Smith Murray: Subordinate Legislation (Confirmation and Validation) Bill (No 3) — First Reading 
Smith Murray: Subordinate Legislation (Confirmation and Validation) Bill (No 3) — First Reading 
[Volume:620;Page:15986] 
MURRAY SMITH (United Future) 
: 
 In the second reading debate on the Subordinate Legislation (Confirmation and Validation) Bill (No 2) last year Mr Worth postulated that maybe members should not be wasting parliamentary time on this sort of bill because it is bland technical and a thing of low measure. I do not want to put too much emphasis on that or to criticise Mr Worth for that because on the face of it the bill does appear to be pretty bland and technical and people may well wonder why members spend time just looking at something that seems relatively straightforward and that seems to go through with a minimum amount of debate and certainly with the agreement in most cases of all parties. 
The effect of moving this bill through the first reading will be that it will go to the Regulations Review Committee which will then typically get a report from the relevant ministry on the particular provisions or regulations that are in it and then the committee reports back to the House usually on the basis that it accepts that the regulations are appropriate and therefore they are confirmed. 
That would seem to be pretty straightforward but I think that the important part of this bill is the way in which the legislature keeps the executive and particularly its ministries honest. It is a way for a ministry to know that if it is to put up and if the executive is to approve regulations that are out of step with what is reasonable it will be questioned about it. It will be taken to task by the legislature. Therefore perhaps the fact that these bills go through in a pretty straightforward manner almost every time is partly because of the awareness that there is that policing function. It is a valuable policing function that this House has to ensure that the executive does not overextend itself. 
The Regulations Review Committee provides an independent review that is cross-party and provides that watch and that can therefore look at it from all aspects of the public interest from the various interests that the parties represent. It comes to a conclusion in terms of whether the particular regulations are wise and within a reasonable bound. So I think that that is important. 
I note that one regulation United Future is particularly interested in is the Gambling (Problem Gambling Levy) Regulations 2004 which has come out of the Gambling Act. The whole area of the problem gambling levy is fraught with a lot of loaded issues. In particular United Future puts importance on seeing gambling reduced and obviously imposing a levy is one disincentive for gambling operators. It is a way of tightening up on the gambling industry and we have been pleased with the way the Government has been moving towards a tightening up in the industry. But also on the other hand it causes problems because of the inconsistency between gambling income being one of the few sources of community grants that the Government now provides and that money that is generated from the things that actually cause problems in society being used to try to solve problems in society. 
Nevertheless that is an area that the committee will examine. The purpose of the first reading is simply to get the bill through the first stage so that it can go to the Regulations Review Committee and be looked at in that measure of detail and issues in terms of reasonableness and the way that the Government is operating in those areas can be addressed. United Future is therefore quite pleased to support the first reading. It welcomes the bill coming through for scrutiny and it looks forward to the report that will come from the Regulations Review Committee. 
Hon RICHARD PREBBLE (ACT) 
: 
 We are debating the Subordinate Legislation (Confirmation and Validation) Bill (No 3) which contains 14 different measures that are being validated. There are within it some measures that everyone would agree with. For example I take it that the superannuation and social security validations are what enable us to increase pensions benefits and war pensions in line with the consumer price index. Those are all meritorious matters. Having said that I am not in favour of the validation of all the regulations set out in the bill and for that reason the ACT party will not vote for this bill. 
Let me direct attention to the particular measures that I object to most strongly and which the Minister of Finance did not explain to the House. This is taxation legislation. This Government with a surplus of over $7 billion has collected $7 billion more than even it is able to spend and here we are being asked to validate the collection of even more tax. Let me give the House the figures that the Minister failed to give. The Excise and Excise-Equivalent Duties (Tobacco Products Indexation) Amendment Order came into force on 1 December 2003 and adjusted the excise and excise-equivalent duties on tobacco products so as to reflect the movement in the consumer price index excluding credit services for the 12 months to 30 September 2003. Consumer price inflation in that period was 1.5 percent. By using Treasury’s ready reckoner which it supplies to enable us to do that one can work out that that is a tax increase of $12.175 million. We then go to alcohol on which the duty is also adjusted according to the consumer price index. In the same period the increase in the consumer price index was still 1.5 percent of course and by using the Treasury’s ready reckoner we can work out the change in the rate per litre of alcohol. Unfortunately it is not easy to work out the taxation changes on alcohol since Mr Anderton decided to tax old ladies who drink sherry so I have had to do a bit of an estimate—I am obliged to the library for assisting me with it. We came to a figure of $7120000. 
