Cullen Michael: Taxation (Urgent Measures and Annual Rates) Bill — In Committee Third Reading 
Cullen Michael: Taxation (Urgent Measures and Annual Rates) Bill — In Committee Third Reading 
[Volume:651;Page:217] 
Hon Dr MICHAEL CULLEN (Labour) 
: 
 One scarcely knows where to begin on this piece of nonsense. I said at the start of this debate that there were some incompetent and silly bits in this bill and this is certainly incompetent and silly and certainly unfair. We are told that this independent earner tax credit applies to 630000 people. There are 3 million taxpayers in New Zealand so 2.4 million taxpayers are getting nothing out of the independent earner tax credit. 
Chris Tremain 
: But they are in the tax threshold changes. 
Hon Dr MICHAEL CULLEN 
: No they are not in the tax threshold changes. The member has not listened at all today. Anybody earning $14000 to $24000 was getting a threshold change under Labour but it is taken away under National. They will be paying more tax under National by 2011 than they would have been paying under Labour. They will be paying $9 a week more if they are on $20000. Everybody believes that. It has been in the newspapers. My God—if we can convince the  
Dominion Post 
 and the  
New Zealand Herald  
then we have the Tory press on side and that is a pretty good start on winning that particular argument. 
We have this nonsense whereby if one is earning $23999 and one earns $1 more one will get a $750 bonus—a $780 bonus by 2010 with the independent earner tax credit. So for that $1 I guarantee that there will be an awful lot of people earning exactly $24000 a year by April 2010. Talk about rorts on research and development tax credits! It will be amazing. We will have businesses around the country saying: “If I slip you 20 bucks extra give me a couple of hundred back under the table because you will qualify for a $780 tax credit from the Government.” That will go on—it will be rorted up and down the country. It will not be all the clever guys in the glass towers who work this one out—small businesses will be working it out for themselves with their own employees. 
But who does not get the independent earner tax credit? Anyone who is receiving an income-tested benefit. So a solo mum who is struggling to bring up her kids going out to work—Paula Bennett’s ideal past—and earning say $8000 a year or $150 a week does not get the independent earner tax credit. She might be struggling to bring up three kids and the Government says to her: “Sorry about that. You’re bringing up kids so you don’t get the independent earner tax credit.” However the guy next door who is her ex-husband and walked out does get it. Members would feel pretty ticked off if they were that solo mum. They would say: “What kind of pro-family National Government is this one?”. This is pretty strange what they are doing here. Had they thought about that? Look at them—they never think about these things when they make up these policies. Why? Because it was made up on the hoof. They promised 50 bucks a week for those on the average wage—which of course was including what Labour was already doing. It was not 50 bucks a week on top of that although they led people to believe that. 
Then when they got the Pre-election Economic and Fiscal Update there was not a dry seat left in the National Party caucus and they said: “Somehow we have to save some money. So how do we deliver 50 bucks a week at $46000 a year?”. Then they had a bright idea. They would have a targeted tax credit that would start somewhere or other fade out by $50000 a year and just happen to add up to not quite $50 but $49.13 I think it was at $46000 a year. That is where this came from. This was a last-minute put-together job that looked as though it was Gerry Brownlee trying to assemble a Chinese bicycle from the parts. It did not work. The wheels were on top of the handlebars and nothing was going anywhere at the end of the day. 
Who else does not get the independent earner tax credit? Anybody who is receiving a veterans pension does not get it. We have heard about all the vets. My goodness have we not had hands on hearts from various people including during the Prime Minister’s speech. Well if one went to one of those places—say Malaya—and got injured and is on a veterans pension and one earns say 10000 bucks which is a couple of hundred dollars a week one does not get the independent earner tax credit. Because one is not independent. So here is a veteran 70 years old or whatever although he is probably a bit older if he went to Malaya. Say he went to Viet Nam and here he is at 60 years old with an injury and qualifying for a veterans pension and my goodness me! He will be cut out of the independent earner tax credit. So that is a thank you for his service to the nation—from the party that sent him there in the first place and did not honour him when he came back. And now it will not give him the independent earner tax credit. I am sure that person will say: “Well thank you very much—again.” 
The person concerned might not be receiving New Zealand superannuation. He or she might have the gall to go out and carry on working which is a good idea with an ageing population he said subtly. It is a good idea to carry on working in that situation. But no that person will not get the independent earner tax credit. And if the person gets Working for Families both partners both spouses do not qualify for the independent earner tax credit—not just one but both. How did Government members make that up in their minds? How do both people get cut out of the independent earner tax credit because of this? This is the first time I am aware of in any developed economy where somebody has developed a tax credit to discriminate against families with children. It is not in favour of families with children as Working for Families is but against them. It says it is a bad thing to have children and if people have children the Government will not say that they are working as hard. 
But what about a person on $23000 or $27000 who is a solo parent going out to work and slaving and probably working horrible shift hours probably paying for childcare and probably struggling to bring up their kids? Those people are being told according to Mr Foss that they are not working hard. Mr Foss who is lying on the great luxurious Government backbenches with no real job to do says: “I know you’re bringing up three kids. I know you’re working 25 or 30 hours a week but you are not working hard enough to qualify for”—what is it from this magnificent this munificent this great turbocharged New Zealand economy? It is $10 a week. When we had a tax cut that for a full-time earner was a minimum of $16 a week it was derided as being merely the cost of a block of cheese. But suddenly $10 a week providing a person does not buy the block of cheese presumably will drive this economy faster into a golden future. 
Hon Ruth Dyson 
: Turbocharge it. 
Hon Dr MICHAEL CULLEN 
: Yes turbocharge it into the future. Are we seriously meant to take this as an intelligent well-thought-through policy by a party that spent 9 years in Opposition planning what it wanted to do in Government? It is rickety put-together ramshackle and expensive. It is expensive to administer. One hundred extra bureaucrats— 
Hon Darren Hughes 
: What! 
Hon Dr MICHAEL CULLEN 
: Do members remember that word? Members opposite call them public servants now that they are in Government but they were called bureaucrats when those members were in Opposition only a few short weeks ago. One hundred extra bureaucrats are needed to administer this bill. It will cost ten million bucks a year which is easily about $100000 per bureaucrat by the time we take the overheads into account etc. etc. That is 100 fewer front-line staff somewhere else in the system delivering services. Well brilliant! It just shows what a brighter future looks like when one cannot think properly when one cannot work out policy and when one does not think about the kinds of individual examples that this applies to. 
I say to Mr Foss that he should go and tell his superannuitants if they work that they do not work hard. He should go and tell the solo mums who are working that they do not work hard. He should go and tell people on veterans pensions who are doing some work that they do not work hard. He should go and tell the struggling families with two income-earners that neither of them will qualify for the independent earner tax credit and then come back here and tell me what a great policy it was. People did not think that is what was happening. The Government might have had it in the fine print but that is not the message it sent to them. The message that National sent was tax credits tax cuts for everybody; that is what National would be doing. But that is not what this bill does and that is why we are voting against this part.