Gilmore Aaron: Questions for Oral Answer — Questions to Ministers Questions to Members 
Gilmore Aaron: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:666;Page:13477] 
3. 
AARON GILMORE (National) 
 to the  
Minister of Finance 
: Have New Zealand’s after-tax wages been rising faster than prices? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes. Since September 2008 real after-tax wages in New Zealand have risen 8.7 percent in less than 2 years since that time. This calculation is based on Statistics New Zealand’s quarterly employment survey data on average weekly ordinary-time earnings. It is the same series that is used for calculating the annual adjustments to national superannuation. Treasury forecasts show that real after-tax wages are expected to grow by around 1 percent per year each year over the next 4 years. 
Aaron Gilmore 
: How does real after-tax wage growth in New Zealand compare with that in Australia? 
Hon BILL ENGLISH 
: As the House will be aware real after-tax wages in New Zealand grew by only 3 percent in the 9 years from 1999 to September 2008. The comparable series for Australia shows that in that same period where real after-tax wages grew 3 percent in New Zealand from 1999 to 2008 in Australia they grew by 19 percent. It was 3 percent in New Zealand and 19 percent in Australia and that record under the previous Labour Government is one of the reasons for the wage gap between Australia and New Zealand. 
Hon David Cunliffe 
: Does his figure that real after-tax wages have grown by 8.7 percent over the past 2 years include Labour’s 2008 October tax cut; if so why is he taking credit for a tax cut he voted against? 
Hon BILL ENGLISH 
: It does include Labour’s tax cut and we have always made that clear. The reason is that Labour did that tax cut only because we made them. 
Aaron Gilmore 
: What has happened to real after-tax wages in New Zealand and Australia since 2008? 
Hon BILL ENGLISH 
: As I said since September 2008 real after-tax wages have grown by 8.7 percent in New Zealand. In the same period real after-tax wages in Australia have grown by 4.8 percent. That is because Australia has had significantly higher inflation than New Zealand and it has had smaller tax cuts than in New Zealand. So the gap has actually narrowed slightly. However we are not getting excited about it. The damage done by the previous Government is so significant it will take a good 10 years or so to really make significant progress in closing up that gap. 
Hon David Cunliffe 
: Can he confirm that based on figures he quoted last week over his period in office real after-tax wages in the private sector have increased by only 1.3 percent and Treasury says that the increase in GST will push inflation to close to 6 percent; if so how many people does he expect will get a 6 percent wage increase next year? 
Hon BILL ENGLISH 
: I cannot confirm whether it is 1.3 percent but if it is then in 18 months we have achieved half of the increase in the real after-tax wage that Labour achieved in 9 years. So 1.3 percent is pretty good. 
Aaron Gilmore 
: What economic policies would put future increases in New Zealand wages at risk? 
Hon BILL ENGLISH 
: The policies that would put further increases in New Zealand’s real wages at risk would be the same ones that did so much damage to them in the last decade—that is soaring Government spending a withering export sector a bloated Public Service excessive borrowing for speculation in housing and an economic policy that undermined the productive capacity of the nation. This Government has turned round all of those things.