Dunne Peter: Questions for Oral Answer — Questions to Ministers Questions to Members 
Dunne Peter: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:621;Page:16517] 
3.  
Hon PETER DUNNE (Leader—United Future) 
 to the  
Minister of Finance 
: Is the Government proposing any changes to the Working for Families package in the next Budget? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 At this stage no. 
Hon Peter Dunne 
: What reaction does the Minister have to last week’s OECD report which pointed to particular problems with second income earners in families and is the Government prepared to consider ways of boosting the income of second income earners through tax reforms such as income splitting? 
Hon Dr MICHAEL CULLEN 
: Income splitting is an interesting idea and I will give a few examples of how it would work. If a couple both earned $30000 a year there would be a net gain of zero from income splitting. But with one income of $60000 a year there would be a net gain of somewhere around $100 a week or more. It is hard to see why that would be seen as equitable when in fact it is more expensive for two people to go out to work than for one person to go out to work in most cases. 
John Key 
: Is the Minister supportive of the accommodation supplements contained in his Working for Families package; if he is how does he reconcile that support with the following statement: “The accommodation supplement or voucher for housing has harmed not helped housing provision for poor New Zealanders including many Maori and Pacific Islanders.” which was from Helen Clark in June 1994? 
Hon Dr MICHAEL CULLEN 
: The introduction of the accommodation supplement system which went along with the removal of income-related rents and the introduction of market-related rents in State housing led to a significant increase in the cost of housing for low-income earners. It is only with a strong programme of income-related rents and State house acquisition that the accommodation supplement system makes any sense. 
Gordon Copeland 
: Does the Minister concede that in a progressive income tax system if the brackets are not adjusted following significant movement in the consumer price index as they will be for the Working for Families package the taxes are being increased in real terms; if not why not? 
Hon Dr MICHAEL CULLEN 
: Yes but the largest reason for the gain in taxation over the last 2 or 3 years has in fact been the growth in employment rather than any fiscal drag effects through bracket creep. 
Gordon Copeland 
: Can the Minister advise the House in light of the reality that in a progressive income tax system taxes are being increased in real terms unless the brackets are adjusted for the movement in the consumer price index how large such an increase would need to be before he would adjust the tax brackets to give some much-needed relief to New Zealand families? 
Hon Dr MICHAEL CUL 
LEN 
: I do not have a particular set against any changes at any point in the future. But if I plucked a sum out of the air of say $500 million—which is probably the rough cost of income splitting or something rather north of that—if that sum was delivered say through bracket indexation arrangements the vast majority of workers would get very little or around $4 to $5 a week. 
Gordon Copeland 
: Does the Minister understand that in indexing the tax collected on tobacco alcohol and petrol whilst refusing to index tax reductions by using the same methodology the families of New Zealand may perceive that the Government is applying a double standard? 
Hon Dr MICHAEL CULLEN 
: Well they may but in response to that let me say that the reason for the excise duties on tobacco is not simply to raise money but is to discourage tobacco consumption. If there is no indexation then the impact of that negative signal actually reduces over time. Secondly in terms of the excise duties on petrol as the member is well aware the real income from petrol excise duty reduces without indexation so we cannot afford more roads. 
Rt Hon Winston Peters 
: With what rigour did the United Future party approach him and his leader during the time of negotiations in respect of their guarantee of support for supply—or did its members just plain lie over as they usually do? 
Hon Dr MICHAEL CULLEN 
: No no the United Future party did not turn the other cheek in any shape or form during the negotiations with the Government. But it was interested in making sure MMP works with stable Government. This is the first Government that has produced stable Government under MMP unlike the attempts when that member was a Minister.