Hayes John: Taxation (Urgent Measures and Annual Rates) Bill — Second Reading In Committee 
Hayes John: Taxation (Urgent Measures and Annual Rates) Bill — Second Reading In Committee 
[Volume:651;Page:148] 
JOHN HAYES (National—Wairarapa) 
: 
 I rise to speak to Part 1 but first I congratulate you Mr Chairperson on your appointment as Assistant Speaker of this Parliament. Secondly I want to address a couple of the comments made by the Leader of the Opposition who will be ankle-tapped by Shane Jones before he gets to 2 years and 11 months from now. 
The difficulty we face in this debate as politicians is that the community wants more police to be on the streets. It wants better health services it wants lots of big roads it wants excellent welfare benefits and it wants to pay lower taxes. People want to pay lower taxes and that is why they voted against the last Labour Government. They knew that too many taxes were being collected which were being spent inefficiently. We on this side of the Chamber want to avoid inefficiency because if we did not we would pass up the opportunity to make somebody better off at no cost to anybody else. That is what we do by increasing efficiency. 
But taxes by their very nature cause some inefficiency and most of us think we need to pay less tax. Most of us think—and this is the essence of the Labour Party’s argument—that taxes are about only the redistribution of income to a lesser or greater extent from the rich to the poor. 
Hon Trevor Mallard 
: This is redistribution from the poor to the rich. 
JOHN HAYES 
: Well we have two contradictory imperatives I tell Mr Mallard. The first is to avoid needless waste—and he wasted plenty particularly through Sport and Recreation New Zealand—and the second thing is that we want to decrease inefficiency and increase efficiency while making sure that wealth is at least somewhat evenly distributed. 
This legislation aims to make the New Zealand economy both efficient and fair—both efficient and fair. If we look at the actual cuts that are being made we see there is no change for people at the bottom of the income levels. Those who earn less than $14000 a year will pay 12.5 percent in tax. The next step to increase efficiency and put more money in the pockets of individual taxpayers applies to those who earn $14000 to $48000 a year who will have a 21 percent tax rate. The maximum income for that group will be moved to $48000 a year so those earners will be significantly better off. 
We want to put more money in people’s pockets. We want to stop them leaving at a rate of 80000 people a year and going to Australia. People deserted Labour but National is interested in keeping those people in this country. 
I will address the comments made by the Leader of the Opposition when he said we were cutting research and development payments. That is completely untrue. He was arguing that there will be a huge drop in research and development in this country. That is not the case at all. Labour’s policy involved borrowing $700 million and in year 1—this next financial year—paying out $20 million for research and development in year 2 paying out $30 million and in year 3 paying out $40 million. That is not what we are doing. We are paying out $75 million a year over each of the next 3 years. That is significantly more than what Labour was going to pay for research and development but we are doing it in a different way from Labour. We did not have to borrow $700 million in order to kick off that fund and that is why we are able to start from lower base borrowing than the Labour Government did. 
This is not a 1-year programme; Mr English has been extremely ingenious in constructing this tax package. In the year from 1 April 2010 for the earners group of $14001 to $48000 a year we will lift the limit to $50000 a year and give those people a tax cut. We will increase the tax cut available to people earning from $50000 to $70000 a year. Again in year 3—in 2011—people in the $14000 to $50000 a year earners group will get a significant reduction in tax. That will be the pattern in every year. Why will we do that? We need to put money into people’s pockets. When I go to Kuripuni in Masterton in my electorate I see people who are on an average wage of $12 to $15 per hour. We need to help those people because they have children to bring up holidays to take and transport to pay for. Tax cuts will pay for that.