Lees-Galloway Iain: Taxation (Budget Measures) Bill — In Committee 
Text is incorporated into the Bound Volume 
Lees-Galloway Iain: Taxation (Budget Measures) Bill — In Committee 
[Sitting date: 20 May 2010. Volume:663;Page:11163. Text is incorporated into the Bound Volume.] 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I am very pleased that the Minister in the chair the Minister of Revenue traversed the subject that he did because I would also like to discuss the same material. The Minister talked about percentages and things that are somewhat intangible to real families. I would like to talk about the real example of a real family who actually happen to live not far from where I live in Palmerston North and the effects that the changes set out in Part 2 of the Taxation (Budget Measures) Bill will have on them. 
This family has four children. Dad works—he is a scientist funnily enough and he earns a reasonable income. Mum is at home with the kids. One of the great things about Working for Families is that it allows many families to have one parent at home and I am sure the Minister in the chair thinks that that is a good idea. Using the Government’s tax calculator that family figured out that even with the dodgy inflation calculations in that calculator the tax cuts would get them between $16 and $20 a week extra. That sounded quite nice on the surface of it. But then we have the changes to Working for Families and the lack of indexation as set out here in this bill. So the inflation rate is to hit 5 percent to 6 percent yet we have no indexation of Working for Families. That family a hard-working family that this Government reckons that it is targeting will see the benefit that they are receiving from Working for Families become slowly eroded over time. They will become steadily worse off. 
But that is not actually the worst thing that will happen to this family. The worst thing concerns the fact that they have kids who still need to go through early childhood education—in fact my youngest will be going to kindy with their youngest. The cost to them of early childhood education will be far greater than the amount that they receive from tax cuts. So the Government gives with one hand but it takes an awful lot away with the other hand. 
That is the truth about this bill that is the truth about this Budget and that is one of the biggest swindles in this Budget. The Government goes on and on about what it is doing for hard-working battling Kiwi families but in truth what it is doing is giving a tiny amount with one hand and taking away a whole lot more with the other hand. Let us look at the regulatory impact statement for the bill. Why is the Government looking at taking these measures around Working for Families? We see that it is to save money. The Government hopes that it will spend a lot less money on Working for Families. 
Let us look at the impact of the equity measures which Treasury has looked at. It says the impact is mixed. When Treasury says the equity measures will have a mixed impact that is hardly a ringing endorsement of this bill for the middle-income families of New Zealand. Basically that means that even Treasury knows that the changes happening as a result of this bill will be unfair on middle-income families—at best. At the very best if we are very charitable to the Government we could say that hard-working families are no better off than they have been. But the truth is that when we talk about real families when we step away from percentages and the theory and get down to the practical impact of this taxation bill on real families in New Zealand we find the truth is that they will become worse off. They will become worse off because this Government wants to appear to be supportive. It gives with one hand with the tax cuts but when we look at what is happening with Working for Families we see the truth is that with the inflation that we will no doubt see through the increase to GST through higher power bills and higher rent those inflationary increases will be passed on to families through the changes that this Government is bringing into place. 
Working families will become worse off. Let us make no bones about it; that is the fact. That is what is happening as a result of the changes to Working for Families that are made in Part 2 of this bill.