2. Question No. 2—FinanceCATHERINE WEDD (National—Tukituki) to the Minister of FinanceQuestion No. 2—Finance2. CATHERINE WEDD (National—Tukituki) to the Minister of Finance: Has she seen any recent reports on income growth in New Zealand? Hon NICOLA WILLIS (Minister of Finance): I've seen a report showing that the median wage in 2010 was $40000 and that now it has risen to $65000. This means that someone earning the median wage back in 2010 was firmly in the 17.5 percent personal income tax bracket and now they are firmly in the 30 percent tax bracket. Through neglect the personal income tax scale has failed to keep up with growth in incomes. Catherine Wedd: What tax bracket are minimum wage earners in? Hon NICOLA WILLIS: That depends on how many hours they work of course but let me give you an example. A person working 40 hours a week on the minimum wage in 2010 was earning $27000. After the increase in the minimum wage a person working 40 hours a week on the minimum wage will now be earning more than $48000 and therefore—like median income earners—will be in the 30 percent tax bracket. Again through neglect the personal income tax scale has failed to keep up with the growth in incomes. Catherine Wedd: When was the last time New Zealanders saw any reduction in the personal income taxes they pay? Hon NICOLA WILLIS: Well sadly you have to go all the way back to 1 October 2010 when the National Government reduced personal income taxes after Budget 2010. That is 14 years ago. To be fair personal income tax reductions were legislated for in 2017. However the incoming Labour Government cancelled them and then introduced a new top tax rate of 39 percent. So apart from the new top rate personal income tax rates and thresholds have remained exactly as they are since October 2010. Catherine Wedd: Has she seen any reports relating to personal income tax reductions? Hon NICOLA WILLIS: Yes I have seen a report on reductions in personal income tax. This came from Australia where the Labor Government has just announced the third in a series of personal income tax reductions. I thought this was highly relevant for New Zealand as it shows that such reductions are commonplace and can be adopted by Governments of all political stripes. Camilla Belich: How does the Minister justify the decision to raise the minimum wage today by less than the rate of inflation—effectively cutting the wages of thousands of low-paid workers in New Zealand? Hon NICOLA WILLIS: Well I'd point out to the member that there are a number of projections for what inflation will be in the year ahead—and that in the last quarter at 0.5 percent and an annualised rate of 2 percent. Hon Dr Duncan Webb: Point of order Mr Speaker. That was a general opinion on inflation but it didn't touch at all on any of the justification for the minimum wage. SPEAKER: But the point is that the question relied on an opinion about the inflation rate. Do you have another supplementary? Question—Hon David Seymour: Supplementary? SPEAKER: Oh sorry—the Hon David Seymour. Hon David Seymour: Can the Minister of Finance confirm that wage growth comes from investments and entrepreneurship and productivity growth allowing employers to pay their workers more and that legislating up the wage from Wellington is not the only or the best way for Kiwis to get ahead—in fact for the 97.1 percent of workers who are not on the minimum wage that's the only way for them to get ahead? Hon NICOLA WILLIS: Yes I am delighted to be in a coalition Government that is committed to growing this economy so that we can have higher incomes and higher living standards for all New Zealanders. Hon Grant Robertson: What measure of inflation was used in the advice given to the Government when setting the minimum wage? Hon NICOLA WILLIS: We received a number of pieces of advice in relation to the minimum wage and that advice included different measures for inflation depending on the time periods that were being looked at. Of course the Consumers Price Index is viewed as the standard measure of inflation but the period which you look at to determine the inflation rate is something that there can be a number of perspectives on.