Copeland Gordon: Supplementary Estimates — Imprest Supply Debate 
Copeland Gordon: Supplementary Estimates — Imprest Supply Debate 
[Volume:626;Page:21279] 
GORDON COPELAND (United Future) 
: 
 It is very clear that between now and the election the Minister of Finance Dr Michael Cullen will try to convince the nation that there is no room for tax cuts following this year’s election. However this assumes that any alternative Government would carry on with his expenditure plans exactly as he has determined them and that they would be funded in exactly the same way as he has intended. In other words there is only one form by which the Government can spend its money and fund its way forward and that is the way that Michael Cullen has determined—there is only one form of architecture for the house. Well that might be true for the house that Michael built but let us be clear that there are alternatives. 
Dr Michael Cullen’s Budget is not carved in stone; it is not Holy Writ and it can be changed. If someone else—for example a sensible stable prudent reliable centre party—were to be part of a coalition after the election then it will be changed. I mean let us get real. Dr Cullen is running a massive multibillion dollar surplus but at the same time he is saying that there is no room for tax cuts until 2008. Hello—is something missing in that statement somewhere? Of course there is room for tax cuts and they will be happening if United Future has something to do with it. We have a good track record in that regard. 
The other day in the House Minister Steve Maharey said that the previous Government had cut taxes. Well let me tell the Minister that the previous Government was a National - New Zealand First Government and under that Government there were no cuts in taxes. In fact the National - New Zealand First Government actually reversed the tax cuts that had been announced by the previous Government. That previous Government—guess what?—was a National - United Future Government. So it is very very clear from our track record that every time United Future is brought into the frame taxes go down; when we are not in the frame taxes go up. 
United Future will be cutting taxes in a number of ways. First of all we want income-splitting for couples who are raising children. It is quite unfair that a person who has no dependents pays exactly the same tax as a man or a woman who is supporting maybe a spouse and two or three children. That is quite unfair; we want to bring it to an end and income splitting will do that. We want to reduce the company tax rate over 3 years from 33c in the dollar to 30c in the dollar and we want to introduce a $3000 tax-free threshold. 
I would like to ask the Hon Phil Goff who just resumed his seat how that puts more money in the pockets of the rich. Can anybody tell me that? It puts more money in the pockets of everyone. Every single taxpayer would get more money every child would get more money every tertiary student would get more money and every superannuitant would get more money. In fact there are no exceptions to that rule. That is not putting money into the pockets of the rich. That may be the National Party’s tax policy. Eventually I guess we will get to hear what that policy is—maybe about 2 weeks before election day the way things are going? But United Future’s policy is to give a tax reduction to every single taxpayer and that will do it. 
We will also adjust the tax brackets by $5000 so that the income threshold of $38000 will go to $43000 for those on a tax rate of 33c in the dollar and the income threshold of $60000 will go to $65000 for those on a tax rate of 39c in the dollar. We will do it not in 2008 but in 2006—1 April 2006. And it gets even better. United Future will raise the amount of money that ends up in the pockets of New Zealand’s 476000 superannuitants. In our tax cuts we are also offering them a boost in their annual amount of superannuation. We will do that first of all because they will benefit from the $3000 zero tax threshold and secondly because we want to take out an anomaly in the present formula for calculating superannuation where it is always based on retrospective data in relation to the cost of living and the average wage. We would make that formula rather prospective so that on 1 April every year the calculation would be done based upon what we expect the consumer price index and the average wage to be over the next 12 months. That is a fair policy. It means that superannuitants actually get the right amount—65 percent after tax—of the average weekly wage concurrent with the movements in that wage rather than always being on the back foot and being behind. 
We will take GST off rates which again will leave money in the pockets of superannuitants and all other residential ratepayers in this country. How much will that cost? Well I can tell the House that it will cost a little less than $2.5 billion to bring in all those very very sensible and very good tax cuts. It will leave money in the pockets of families. It will leave money in the pockets of companies. It will leave money in the pockets of children. Fancy at the moment we tax the earnings of kids—their pocket money. We put a tax on it. We want to get rid of that. We put a tax on the few dollars that tertiary students earn while they are trying to pay their way through a university education. We will bring that to an end as well. We will leave more money in the pockets of children. They will have some pocket money—the actual amount that is given to them as pocket money and not reduced through taxation. As I mentioned we will put quite significant amounts of money into the pockets of superannuitants and give them a fairer deal as we move forward. 
Now when we think about it let us put that in context. United Future says that it will give tax reductions of about $2.5 billion. Michael Cullen says that there is no room to give tax reductions of $2.5 billion. He has said so in the House several times already. When I ask him a question about any old thing these days he comes back and says: “If we go ahead with the tax cuts that that member is proposing there will be no room for expenditure on health there will be no room for expenditure on education there will be no room for expenditure on police and there will be no room for expenditure on defence.” But does he ever mention the fact that he is actually budgeting for a surplus of between $6 billion and $7 billion a year? How come he is silent about that reality? I think the silence needs to come to an end. 
I think that the media also needs to do some pretty simple basic arithmetic here because the people of New Zealand certainly are. They say that if the Government has a $6 billion to $7 billion surplus and a party comes along and says that it will leave $2.5 billion of that amount in people’s pockets and people’s purses so that they can have more money to service their debt and more money to provide an adequate income to their families so that they can give their families the health and education services they want for them and ensure that they are able to have some little family celebrations occasionally with plum pudding and the like—so that they can do all those things that we take for granted as part of the New Zealand tradition—it is no reply if they are told that that cannot be done because Dr Cullen’s surplus is only $6 billion to $7 billion. How big does a surplus have to be before we can afford tax cuts? 
Let us do the simple arithmetic. Let us follow the logic through. I challenge the media today to get stuck in and say: “Let’s unbundle all of this.” We are collecting that $6 billion or $7 billion surplus from taxpayers; that is where it comes from. So when we say we cannot afford tax cuts United Future says that Dr Cullen is wrong. We certainly can. If we have something to do with this we will. It is time to shift aside from the simplistic analysis that the Minister of Finance is giving to the nation on this. If he cannot afford tax cuts—and that is what he is saying; that the nation cannot afford tax cuts and it would be better if he said that the Labour Government cannot afford tax cuts—well let us get some new advice from somebody else. Let us get some new vision from someone outside the Labour Party that will see more money in everyone’s pockets. At the same time can I say that by just rearranging the architecture and the balance sheet of the nation we can at one and the same time by innovation and by doing things differently ensure that we continue to build a world-class health system education system police system and so on in this country. We do not have to have this false dichotomy that says that we cannot do both. We can and if United Future has anything to do with it we will.