Goff Phil: Questions for Oral Answer — Questions to Ministers 
Goff Phil: Questions for Oral Answer — Questions to Ministers 
[Volume:674;Page:20164] 
1. 
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he stand by his statement that “I think we all have to accept that there is a degree of inequality in New Zealand”; if so has he read any recent reports on the growing gap between rich and poor in New Zealand? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes I do stand by that statement and I have excellent news for the member: a very detailed scientific report on income equality actually went up on the Ministry of Social Development’s website at 2 o’clock today. It is titled  
Household Incomes in New Zealand 
. The report shows that income inequality in New Zealand under standard measures like the Gini coefficient or the 80:20 ratio has actually fallen in recent years. I go on to say that in fact the report shows that the distribution of income in New Zealand is more even now than it was at any time under the previous Labour Government. So I point out to the member that he is quite wrong to say the gap between the rich and the poor has been growing; in fact it has been reducing. I urge the member to read the report. 
Hon Phil Goff 
: Does today’s release from Statistics New Zealand which shows that wages and salaries have gone up by 1.9 percent over the last year—that is by well under half the rate of inflation—and the release a couple of days ago from the  
National Business Review 
 which shows that 150 people the richest New Zealanders increased their wealth by 20 percent actually suggest to him that the gap between wealthy and other New Zealanders is narrowing? 
Rt Hon JOHN KEY 
: Firstly let me take things in reverse order. In terms of the rich list let us understand what that is. It is a list from a bunch of journalists who are making up stuff on the best estimates they have. If we want to go to the facts let us go to the household income survey that was just put on the website at 2 o’clock. Secondly the member uses the Labour Cost Index which as he knows is not the best measure actually of the increase in wages in New Zealand. 
Hon Phil Goff 
: Oh! 
Rt Hon JOHN KEY 
: Well the member goes “Oh!” but for 9 years the Labour Government set New Zealand superannuation off the quarterly employment survey. In fact the Labour members believed in it so much that in 2001 they changed the law to ensure that the quarterly employment survey was used as the basis for superannuation in New Zealand. So if they want to go out and tell the pensioners of New Zealand they got it wrong they are welcome to do that. But the quarterly employment survey which also came out today shows this: average weekly earnings are up by 1 percent for the quarter by 4.2 percent for the year and by 7.4 percent in after-tax terms and in fact the average wage in New Zealand has now risen to $51123. 
Hon Phil Goff 
: If there was a skerrick of truth to anything that was in that report how does the Prime Minister explain that groups like the Salvation Army and the Auckland City Mission are reporting that more and more people are coming for assistance because the soaring cost of living particularly for food and other necessities is forcing them and their kids below the poverty line? 
Rt Hon JOHN KEY 
: Firstly we need to acknowledge there has been a global financial crisis and that it has dealt a very severe toll to a lot of New Zealanders. We accept that. The second thing we would say is that the Government has spent the last 3 years ensuring that it has done whatever it can to help the most vulnerable New Zealanders through. That is why we did not cut pensions. That is why we did not cut Working for Families payments. That is why we have preserved the income of those New Zealanders as best we can. We do know that we need to move more people off benefits and into work and the Minister and the Government are working very effectively on that matter. Lastly I look at the household income survey that came out today and I see that it shows that inequality between the rich and the poor has fallen. It is at the best level that it has ever been including the level under any other previous Labour Government and what a wonderful report that is. 
Hon Phil Goff 
: Does the Prime Minister not understand that notwithstanding a global financial crisis the 150 richest people in New Zealand in the last year increased their asset value by $7 billion—$7 billion for 150 people—and every one of those 150 got more than $1000 a week from him in tax cuts while somebody on the median wage got just $14 a week? 
Rt Hon JOHN KEY 
: I deal in facts and the facts are in the  
Household Incomes in New Zealand 
 survey which was put on the website at 2 o’clock today. As I said the rich list is a report made up by a bunch of journalists. But what I can note is this fascinating fact: I am amazed that the Leader of the Opposition has had time to read the NBR Rich List because apparently he did not have time to read the briefing report he got on so-called Mossad agents in New Zealand. 
Hon Phil Goff 
: Does the Prime Minister agree with the Children’s Commissioner Dr Russell Wills who said paediatricians—and he is one himself—are seeing kids who become ill develop behavioural problems fail at school and do not have their basic needs met because their parents are poor; and does he accept the  
New Zealand Herald  
assessment this week that those numbers are growing? 
Rt Hon JOHN KEY 
: I cannot comment on the last bit but I can comment on the first piece. I agree with Dr Wills—in fact I met with him this morning. I can also say that he is a very strong supporter of the green paper process that the Government is going through. I think we all need to recognise there is more we can do for the kids of New Zealand. 
