Tremain Chris: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
Tremain Chris: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
[Volume:644;Page:13694] 
CHRIS TREMAIN (National—Napier) 
: 
 I rise tonight to speak on various parts of the Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill but for starters I will focus on Part 1. As my colleague Lockwood Smith said we will be canvassing various clauses of the bill clause by clause and taking it issue by issue as it comes along. In particular I will focus tonight on three areas. Firstly I will deal with clause 3 and the rates of income tax for 2007-08. Later on tonight I will have a look at the changes to the charities legislation in clauses 27 and 85. Clause 85 deals in particular with rebate in respect of gifts of money. Later on I will look at the new sections KJ 6 through KJ 12 which introduce changes to the KiwiSaver employer tax credits. So there is a fair bit to cover. I know that other colleagues will deal with the various issues tonight. 
In rebuttal of the chairman of the committee in regard to Supplementary Order Paper 167 the issue here is a matter of process. This particular issue did not come before the committee but has ended up in a Supplementary Order Paper before us in the Chamber tonight without a wider consideration of other matters such as accident compensation payments which my colleague pointed out could have been brought into consideration along the way. Once again a Supplementary Order Paper has been thrown on the Table without due consideration and without coming before the select committee and in our opinion that is not good enough. 
I focus on clause 3 “Rates of income tax for 2007-08 tax year”. Taxation rates in this country have been far too high for far too long. Under this Labour Government we have seen tax rates climb not fall. Since 2000 the number of people in the 39c tax rate has increased and as a result of that we have seen taxation collected in this country like never before. For the year ended 30 June 2007 $56.5 billion in tax was collected from this country. If we take a step back to the year 2000 $34.4 billion was collected in taxation. That is a total increase of $22.1 billion over 7 short years—$22.1 billion. That is a whopping 5525 additional tax dollars per every man woman and child. It is a 64 percent increase in direct taxation on the basis that this Government knows best how to spend taxpayers’ money—not its own money but the taxpayers’ money. 
How have we ended up in this position? There has been absolutely no movement in tax rates over the course of this Government except in this latest bill that we see before us. I call it the “Too Little Too Late Bill”. There are some tax deductions now but we have not seen that over the course of this Government until this stage. What have we seen? Taxes are up the thresholds have been unchanged and we saw the “chewing gum tax cut” threshold proposed and then taken out by this Government. We have seen tax bracket creep as people have moved into higher tax brackets. When we started out there was the proposal by the Government that no more that 5 percent of the country would be above a 39 percent tax bracket. Now we see nurses policemen tradesmen and wharfies all creeping up into that 39 percent tax bracket through bracket creep. They are paying more and more tax. We now see 12 to15 percent of taxpayers in that higher tax bracket. 
One has to ask whether we are going to see personal tax cuts over the next year? We have seen Dr Cullen out there proposing it having his arm twisted by the Prime Minister. I come back to a Cabinet paper signed by Michael Cullen in 19 April 2007. There will be Ministers on the other side of the House for example Mr Shane Jones who were not present when this paper was signed off. What it shows is the determination of this Government to keep tax rates high. Clause 23 states the commitment from Dr Cullen: “To maintain our commitment to the long term fiscal objectives”—that is Cullen-speak for building the kitty—“I may need to make some adjustments to future Budgets. These are likely to be that we do not adjust tax thresholds in the medium term thereby retaining fiscal drag and potentially allowing tax to GDP ratios to rise slightly. Accordingly this paper seeks Cabinet agreement to rescind our previous decision to adjust income tax thresholds.” 
There we go. It is a paper no doubt signed off by the Minister sitting in the chair tonight Peter Dunne. It is a paper that is going to rescind on any future tax increases. It goes on to say: “Within the projection period i.e from 2011-2012 we will adjust tax thresholds for inflation.”