Roy Heather: Taxation (Annual Rates and Urgent Measures) Bill — Second Reading 
Roy Heather: Taxation (Annual Rates and Urgent Measures) Bill — Second Reading 
[Volume:628;Page:714] 
HEATHER ROY (Deputy Leader—ACT) 
: 
 I rise to speak to the second reading of the Taxation (Annual Rates and Urgent Measures) Bill. I do so very proudly to oppose the bill because it is the right thing to do. I feel sorry for the previous speaker Mr Gordon Copeland because he knows that opposing this bill is the right thing to do too. The only good reason he could find to support this bill is that the Australians have agreed to give us some money for our wine. On every other issue he is supporting it because United Future members have sold their souls to support this Labour Government. 
This bill is not really about the Australians giving us some money for our wine. It is about three very important issues. Firstly this bill allows for enhancements to the Working for Families package; secondly it allows for full interest write-off for student loan borrowers; and thirdly it sets the annual income tax rates for the 2005-06 tax year which are the same as those for the current 2004-05 year. ACT is opposed to all of those measures as is I believe the National Party. I think Gordon Copeland actually is opposed to all of them too despite the fact that he will vote in favour of them. ACT is opposed to those measures. It is opposed to turning large numbers of New Zealand families into State beneficiaries. As Dr Pita Sharples put it so well we are opposed to welfare in the guise of family assistance. ACT is opposed to writing off student loan interest which will give some members of our society special treatment while other taxpayers foot the bill. The incentives are completely wrong. ACT is opposed to maintaining income tax rates at their present level when the Government has nearly an $8 billion surplus. 
We should not forget that the people have spoken. Sixty percent of the people of New Zealand voted for parties that were promoting tax cuts of one sort or another. It is shameful that this bill made it through the Finance and Expenditure Committee in approximately 2 hours with no public submissions. These issues are of great importance to the future of our country and giving them such cursory examination shows the contempt that the Government and its supporters have for the value of what New Zealanders believe in. 
Let us come first of all to the Working for Families package. Before the election the introduction of the Working for Families package turned an extra 150000 New Zealand families into State beneficiaries—people who are dependent on the Government for their income. Now with the enhancement of the Working for Families package an extra 300000 New Zealand families will be dependent on the Government for part of their income. An extra 300000 families are now State beneficiaries. Is that something to be proud of as the Labour New Zealand First and United Future members promote? No. We want—as the Maori Party members articulated—New Zealanders to be able to stand on their own two feet. The way to do that is by taking some of that $8 billion surplus and giving New Zealand workers and families the tax cuts they deserve. If this Government really wanted to help families that is exactly what it would have done. It would have taken this opportunity to cut the personal tax rates of New Zealand families. 
Before the election Michael Cullen was very vocal about tax cuts. He was particularly scathing about the National Party and ACT wanting to reduce the taxation rates—in particular the personal taxation rates. He said: “Oh no we can’t have tax cuts—they would be inflationary.” Well let us look at the other things that cause inflation in this country. I ask Dr Cullen who thinks he is always right about Government expenditure. Let me tell members about the increase in Government expenditure. Over the last 6 years Government expenditure has increased by 34.5 percent—and Dr Cullen does not seem to think that is inflationary. Let us go back to the tax cuts. Tax cuts may well be inflationary but only if that money is spent. If some of it is saved that is not inflationary. He has looked at things from a very one-eyed biased viewpoint. 
Let us now look at the student loan scheme. The provisions in this bill will encourage students to take out bigger loans; will encourage more students to take out loans including those students who would not have done so beforehand because they did not need a loan; and will mean that loans are repaid more slowly. To be honest students who will not take advantage of the provisions are mad. Why would they not? Treasury had a lot to say about the issue of student loans. Dr Cullen said that they would cost us only $300 million. It is easy to spend somebody else’s money is it not? With the flick of a hand off it goes. Treasury said that we should look at the policy carefully and that it was more likely to cost the country around $900 million. But Dr Cullen seems not to like Treasury very much. He talks about philosophical burps and ideological burps. He thinks that Treasury’s advice is not worth listening to. It was the same when he received the McLeod report in 2000: he threw it across the room and said that he had just paid $1 million for ACT’s tax policy. But he is not good at taking good advice. No Dr Cullen knows best and he just dismisses the experts with the flick of a hand. 
Mr Woolerton of New Zealand First talked about encouraging New Zealanders to come home. The best way to encourage our young New Zealanders to come home is to give them reasons to come here and tax cuts are those reasons. Why would people come back to New Zealand when they are earning good salaries overseas where taxation rates are lower? If we want them to come back here we cannot rely any longer on lifestyle alone to attract them back. It might have been enough in the past when New Zealand was on a level playing field with the rest of the world but that is no longer the case. This Government has made that situation much much worse. The way to encourage our young New Zealanders home is with lower taxes. 
I come to the third reason that this bill is before Parliament: the annual income tax rates for the 2005-06 year which will remain unchanged. The Government has an $8 billion surplus. The country is awash with cash because Dr Cullen cannot balance his books. He has charged everybody far too much and we have a surplus. We should be giving back that money to the people it belonged to in the first place. We should be giving it back to the New Zealand families the workers of New Zealand who earned it in the first place and we should be doing that in the form of tax cuts. During the election campaign ACT campaigned hard on tax cuts. The country can afford them. We believe that top tax rates should come down to 25c in the dollar with a second tax rate of 19c in the dollar for those earning under $38000. That is fair reasonable and the way to help New Zealand families. We should be helping New Zealand families to help themselves not turning them into State beneficiaries and not writing off loan interest for students and giving them special treatment. I have a son going off to university next year and I do not think—[ 
Interruption 
] I am not. He is off to university and he would be mad not to take advantage of this new system. 
But most important 63 percent of New Zealanders voted for parties that promoted tax cuts. They have been denied that because of the way the Government has been put together and that is shameful. ACT will be opposing this bill for the very reasons I have outlined.