Cunliffe David: Questions for Oral Answer — Questions to Ministers 
Cunliffe David: Questions for Oral Answer — Questions to Ministers 
[Volume:663;Page:11514] 
6. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Does he stand by his statement to the House yesterday that the Budget projects wages to grow faster than inflation; if so how does he explain the table on page 160 of Budget documents B.2 and B.3? 
Hon STEVEN JOYCE (Associate Minister of Finance) 
 on behalf of the  
Minister of Finance 
: The Minister absolutely stands by that statement. The table in question shows Treasury’s projections of pre-tax wage growth and inflation out to 2014. During this period wages are projected to grow by over 14 percent—somewhat higher than inflation. This table does not take personal tax reductions into account. The growth in after-tax wages will be larger in 2010-11 because of the income tax cuts. That is why the same table shows real private consumption expenditure rising by almost 3 percent in that year. In fact over the 4 years to 2014 Treasury’s projections show household disposable incomes from all sources and after tax increasing by over 25 percent. That is consistent with the projections that show 170000 net new jobs being created. 
Hon David Cunliffe 
: Given that inflation in the next year is 5.9 percent and wage growth only 2.4 percent can he confirm that it will take until 2014 for wage growth to keep up with inflation? 
Hon STEVEN JOYCE 
: I do not accept the premise in the member’s question because he fails to take into account the effect of personal tax reductions on 1 October this year. One cannot just sit there and say that CPI inflation goes up at this rate and wage rises go up at this rate and ignore the effect of personal tax reductions. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. I seek your guidance on whether it is possible for the Minister instead of answering the question to simply reject it although it was in the same terms as the primary question set down on notice which was absolutely— 
Mr SPEAKER 
: I listened very carefully and in my view the Minister answered the question perfectly fairly. He pointed out that there was information that had not been included in the information the member asking the question had put forward and he is perfectly at liberty to do that. 
Hon David Cunliffe 
: How does he square his assurance to the House yesterday that wages will outstrip inflation with the Minister of State Services’ statement made the same day: “it is pleasing to see that the Government’s expectations of restraint are being heard.”? 
Hon STEVEN JOYCE 
: I think the member will find that the Minister of State Services was referring to public sector wage inflation which of course has in recent times been considerably higher than private sector wage inflation. 
Peseta Sam Lotu-Iiga 
: Talofa lava Mr Speaker. How will Budget 2010 improve the incomes of New Zealanders? 
Hon STEVEN JOYCE 
: The sustained lift in real disposable incomes that I mentioned will see the average household about $7000 a year better off. This comes from a range of sources. Some of it comes from the Budget measures which mean that taxpayers at all income levels will receive a tax cut larger than the extra GST they will pay. Some of it comes from the cut in the company tax rate which will allow businesses to invest more and pay greater dividends. But most of it comes from getting the economy growing again creating those 170000 jobs and getting New Zealand back to work. 
Hon David Cunliffe 
: Why should New Zealanders trust the Minister of Finance’s word when he has now admitted that his tax calculator understated inflation that he has misled them on wages and prices and that he has broken his promise not to borrow additional funds for high-income tax cuts? 
Hon Rodney Hide 
: I raise a point of order Mr Speaker. I listened most carefully to the member’s question. I think that everyone in the country appreciates Mr Speaker your requiring Ministers to answer questions properly when they have been put clearly. But there is a quid pro quo which is that questions should also meet a standard. We have just seen the tactic of a member of Parliament standing up to ask a question and stating what the Minister has admitted none of which I can assure you—I am sitting here as a disinterested party—any Minister has admitted at all. I would say Mr Speaker that if you are to hold Ministers to account to provide a high standard of answer you also have to hold members of Parliament to account to provide a high standard of question. 
Mr SPEAKER 
: I do not need assistance on this. The member has raised a perfectly fair point of order—I absolutely accept that. The member is right in that questions often do not conform with the Standing Orders in the way that perhaps could be expected. But rather than inject the Speaker too much into question time the view I have taken is that where a member asks a question that is pretty marginal in respect of the Standing Orders the Minister has license to answer it in the way the Minister sees fit. To my mind that is the discipline on the person asking the question; questioners may get answers they do not like if they ask that kind of question. I could intervene endlessly and say that no that bit of a question is out order but I would rather not do that. I think it is better to leave it to the Ministers. Ministers know; they see every day that questions being asked are pretty marginal in respect of the Standing Orders. I will not pull up Ministers on the way that they answer such questions. 
Hon STEVEN JOYCE 
: I dimly recall three questions in that question. I would like to point out two things to the member which I think will address his questions. Firstly the website obviously factors in the tax changes on 1 October and does not address forecast wage increases falling unemployment or possible consumer price changes. But Treasury expects as per the table the member originally cited in his primary question that wage increases over the next 4 years will outstrip price increases even including the impact of the GST change. The personal tax deductions are on top of that and the member needs to understand that.