O'Connor Damien; Watts SimonHon DAMIEN O'CONNOR (Labour): Thank you very much Mr Chair. I'm going to take a brave approach to this and take a generous approach to this piece of legislation because it says here the bill also intends to reduce the cost of living. The Government's adherence to tax—and of course their claim that you know high taxes the lack of changes to the thresholds have been the biggest impact on the cost of living for New Zealanders then the question for the Minister is that did he or the Government consider different changes to the thresholds and the impact that that might have had on the cost of living—not the tax going back but the cost of living? Because the reality was for people in those different thresholds the cost of living is made up of different things. Tax is one part of that.In fact if you go to the top end over $180000 in fact the cost of living is made up of food and rent—often not rent because they probably have their own homes. In fact it's discretionary income that will be given back to those higher-income earners. As the previous speaker said at the top quintile where most of the money will be going the impact on cost of living is minimal. It will be an impact on discretionary spending but not cost of living. So if we could go back in a generous way—and I know that I'll be criticised by my colleagues—and say actually the Government may be genuinely interested in reducing the cost of living instead of what some people have been saying which is Actually they're just interested in handing benefits to landlords." I'll be generous. I'll say they are genuinely interested in reducing the cost of living and so the changes to the thresholds in clause 7 here have been made by the Government. My question to the Minister is: did he or his colleagues think about other adjustments that may have at the bottom end say $14000 to $15000 $15000 to $48000 whether you'd extended that out to $60000 and whether actually more benefits to those people whose cost of living is really significant—they spend virtually every bit of their income surviving. Grant McCallum: That's why we need tax relief.Hon DAMIEN O'CONNOR: Oh well that's one of the things yes. I accept that the money going back to them will help but if the aim is to genuinely reduce the cost of living there are many other charges that are going to come at New Zealanders through this Budget believe me—many that haven't been identified yet. So the question is: will this deliver to those in the $15601 to $48000 bracket who'll be paying 17.5 cents per dollar? Will the relief they get from the changes to the threshold have any real impact on the cost of living for those families? Has the Minister considered it and whether there were other ways of reducing the cost of living better ways than the changes that have been made here?Because I can tell you that from $180000 upwards for most of the people here—all the people in this House earning over $180000—this won't make much of a difference to our cost of living. It won't make much difference to our cost of living because it will be discretionary spending. So the question to the Minister: were there considerations given to other changes in the thresholds or other groupings that may have genuinely reduced the cost of living for those people who really need to have their cost of living reduced? If it's the aim of the Act or the aim of the bill as we're told then I want to know from the Minister that these decisions are going to deliver the best outcomes as claimed by the Government.Hon SIMON WATTS (Minister of Revenue): I thank the member for the question. I also acknowledge his agility on the rugby field in the Parliamentary Rugby Team as well. Look we're talking about a tax bill here and some of the questions that were being noted there are broader in regards to the economic implications. The reality of reducing income tax on individuals is going to mean that they're going to have more of their own money to be able to spend or save in the way in which they determine and on this side of the House we are supportive of people taking personal responsibility about how they spend or save that money. No doubt some of that money that they will not be paying in tax to the Government will be used to pay for goods and services that they may not have been able to afford previously if they had not had that money and therefore their ability to deal with the implications of the cost of living will be softened as a result of that. The broader conversations around scenarios and optionality are included within the documentation in relation to this bill. There was consideration as you'd expect in terms of the coalition Government in regards to policies but we have landed where we have landed and we deem that that is the most appropriate mechanism in order to deliver that tax relief to low and middle income New Zealanders. In regards to the questions from the member in regards to the debt track the view is that the general questions of that nature are more appropriately directed to the Minister of Finance and from my assessment of them they're outside of the scope of this bill."