Goff Phil: Questions for Oral Answer — Questions to Ministers 
Goff Phil: Questions for Oral Answer — Questions to Ministers 
[Volume:663;Page:10956] 
2. 
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: When he told Kiwis that they should not be envious if the rich get more from the Budget tax package because they were in core and critical categories for the economy what was he telling middle and low income New Zealanders about their importance to New Zealand? 
Hon JOHN KEY (Prime Minister) 
: 
 What I actually said on Monday was that people paying the top personal rate included skilled professionals like doctors engineers scientists and the like who fit into some core and critical categories in the economy. Those people are in demand all around the world and we need to have their careers here and for them to be put to work in New Zealand. I did not mention the rich at all because the rich by and large do not pay the top personal rate. Really wealthy people will probably find that they are paying considerably more tax as a result of the Budget tomorrow not less. 
Hon Phil Goff 
: If the tax switch that the Prime Minister talks about is to be revenue-neutral as he claims why is he telling middle and lower income Kiwis struggling to meet rising costs that they should get less so that higher-income earners can get an even bigger slice of the pie? 
Hon JOHN KEY 
: For a start even taking all the aspects of the package put together middle and low income New Zealanders will not be getting less. The good news for them tomorrow is that they will be getting more. The interesting thing is that someone earning $60000 a year with no children who waited 10 years under a Labour Government to get absolutely not a cracker will be getting more in the Budget tomorrow than he or she might expect. 
Hon Phil Goff 
: Why does the Prime Minister think it is fair that chief executives who as we saw in the media last week were getting pay increases of more than $1000 a week last year and getting very handsome tax cuts last year should get $700 a week more this year under his proposed tax cut while middle and low income earners such as families earning under $40000 got nothing last year and will get very little this year in net terms? 
Hon JOHN KEY 
: There are two things. Firstly the chief executives the member is talking about had pay increases locked in under his Government not ours; and by the way New Zealanders earning $40000 who have two children do not pay any tax in this country because of Working for Families. 
Mr SPEAKER 
: I apologise to the Hon Jim Anderton but I have no chance of hearing his supplementary question while that amount of noise remains. 
Hon Jim Anderton 
: Is the Prime Minister aware that New Zealand has one of the worst income gaps between rich and poor in the developed world; if so why is he planning to make that situation even worse while asking the poorest New Zealanders not to be envious? 
Hon Phil Goff 
: I raise a point of order Mr Speaker. I do not know how you heard that question because I am closer to the member and I did not hear it at all over the interjections from the Government benches. 
Mr SPEAKER 
: I did hear the question. 
Hon JOHN KEY 
: All I can say to the member is that if it was something that concerned him so much why was he part of a Government that for 9 years made it worse? 
Hon Jim Anderton 
: I raise a point of order Mr Speaker. I think my question to the Prime Minister was very clear. I know he was talking to the Minister of Finance to try to get some help but he did not address the question in one single way at all. What he did was abuse the questioner. 
Mr SPEAKER 
: What I will do on this occasion—because members complained that they could not hear the question and I am not totally surprised by that—is invite the member to repeat his question so that no one can be in any doubt about it. 
Hon Jim Anderton 
: Is he aware that New Zealand has one of the worst income gaps between rich and poor in the developed world; if so why is he planning to make it even worse while at the same time asking the poor not to be envious? 
Hon JOHN KEY 
: I am aware that it became worse under the previous Labour Government and Jim Anderton was a member of that Government. I am also aware— 
Mr SPEAKER 
: I apologise to the Prime Minister but members were concerned about the previous answer given. I allowed the questioner to repeat his question. The House showed courtesy in hearing it in virtual silence. The Prime Minister is answering the question which I heard very clearly and he should be able to do that without a total barrage of interjections. 
Hon JOHN KEY 
: I am acutely aware that there are low-income New Zealanders who would like to earn better wages and the fastest way to do that is to have good economic leadership. For 9 years we waited for that and it never came. Tomorrow the bus is arriving here in Parliament. 
Hon Phil Goff 
: How will average wage earners and salary earners be better off when banks are forecasting that with GST increases inflation will rise to or above 5 percent over the next year and when the same forecasters are saying that the average wage will go up probably by less than 3 percent; so how will they be better off? 
Hon JOHN KEY 
: As that member is aware because he has been in the situation before if there is to be an increase in GST then the Reserve Bank looks through that and the economic implications in terms of inflation from that will not have a bearing on interest rates. What I will say though is that if I recall correctly the last 4 or 5 years of the Labour Government was a time when we saw not only quite high inflation but very high interest rates and we did not get any answers from that Government at that time. 
Hon Phil Goff 
: How does the Prime Minister intend to stop any increases in property tax simply becoming a rent tax that is passed on and adding to the burden of the 30 percent of New Zealanders who rent their homes? 
Hon JOHN KEY 
: Although I cannot give indications today for obvious reasons I can say that the Budget will spell out clearly tomorrow what Treasury’s advice was on that matter. I can advise the member that the effect is negligible. 
Hon Phil Goff 
: How does he explain to Henry Lindsay who is 84 and suffering from critical illnesses that he and thousands of other elderly New Zealanders have suffered cuts to their home help because the Minister of Finance regards that as low-quality expenditure while apparently it is high-quality expenditure to make the biggest tax cuts for the wealthiest New Zealanders? 
Hon JOHN KEY 
: I can explain in two ways. Firstly tomorrow that man will be able to celebrate the fact that we will be spending on health the highest amount ever spent in this country and be spending more on aged care than ever before. Secondly while he was having a cup of tea this morning he was hopefully reading the  
Dominion Post 
 headline “How the wealthy dodge tax” and seeing that tomorrow we will be making sure that all New Zealanders the wealthy included pay their fair share. 
Hon Phil Goff 
: Can the Prime Minister confirm that the article in the  
Dominion Post 
 states that the way we close the loophole is we open it up so that everybody can get through it—it is a bit like saying we close a breach in a prison wall to stop one prisoner getting out and knocking down the wall so everyone can get out? 
Hon JOHN KEY 
: No actually but I am aware that that very article in this morning’s  
Dominion Post  
states: “Financial author Martin Hawes said he would be surprised if any of the richest Kiwis paid the top income tax rate and if they did it would be on only a tiny fraction of their worth.” John Shewan the highly respected tax partner and rightfully so said that trusts were “breeding like rabbits in the South Island”. The  
Dominion Post  
has quite rightfully worked out that a lot of high-income earners are not paying the top personal rate and maybe we should tighten up the tax system so they pay their fair share.