4. Inequality Economic and Social—Housing Affordability and Government ResponseGRANT ROBERTSON (Labour—Wellington Central) to the Minister of FinanceInequality Economic and Social—Housing Affordability and Government Response4. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he agree with Tracy Watkins that the poorest New Zealanders are shouldering the biggest burden" of the housing crisis spending more than half their income on housing and that beneath the Government spin on the Household Incomes Report "it's not nearly so rosy"?Hon BILL ENGLISH (Minister of Finance): I agree with some of the comments and not others. I point out to the member that the Government has been aware of these problems and that is why it commissioned the Productivity Commission report back in 2012 where the idea that poor planning law was bad for low and middle income households was regarded as pretty cranky if not weird. Now it is mainstream thinking because it is correct. That is why we are setting out to improve planning law so that the cost of land is not driven up by misguided attempts to make cities smaller because that burden does fall mostly on low and middle income households.Grant Robertson: Is the statement on page 15 of the household income report correct that "there is evidence of higher [after-housing costs] income inequality in the last few years as compared with the mid-2000s and earlier."?Hon BILL ENGLISH: The report is the report and I have not looked at that exact statement but if the member says that is what is there that is what is there. The point is this though: the increase in the burden of housing costs has arisen because at a time when there is growth in demand for housing through New Zealanders not going overseas and through more confidence in the economy and lower interest rates the supply has not been able to react quickly. That is the part we need to change and that is the part that has been locked up for 30 years with misdirected thinking about how planning of our cities should work.Grant Robertson: If the problem is poor planning law alone—which it clearly is not—why has the Government not actually done something in the last 8 years to deal with those problems?Hon BILL ENGLISH: There has been an awful lot of measures ranging from the HomeStart programme which will help 90000 first-home buyers through to the $2 billion of accommodation subsidies that the Government pays each year. But those measures of themselves will not help low and middle income households in the long run even though they are quite supportive in the short run.Grant Robertson: Why is his Government spinning that it is "heading in the right direction on income inequality" when the household income report shows that it has increased on his watch when the top 10 percent of earners now earn 10 times as much as the bottom 10 percent and when the number of children living in cold damp houses or who own only one pair of shoes has increased by 10000 in the last year?Hon BILL ENGLISH: The member has made a number of statements that are wrong. The report does not show growing income inequality. And it does not matter how often the member asserts that it is simply not what is in the report. Secondly the material hardship survey comes from before this Government passed on a $25 a week increase to all families on a benefit with children the first such increase in 42 years. So we look forward to whether in the future the hardship survey shows the same results.Grant Robertson: How is it fair that whilst the poorest households are carrying the burden of increased housing costs and income inequality a third of the wealthiest New Zealanders—those with wealth over $50 million—declared an income of $70000 or less last year?Hon BILL ENGLISH: In respect of the high-income earners—as my colleague pointed out to the House last week—as a result of this Government's changes in income taxation the top income earners are paying a higher proportion of income tax than they used to under that previous Labour Government. And as for the burden on low and middle income households we look forward to and I think can now expect the support of the Opposition parties on law changes that are coming before this House to ensure that the planning system does change so that we do have more supply of housing.Grant Robertson: So is he now agreeing with the Prime Minister that it is OK for a third of the New Zealanders with wealth over $50 million to claim to have an income of only $70000 because as the Prime Minister says "They pay a whole lot of GST." and does that mean that low-income New Zealanders who pay their taxes and actually spend a higher proportion of their income on GST do not really need to bother paying the right tax either?Hon BILL ENGLISH: The higher-income—higher asset owners have to comply with New Zealand's tax law and because it—Grant Robertson: But they're not are they?Hon BILL ENGLISH: Well if the member believes any individual is not doing so he is free to report them to the Inland Revenue Department or the police. The fact is that we have probably in the developed world the most comprehensive even-handed income tax system that you can have and as a result of that higher-income earners are paying a greater share of income tax than they did under the previous Labour Government."