Smith Lockwood: Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill — In Committee Third Reading 
Smith Lockwood: Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill — In Committee Third Reading 
[Volume:647;Page:16299] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 During the debate last night National members raised concerns about this tax cut legislation the cynicism of it bringing in cuts just 2 weeks before what we now presume will be the election and the lack of real help to families when an average person gets only $16 a week which is only the price of a family block of cheese. But with Dr Cullen being the Minister in the chair I would like to take the opportunity to focus on the particular issues in Part 1 which is the part we are now debating. The danger with putting legislation on tax through all stages in the way we are doing is the risk of error and I think we need to examine this bill to make sure we understand exactly what it is doing. Because it is amending some quite complex parts of our tax law we need to understand it. 
The point I would like to raise first with the Minister relates to what he said in his speech yesterday when he said that the legislation—or the Budget and this legislation—will be a bringing forward of indexation of Working for Families and a forecast second round of such indexation. I would like to check with the Minister exactly what he is indexing in this legislation because as I understand it Part 1 handles those issues. If we look at the clauses in Part 1 we see that the particular clauses that affect both the personal income tax schedules and the Working for Families payments are clause 5 in the case of Working for Families and clause 7 in the case of the income tax schedules. 
Clause 5 makes amendments to section MD 3 of the Income Tax Act 2007. Section MD 3 in the Income Tax Act covers family support. It seems to make sense that the changes to section MD 3(4) spelt out in clause 5 appear to be consistent with what the Minister has said and if we look at subclauses (1) and (2) we see that the changes there would apply to this indexation and the one that the Minister has forecast will come ahead. Then we see that clause 6 indexes the abatement threshold and amends section MD 13. If we look at the principal Act we see that section MD 13 appears to be doing what the Minister says. 
While we have the Minister in the chair I would like to ask him whether this Budget policy indexes all the Working for Families payments because he gave the impression in the Budget that all Working for Families payments would be indexed. So I ask him which clause indexes the issues covered in section MD 4 because section MD 4 of course covers the in-work payments provisions. It is a crucial part of Working for Families. In fact it has been the flagship part of the Government’s Working for Families policy. The Government claims that the in-work payments section is where the incentive is provided for people to get into work. I might be missing something here but as I scan the provisions in Part 1 and look at the various clauses I cannot see where the matters covered in section MD 4 are indexed yet they are very crucial parts of the system. 
If we look at not just section MD 4 itself but the whole group of MD sections—section MD 4 through to section MD 10—we see that section MD 10 for example in the principal Act has some figures actually spelt out so it is not as if they are percentages that automatically adjust or abatement rates that automatically adjust; it has some actual figures. I would appreciate the Minister’s advice as to where the amendments for indexation to the figures spelt out in section MD 10(3) are covered in the bill because I just cannot see them. 
I imagine the Minister would have tried to be accurate in his Budget speech. If they were not meant to be amended by the legislation I am sure he would have told us which bits of the Working for Families tax package the Government plans to index. I am sure the Minister would have wanted to be very straightforward with this and not indicate that the whole package was being indexed if in fact parts of Working for Families were not being indexed. 
I stress that I could well be missing something in the legislation here but I just cannot see where the actual payments that are a crucial part of Working for Families covered in the principal Act in section MD 10(3) are amended in the bill.