Hon Phil Goff 
: Did the Prime Minister fail accidentally to tell the House that the report that he quoted in answer to my first question did not include the tax cuts of October 2010 which gave a huge amount of money $2.5 billion a year to the top 10 percent and practically nothing to the bottom 20 percent who got 3 percent of those cuts? 
Rt Hon JOHN KEY 
: No. What is quite clear is that the report covers from 1982 to 2010. It is the most accurate information we have. As we have said on numerous occasions even if it does not suit the Leader of the Opposition’s case in fact two-thirds of all the tax cuts delivered by the National Government were delivered to the bottom two codes in New Zealand. 
Hon Phil Goff 
: Did he include those tax cuts in his answer? 
Rt Hon JOHN KEY 
: The tax cuts are not the issue. The issue is more— 
Hon Members 
: Oh! 
Rt Hon JOHN KEY 
: Well they are not the issue. The issue is what the report actually shows. 
Hon Trevor Mallard 
: Own goal. Own goal. What an idiot. 
Rt Hon JOHN KEY 
: The own goal was the thing Trevor Mallard read out about 3 weeks ago I say to him because it is not going very well. If we look at the report we see it quite clearly shows that income distribution in New Zealand is narrowing not widening as it did under a Labour Government. 
Hon John Boscawen 
: Given that the Government has made such good progress in helping the most vulnerable in society what progress has been made in reducing the income inequality between those living in New Zealand and those living in Australia? 
Rt Hon JOHN KEY 
: If we have a look at after-tax wages we see that the gap between New Zealand and Australia is narrowing. In fact it is narrowing slowly and we accept that but we are making progress. There is a lot more work to be done. That is why this country needs another 3 years of a National-led Government. 
Mr SPEAKER 
: Just before I call the honourable Leader of the Opposition the Hon John Boscawen asked a perfectly fair question and had a right to hear the answer. I just ask members to be a little more reasonable about the interjection level. 
Hon Phil Goff 
: If as the Prime Minister just claimed the gap is narrowing how does he explain the fact that Australia which had a higher rate of unemployment than New Zealand at the time that the last Labour Government left office now has a one-third lower rate of unemployment than New Zealand and the fact that wages are one-third higher in Australia than in New Zealand which perhaps explains why in the last 2 months the highest number of New Zealanders ever in the history of this country left permanently for Australia? 
Rt Hon JOHN KEY 
: Minerals. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. I am sorry but the Prime Minister garbled something very quickly. I could not hear it and I was listening. 
Mr SPEAKER 
: Well—[ 
Interruption 
] I am on my feet I say to the Hon Pete Hodgson. I do not think the House heard the answer. I ask the Prime Minister to repeat his answer. 
Rt Hon JOHN KEY 
: Minerals. 
Hon Phil Goff 
: Why are wage and salary earners taxed on every dollar that they earn while high income earners can earn enormous sums of money through capital gains and pay no tax at all on them; and is that one of the reasons why we are becoming a less equal society? 
Rt Hon JOHN KEY 
: Firstly we are not becoming a less equal society. It may not suit the Leader of the Opposition but he should wander off and read the Ministry of Social Development report. That is the first flaw. Secondly it is not true that New Zealanders are not taxed on capital gains that they might incur. In fact the member should go and ask many many thousands of New Zealanders who pay a capital gains tax all the time in New Zealand. The truth is that this Government has put more money into making sure that those who might avoid that capital gains tax are found out and pay it. One only needs to look at the changes that took place in Budget 2010 to see the enormous amount of money that was taken out of the property sector as a result of those changes. 
Hon Phil Goff 
: Is Sam Morgan wrong then in saying that when he sold TradeMe they made $700 million that they did not pay a cent in tax on and was he wrong in saying it is simply not right that he paid no tax on that when every other New Zealander who is a wage and salary earner pays tax on every dollar they earn? 
Rt Hon JOHN KEY 
: No but he pays tax on every dollar he earns off that money now. 
Hon John Boscawen 
: If the Prime Minister believes that minerals are the main cause of the disparity in income and equality between New Zealand and Australia what steps is his Government taking to develop New Zealand’s not inconsiderable mineral wealth? 
Rt Hon JOHN KEY 
: This Government has actually been taking quite considerable steps. If one looks at oil and gas exploration for instance one sees that we have been not only looking at new areas where we can prospect but also looking at new legislation for the economic zone looking at where it might be possible to increase New Zealand’s coal activities looking at where it might be possible to look at lignite activities in New Zealand and working on greater prospecting for ironsand in New Zealand. What is true is that the Government rejected the option of going into schedule 4 land. The reason we did that was that in the end the opportunities presented relative to the environmental concerns that New Zealanders had did not make that proposition worthwhile.