Little Andrew: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeLittle Andrew: Questions for Oral Answer — Questions to Ministers[Sitting date: 16 April 2014. Volume:698;Page:17322. Text is incorporated into the Bound Volume.]11.ANDREW LITTLE (Labour) to theMinister of Finance: Does he stand by his statement “we still have much more to do to improve New Zealand’s economic growth and to support higher incomes across the board”?Hon BILL ENGLISH (Minister of Finance): Yes I do because the first stage of Government action was to undo the damage done by the previous Government including home mortgage interest rates at nearly 11 percent a current account deficit of 8 percent and houses prices that had more than doubled in 9 years. Having undone a fair bit of that damage there is much to do to build our future capacity to deliver higher incomes to households.Andrew Little: In light of the fact that two-thirds of wage and salary earners earn less than the average wage that the average wage has increased in real terms over the last 5 years at less than half the rate it increased under the Labour-led Government and that incomes for the bottom half of all earners have either stayed the same or gone backwards what exactly will his Government do to lift incomes higher across the board?Hon BILL ENGLISH: In the first place the facts do not back up the member’s assertion that the incomes at the lower end have fallen further behind. That is simply not the case. The process set up by the previous Government to measure income inequality shows that despite a recession over recent years incomes have been flat not declining. In respect of the Government’s plans we intend to persist with a comprehensive strategy to raise educational achievement so that every young New Zealander gets a decent start in the workforce; continue to fine-tune the skills system which was very wasteful under the previous Government but is now starting to produce some real benefits for young New Zealanders; continue to negotiate free-trade agreements with more of the world’s faster-growing economies so we can sell more to the rest of the world at higher prices; and continue to reform the Government itself so we deliver more benefits and more value to those who are very dependent on the Government for their standard of living.Andrew Little: What specifically will he do to ensure that the nearly 50 percent productivity improvement achieved by New Zealand workers since 1992 will be fully shared with them rather than the 14 percent to date that has gone to wages?Hon BILL ENGLISH: I cannot confirm whether the member’s figures are actually correct. There is a bit of a challenge in that there is a worldwide phenomenon where theproportion of where the benefits of productivity lie has changed particularly since the global financial crisis. We do not know all the answers to that puzzle actually. In the first place in New Zealand we need to raise our productivity levels so that we will be working out how to divide a larger cake. In fact that is the Government’s top priority because whatever the proportions are between wages and capital the larger the pie is the more the workers are going to get.Andrew Little: In light of his Government’s employment legislation currently before the House allowing employers to peremptorily walk away from collective bargaining and to abolish the application of collective agreements to new employees and his claim in 2011 that low wages are an advantage for New Zealand does he now accept that his claim of an increase in incomes of $7500 over the next 4 years is just deceitful and cynical?Hon BILL ENGLISH: I certainly do not agree with that. I mean I made a similar claim about increases in the average wage over the last few years and that was actually the basis on which this Parliament decided that New Zealanders over the age of 65 should get their superannuation. I do not think that Parliament was being deceitful when it used the average wage as a measure of incomes in New Zealand appropriate to apply to every single New Zealander over the age of 65. Where I think we differ is that the member believes that collective bargaining is the only way workers can get wage increases. In fact collective bargaining applies only to quite a small proportion of the workforce and the rest of them are getting significant wage increases in any case. We would like to see them get more.