Mallard Trevor: Taxation (Urgent Measures and Annual Rates) Bill — Second Reading In Committee 
Mallard Trevor: Taxation (Urgent Measures and Annual Rates) Bill — Second Reading In Committee 
[Volume:651;Page:149] 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I think that John Hayes who I understand comes from Wairarapa has an incredible cheek to speak on the Taxation (Urgent Measures and Annual Rates) Bill because Wairarapa other than the electorate of Dunedin North which mainly consists of students is the electorate in the country with the most people aged 15 years and over who earn $40000 or less. This is the very group that has been most attacked by this legislation. I do not know whether John Hayes is thick whether he has not read it or whether he is being a hypocrite. I do not know which of those things he is doing but I will leave one out and just say that he is silly. It is one or two of the other words. 
Hon Member 
: Why don’t you just come across and punch him. That’s a good idea. 
Hon TREVOR MALLARD 
: No no. Next time he tries to throttle me I will. 
Getting back to the legislation I say that John Hayes did not understand the way that thresholds interplay with rates. As a result of this he did not understand what was in the legislation that is now being taken out. The tax changes previously legislated for the threshold rate currently at $14000 going to $20000. The effect of this change means a loss of almost $500 a year to some of the poorest income earners. That is without doing some other things as well that impact on them in the KiwiSaver and other changes. 
I ask John Hay whether when he goes to Masterton East to the poorer areas and to some of those schools he will explain to people that he is putting his hand into their pockets taking their wallets and taking out $9 or $10—not a year but every week. I wonder whether John Hay is prepared to act as a personal tax collector for the chief executive of Telecom whether he is prepared to wander around 50 Maori families to take $10 a week from out of each of their pockets and hand it over to the chief executive of Telecom who gets the extra $500. Is John Hayes prepared to work his way around? 
Craig Foss 
: His true colours are being shown right there. 
Hon TREVOR MALLARD 
: No no. I am making it very very clear that the Maori Party is collaborating with this change which will result in John Hay going around Maori families and getting the tax collector to put his hand into the pocket of those Maori families—not all of them only the poor ones—and taking out from their pockets $9 or $10 a week and handing it over to the chief executive of Telecom and his like. How many Maori families will John Hay have to go around in Masterton East? He will have to go around about 50 or 60 families to collect up the tax cut which is being handed over to people on the highest incomes in New Zealand. As well as that will he be prepared to tell the people in Masterton that the taxation bureaucracy in Wellington will climb enormously to handle the provisions of clause 12 which is within this part of the bill? 
The CHAIRPERSON (Eric Roy) 
: Speakers’ ruling 26/7 is quite specific about the use of the correct name. The member of Wairarapa whom you were referring to as Mr Hay is actually Mr Hayes. It is a small point but if we do not use correct names names can be used in a way that is inappropriate. 
Hon TREVOR MALLARD 
: Which one is the correct one? 
The CHAIRPERSON (Eric Roy) 
: Hayes. 
Hon TREVOR MALLARD 
: Thank you Mr Chairman and I apologise to the member. He is one of a number of the back benchers who have not quite made an impression over the 6 years that they been in Parliament. 
Hon Member 
: Only for 3 years! 
Hon TREVOR MALLARD 
: No wonder I did not notice him in the first 3 years. 
Returning to the bill I ask the Minister in the chair Bill English who I understand will take a call what the extra budget is for the Inland Revenue Department to implement schedule 1 in clause 12 of this bill. Clearly this will involve a lot of extra work for the Inland Revenue Department. It will require extra staff and I want to know whether these extra staff have been provided and what the costs of those extra staff are to implement the schedules of the bill. I want to know from the Minister of Finance whether these staff will be regarded as front-line staff or not. Are the people who are working out these credits and it might be a very cunning job creation scheme on the part of the National Party— 
Chris Tremain 
: I raise a point of order Mr Chairperson. We are wandering way off Part 1. Tax credits are in Part 3 of the bill. This is Part 1. Can you bring the member back to the part please. 
Hon TREVOR MALLARD 
: Speaking to the point of order I point out that clause 12 is in Part 1 and it is the clause that puts in the schedule that implements the employers’ superannuation contribution tax. 
The CHAIRPERSON (Eric Roy) 
: I will not uphold the point of order. 
Hon TREVOR MALLARD 
: The point I was getting to is that the bureaucracy that will be involved in this could well be a cunning job creation scheme to make sure that the unemployment in the electorate of Wellington Central—the electorate of Grant Robertson—does not fall. I want to know whether that is a deliberate policy. And I want to know from Sir Roger Douglas whether he regards clause 12 as something that is efficient that is pure and that works towards a fair tax system or whether he regards it as something that pushes up the marginal tax rate—the effective tax rate—for a lot of lower and middle income earners. Because that is what it does. It pushes up the marginal tax rate and at the same time it requires a bureaucracy of tax officials in order to check probably tens of thousands—and maybe hundreds of thousands—of returns to make sure that people are eligible. In fact it puts a whole new group of people into the group who have to file returns in order to get changes in tax rates. 
We have had quite a good system over the past few years in New Zealand where fewer and fewer people have had to file tax returns because it is all done as part of the wash-up and if people consider they have been fairly treated then they do not have to file a return. One of the effects of this bill will be that a whole new group of people probably hundreds of thousands of people will have to file a return which then has to be processed. And we have to employ people to process it. Rather than moving towards being efficient towards being proactive and towards chasing some of the delinquents in the way that has been done under the previous Minister of Finance—and that has had I think it is fair to say very good effects on the revenue—we will have as a result of clause 12 in Part 1 a new army of people who look at the forms being sent in load them into the computer and then check them at the end of the year— 
Hon Annette King 
: Is it definite it’s a wash-up yearly or— 
Hon TREVOR MALLARD 
: No no; it can be in the wash-up yearly or it can be the other way. It does not matter; whichever approach is taken there needs to be either bureaucrats at the front end or bureaucrats at the back end if it is to be done as a wash-up. As a member of the Labour Party and somebody who has had a lot to do with the Public Service Association (PSA) I welcome the approach of the Minister of Finance in building PSA membership. Building up PSA numbers is I think a good thing to do.