GDP per capita and that has increased by just under 1 percent over the last year. I know the member has a propensity to try desperately to find reasonably obscure statistics to back up his claims but GDP per capita which is his normal method of complaint is just under 1 percent.Grant Robertson: Is it not in fact correct that New Zealand is now in a productivity recession and that this is one of the main contributing factors to two-thirds of workers getting a pay rise less than inflation in the last year?Hon STEVEN JOYCE: No. The member is literally wrong. New Zealand's wages have been growing faster than inflation over the last several years and New Zealand has been seeing real wage growth at a higher level than countries like the US. But I would suggest rather than Mr Little listening to Mr Robertson he perhaps go and get a dispassionate observer like the OECD so that he does not get the wool pulled over his eyes.Grant Robertson: Is he telling the House that it is incorrect that two-thirds of working New Zealanders got a pay rise less than inflation in the last year?Hon STEVEN JOYCE: Well inflation last year—the calendar year 2016—was zero. It is difficult to get a pay rise less than zero and in fact I think from memory the average pay rise was around 2 percent last year. All of that therefore was a real wage increase given that during that year inflation was zero."