Robertson Grant: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeRobertson Grant: Oral Questions — Questions to Ministers[Sitting date: 31 May 2016. Volume:714;Page:11464. Text is incorporated into the Bound Volume.]4.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Is it correct that table 1.1 of the 2016 Budget Economic and Fiscal Update shows inflation rising faster than nominal wages in the next two financial years?Hon BILL ENGLISH (Minister of Finance): Yes but of course that depends on the inflation forecast turning into reality. I have to say to the member that over the last few years that was not the case. The effect of that has been that over the last 5 years the average annual wage has risen 14 percent and inflation has risen by 4.7 percent.Grant Robertson: Why is his Government delivering falling real wages to New Zealanders over the next 2 years?Hon BILL ENGLISH: I just remind the member of the figures for the last 5 years where real-wages increases were delivered by the economy. There was a 14.1 percent increase in the average wage and a 4.7 percent increase in inflation. So wages have risen faster than inflation. Whether they continue to do so will depend on whether the inflation forecasts come right. As the member knows there is a connection between wage increases and inflation and my guess is that if inflation is higher wage increases will be bigger.Grant Robertson: Will he meet his election promise that the average wage will rise to $62000 by 2018?Hon BILL ENGLISH: There is an election next year as I understand it. The promise of that would be more of the same and that is an economy growing faster than most developed countries delivering moderate and consistent wage increases. We do not promise some specific level of income because if we could we would promise it would be much bigger than what they have got now.Grant Robertson: In light of that answer why did he promise at the last election that the average wage would rise to $62000 by 2018?Hon BILL ENGLISH: If the member regards Treasury’s forecasts as promises by a political party then he is not fit to be the Labour finance spokesman.Grant Robertson: Does the Budget now indicate that the average wage will be $59400 by 2018 and where should working New Zealanders go looking for the missing $2600 from his election promise? And please do not blame the Auckland Council for this.Hon BILL ENGLISH: As I have pointed out to the member if the Labour Party’s finance spokesman regards forecasts of the average wage as a guarantee by the Government that that is what will happen he simply does not understand how an economy works. I would say that is a risk for the Labour Party.Grant Robertson: If believing Treasury forecasts makes you incapable of being the Minister of Finance why did he use a Treasury forecast to promise New Zealanders an average wage of $62000 by 2018?Hon BILL ENGLISH: I have dealt with that issue in the last couple of questions. What has actually happened in this economy is that inflation has turned out to be quite a lot lower than anyone expected and until now wage earners have benefited from that because on average wage increases have been considerably higher than inflation. Over the next few years it is still uncertain as to whether inflation will pick up at the rate specified in the forecasts and to whether wage increases will continue at the rate that they have. No one can be quite sure. Treasury has published its forecast. It has been wrong about inflation for the last 2 or 3 years; it might be in the next 2 or 3 years.Rt Hon John Key: What was the Treasury forecast approximately of the budget surplus or deficit in Budget 2015 and what was the actual result that the country enjoyed?Hon BILL ENGLISH: I think the forecast would have been something like minus $700 million and it turned out to be higher. [Interruption]Mr SPEAKER: Order! [Interruption] Order! Question No. 5—[Interruption] Order! I have called for some order now.