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: 30 January 2014. Volume:696;Page:15694. Text is incorporated into the Bound Volume.]3.Hon DAVID PARKER (Deputy Leader—Labour) to theMinister of Finance: Does he agree that asset and income inequality have increased over the past 30 years; if not why not?Hon BILL ENGLISH (Minister of Finance): No I do not agree with that description of events in New Zealand. Income equality increased in the 1980s and early 1990s it peaked in 2004-05 and since then it has been relatively flat. I think a more accurate description has been that New Zealand has become more unequal in the last 30 years but that is not true for the last 15 years where income inequality has been pretty much flat.Hon David Parker: I raise a point of order Mr Speaker. There are two parts to that question. The Minister has addressed only income inequality not asset inequality.Mr SPEAKER: Does the Minister want to add anything further to the answer to address the question of asset inequality?Hon BILL ENGLISH: And there are no reliable measures of asset inequality over the last 30 years.Hon David Parker: Does he agree with John Key that New Zealand has a growing underclass and why has John Key stopped talking about it?Hon BILL ENGLISH: I do agree that New Zealand has an underclass. The good news is that despite the recession it is not growing. John Key talks about it all the time in Government because much of the Government’s activity has been focused on lifting immunisation rates fixing our social housing mess lifting persistent educational underachievement and reducing welfare dependency all of which define our underclass.Andrew Little: Why did the Minister tell Parliament yesterday that over the last 2 years “This means that families and households have on average had real increases in their weekly wages” and then outside the House say: “I think a lot of households will be looking for benefits through pay rises which households haven’t had much of through the last 3 or 4 years.”?Hon BILL ENGLISH: Because some of them have not. As I was careful to say in the House on average real wages have increased despite the fact that on “Planet Labour” they have been cut or have gone down or no one has had any pay rises. But you cannot know the circumstances of every individual family and there will be some who will be looking for pay rises if only for the reason that they have not had any in the last few years.Andrew Little: Does he accept that the bottom 50 percent of wage and salary earners have seen no increase in pay rates in real terms over the last 2 years and that his Government’s employment law changes over the last 6 years are the cause of low or non-existent real wage growth for most working families in recent years?Hon BILL ENGLISH: I would have to check the figures on the member’s first assertion but I would not agree with his second one. I think it is well known around the Western World that particularly for people with lower skills there has been a lot ofcompetition through global supply chains which has meant downward pressure on pay in some industries and some industries themselves have gone through extensive restructuring and reductions. I do not agree with his assertion that it is to do with the changes in employment relations legislation.Hon David Parker: Does he agree that existing income inequality leads to ever-increasing asset inequality; if not why not?Hon BILL ENGLISH: I simply cannot answer the member’s question because there is no particular evidence. What I can say is that for the largest single-asset class of housing that member’s party should be supporting the Government’s measures to improve the supply of housing because where it is restricted as it has been in our metropolitan areas insiders who already own houses benefit from price increases and low and middle income New Zealanders who cannot access the housing market miss out on that increase in wealth. So if the member believes anything that he is saying he would support the Government on these measures instead of attacking us on them.Hon David Parker: Why did he claim yesterday at the Finance and Expenditure Committee that there is no link between rising asset inequality and declining homeownership rates?Hon BILL ENGLISH: I have said that there is no obvious link between the two and the member has not produced any. But this red herring is another distraction from the problem that Labour claims income inequality is growing when the facts show that it is not.Hon David Parker: Does he still say there is no link between rising asset inequality and declining homeownership rates?Hon BILL ENGLISH: I have seen no evidence of a connection between the two and the member has not produced any. What he does need to produce is evidence that the rich are getting richer and the poor are getting poorer. He will not be able to because it is not true. All the data shows that New Zealand’s income inequality has been roughly flat for the last 10 years.Hon David Parker: Do the income inequality figures that he refers to include all capital income?Hon BILL ENGLISH: They do include a broad definition of income and one that has been used consistently. It does not matter how the member tries to reconstruct the official data on—Hon David Parker: I raise a point of order Mr Speaker. My question was not whether—Mr SPEAKER: Order! I am going to ask the member to please just repeat his question.Hon David Parker: Thank you. Does the measure of income inequality that he relies upon include all capital income?Hon BILL ENGLISH: The figures which are not figures that I rely on are the official calculations done by the Ministry of Social Development every year for the last 7 or 8 years. They include all income. This does not help the member get round the fact that on “Planet Labour” the rich are getting richer and the poor are getting poorer but in the real world they are not. Income inequality in New Zealand is not getting worse. If anything it is getting slightly better.