Woodhouse Michael: Address in Reply — Presentation to Governor-General 
Text is incorporated into the Bound Volume 
Woodhouse Michael: Address in Reply — Presentation to Governor-General 
[Sitting date: 28 February 2012. Volume:677;Page:592. Text is incorporated into the Bound Volume.] 
MICHAEL WOODHOUSE (National) 
: 
 In my strong support for the motion I want to explore in this call the issue of income inequality and its links to the welfare reforms campaigned on by the National Party and announced by the Government just yesterday. Some might argue that the issue of income inequality is one where Tories might fear to tread; indeed we have heard both Darien Fenton and Iain Lees-Galloway in their recent calls talking about it. But I think it is really important to examine the thesis behind it and to check whether it is really the root cause of so many of the social ills that do beset our society. I want to say right from the outset that living on low incomes must be extremely difficult and the goal for any Government is to create a framework where all New Zealanders can get ahead under their own steam. But the whole notion of relative inequality creates a situation where automatically a certain group of Kiwis is going to be labelled “in poverty”. So it is important that if we use these labels of poverty income inequality and so on they are analysed and either confirmed or refuted.  
The Spirit Level 
 the book written by two British epidemiologists seems to be the basis for the belief that societies are worse off when incomes are unequal even if they are higher-earning countries. I just want to test that because what it suggests is that it is better to live in Afghanistan or the Czech Republic because although their incomes are lower their incomes are less unequal and I think that is a nonsense. But just for the moment let us assume there is merit in that argument. It is worth looking at some of the countries that have managed to reduce income inequality over the last 20 years. For that I am grateful to the Child Poverty Action Group for a recent report that it had.  
I do not tend to put much weight on an organisation that claims that the Government puts an overemphasis on paid work as the way out of poverty as if there could be some other way because that is rubbish. Paid work is the only way out of poverty and anyone who says different is deluded. But it does provide a helpful analysis of the countries that have reduced income inequality over the last 20 years or so. According to the Child Poverty Action Group nine countries have reduced income inequality but only four or five by any material measure—and guess who is included amongst that five: Portugal Ireland Greece and Spain. The so-called PIGS of the global financial crisis have all reduced income inequality and I bet their citizens feel just cock-a-hoop about that. The simple fact is that income transfers and a Government borrowing ahead of its means to support the closing of an income gap are in the medium to long term completely futile. And those countries have found that out to their economic peril.  
Very recently the Government announced an increase in the minimum wage and in a press release entitled “Minimal pay increase a tragedy” Dunedin Methodist Mission’s chief executive Laura Black breathlessly stated: “Thirty years ago we were sending international aid to Singapore. Over those thirty years they have transformed their standard of living by aggressive increases in the minimum wage and high investment in research and development. New Zealand is doing neither of those things.” Only here is the problem with that: Singapore does not have a minimum wage. It is actually one of the most unequal countries in the world yet it is nearly not mentioned in any of the references to income inequality in  
The Spirit Level 
. Nor is Hong Kong. And if I had a dollar for every time the Nordic countries were mentioned in comparison with New Zealand I would be very well off because they are held up as the Holy Grail by  
The Spirit Level 
. But Slovenia South Korea and the Czech Republic all enjoy Nordic levels of income equality but not Nordic levels of well-being. Those Nordic countries have very high rates of divorce crime alcoholism mental illness and suicide but none of those variables are mentioned or even measured in  
The Spirit Level 
.  
So for a publication that is meant to be based on science this is pretty damning. If one has a hypothesis and empirically tests it it is bad science—it is junk science—to ignore the variables that do not suit the researcher’s preferred outcome. So much evidence against the income inequality thesis exists.  
But here is the issue: we do have a problem one where pregnancy drug addiction crime and many other social ills are caused by people who are on low incomes and we have significant social problems to address. Here are the simple facts: 220000 people are living on a benefit. Despite the wailing by the Child Poverty Action Group the last thing they actually need is to become more benefit dependent. But that is exactly what the Child Poverty Action Group Labour and the Greens would do for them by making them more dependent on State assistance. Paid work and a reduction in the reliance on the State is the only pathway out of poverty and the Government’s policies are designed to do just that.  
Some have suggested those reforms are a form of beneficiary bashing. Well here is what I think bashes beneficiaries: 16-year-olds who drop out of school and become invisible until 90 percent of them turn back up on the dole at the age of 18; ensuring vulnerable mothers are left to their own devices and at the mercy of drop kick boyfriends who are not the fathers of their dependent children; and telling those people on a sickness benefit that that is as good as it gets so that instead of focusing on the things that they can do people are worried more about what they cannot do. That is beneficiary bashing. It has got to be addressed and under the reforms that this Government proposes it will be.  
We will not just hand over benefits and leave people to their own devices. Instead we are going to take an active work-based approach because we have greater aspirations for those people. 
Andrew Little 
: You like poverty. 
MICHAEL WOODHOUSE 
: My friend Mr Little says there is no plan which is the classic Labour mantra: there is no plan and where are the jobs? Well there is a 120-point economic development plan which that party which was so worried about its own leadership and its own insular battles during the election campaign did not know even know existed. Let us talk about jobs. There are thousands of jobs being filled by immigrants and seasonal workers. 
Hon Tim Groser 
: I raise a point of order Mr Speaker. I know that the member has only recently been in the House but this is getting very close to a barrage of interjections which does not meet very familiar tests set out in previous Speakers’ rulings. 
Mr DEPUTY SPEAKER 
: I will uphold the point of order. The member was being excessive. He is not I think sitting in his own seat so it could be said that he has assumed a position to have advantage in interjection. That is also a Speakers’ ruling. So if he could just contain himself a little bit. 
MICHAEL WOODHOUSE 
: In the interest of time I just want to wind up by saying this which is something we need to be very clear about: the Government’s announcements should not be taken as punishment for people not finding a job. But should people be penalised for not bothering to look? I say yes. I strongly support the Government’s welfare reforms in that area.