Little Andrew: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeLittle Andrew: Oral Questions — Questions to Ministers[Sitting date: 10 December 2014. Volume:702;Page:1321. Text is incorporated into the Bound Volume.]2.ANDREW LITTLE (Leader of the Opposition)to the Prime Minister: Does he agree with yesterday’s OECD report that “focusing exclusively on growth and assuming that its benefits will automatically trickle down to the different segments of the population may undermine growth in the long run”; if not why not?Rt Hon JOHN KEY (Prime Minister):With regard to New Zealand under this Government that is a hypothetical question. That is because the Government is providing billions and billions of dollars of targeted income and welfare support to the most vulnerable New Zealanders every year. So it is simply incorrect to characterise our economic approach as trickle-down. I would also point out to the member that the data covered the period from 1985 to 2005. I became Prime Minister in 2008. I know he wants to blame me for everything and he will for the next 3 years but it is a little bit difficult to blame me for something when I was not even Prime Minister.Andrew Little: In view of the figures in the report relying on data to 2011 and in light of his previous answer what specifically does he think was wrong with the OECD’s analysis when it found that economic growth is undermined by inequality?Rt Hon JOHN KEY: There are many many things in the report but what the report last night showed is that there was a growing income inequality in a period that started with a Labour Government and ended with a Labour Government. That is called a failure of Labour’s policies. Since we have had a National-led Government income inequality is narrowing and that is because this Government is providing enormous support to those most in need. One great example of that is that under this Government the support that is given to households earning under $60000 a year—that is just under half of all households are expected to pay no net income tax at all. The members opposite do not like it but I will tell you what we do not like—the failure between that 1985 to 2005 period of a Labour-led Government.Andrew Little: Does he accept Statistics New Zealand’s finding that incomes for the top fifth in the year to June 2014—after the date for the OECD report—grew by 14.7 percent while incomes for the bottom fifth grew by just 2.9 percent thereby increasing inequality in New Zealand?Rt Hon JOHN KEY: The last bit is the assumption of the member and it is simply incorrect.Hon Members: Ha ha!Rt Hon JOHN KEY: No I am sorry but it is simply incorrect. The first point may be correct but if my memory serves me correctly and the member is talking about the data series I have seen in the past that is because it includes returns on investments and other things and as the member will—Hon Member: When was it you got your memory back again?Rt Hon JOHN KEY: That is right—that is right. The member will know that between 2008 and some period I think in 2011 or 2012 there was a decrease each year because those returns were negative.Andrew Little: Does he accept the finding of the New Zealand Institute of Economic Research that loan-to-value ratio restrictions have led to home purchases by speculators leaping as high as 45 percent while the number of first-home buyers has fallen all of which is making inequality in New Zealand worse?Rt Hon JOHN KEY: No I do not accept that as being correct. I will remind the member that it was his party that actually supported loan-to-value ratios in the early days but that is another issue. Here is the point: loan-to-value ratios were part of the tool box deployed by the Reserve Bank governor. Without that interest rates would have gone up by at least half a basis point for all New Zealanders and that would have had a very significant impact on lower-income New Zealanders. Actually what we know is that economic growth is being delivered at high levels by this Government and that follows the economic disaster that we inherited from the previous Labour Government.Andrew Little: Does taking away the rights of low-paid workers to better pay secure work and even tea breaks make them economically stronger or weaker compared with their employers?Rt Hon JOHN KEY: We are not doing that. What we are doing is providing flexibility in the labour markets. Interestingly enough last week Mr Little was trying to tell New Zealanders that somehow small businesses are now working New Zealanders and that they would have his support. They would have his support so much that they would not be allowed a 90-day probationary period they would not be allowed flexibility in their labour markets and they would have to pay a much higher starting-out wage or a much higher minimum wage. I know why the member is supporting his policies; it is because his caucus did not vote for him but the unions did.Mr SPEAKER: Order! That answer will not help the order of the House.Andrew Little: Given the OECD’s finding that increased inequality has made the economy 15.5 percent worse off since 1990 how does he plan to reduce inequality in order to grow the economy faster?Rt Hon JOHN KEY: Income inequality is narrowing under a National-led Government as supported by the OECD. The members cannot have it both ways. They cannot say one OECD report is right and another one is wrong. The only point I would make is simply that the member needs to go away and get his facts right. Under the report where income inequality was widening was under a Labour-led Government. I know it is a disgrace but that is why they were hammered at the polls—it is because they were a disgrace. [Interruption]Andrew Little: Save your applause for a decent performance. Why is he so unambitious that he does not want to boost future economic growth for all New Zealanders? Is it because he is still trapped in a 1980s time warp?Rt Hon JOHN KEY: I am very ambitious for New Zealand and for the growth rate of New Zealand. We are delivering on that growth rate for New Zealand which is why it was nearly 4 percent this year. I am so ambitious that if I put my leadership up for a vote I would expect more than four people to vote for me. [Interruption]Mr SPEAKER: Order! [Interruption] Order! I am on my feet.