Foss Craig: Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill — First Reading Second Reading In Committee 
Foss Craig: Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill — First Reading Second Reading In Committee 
[Volume:647;Page:16283] 
CRAIG FOSS (National—Tukituki) 
: 
 It is an absolute pleasure to be speaking on and voting for the Taxation (Personal Cuts Annual Rates and Remedial Matters) Bill—an absolute pleasure. It feels good. I thought we would have to wait another 6 months or so to be voting for one of these bills or to have a bill that cuts personal taxes before the House. Thank you Mr Assistant Speaker for the opportunity to vote on this particular bill.  
As many speeches before mine have crossed into the Budget itself and this bill I will follow suit. We are in urgency tonight. Maybe it is because Dr Cullen could not trust himself but more likely it is because Mr Goff did not trust Dr Cullen. We are in urgency because it is urgent that there are personal tax cuts in New Zealand. It is as simple as that. It is desperate that there are personal tax cuts in New Zealand. It is overdue that there are personal tax cuts in New Zealand—9 years overdue or to be precise and quote John Key from his earlier speech 3000-odd days overdue. 
In the second reading of this particular bill and in the Budget there is no apology whatsoever from the Government for doing nothing about personal tax rates and thresholds for 9 years of the best economic conditions that New Zealand has ever faced. There is no apology whatsoever in the Budget for the doubling of interest rates under the current regime. There is a commentary within the Budget itself where there are some very interesting graphs of the behaviour of Dr Cullen’s spend-up over the last 9 years and they basically go straight up as interest rates have increased under his watch. There is no apology in this Budget or this bill for inflation being north of 3 percent and eating away at our wealth. Members on the other side of the Chamber go on and on and talk about public assets etc. but inflation eats away at our wealth and our future. There is no apology in this Budget or in this bill for the lack of productivity growth in New Zealand—the only way out of the current bind that we are in. There is absolutely no apology to family friends and whanau who have all given up and moved to Australia for brighter futures and better income streams. There is absolutely no apology whatsoever. 
Earlier speakers have spoken about borrowing. Mr Chauvel over there was saying there was no borrowing for tax cuts. Well in this bill it is quantified at about $10 billion over 4 years. I refer members to page 104 of the Budget which states there is net bond issuance over the next 4 years of $6.4 billion; $6.4 billion will be borrowed to help fund this Budget and it is signed off by the Minister of Finance who has raved on ad nauseam over the last 9 years about not borrowing for tax cuts. He does not explain how he will fund his tax cuts other than with bonds as it says here. He has been denying that for many years. Not only that but in the same Budget there is a $12.8 billion cash deficit forecast for 4 years down the track. How does one fund a cash deficit? The Minister says right here that this will be met by an increase in borrowing—oh please excuse me I meant by domestic bond issuance. Bonds are borrowing. To fund $10 billion worth of tax cuts there is $6.4 billion of bond issuance. Hello! To quote a certain Minister of Finance from what I think was his last Budget: “What is the connection?”. 
The news is not good. New Zealanders—and we saw it on TV tonight—are suffering double interest rates suffering mortgage rates and suffering fixed-rate rollovers to double figures for their 2 and 3-year mortgages. Right here on page 70 of the same Budget the news is not good. In the Budget fiscal update the prediction is that the 90-day bill average rate for this coming year is 8.8 percent. That is predicted to plummet to 8.6 percent next year. So I ask Government members to show where the relief is in that. In his speech the Minister kept talking about relief from interest rates. Well I have some ideas for the Minister of Finance about how we can start to attack those interest rates and it is not just subprime. Subprime is a credit issue; it is all about where New Zealand’s credit margin starts and the next Government will be doing an awful lot to bring the base Government curve right down. The news is not good in this particular Budget. We have unemployment forecast to blow out to 4.5 percent at the same time that the Minister of Finance is borrowing. The current account is blowing out to 7.2 percent to 7.3 percent. It is not good news. There is one piece of good news: this particular bill. It is a pleasure to vote for a personal tax cut bill. 
I will make another couple of quick points about things that are in the bill. I recall us being in urgency about KiwiSaver the fair dividend rate and the specified superannuation contribution withholding tax changes etc. Right here in this bill—once again sadly I need to say it—there are further changes and amendments to the KiwiSaver legislation to fix up some of the calculations that were not put into it correctly in the first instance when the bill was rushed through. Had a bit more time been spent on that bill it would not even have had to be here under urgency. There is also another fix up in here about the change to registered charities which we will speak to during Committee stage but again that was part of a bill rushed through. The process of this Parliament is about consideration—let the people submit to a select committee—and these mistakes will not have to reappear. The only difference this time is there is no Supplementary Order Paper. Normally there is a Supplementary Order Paper the Government races in under urgency to fix these things up. I will end my speech right there but just again it is a pleasure to finally be voting for a personal tax cut bill.