Smith Lockwood: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee 
Smith Lockwood: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee 
[Volume:621;Page:16504] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 In speaking to Part 1 of the Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill I remind listeners that that is what we are debating because they may have gotten a little confused. Part 1 is about this Labour Government wanting to confirm the annual income tax rates. 
It is an incredible paradox that this Government seeks tonight to confirm income tax rates in this country when it seems to be Helen Clark’s policy that Cabinet Ministers may or may not have to pay income tax. To me that is an extraordinary paradox. The Minister John Tamihere has not been sacked so it seems to be OK to Helen Clark that he does not pay income tax. What are we debating Part 1 for if Cabinet Ministers do not have to pay income tax? As the Minister in the chair the Hon David Cunliffe knows it is the responsibility of every citizen to pay— 
Hon Damien O'Connor 
: Of the employer. 
Dr the Hon LOCKWOOD SMITH 
: No it is not. The Hon Damien O’Connor suggests that it is the employer’s responsibility. It is the responsibility of every citizen to pay his or her taxes. It is the responsibility of every citizen to make sure he or she has paid the correct amount of tax because employers do not know what other income individuals have. It is up to individuals to make sure except that Helen Clark’s Labour Government sets new standards. Working people of New Zealand pay income tax as spelt out in Part 1 but not her Labour Cabinet Ministers. 
I want to raise a couple of other serious issues. This Labour Government is confirming these high rates of tax when it has increased the tax take by 25 percent in real terms. According to the OECD we are now paying 35 percent of GDP in tax. What is worrying about that is that in the last year for which the OECD has data—that is 2001-02—the amount of tax as a percentage of GDP went up from 33.3 percent to 35 percent. What is quite clear is that Labour is trying to get back to where it was in 1989 when it was last in office when the tax burden was 38.3 percent of GDP. Labour is trying to head back up there. 
If the Government was spending the money on worthwhile projects—such as the desperate need to build some roading infrastructure instead of just setting up more committees—there might be some support for this level of taxation. But what is troubling me hugely is that Helen Clark and her Treasurer are now starting to spend money to buy votes. They are going to tax working New Zealanders—Part 1 confirms the high burden of tax on working New Zealanders—and spend the money to buy votes in next year’s election. The most recent occurrence was $20 million of ordinary working New Zealanders’ taxes going to buy the votes of the 20000 Niueans living in New Zealand. It is a disgraceful performance by a Government to tax working New Zealanders far more than they have ever been taxed before. This Government has taken $34 billion more from working New Zealanders and is spending it on buying votes for the election next year. 
In my 20 years in this place I have never seen such blatant vote buying as we are now seeing from this Labour Government. It is a disgrace twice over that we confirm these tax rates in Part 1. It is a disgrace because firstly under Helen Clark’s Labour Government it seems that Ministers do not actually have to pay their income tax. It is quite clear that the Hon John Tamihere did not fulfil his taxation responsibilities under this law and the Prime Minister has not sacked him. Secondly it is a disgrace when taxpayers’ hard-earned dollars are used to buy votes blatantly.