Russell DeborahHon Dr DEBORAH RUSSELL (Labour): This is a sneaky bill. It's a sneaky bill that on the face of it has some tax threshold changes which will make a bit of a difference to some New Zealanders but in the detail of the bill as we uncovered through the committee of the whole House stage there are some fish hooks some wrinkles some traps some issues that the Minister couldn't give us the modelling for or the decisions for. I want to go through that so that people are not misled by this bill.So let's start with the changes to the tax thresholds. The Minister of Finance was at pains to tell us in recent weeks that the changes made to tax thresholds would be meaningful and would make a difference. I tell you what's meaningful: the massive job cuts that are going on across the public sector with 5000 people out of work. Here's what's meaningful: the families who are losing access to prescriptions because that prescription charge is going back on. Here's another thing that's meaningful: the families who are paying increased public transport costs so that's going to eat up any changes to the tax thresholds. Here's another thing that's meaningful: these staggering increases in rates because that Government has refused to engage with meaningful water reform.People are supposed to be grateful because in the face of these stupendous increases to costs there is a small change in the tax thresholds. I suspect that when the reality of these changes appears and the amount that comes through perhaps in August—we couldn't be sure because the Minister wouldn't guarantee that employers could do it—I think people are going to look at what happens in their pay packets and they're going to say Is that it? Is that it?"It's going to make no real difference to them. Here's why: there are the changes in the tax thresholds but then the majority of the weight that is lifted in the alleged amounts that families will get is done by the childcare rebate. That's the biggest change that's coming through. Again on the face of it it looks like a good measure on the face of it. But when we dug into it during the committee stage we found that there were all sorts of problems.We found that instead of the rebate from childcare just blowing through the system on a fairly automatic basis families were going to have to collect receipts from childcare providers send them into IRD and then get a refund into their bank account in an incredibly clunky process. I recall being the mother of young children juggling getting the kids to and from childcare while I was managing my job managing all the juggle with my husband. It took a lot of work. Adding an administrative burden to that seems simple to those who sit in a job where all sorts of things are done for them but for busy working families that is an administrative burden. We know it's even more of an administrative burden for our Māori families for our Pasifika families for our rural families. They have given with one hand but made it so difficult for the families who are going to benefit from it.Then we found out something really interesting about that childcare rebate: that it abates. When the family income is $140000 the rebate starts to abate and then it fully abates by the time the family income is $180000. That is an incredibly steep abatement range. What it does is it increases people's effective marginal tax rates. So I asked the Minister and I said "What is the effective marginal tax rate for someone who perhaps earns $100000 paying a tax rate of 33 percent at that rate maybe has a student loan and then is going to get this childcare rebate abating as well by the time they're at $140000?" He couldn't tell me. He had not done the modelling on the effective marginal tax rates. It was a lazy move and it should have been done. All it would have taken is sitting an official down with a spreadsheet for an afternoon. They could have done it but they had not done it so we don't even know what the impact is going to be on individual earners.Let's carry on to the tax credits. So there are changes to the minimum family tax credit and the in-work tax credit. Again on the surface it looks pretty good—Hon Member: $50.Hon Dr DEBORAH RUSSELL: —and of course it will help some families—SPEAKER: Look that's enough.Hon Dr DEBORAH RUSSELL: —but there is massive fish hook in there which the Minister did not address. I refer the House back to the regulatory impact statement and the crossover between the minimum family tax credit threshold and the Working for Families abatement threshold. I'll read it out: "As the minimum family tax credit threshold increases annually it is forecasted that on 1 April 2027 it will overlap with the Working for Families abatement threshold. This will mean that Working for Families customers will face effective marginal tax rates of well over 100 percent." That is a problem that the Minister and the members on that side of the House have not grappled with. They have set up a situation where people are going to face an effective tax rate of over 100 percent. It's a problem they need to deal with. That was a lurking problem in this bill.Then we get on to Part 4 and the changes to the fringe benefit tax (FBT) employer superannuation contribution tax (ESCT) and portfolio investment entity (PIE) rates. That was one of the sneakiest changes of all—one of the sneakiest changes of all. Those FBT and ESCT rates are set in relation to personal income tax rates. The cost is borne by the employer but the rates are set in relation to personal income tax rates. Those changes to FBT and ESCT rates will not come into effect until 1 April next year. So from 31 July this year until 1 April next year employers will be over-taxed on FBT and ESCT. The alleged party of business has put this in place—the alleged party of business.Then the Minister told us that this was because the compliance costs would outweigh the tax so in effect the Minister on behalf of businesses made the decision for them. He made the decision that employers would choose to pay more tax instead of incurring more compliance costs. Here's the problem with that: in the FBT regime as it stands there is a choice for employers. They get to choose whether or not they will pay some more compliance costs do some more calculation do some more work or pay more tax. The concept of a choice is already there but the Minister has denied that choice to businesses and he has just laid some extra tax on them. The alleged party of business has done that. I say that that is not a business-friendly move.Then there's the PIE rate and this is the most disgusting change of all. Instead of aligning the PIE rates for low-income earners with the personal income tax thresholds that party is going to over-tax low-income savers on their investment returns. That party is taxing our lowest paid workers more on their KiwiSaver—that is absolutely outrageous. Just to top it all off right at the end of the bill they whack another 1 percent on overseas student loan borrowers. Now that might not sound like a lot but there are already huge burdens for young people who are trying to travel trying to work trying to get their careers going and now they are loading extra interest on them putting some more costs on. That's why I say that this is a sneaky tax bill. They are touting it as offering people more money in their back pockets but as they allegedly give with one hand they take take take with the other. They undermine the way we live in New Zealand they undermine the support we give to each other and the worst impact of this will be on low income earners. That is an outrageous thing to do and I cannot believe that they would be proud of this.You know we could have teased these problems out in a proper select committee process but now we can't even address them. It is outrageous that they have done that. It's outrageous that it has been done under urgency and it is outrageous that the time for the debate was cut short. This is an outrageous bill and the National Government should be ashamed.SPEAKER: Just before I call the member can I remind members that this is a third reading. It's not a discussion across the House and interjection should be as rare and reasonable as possible."