Seymour DavidDAVID SEYMOUR (Leader—ACT): Madam Speaker I hadn't even sought the call. Thank you very much. I want to rise on behalf of ACT in support of this bill. It is the right thing to support funnily enough for reasons that none of the opponents of the bill appear to understand. Let me lay that out and then give one objection ACT has that future support will depend on.Inflation is back. Almost everyone in New Zealand is aware of it except perhaps those working at Statistics New Zealand publishing the official statistics. You go and talk to people in the trades—they say sometimes prices and quotes only last seven days because their suppliers say prices are going to go up. You talk to people who are trying to hire staff—they say there is a bidding war on for skilled staff in this labour shortage. Wage inflation is going up and what that means is that people have to earn more to buy the same stuff. As incomes rise so people can buy the things they need what they find is they can't buy more stuff but their incomes have pushed them further and further into higher tax brackets. So the average amount of tax they pay on a dollar they earn goes up because more of their dollars are in higher tax brackets not because they can buy more but because inflation's put the prices up—they're just paying more tax.Now what's interesting about this is that as this goes on fewer and fewer low-income New Zealanders find that their marginal tax rate and their average tax rate is in the lower brackets. After a while if we leave the brackets the same for long enough then practically everybody finds themselves on higher tax brackets and our tax system becomes less progressive. Let that sink in for a moment. So the Labour Party friend of the worker friend of low-income New Zealanders actually are opposing a bill that would have maintained the progressivity of the tax system by raising the tax brackets so low-income New Zealanders stay in lower tax brackets. This is the problem.Chlöe Swarbrick gets up and gives us all the philosophy but she hasn't thought about the basic arithmetic behind this bill neither has Deborah Russell. The so-called tax expert points out that people who earn more and pay more tax will benefit more from tax reductions. Of course they will that's always true. But the relative effect of this bill will be to ensure that lower income people stay below the tax thresholds and pay lower rates of tax.The previous National Government actually boasted that they had made taxation more progressive and that's why the ACT Party is supporting this bill to select committee but no further. Actually we want lower flatter taxes. We want all New Zealanders to pay the same tax rate on all income. If we're going to do that then we're going to have a tax system which is fairer where everyone pays the same rate which is simple which doesn't involve accountants trying to shift income around between vehicles and between income years to lower the tax that they pay and which has the right values that if you earn more you pay more but we don't hit people harder with additional tax rates.This bill is actually counter to the principle of lower flatter taxes. It maintains the progressivity of the tax system. So we support it to first reading because we're always eager to see tax reductions for hard-working New Zealanders. But we will put up an amendment to this bill at later stages which says this: As fiscal drag pushes people into higher tax brackets and people pay a larger portion of their income in taxation even though inflation has eroded their purchasing power here's what should happen to the extra money that Government gets from fiscal drag: it should be used to drop the top tax rate so that our taxation system becomes lower fairer flatter simpler and more in line with the values of New Zealand that if you work hard it's yours." That has got the Labour benches confused. That's why we'll be supporting the bill to first reading but we'll need amendments at later stages. Thank you Madam Speaker."