Katene Rahui: Taxation (Budget Tax Measures) Bill — In Committee Third Reading 
Katene Rahui: Taxation (Budget Tax Measures) Bill — In Committee Third Reading 
[Volume:654;Page:4039] 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 In the hustle of post-Budget commentary the comments of a humble crane operator from Porirua probably summed up for many the reaction to this Taxation (Budget Tax Measures) Bill. Koro Moon told local papers: “I was hoping for more money but I’m not surprised there were no tax cuts. I am not affected by the recession. It doesn’t bother me because we’ve just got to live the way it is. I mean what more can we do?” What can we do? Exactly. We face the worst economic downturn in 30 years. It was always expected that we would all need to tighten the belt and nail down the hatches if we are to get through this time unhindered. I suspect that the nonchalance and possibly fatalism expressed by Koro Moon would not be too different from the response of many New Zealanders as the Budget hit the bookshelves and the analysts plotted their storyline. Quite frankly the repeal of the personal tax cuts and independent earner tax credit will not register with many of our constituents who are far more focused on ensuring that the whanau survives the tough times. 
I bring another angle to this debate. Yesterday as our Budget hit the news-stands the United Nations released a statement warning that “Economic development activities whether government infrastructure projects or mineral extractions by corporations must not infringe on the rights of indigenous peoples”. The United Nations Permanent Forum on Indigenous Issues stated that these issues are extremely complex because so often we understand the need to make economies survive— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. 
Mr DEPUTY SPEAKER 
: I know what the point of order is. We are debating a tax bill that relates to doing away with tax cuts and to KiwiSaver. The member must confine her comments to that. We are dealing with pretty narrow content in the third reading not with other peripheral issues that may be of interest but certainly do not relate to this bill. I ask the member to continue. 
RAHUI KATENE 
: Certainly. If the member had waited I would have pulled the matters together for him. 
As we looked through this bill we have been weighing up in our minds whether the decision to kill the tax cuts comes at the expense of the lives of indigenous peoples. I have to say that the balance is favourable. As Koro Moon pointed out tax cuts never meant a great deal in comparison with some of the other issues affecting indigenous peoples. There has been a lot of rhetoric in this debate around broken promises. All I can say is that for tangata whenua a fairly significant promise weighs heavy in our collective soul—that is around Te Tiriti o Waitangi. So we should get a bit of perspective here. 
The evidence provided to us has told us that tax cuts to middle to high income earners contribute to growing income inequality. They do not create the economic benefits that will trickle down to lower-income earners. Indeed the latest OECD report on income distribution  
Growing unequal? Income Distribution and Poverty in OECD Countries 
 shows this as a particular and perverse effect of globalisation. It is well known that the Maori Party was a reluctant signatory to the first tranche of tax cuts. We were always nervous that the new tax regime had created new and unnecessary layers of complexity. It was our thinking in the Maori Party that low-income earners would be better served by blanket tax cuts as had been provided to higher-income earners and by raising the minimum wage. Administrative simplicity is one of the benefits of a broad based - low rate tax framework. Yet the cuts introduced last December failed to provide this benefit. 
We are pleased to support this new bill to cancel further tax cuts in the context of ongoing spending restraint. This is the time for a fresh look. No additional tax relief has been provided for the nation’s most vulnerable families in this time of global economic recession. This tax relief must be an urgent priority for us. In this bill with its effective freeze on tax cuts we hope that the Maori Party will have another opportunity to influence further tax policy. We are pleased that people earning under $40000 a year and who received no tax cuts on 1 April 2009 will no longer be subjected to the higher taxes that were due to come in on 1 April 2010 and 1 April 2011—up to $8.65 per week for some low-income earners. 
The positive in all of this is that the increase in the inequality in disposable income is somewhat halted because of this bill today. But now we must turn to the task at hand. We must think about creating ways to provide tax relief to low-income earners and families such as through tax cuts through taking GST off food and through an increase in the minimum wage. In line with that vision we will support this bill as an opportunity to move forward.