Hughes Darren: Taxation (Budget Measures) Bill — In Committee 
Text is incorporated into the Bound Volume 
Hughes Darren: Taxation (Budget Measures) Bill — In Committee 
[Sitting date: 20 May 2010. Volume:663;Page:11128. Text is incorporated into the Bound Volume.] 
Hon DARREN HUGHES (Labour) 
: 
 Part 1 of the Taxation (Budget Measures) Bill is the “robbing Peter to pay Paul” part. This is the part of the bill where tax rates are changed on the one hand and on the other hand Government fees the cost of Government services and the goods and services tax go up to wipe out all of the gains that most people in New Zealand will receive by way of the first change that the Government is making. The National Government is robbing Peter to pay Paul and when people work out in a few months’ time that their financial situation has not changed enormously I think it will rebound on National in quite a big way. 
Here is the point. My colleagues have already pointed out that the Budget documents show that inflation will be 6 percent in the coming year. That is hardly a model of economic stability and orthodox management on the part of the National Government. A 6 percent inflation rate will immediately flow through to the cost of living because higher inflation will erode people’s purchasing power. When people pick goods off the supermarket shelves they will find that prices are higher. When they go through the checkout and get their bill they will find that the taxes on the products they have bought are also higher. So not only will inflation erode the cost of living of people but the GST changes will put a 15 percent fee on the final price of the product. 
That is hardly what people thought they were getting when they voted for the National Party at the last election. I do not remember the National Party campaigning at the last election on a policy of increasing GST. John Key in that complicated way he has of explaining himself said: “Oh well I said we wouldn’t put up GST to fund a deficit.” I looked at the Budget documents and in the next financial year we as a country will be in deficit so GST will be put up at a time when we are in deficit even though National said first of all that there would be no rise in GST and we then had the complicated explanation from John Key that in his head he was trying to say that if there was a deficit he would not put up GST. National has failed on that test as well. 
This measure affects hard-working New Zealanders and that is people who work hard full stop. Of course in the eyes of National members one is a hard worker only if one earns a lot of money. We hear all the time from members opposite about hard-working New Zealanders who earn over $100000 a year. Sure there are probably some hard-working people who earn over $100000 but lots of people who earn over $100000 do not work very hard and I can see quite a few of them this morning as I look across the Chamber. As I look across the Chamber I see plenty of people who earn over $100000 whom I would never describe as hard-working New Zealanders. 
Paul Quinn 
: Look in the mirror Darren! 
Hon DARREN HUGHES 
: I would describe Mr Quinn as a loud New Zealander but from the exchequer’s point of view I would describe him as a rip-off because we pay $100000 a year for him yet for 600 bucks one can get a better sound out of a flat-screen TV. So I do not think we need to waste any time on him. 
Let us look at those people who earn over $100000 a year. The people in New Zealand who earn over $100000 have had tax cuts for 3 years in a row. In October 2008 people earning over $100000 a year received a tax cut from the Labour Government. In April 2009 people earning over 100 grand a year got a tax cut from the National Government. Now in October this year the National Government will give those same people a third tax cut. That is tax cuts for 3 years in a row for the highest-paid New Zealanders. Given that I think most members of the House agree that we have a wages problem rather than a tax problem in New Zealand it seems to me that giving that 5 percent of people tax cuts for 3 years in a row has hardly resulted in economic nirvana when we look at what the opportunity cost for our country means. 
I live in the Horowhenua district where just over 1 percent of people earn over $100000. So 99 percent of the people in the community in which I live do not get— 
Paul Quinn 
: You’re one of them paid by the taxpayer as you have been all your life! 
Hon DARREN HUGHES 
: Paul Quinn that great civic contributor in our country has made an interjection. Paul Quinn is the man whom I think should be the quietest person. He should get the least amount of money for his contribution in Parliament. If we were paid by value of contribution that man would be returning money to the taxpayer every week. So let us not hear anything from that rip-off artist in that sense at all. 
In our community we have a problem with the number of hospital beds because the Government wants to downgrade the number of hospital beds at the Horowhenua Health Centre. The Government says there is not enough money from taxes to fund our health services yet there is money to give people who earn over $100000 their third tax cut in 3 years. 
The tax system today is radically different from what it was 3 or 4 years ago because we already have had a reduction in revenue. Now the Government has to try to convince the country why we should have fewer services higher inflation and higher interest rates because of that higher inflation as the Reserve Bank will inevitably have to make changes to compensate for the fact that this Government is putting $15 billion in tax cuts out into the economy over the next period. Then of course we have the changes to accident compensation levies and the increase in GST. All these things mean that we are robbing Peter to pay Paul and from a long-term point of view—looking at the future of our country—the biggest concern is that we are borrowing to give away those tax cuts. This is hardly bold; we are borrowing for it.