Cullen Michael: Taxation (Urgent Measures and Annual Rates) Bill — In Committee 
Cullen Michael: Taxation (Urgent Measures and Annual Rates) Bill — In Committee 
[Volume:651;Page:183] 
Hon Dr MICHAEL CULLEN (Labour) 
: 
 This is an interesting clause—and in ways a somewhat unusual one—which is a kind of historical relic. We have to pass legislation to confirm the annual tax rates even though in Part 1 of the bill we have set the annual tax rates for 2009-10. In Part 3 we have another provision to confirm that we have actually set those annual tax rates for 2009-10. One may well ask why on earth we have to do that. Well the historical reason is quite simple: we are confirming the Sovereign power to tax and we are not allowing the King or in our case these days the Queen to levy monies without the consent of Parliament. Although in one bit we have said that those are the tax rates in this bit we confirm that it is the intention of Parliament and we have the authority of Parliament to levy those particular tax rates. 
This is interesting because this is the one year in which nobody loses—2009-10—because the current tax law provides for a series of tax cuts in 2010-11. In 2010 the bottom threshold will move from $14000 to $17500 and then to $20000 on 1 April 2011. On the other hand the changes made in Part 1 will remove that increase to that threshold so on incomes from $14000 to $20000 a year a higher level of tax will be paid. But that change will not occur until 1 April 2010 so for this one brief year of glory the National Party will be able to parade around the country saying that nobody is worse off as a result of its tax changes. 
But wait—help is on the way from this side of the Chamber as has so often been the case so far in this Parliament. We have had to help those members procedurally and we are now going to help those members in terms of what they will try to tell everybody up and down the country. Very shortly we will come to an amendment when we get on to the next question. It will continue the ability to ensure that nobody is worse off as a result of this bill by providing a mechanism where nobody will see themselves worse off than they would have been under the provisions in place before this bill is enacted and comes into force. 
That is where it will be very interesting to see how people vote. I am particularly interested to see how the Maori Party votes both on this clause and on later clauses. The Maori Party has been calling I think for a kind of expansive policy—for the first $25000 to be tax free for the lowering of GST and for an enormous range of things which add up to a vast and gob-smacking sum of money that would clearly have to be raised by an enormous number of raffles being run up and down the country because it would run into many many many billions of dollars a year. What it had to do with Maori needs is by no means apparent to many of us. Those members now have the chance to decide whether they really want to vote for big tax cuts at the bottom or big tax cuts at the top because this tax bill provides for tax cuts at the top and increases in tax at the bottom. 
I do not think the Maori Party members understood that. I do not think they were properly briefed on that. I do not think that when they signed up to something that was supposed to be mana-enhancing they thought they were signing up for the exact reverse of what they had promised their constituents. We will be happy to help their constituents as well. We will be happy to remind them of how their members have voted because we know that for small parties of only five members it can be very difficult communicating with their constituents and telling them what they have done. We will be very happy to assist in that and make sure the Maori Party’s constituents are properly informed about how their members have voted within Parliament. 
We will also be very interested to see what judgment those constituents make upon that party. It is not beyond the realms of possibility that those constituents will decide that having seen a tax increase over what they were expecting to get that is somewhat mana-reducing from their perspective rather than mana-enhancing. It may well be goodbye to the Maori Party at the 2011 election which will solve a lot of problems for a lot of people. But of course Mrs Turia has a way of making up the difference. She believes that Maori own the foreshore and seabed; no doubt she will be charging for entry to that at some point in the future under a National Government and that may well make up some of the difference for some of the families involved. 
I think not; I do not see the National Party going down that route. The polling tells us—amazingly—that people believe that any change to the current law should reduce Maori rights not increase them. So I strongly advise the Maori Party to adopt the route that Ngati Porou has taken and to advise people to negotiate very strong agreements that will give proper recognition of those rights rather than hold out a false impression that something more significant can be gained from a National-led Government which will certainly not be the case when reality sets in. Like the Resource Management Act changes it will be the reverse of what many people were hoping to see. 
Therefore this small part confirms those annual tax rates. For this one brief year of glory nobody will lose and then the losing will begin.