We have had the McLeod Tax Review. The Government paid $2 million to have an independent review of taxation and I do not think it has taken note of any of the recommendations. One of the things Mr McLeod stated was that there were no intellectual or rigorous reasons for the “sin” taxes. We in this House say that smoking tobacco is bad for people—and it is—and that we should whack it with tax. The Minister says the Government will use that money to help the poor people who smoke. We of course know that that is not what actually happens with the money. The money is used by the Government to pay for its treaty settlement processes and for all the other various things that this Government does and very little of it goes to smokers. 
Then we have the drinkers. People say drinking is bad for us. Actually it is not—a glass of red wine per day does not do us any harm nor does a glass of beer. It is only if one drinks to excess that alcohol— 
Brian Connell 
: Ten must be pretty good for you. 
Hon RICHARD PREBBLE 
: No the statistics are there for us to look at. The French who drink red wine have a lower rate of heart attacks than we do. 
Brian Connell 
: It reduces your cholesterol. 
Hon RICHARD PREBBLE 
: I thank the member; I am obliged to him. I am told that drinking red wine reduces one’s cholesterol. The point is that in itself—unlike tobacco where I think any amount of smoking is bad for people—alcohol is not bad for us. So where is the justification for increasing the tax on alcohol? The Minister did not give us any. I know where the justification comes from. It was an idea of David Caygill’s. He was the person who told Cabinet in 1990 that we would have a surplus and then we found out about the BNZ sometime after the election along with the incoming Government. No one in Cabinet knew about the fact that there was a huge hole. He said we should provide for an adjustment to the taxes on alcohol and tobacco by the consumer price index so we would not have to have a debate in Parliament to justify increasing those taxes. 
I think that is wrong; I believe we should debate it. I say to the Government that the ACT party will not vote for this bill because subsequent to the Government writing us a letter we discovered it is collecting $2.5 billion more in taxation than it asked the House to approve in May. There is no possible justification for increasing any tax in New Zealand even including that on a product like tobacco. Why do I say that? We all know that most people who smoke in New Zealand are people least able to pay tax. I think there is something a bit immoral about our being non-smokers—no ACT member of Parliament smokes and we are always told we are the wealthy party—and the Government collecting a disproportionate amount of tax from those people least able to pay it. There is something immoral about that. It may be electorally attractive. I have been studying the liquor taxes a little bit—and I have to say it is an informal bit of research—but as far as I can see the amount of crime committed by little old ladies does not appear to have gone up or down since Jim Anderton decided to whack a tax on sherry. I have not seen that make any difference to the crime statistics or to social habits except that it has altered the amount of sherry that is sold—that is true. 
Brian Connell 
: Are they binge drinkers? I don’t think they are. 
Hon RICHARD PREBBLE 
: There might have been a few but most people who drink a glass of port are not known for being binge drinkers. I have never heard of anyone binge drinking on port but I guess technically it can be done. 
I point out to the National Party that its leader made a very good speech the other day saying that this Government is collecting an outrageous amount of tax. In fact I think that the revenue from taxation under this Government has gone up by 50 percent—it is some huge figure. 
Brian Connell 
: Forty. 
Hon RICHARD PREBBLE 
: Forty percent. There is no doubt that record amounts of taxation revenue are now being collected and now we are being told that if we send this bill to the Regulations Review Committee somehow it will review that tax. I have a lot of respect for Richard Worth and the rest of that committee but there is not an economist amongst them—not one. They will not look to see whether this bill has been properly drafted. As a bill like this comes up every year and has done for the last 14 years it is highly unlikely that there is anything wrong with its drafting. I have no doubt that this is very efficient taxation. The question I ask the Government—a Government that collects $7 billion more than it needs to—is why it should get another $12 million from smokers and another $7 million from people who enjoy a drink. We ought to have a justification of that from the Government. 
I say that there is no case for increasing any tax. There is an overwhelming argument for a tax cut. We should always remember that that money does not belong to us. It belongs to the people of New Zealand who pay for their cigarettes and their drink. Accordingly the ACT party as a protest about the Government—and there is something immoral about this—collecting more in taxation than it needs to collect will not vote in favour of this year’s subordinate legislation bill.