Goff Phil: Questions for Oral Answer — Questions to Ministers 
Goff Phil: Questions for Oral Answer — Questions to Ministers 
[Volume:673;Page:19366] 
2. 
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he stand by his statement that “the vast majority of New Zealanders are now better off even after the GST increase”; if so which New Zealanders are worse off? 
Hon BILL ENGLISH (Deputy Prime Minister) 
 on behalf of the  
Prime Minister 
: Yes the Prime Minister stands by his full quote made in October last year which is “Most of you will have noticed a boost in your pay packets since the 1 October tax cuts. The vast majority of New Zealanders are now better off even after the GST increase.” That was of course referring to the income tax / GST switch that happened on 1 October 2010. To answer the second part of the member’s question there were some people not fully compensated by the tax changes. Those were people who were sheltering income in trusts or otherwise earning income that was not fully taxed at the personal tax rates. 
Hon Phil Goff 
: Is the Prime Minister saying that taking into account inflation and the level of tax cuts given to people on the medium or lower income those people are now better off than they were before—taking account of both GST and inflation? 
Hon BILL ENGLISH 
: Yes. The after-tax average wage has increased 7.1 percent over the previous year—considerably more than the increase in prices over that time. In fact the real increase in the after-tax average wage over the last year has been 2.5 percent. 
Hon Phil Goff 
: When he claims that the average wage has increased by 2.5 percent over the last year what account does he take of the fact that for his income he would have got $1000 a week extra in tax cuts and the top 10 percent of wage earners got 40 percent of the tax cuts thus distorting the real income earned by people across the board and that lower-paid people people on a median income or less are actually worse off? 
Hon BILL ENGLISH 
: The measure I am using is the one that has been used by this Parliament in legislation for 20 years to calculate the basis of New Zealand superannuation. If Labour members think that is wrong then they should campaign among New Zealand’s pensioners to change the way that New Zealand superannuation is adjusted. The fact is that there has been a real increase of 2.5 percent in the average ordinary-time after-tax weekly wage in the last 12 months. 
Hon Phil Goff 
: Is he telling New Zealanders on the medium wage or less than the medium wage that they are wrong in believing that the cost of their food their power their rents and their petrol have soared above any of the wage increases they have got and that he actually knows better than them? 
Hon BILL ENGLISH 
: I was just telling Parliament the facts about the averages. Of course in individual circumstances many New Zealanders over the last 2 or 3 years have not had significant wage increases or have had no significant wage increases at all. They are victims of the mismanagement of this economy by the previous Labour Government when people thought they had sustainable jobs but the jobs were actually based on borrowed money and excessive Government spending. We are working very hard to replace those unsustainable jobs and times of no wage increases with the benefits of a strong growing economy and we are making some progress. 
Rahui Katene 
: Is he aware that over the last month the price of fruit and vegetables has risen another 1.6 percent and does he agree that to add $6 million to the $300 million - plus that the Government is already borrowing per week in order to take GST off healthy food would leave every New Zealander better off; if not why? 
Hon BILL ENGLISH 
: Although it is true that food prices do rise in some months they also fall in others. For instance over the last 6 or 7 months the price of fruit and vegetables has actually fallen in total. That is good for household budgets. I am not sure New Zealanders are any healthier as a result. The second thing is that every dollar we add to our already fast-rising debt will need to be repaid with interest. 
Hon Phil Goff 
: Did the cut in taxes for a person on the medium wage which was about $14 a week adequately cover the cost of filling up their car with petrol cover the average rental increase of $23 a week in Auckland and cover the increase in food prices which went up by 7.4 percent averaged over the year just to name a few of the costs those families are facing? 
Hon BILL ENGLISH 
: No family will be on $14 an hour and the member should look at the family support system— 
Hon Phil Goff 
: $14 a week. 
Hon BILL ENGLISH 
: It is $14 a week. The fact is that New Zealand families who are on low incomes benefit from Working for Families from the accommodation supplement where that is required and from subsidies on early childhood education. The Government has increased all of those subsidies for those families despite the fact that we have had the biggest recession in a generation. 
Hon Phil Goff 
: Was Statistics New Zealand right in stating that median incomes actually fell in the year to June last year although the December quarter price rise was the highest in 20 years? 
Hon BILL ENGLISH 
: The member is always going to be able to find a measure of income and a measure of expenditure some time in the last 3 years that do not match up. The fact is that firstly on average real after-tax wages have increased and secondly the median income measure used by Statistics New Zealand is not the one we use to set New Zealand superannuation. If Labour members want to change that they should say so. Thirdly that measure does not take account of all the Government transfers which have all increased because we have protected the most vulnerable through the worst recession in a generation. 
Hon Phil Goff 
: What does the Prime Minister say to members of the Otangarei branch of the Maori Women’s Welfare League who told Kelvin Davis recently that they are having an unprecedented demand for assistance particularly food parcels because unemployment has doubled among Maori to 19.5 percent and because costs have soared above the incomes that Maori people are earning in the north? 
Hon BILL ENGLISH 
: We are fully aware of the impact of significant unemployment both among young people and among Maori. That is why it is so important we get this economy growing again. New Zealand is not going to create new jobs out of new Government schemes. It is going to create new jobs out of a fast-growing economy. The Prime Minister would be interested to know what Kelvin Davis said to that branch of the Maori Women’s Welfare League. No doubt it was a large number of expensive uncosted promises that he does not want broadcast to the rest of the country. 
Hon Trevor Mallard 
: Does he understand today that real average wages go up when high-income earners get massive tax cuts including over $1000 a week in his case and low-income workers lose their jobs? 
Hon BILL ENGLISH 
: The Prime Minister understands that Labour has always agreed as we have to use the ordinary-time average weekly wage as the basis for calculating New Zealand superannuation. If Labour wants to change that it is welcome to go and campaign. Of course there are a lot of statistical effects on where the average wage comes out but over time Parliament has regarded it as the fairest measure of the overall wage picture for New Zealanders. That is why it is in the law where it has been for the last 25 years as the way of calculating New Zealand superannuation. 
Hon Trevor Mallard 
: Does the Prime Minister understand that real average wages go up when high-income earners like him get tax cuts of over $1000 a week and low-income workers lose their jobs? 
Hon BILL ENGLISH 
: The member is wrong.