Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
[Volume:613;Page:9622] 
1. CLAYTON COSGROVE (Labour—Waimakariri) 
 to the  
Minister of Finance 
: What are the Government's priorities for changes to the tax system? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The Government is engaged in a comprehensive programme of tax simplification and compliance cost reduction. We also plan to introduce a package in the 2004 Budget to deliver income increases including through the tax system to low and middle income families. 
Clayton Cosgrove 
: Has the Minister received any reports on other possibilities for tax changes? [ 
Interruption 
] 
Hon Dr MICHAEL CULLEN 
: And can I add my welcome to Dr Brash. I have seen a report advocating a reduction in the top income tax rate and the corporate tax rate to 30c in the dollar. This would deliver nothing to anybody earning under $38000 a year. 
John Key 
: Earning less under you. 
Hon Dr MICHAEL CULLEN 
: I notice the spy has not come in from the cold just yet! This would not deliver anything to anybody earning under $38000 a year and would place considerable pressure on both the fiscal position and the economy where the domestic sector is moving very strongly. It is no wonder that National post-coup is described as a bunch of deranged haemophiliacs arguing over which is the best band-aid. 
Mr SPEAKER 
: That last phrase was out of order and I ask that it be withdrawn. 
Hon Dr MICHAEL CULLEN 
: I withdraw it. 
Dr Don Brash 
: Given that the Minister’s own preferred measure of the Budget balance shows the surplus in the year ended June 2003 was $5.6 billion is he determined to continue overtaxing hard-working New Zealanders; if so is this related to his need to fund his planned election year give-aways? 
Hon Dr MICHAEL CULLEN 
: It is a bit rich as we might say on this side of the House to describe a programme designed to deliver better incomes to low and middle income people as a give-away but tax cuts for people on many hundreds of thousands of dollars a year as presumably good economics. 
Dail Jones 
: Why does the Government give greater priority in its changes to the tax system to giving tax incentives for foreigners in the film industry while failing to support New Zealanders in export businesses with tax incentives such as the New Zealand First proposal for a 20 percent tax rate especially bearing in mind this country’s seriously deteriorating balance of payments situation? 
Hon Dr MICHAEL CULLEN 
: The film industry offers the opportunity for substantial development of employment and wealth creation within New Zealand. But I think if the member actually looked seriously at his proposal on tax rates which involves differentiating between an exporting business or a non-exporting business and which part of it is exporting and which part of it is not he would find that huge compliance costs would be created in trying to operate differential tax rates in that regard. 
Rod Donald 
: Why does the Minister continue to refuse to give middle and low income workers in this country the same 6 percent tax concession that those earning over $60000 currently enjoy? 
Hon Dr MICHAEL CULLEN 
: The roughly $79 million a year cost of that would be far better spent if there were other mechanisms designed to address and assist savings. The Government expects to make announcements on that within the next few months. 
David Benson-Pope 
: What is the estimated cost of reducing the top personal tax rate and the corporate rate to 30c? 
Hon Dr MICHAEL CULLEN 
: The reduction would cost approximately $1.7 billion. It should be noted that if that was applied to increases for low and middle income families via such mechanisms as family support it could lead to increases of about $150 a week or more for a two-child low-income family. Under the proposals I have seen that family would not get a single cent extra.