11. Economic Growth—GDP Per Hour and Wage GrowthGRANT ROBERTSON (Labour—Wellington Central) to the Minister of FinanceEconomic Growth—GDP Per Hour and Wage Growth11. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he agree with Nobel Prize-winning economist Paul Krugman A country's ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker"; if so can he confirm that real GDP per hour worked has not grown in New Zealand since 2012?Hon BILL ENGLISH (Minister of Finance): In answer to the first question yes. In answer to the member's second question the member keeps picking on the measure he can find that he thinks indicates lack of economic progress. GDP expenditure per capita is up 0.7 percent and GDP production per capita is up 5.9 percent. Then the member picked on real disposable income per capita which is up 7.9 percent. It is not surprising that GDP per hour has not risen much since 2012 for two reasons: one is that in the recession prior to that including in Christchurch where they had a massive earthquake the number of hours worked dropped sharply so then it had to pick up strongly from 2012. Unlike the member we believe that having more people in work is actually a very good thing. More people working with the highest participation rate in the developed world is an indicator of success and because it actually probably cannot rise much further we are likely to see GDP per hour growing. Grant Robertson: Is real GDP per hour worked lower as at September 2016 than it was in September 2012?Hon BILL ENGLISH: I cannot confirm that or otherwise but now that I see the member has outsourced his economic advice to the New Zealand Herald can I tell him this: The Economist has an introductory offer of $5 a week for 12 weeks and I am sure that if the member tells it that he is the Opposition spokesman it will throw in steak knives—Mr SPEAKER: Order! [Interruption] Order! [Interruption] Order!Grant Robertson: Is it correct that in the data released last week average hourly earnings grew by 1.7 percent in the September quarter approximately half the growth of the same time last year?Hon BILL ENGLISH: Yes. The wage growth looks moderate when you look at nominal wage growth but of course inflation has been upgraded to 0.4 percent—Hon Steven Joyce: For the year?Hon BILL ENGLISH: —for the year. So real wage increases have been occurring year on year for a number of years in this economy which makes it pretty distinctive from many other developed economies. But what I have not figured out is how Labour's tax on employing migrants is somehow going to fix this.Grant Robertson: How does he expect New Zealanders to get ahead with pitiful wage growth and low productivity and stacked up against an annual increase of 13 percent in housing costs and renters facing an average increase of nearly 800 bucks a year?Hon BILL ENGLISH: I am very pleased for those—I think 135000 New Zealanders—who have a job now that did not exist just a couple of years ago. So the difference for them between having no job and having a job does amount to getting ahead. As I pointed out to the member the fact that we have had large numbers of people come into the workforce does mean that productivity per hour worked has been relatively flat because there have been so many more hours worked. In an economic cycle you will see that as the entrants slow down productivity per hour is likely to rise."