Woolerton R Doug: Income Tax Bill — Third Reading 
Woolerton R Doug: Income Tax Bill — Third Reading 
[Volume:643;Page:12745] 
R DOUG WOOLERTON (NZ First) 
: 
 New Zealand First supports the rewrite of the Income Tax Bill. It is true and I do not know whether everybody knows but this rewriting of our tax legislation goes right back to the days of Roger Douglas in this Parliament. It has been a huge huge task and one needs only to look at the formidable tomes on the Clerk’s desk to see the size of the work. The rewrite was to bring the law into modern-day language. In many cases it was to line it up with Australian tax law. As Dr Lockwood Smith has said it is ongoing and he makes a criticism of that. But he does know and he admits that all tax law is ongoing. One can never capture it all in one lot and have the world stand still after that. 
Encompassed in this of course are the new changes that Dr Smith talked about. New Zealand First has been a particularly strong advocate of the Working for Families package that is an add-on to this tax law. We are fans for that legislation because we do not believe that flat tax cuts right across the board do the job any more in New Zealand. We believe they are unsophisticated. We do not believe that they send the right messages. We do not believe they reward the right people and we do not believe that they do the right thing for the economy. Everybody knows that a tax cut right across the board will reward those who earn more money to a greater degree than those who earn less. 
It is true that the Working for Families package came out at about the time of the last election. I used to tell people that my son and his wife had just had another little child and my daughter-in-law had given up working for a period of a year or so. I said that the tax cuts that were proposed by one side of the electoral spectrum at that stage would have given me personally about a $90-a-week tax cut and would have given my son his two young children and his young wife nothing. In fact the Working for Families package gave him in excess of $100—just over I think—per week and gave me nothing. I think that that was right. I thought that was right and proper then and I think that is right and proper today. 
As well as that Dr Smith talked about an issue that I know genuinely concerns him and I respect his concern. He talked about the poverty trap and getting out of poverty and he talked about the area we call “round the margins” where one goes back to work and is reasonably highly taxed on the first few dollars earned over a certain level. That is recognised in the Working for Families package and I say with due respect that it was criticised by the National Party because it goes right up to a household income of $70000 or thereabouts. That was the way that we got around that poverty trap business. I think everybody would accept that although $70000 is not a king’s ransom it is certainly a long way from poverty. I think it is right in this modern age that we first of all look at the income for the household and that we take— 
Dr the Hon Lockwood Smith 
: You are still facing a 60 percent effective marginal tax rate at $70000. 
R DOUG WOOLERTON 
: Yeah; at the margins. I understand that argument and accept it and I know the member is genuine about that. But we have here a solution to that. We can provide that solution by messing around at the margins or by taking the tax cut higher up the scale which is what the Government chose to do. We think that that is the more elegant solution. There is always a problem around the margins when people move on to the next tax rate but we believe that it can be dealt with better if people are getting a tax cut to that level. I do not believe as I said before that a tax cut of the same percentage across all income levels provides justice. I think it would provide more inequities than the solutions that the Labour Government—ably supported by New Zealand First I might add—has come up with. 
Having said that I think it is appropriate to congratulate the people who have involved themselves in this huge task. I understand that a tax rewrite has been undertaken in Australia and also in England with varying degrees of success. But we have a bill before us; it is here and I think it is a wonderful achievement by the people who have embarked upon it. I must admit that some members of the select committee were rather more into the detail than I perhaps was and I am sure that they will speak in more detail on the bill. But I pride myself on the fact that while there are others to do that level of detail I will look at the overall effect. I am happy to do that and it does not worry me at all that I did not go through every page. We have people far more qualified than members of Parliament to do that and they do literally slave over every word that is in these huge tomes we have before us. 
Before I sit down I want to talk about tax compliance in this country. Tax compliance waxes and wanes but although tax is compulsory it is far better morally and legally if we can have a high level of voluntary compliance. In other words it is far better if people do not have to have the tax department sending them letters piling on the compound interest and threatening to take them to court and from there to jail. I have to say that in the past the people who have been in charge of our policy and our taxation system in New Zealand have understood absolutely that in this country we do rely on a high level of voluntary compliance. They have altered the structures so that if a business is contemplating a deal shall we say it can go to the tax department and it can get if not a binding opinion an opinion on whether it will meet the criteria. I think that a taxation system and regime that allows that to happen and encourages working with the department and vice versa is absolutely what we should have in an enlightened country like New Zealand. 
I am not saying that people enjoy paying tax. I am not saying that they should not work sensibly and within the law to get around paying excessive amounts of tax but we should never have a situation that allows tax cheats and we should always have a situation that encourages compliance. At the end of the day it is tax that pays for schools hospitals roads railways— 
Craig Foss 
: The surplus. 
R DOUG WOOLERTON 
: —and many of our other services. The surpluses will I have no doubt in time be used for those purposes which are needed by us and by all citizens.