Copeland Gordon: Questions for Oral Answer — Questions to Ministers Questions to Members 
Copeland Gordon: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:621;Page:16445] 
12.  
GORDON COPELAND (United Future) 
 to the  
Minister of Revenue 
: Is he satisfied with the current levels of taxation in New Zealand? 
Hon Dr MICHAEL CULLEN (Minister of Revenue) 
: 
 In general terms yes. New Zealand is lightly taxed by developed world standards being ranked 12th lowest of 30 OECD countries in terms of tax revenue to GDP. 
Gordon Copeland 
: Has the Minister seen the latest  
OECD Revenue Statistics 
 report which shows New Zealand at 20.6 percent—not only second-highest but also way above the OECD average of just 12.9 percent—for tax on individuals and companies as a percentage of GDP; and does he acknowledge therefore that New Zealanders are highly taxed in that regard? 
Hon Dr MICHAEL CULLEN 
: No not at all because the vast majority of OECD countries—in particular European countries—have other large taxes on personal income by means of social security contributions which in New Zealand do not exist as separate taxes. We would have to add European-style social security contributions from both employers and employees to the figures to arrive at comparable numbers. 
John Key 
: If the Minister does not think it is necessary to adjust tax thresholds for the impact of inflation why did he recently slip through legislation that allows him as Minister of Revenue to index annual increases for petrol taxes and how does he see that as being fair? 
Hon Dr MICHAEL CULLEN 
: I do not think I have slipped that through yet and clearly I have not got away without it being noticed. 
Gordon Copeland 
: Is the Minister aware that in the same OECD report the latest figures show that at 14.8 percent New Zealand has the third-highest tax on personal income as a percentage of GDP and again that that is way above the average of just 9.8 percent for the OECD as a whole; and is that not further evidence that taxes are too high in New Zealand? 
Hon Dr MICHAEL CULLEN 
: No. I repeat that one has to look at the social security taxes that are levied separately in nearly all other OECD countries. I think that in Germany the figure for superannuation alone is a 19 percent tax rate on personal income. 
John Key 
: If the Minister does not think that there is room for tax cuts when the operating balance excluding revaluations and accounting changes is running at around 4 percent of GDP—in fact above 4 percent of GDP—how large would the surplus have to be before the Minister thought tax cuts were appropriate? 
Hon Dr MICHAEL CULLEN 
: I suspect it would have to be extremely large before that member would benefit from any tax cuts that I would introduce. But other people are looking forward to significant gains under this Government and in next year’s Budget package there will certainly be moves in the business area. 
Gordon Copeland 
: Does the Minister concede given that New Zealand gets an unusually high proportion of its tax revenue from personal and corporate incomes that consideration should be given to a re-evaluation of the levels at which these taxes are set? 
Hon Dr MICHAEL CULLEN 
: No. Let me give an example. If in New Zealand we had a 9 percent payroll tax which is about the average paid in Australia at the combination of state and Commonwealth levels the corporate tax rate could be lowered to about 15 percent on a revenue neutral basis. But in terms of tax design a payroll tax is not superior to having a higher corporate tax rate. 
Gordon Copeland 
: I seek the leave of the House to table three documents from the OECD—“Total Tax Revenue as a Percentage of GDP” “Taxes on Income and Profits as a Percentage of GDP” and “Tax on Personal Income as a Percentage of GDP”. 
Mr SPEAKER 
: Leave is sought to table those three documents. Is there any objection? There is. 
Peter Brown 
: Has the Minister taken careful note of United Future’s passionate plea for a reduction in taxation and can he tell the House whether it has made any representation to halt the proposed petrol tax in the Customs and Excise (Motor Spirits) Amendment Bill—or are they just making hollow noises? 
Hon Dr MICHAEL CULLEN 
: United Future has made a lot of suggestions around the taxation area and received a lot of information from the Government in that respect. United Future supports an increased funding flow going into roading and public transport in the future and therefore are prepared to pay for their dreams in that regard whereas some parties just have the dreams without paying for them.