Foss Craig: Questions for Oral Answer — Questions to Ministers 
Foss Craig: Questions for Oral Answer — Questions to Ministers 
[Volume:661;Page:9889] 
2. 
CRAIG FOSS (National—Tukituki) 
 to the  
Minister of Finance 
: How will Budget 2010 make the tax system fairer? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 A stream of bad decisions taken by the previous Labour Government over recent years— 
Hon Darren Hughes 
: I raise a point of order— 
Mr SPEAKER 
: I do not need to hear the point of order. I simply say to the Hon Bill English that when he is asked “How will Budget 2010 make the tax system fairer?” to start with “A stream of bad decisions taken by the previous Government” is hardly answering the question asked and it is out of order. 
Hon BILL ENGLISH 
: The Budget will seek to undo a stream of bad decisions made by the previous Government. The previous Labour— 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: Members may not have noticed but a point of order was called and any interjections during a point of order will see someone out of the House. 
Hon Darren Hughes 
: As you pointed out Mr Speaker the question on notice which comes from the Government side is clearly about Budget 2010. You made an intervention which the Minister deliberately flouted and the Minister’s answering questions like that will lead to disorder. He can give a solid answer based on that primary question. 
Mr SPEAKER 
: Absolutely. I agree with the honourable member that there is no need to start answering the question that way. It is bound to lead to disorder. Once the Minister has given an answer he knows he can probably make some comment but to start answering that way is inconsistent with the Standing Orders. The Minister should start by telling us what he is planning to do with tax in the Budget as the question asks. 
Hon BILL ENGLISH 
: Budget 2010 will seek to undo a stream of decisions made by the Labour Government that allowed too many New Zealanders to essentially choose the rate of tax they will pay. Labour did this by creating a proliferation of different tax rates across different entities and this has undermined the wider sense of fairness in the tax system. We want to make sure that people pay the statutory tax rates and do not exploit the opportunities provided by the previous Labour Government for higher-income taxpayers to pay less tax. 
Craig Foss 
: What options are available to the Government to reduce inequities in the tax system? 
Hon BILL ENGLISH 
: The Government has the option of simplifying the tax system. The previous Government left us with a proliferation of tax rates; for instance it set the top personal tax rate at 39c the trust rate at 33c the company rate at 30c and the rate on high-income investors at 30c. It may not be possible to bring all these rates into line but we can reduce the number and spread of the tax rates so that the system is fairer to New Zealand taxpayers. 
Stuart Nash 
: How is it fair that under details of the tax package leaked by the Government to the  
Sunday Star-Times 
 
someone on $150000 gets a tax cut nine times as large as someone on $50000? 
Hon BILL ENGLISH 
: The member will have to wait for the details of the package as I pointed out to him previously. He needs to bear in mind that under his Government a self-employed person on $150000 could virtually pick what tax he or she paid. We want to fix that unfairness. 
Craig Foss 
: What measures will demonstrate that the Budget has produced a fairer tax system? 
Hon BILL ENGLISH 
: There will be a number of ways in which people will be able to judge it. People will be able to use standard measures of equity such as Gini coefficients or ratios between different quartiles of income earners or look at how actual households benefit from the changes. We will look at eliminating the glaring inequities in the tax system that the previous Government left behind. I can also indicate that we expect the overall effect of the package to be pretty much neutral across different income levels. 
Stuart Nash 
: Does he consider a tax cut package that delivers a $2 a week tax cut to almost 70 percent of all taxpayers while delivering a $90 a week cut to the top 1 percent is a fair package? 
Hon BILL ENGLISH 
: I would not believe anything that Labour said about a tax package that has not been announced. 
Mr SPEAKER 
: I am not sure I heard exactly what the Minister said in that answer. I believe he said he would not believe anything someone said. The question asked how certain reductions in taxation were fair. The Minister can certainly dispute the figures given but to do it in such a way that I perceive to be derogatory to the questioner is not acceptable. The question was a fair one. It might have been wrong but the Minister can point it out if it is wrong without being derogatory. 
Hon BILL ENGLISH 
: The member is simply putting up a hypothesis. He cannot possibly know what the tax package is because the details have not been decided.