English Bill: Questions for Oral Answer — Questions to Ministers 
English Bill: Questions for Oral Answer — Questions to Ministers 
[Volume:646;Page:15174] 
2.  
Hon BILL ENGLISH (Deputy Leader—National) 
 to the  
Minister of Finance 
: What was Treasury’s best estimate of the cost of the announced but later cancelled inflation indexing of personal tax thresholds which were due to come into effect on 1 April 2008? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 In the first year it was approximately $360 million. I do note that those changes were opposed by the National Party. 
Hon Bill English 
: Can he confirm that in the 3 years since he promised the “chewing gum tax cuts” the cumulative surplus has been $25 billion and that he argued in 2007 he could not afford a 67c a week tax cut and then went on to commit $11 billion towards new spending in the same Budget in 2007? 
Hon Dr MICHAEL CULLEN 
: The member is perilously close back to arguing that the operating surplus is the measure of what is available for tax cuts a point of course he has got into some trouble over when by a matter of a failure in the Inland Revenue Department the Government announced an operating deficit and the member was the first to rush from the corner and say this had nothing to do with the level of tax cuts that were affordable. 
Hon Mark Gosche 
: What is the value per annum of the tax relief for families announced before the 2005 election? 
Hon Dr MICHAEL CULLEN 
: Due to the post-Budget announcements in 2005 those eligible for Working for Families will this year receive over $2 billion in tax cuts. I make the following comparison. For a single-income family on the average wage and with two children under 12 in December 1999 the net tax payable by that family was $4655 or 13.4 percent of the gross income. In the last quarter of last year that had dropped to $1941 or 4.2 percent of its gross income—less than a third of what obtained under the last period of the National Government. 
Hon Bill English 
: Can the Minister confirm that the hundreds of thousands of households that missed out on the tax cuts that he promised just before the last election but cancelled afterwards now face record high household debt record high interest rates and record petrol prices and food prices and that he is planning to use the money from those cancelled tax cuts to try to buy their votes this year? 
Hon Dr MICHAEL CULLEN 
: I can confirm that the National Party promised to cut the last $10 a week in the increase to the Working for Families tax credit that came into force on 1 April 2007 which has delivered substantial gains to many low-income families. I do note the member’s view that tax cuts delivered by the Labour Government are buying people’s votes whereas tax cuts promised by the National Party have nothing to do with that at all. 
Hon Bill English 
: Is the Minister aware that the number of New Zealanders who left permanently for Australia in the year ended February is 38 percent higher than in the year before and does he think it has anything to do with the fact that Labour’s record on personal tax is to promise cuts then not deliver them while the Australians have consistently cut taxes for the last 5 years and will continue to do so for the next 3 years? 
Hon Dr MICHAEL CULLEN 
: Labour has delivered some $4.5 billion a year of tax cuts so far. I confidently predict that on Budget night if and when there is—and there will be—legislation to implement tax cuts National will vote against it thereby completing its long record on that. The member nods his head in agreement. 
Hon Bill English 
: Why is it that the Minister has gone ahead with company tax cuts because he believes they will stimulate investment and make New Zealand more competitive and gone ahead with a research and development tax credit because he believes it will stimulate investment and make New Zealand more competitive but he has always argued that personal income tax cuts make no difference whatsoever which is why he cancelled them from 1 April today? 
Hon Dr MICHAEL CULLEN 
: No indeed that was cancelled so that the Government could afford the enhancements to KiwiSaver which has over 500000 New Zealanders joined up to it and is proving to be a stunning success. Mr English cannot wait again to run into a corner to hide from questions about National’s policy on KiwiSaver. Everybody is waiting with bated breath. 
Rt Hon Winston Peters 
: Has the Minister received any reports as to the series of retrograde steps taken by Roger Douglas after 1984 and then onwards by Ruth Richardson in 1990 which began to create the huge disparity between New Zealand’s and Australia’s economic performance and which will take considerable time to turn around; is it a fact that Mr English and his ilk supported those measures back then in the heyday of Roger Douglas and Ruth Richardson and is it not a bit rich now for him to start arguing that somehow that huge differentiation owes nothing to his responsibility at all? 
Hon Dr MICHAEL CULLEN 
: It is certainly true that the gap in GDP and the gap in wages and salaries grew most strongly between the early 1980s and the mid-1990s. That is when the gap opened up the most. I think it would be quite flattering to say that some of the measures undertaken between 1984 and 1990 were supported by the National Opposition. I think that it is true to say that it supported them in secret but continued to vote against them in public. 
Hon Bill English 
: Does the Minister believe it is an achievement of the Labour Government that people on the average wage who do not have the benefit of Working for Families tax relief now pay a greater proportion of their income in tax than they did when Labour took power and that many hundreds of thousands of New Zealanders not only have had no relief from high taxes but in fact have had their taxes increased? 
Hon Dr MICHAEL CULLEN 
: The reason why that statement about the proportion of income is true of course is that real incomes have risen by 15 percent at an individual level and by 25 percent at a household level. I emphasise that real incomes have risen by 15 percent at the individual level and by 25 percent at the household level. We have had the longest period of economic growth since World War II. We have the lowest unemployment rate we have had since the modern measures were introduced. 
Hon Bill English 
: Why no tax cuts? 
Hon Dr MICHAEL CULLEN 
: The member cannot recognise that kind of achievement when he sees it but I will say again: there will be significant tax changes in this year’s Budget and I guarantee that that member will vote against them and will find every possible casuistical excuse for doing so.