Williams Andrew: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeWilliams Andrew: Questions for Oral Answer — Questions to Ministers[Sitting date: 07 May 2014. Volume:698;Page:17561. Text is incorporated into the Bound Volume.]3.ANDREW WILLIAMS (NZ First) to theMinister of Finance: For each of the years ending 30 June 2011 2012 and 2013 what was the reduction in tax revenue specifically in the top tax bracket as a result of the tax reductions in Budget 2010?Hon BILL ENGLISH (Minister of Finance): It is not possible to give the member an exact figure because we can only measure it against assumptions about what tax would have been paid. However as a rough estimate if the top tax rate had stayed at 38 percent and all other things had remained equal income tax revenue would have been higher by around $400 million in the 2011 tax year and by about $1 billion in 2012. However members will recall that all personal income tax payers in all tax brackets had a significant income tax reduction in 2010 at the same time as GST went up. Analysis done at the time demonstrated that the combination of a reduction in income tax rates and an increase in taxes on investment property and increased GST weredistributionally neutral—that is it had roughly the same effect on income distribution across the income range.Andrew Williams: I raise a point of order Mr Speaker. The Minister mentioned 2011 and 2012. My question also specified 2013.Mr SPEAKER: Yes but the member will recall that the Minister started his answer by saying that it is simply not possible to answer the question accurately. The member has further supplementary questions. That is the way to delve into it.Andrew Williams: I seek leave to table from the Parliamentary Library a paper detailing each of the years 2010 2011 2012 and 2013 in terms of totalling $4 billion—Mr SPEAKER: Order! [Interruption] Order! The member will resume his seat. The point of tabling a document is to give further information to members. I am prepared to put the leave but it is not for the member to take the opportunity to make a political statement. Leave is sought to table that information from the Parliamentary Library. Is there any objection? It can be tabled.Document by leave laid on the Table of the House.Andrew Williams: If it was so vital to sell State assets for about $4.7 billion why did the Government—based on these Parliamentary Library figures—give away $4 billion to top income earners over the past 4 years?Hon BILL ENGLISH: The tax package in 2010 did not give away $4 billion to top income earners. What it did was change the mix of taxes for the same total revenue. Higher-income earners paid more GST and the impact of about a billion dollars of extra tax collected on investment property fell largely on higher-income earners. The analysis done at the time by Treasury and Victoria University showed that the tax package was roughly fiscally neutral and that it was roughlydistributionally neutral—that is it had the same impact on income groups right across the income range. It is a tax package that this Government is proud of. We have a very good tax system and it collects revenue very efficiently. Among high-income earners there is much less tax dodging than there was under the previous Government.Andrew Williams: What is the estimated loss in the Government’s revenue stream in the 2014-15 Budget year as a result of dividends foregone due to the sale of $4.7 billion in State assets over this past year?Hon BILL ENGLISH: I cannot give the member those numbers off the top of my head. However if he looks at the investment statements that were published for the electricity companies he will be able to see that. I must say though that from the taxpayer’s point of view these large risky businesses are now being managed and scrutinised by people who have much better capacity to deal with the complexities of the electricity market than the Government ever had.Andrew Williams: I seek leave to table and the source again is the Parliamentary Library a paper detailing the amount of dividends foregone—Mr SPEAKER: Order! Leave is sought to table that particular document. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Andrew Williams: Does he agree that had he not made the $4 billion in tax cuts over the last 4 years to top income earners and had he invested this and maintained Government contributions to the high-performing Cullen superannuation fund New Zealanders would all be much better off long term in terms of their retirement superannuation; if not why not?Hon BILL ENGLISH: No I do not agree with that.Andrew Williams: I raise a point of order Mr Speaker. I ended the question by saying “if not why not?”.Mr SPEAKER: Order! [Interruption] Order! The member has been here a long time. He gets the ability to ask a supplementary question. If he puts two legs in it and the Minister chooses to answer one that is satisfactory.Andrew Williams: Does he accept that having already given up over $4 billion in tax revenue in the last 4 years—over a billion dollars per year—the 2010 tax cuts were misguided given next week’s anticipated paper-thin Budget surplus and critical areas ofGovernment spending such as conservation and biosecurity having suffered; if not why not?Hon BILL ENGLISH: The member is simply wrong. The Government did not give up $4 billion worth of revenue. It reduced income taxes across the board which we are very pleased about because that means better incentives to work and to save and to exporting and we increased GST and the tax on investment property. If one can recall at the time New Zealand had been on a debt-funded consumption boom and we decided to do something about it. It was effective and now we have one of the stronger growing economies in the developed world. We are very pleased with those decisions. They were fair and they were economically sound.