9. Wage Rates—Growth and InequalityGRANT ROBERTSON (Labour—Wellington Central) to the Minister of FinanceWage Rates—Growth and Inequality9. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: How much will real wages rise in percentage terms over the 2017 and 2018 years according to the Half-Year Economic and Fiscal Update?Hon STEVEN JOYCE (Acting Minister of Finance): The Half Year Economic and Fiscal Update forecast shows strong labour market growth in the period to 2021 with unemployment expected to drop to 4.3 percent; another 150000 jobs expected to be created; and the average wage expected to increase by $7500 to $66000. In combination with an expected fall in net migration and assuming inflation returns closer to its long-run average Treasury forecasts real wage increases of 0.1 percent in 2017 0.2 percent in 2018 0.7 percent in 2019 1.1 percent in 2020 and 0.9 percent in 2021. These are of course forecasts and of course we will see how they roll out in practice.Grant Robertson: Does he think that an average wage earner getting $11 a week in the face of record increases in housing costs and an average increase in rentals of at least $20 a week represents a fair share of the economy for working people?Hon STEVEN JOYCE: I presume the member is basing that on Treasury's predictions and I should point out to him that Treasury's forecasting in relation to real-wage growth has undershot the actual real-wage growth three times in the last 4 years. In fact since 2008 average Kiwi wages are up around 25 percent which is almost double the increase in the cost of living over the same period. So we do not yet know how that is going to roll out in the years ahead but I think if you were a betting man looking at Treasury's forecasts for the last 4 years you would say it will probably be a little bit ahead of what it is proposing.Grant Robertson: Can he confirm he will be using those same Treasury forecasts when he decides whether or not to do tax cuts?Hon STEVEN JOYCE: In terms of the Government's spending intentions and all its fiscal intentions we will make the decisions at the time based on the actual accounts and also the forecast accounts as we have always done. But I would point out to the member that in terms of real wage growth the biggest variable has actually been the Consumers Price Index inflation figure. Treasury is predicting that that will return to 2 percent by 2018. It has of course been 0.4 percent in each of the last 2 years. Those predictions are yet to be borne out.Grant Robertson: Does he think it is fair that salary increases for chief executives have increased at four times the rate of average workers' in the last year?Hon STEVEN JOYCE: Well I would have to check the member's figures on that and where he has got those from but the actual fact is that wage growth over the last year has been strong relative to inflation and average weekly wages are up 1.9 percent compared with an inflation rate of 0.2 percent. So regardless of the individual elements of that overall Kiwi workers have done far better than inflation and we are very pleased for them for that.Grant Robertson: What if anything will he do differently from his predecessor if he becomes the Minister of Finance to fulfil the commitment of the new Prime Minister that he will ensure the benefits of growth are widely shared?Hon STEVEN JOYCE: Well this Government is already ensuring just that. Real wages—Hon Members: No it's not.Hon STEVEN JOYCE: —have been growing at twice the rate of inflation. I know those members are not accustomed to this because if you go back to 2008 they were actually growing nominally at 5 percent but then inflation was around 5 percent as well. Now with very low inflation rates real wages have been growing and I know that is not something the Labour Party is familiar with. Grant Robertson: Does he really think that growth in real wages of 0.1 percent and 0.2 percent in the next 2 years represents a Government that is ensuring that the benefits of growth are widely shared?Hon STEVEN JOYCE: This gets to the heart of Mr Robertson's trainspotting approach to the finance portfolio because it is not Governments that decide the 0.1 percent; it is decided by the strength of the economy. This Government is absolutely focused on improving the competitiveness of the New Zealand economy and that has flown through into real wage growth. I am prepared to predict that it will continue to flow into real wage growth only provided you continue to elect a National-led Government.