2. Economic Growth—Wage Growth and ProductivityJAMES SHAW (Leader—Green) to the Prime MinisterEconomic Growth—Wage Growth and Productivity2. JAMES SHAW (Leader—Green) to the Prime Minister: Does he stand by all his policies?Rt Hon BILL ENGLISH (Prime Minister): Yes; particularly on the over $400 million the Government has spent on freshwater improvement that is lifting the quality of water in our waterways including the $100 million improvement fund set aside in the Budget and the $44 million of projects that we announced recently right around New Zealand which engage communities in the project of raising the quality of their waterways that they care about. I would welcome the Greens support for such a move now that it has decided to be a green party.James Shaw: Why did real average wages in the private sector fall by 0.5 percent in the year to June 2017 despite a growing economy?Rt Hon BILL ENGLISH: Over the last 8 years the average wage has risen by twice the rate of inflation. A good measure of that is to look at what has happened to national superannuation because it is tied to the after-tax ordinary-time weekly wage—the average wage—and national superannuation has risen at twice the rate of inflation—James Shaw: I raise a point of order Mr SpeakerRt Hon BILL ENGLISH: —over the last 8 years whatever the most recent quarterly figures.Mr SPEAKER: Order! Point of order James Shaw.James Shaw: The Prime Minister was not referring to the question about real average wages in the private sector which fell by 0.5 percent; he was talking about overall wages.Mr SPEAKER: I appreciate that but when I look at the generality of the primary question that has been asked—and I invite the member to look at Speaker's rulings 191/3 and 191/4—on this occasion because of the generality of that primary question I think the answer given by the Prime Minister has addressed the question.James Shaw: Why did real average wages in the private sector fall by 1.1 percent in the year to March 2017 despite a growing economy; are declining real wages the best that he can deliver after 9 years?Rt Hon BILL ENGLISH: As I pointed out over the last 8 years wages have risen at twice the rate of inflation and that translates through into national superannuation. The amount of money that people take home will be significantly assisted by the Family Incomes Package announced in the Budget and implemented on 1 April. People will see the benefits of reductions in the tax on their income increases in the per-child payments for the children in their family and also significant extra assistance with housing costs which means that on average 1.3 million people will be $26 a week better off and some will be over $100 a week better off if they have high housing costs.Rt Hon Winston Peters: Is it one of his policies for one of his Government's Ministers to use his department to attack behind his back the Australian Deputy Prime Minister at the behest of the Australian Labor Party so much so that the Australian Foreign Minister is saying right now that if there is a change of Government in New Zealand they would not be interested in working with them?Rt Hon BILL ENGLISH: I would have thought the member would be well informed on that because his fellow Opposition party seems to be in a bit of a shambles about what its story is over its role in working with the Australian Labor Party. These are serious issues—to interfere in another country's politics—and it appears there have been significant misjudgments by the member's fellow Opposition party. [Interruption]Mr SPEAKER: Order! [Interruption] Order! My patience just cannot continue to be as well controlled as it has been. If members want to have a discussion with their parliamentary colleagues go outside and do so. Do not continue to chat across the Chamber. There are one or two members I specifically have my eye on and if they continue to interject I may well ask them to leave.James Shaw: Why are people's wages going backwards when we have historically low interest rates highly favourable terms of trade an economic stimulus from rebuilding Christchurch and the housing shortage in Auckland and a booming tourism sector; is this honestly the best his Government can do?Rt Hon BILL ENGLISH: As I have said over time real wages have risen. Wages have gone up at twice the rate of inflation. I am particularly pleased with the number of jobs that this economy has been generating—180000 over the last 2 years—which means that more older people are staying on in the workforce thousands of people have come off benefit and into work and school-leavers have more opportunity now to find a job than has been the case for decades. Some of those people will not be as productive as they will end up being but they are most welcome in our workforce. If the member is suggesting there are too many jobs and that we would be more productive and have higher wages if we had fewer new jobs then I simply disagree with him.James Shaw: Speaking of productivity is the real problem with wage stagnation that labour productivity growth has been zero for the last 4 years as Treasury has found and without labour productivity growth there can be no meaningful long-term gains for working people?Rt Hon BILL ENGLISH: Firstly I understand the member's calculations are wrong. But as I said before this is an economy producing thousands of new jobs—180000 over the last 2 years—and that means a lot of people with lower skills and less experience now have the opportunity to join the workforce so much so that we have the highest proportion of the adult population in work than New Zealand has ever had. More of our adult population is in work than has ever been the case. If the member believes they should all be more productive he is welcome to turn up to the workplace and shout at them and tell them to work harder but we welcome them coming into the workforce.James Shaw: Does he agree with business journalist Brian Fallow who said recently that the top decile has been pulling away … particularly swiftly on National's watch."?Rt Hon BILL ENGLISH: The reference I would send the member to is what is now I think called the Bryan Perry report which is produced by a Government agency every year with many measures—many measures—of inequality. They show an equality flat to falling. The next step is of course the Family Incomes Package which comes into effect on 1 April next year. According to one of the measures in that report—an international measure—that incomes package on 1 April will reduce child poverty in New Zealand by 30 percent. I think that would be a big step forward.James Shaw: Speaking of that report is he concerned that the benefits of New Zealand's economic growth are not being evenly shared given that household incomes at the 90th percentile have risen 14.7 percent since 2009 while those at the 10th percentile have increased only 9.4 percent?Rt Hon BILL ENGLISH: This seems to rebut the numbers the member just used saying that there was no income growth. Now he is saying that the lower decile rose by 10 percent. Well of course I would have to check the member's figures but I can tell you this: you can only spread the benefits of growth when the economy is growing and the economy is not going to grow if it is going to be burdened with half a dozen new taxes wasteful Government spending and policy that does not understand how wealth is created by our businesses. That member is part of an Opposition that is campaigning to do that."