Hide Rodney: Questions for Oral Answer — Questions to Ministers 
Hide Rodney: Questions for Oral Answer — Questions to Ministers 
[Volume:622;Page:17429] 
7.  
RODNEY HIDE (Leader—ACT) 
 to the  
Minister of Finance 
: By how much has the average household income after tax increased in the 4 years since the 1999-2000 financial year and what does this after-tax increase equate to when adjusted for inflation? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 It is 10.1 percent the same as the increase in the consumer price index but Treasury noted that periods of high immigration and changes to household structure will tend to underestimate income growth. A more accurate measure is the average weekly wage which increased by 14.2 percent over the period while of course employment also increased by 11 percent. 
Rodney Hide 
: Can he confirm that Treasury’s figures show that the after-tax income for the average household increased by $4975 since 1999 but that when allowing for inflation of 10.1 percent that figure goes right down to zero so that the average household is no better off after tax in real terms than 4 years ago? 
Hon Dr MICHAEL CULLEN 
: Treasury notes that in periods of high immigration and changes to household structure this measure will tend to underestimate income growth. For example in an elderly family when one person dies the household income falls. In a family with young people who are moving into tertiary education if they stay home household income goes up if they get a student allowance; if they leave home the two new households have an average much lower income than previously. 
John Key 
: Why is it fair that in the last 5 years the average Kiwi worker has seen his or her real after-tax income rise on a cumulative basis by around 4 percent when the real increase in the Crown income over the same period has been seven times greater than that at around 24 percent? 
Hon Dr MICHAEL CULLEN 
: That is very fair because employment has increased by 11 percent unemployment has dropped down to 3.8 percent and health and education expenditure have increased by around 24 percent to 25 percent which represents the social wage. 
Gordon Copeland 
: Would the after-tax income of the average household be further increased if couples with dependent children were permitted to split their income for tax purposes in line with United Future’s policy? 
Hon Dr MICHAEL CULLEN 
: Yes but the impact of that would be very differentiated according to the nature of the household income. People on higher incomes would tend to gain a great deal more—particularly people in a household with one high income—than people in households with two low incomes for example. What is more the Budget Policy Statement will show the operating surplus falling back to roughly the level required to fund contributions to the New Zealand Superannuation Fund without the gross debt to GDP ratio rising over the long term. 
Rodney Hide 
: Can the Minister confirm that his own reworked figures from Treasury show that the average household is no better off in real terms after tax than it was 4 years ago but that the same average household is having to contribute an extra $3200 in real terms to the Government; or is it the case that he does not really care how households are getting along? 
Hon Dr MICHAEL CULLEN 
: I think that the opinion polls confirm that this Government not only cares about these matters but that the public appreciates the nature of that caring. I can confirm that Treasury figures based on a variety of different sources suggest relatively low growth in real after-tax household income but Treasury itself advises that immigration and changes in household structure mean that real growth has probably been higher than that.