15 Apr 2014

English says Budget will lift wages

7:05 pm on 15 April 2014

Finance Minister Bill English is promoting the Budget as one which will create more jobs and lift wages

Finance Minister Bill English.

Finance Minister Bill English. Photo: RNZ / Diego Opatowski

But Green Party co-leader Russel Norman said under National, wages had not kept pace with inflation, and low and middle income families were worse off.

In a pre-Budget speech to the Wellington Employers' Chamber of Commerce on Tuesday, Mr English has held out the promise of much better times in the years ahead.

He says in the past two years, the average fulltime wage has already increased by $3000 and in the Budget on 15 May the Treasury is forecasting the average wage will go up even more.

"The average wage will rise further to around $62,200 a year in four years' time - that is an increase of $7500 per annum by 2018. So if you take the six-year period from 2012 to 2018, the average wage would've gone up by $10,500.

But Greens co-leader Russel Norman doesn't believe that. "Bill English is now just making stuff up. The Department of Statistics are very clear on this - if you look at the labour cost index, it has risen less than inflation under this Government."

The Treasury expected the economy to grow by 2 to 4 percent a year through until 2018, and forecasts also showed about 170,000 more people would be working by then. Mr English said the Government would stick to its limit of $1 billion of new spending in the Budget.

Reining in house prices

Bill English said the Budget would also include further measures to rein in rising house prices.


Bill English said the Government will do what it can to influence the market. Photo: RNZ

"The Government intends to do whatever it can to influence the housing market over the next three or four years because a fast rising housing market presents a significant risk to sustaining economic growth in New Zealand."

Mr English again blamed local body rules for driving up the cost of housing.

In Parliament on Tuesday, the Labour Party's deputy leader David Parker asked Prime Minister John Key about the housing market.

"Why does he have confidence in the Minister of Housing, who now says New Zealanders will have to wait 20 years for affordable housing under his Government?"

Mr Key replied "Mr Speaker, I don't think the minister said that. What the minister did say is it's a very long-run process. And Mr Speaker, I'd note that if one looks at home ownership rates, they've been declining since 1991. What is, of course, of great concern to many New Zealanders is the way that house prices doubled under the previous Labour Government."

David Parker then asked this: "Who is correct - Bill English, who said we won't collect data on overseas buyers of New Zealand houses; last week's Prime Minister, who said we won't collect data on overseas buyers; or yesterday's Prime Minister, who said that concerns around overseas buyers are credible and he might now gather the data."

John Key replied: "Mr Speaker, the point we've been making is the right point, which is we don't think actually foreign purchases of houses are a significant impact on housing prices in Auckland or around New Zealand."

Mr Key said it might be useful to have more information about how much property is being bought by foreigners - but it wouldn't make much difference to house prices.