2. Economy—Family Incomes Package Tax Changes and Government SurplusJONATHAN YOUNG (National—New Plymouth) to the Minister of FinanceEconomy—Family Incomes Package Tax Changes and Government Surplus2. JONATHAN YOUNG (National—New Plymouth) to the Minister of Finance: How is the Government ensuring New Zealanders share in the benefits of a growing economy?Hon STEVEN JOYCE (Minister of Finance): New Zealanders benefit from a growing economy first of all through rising wages and job growth. Real after-tax wages have increased by 19 percent so far under this Government and we now have more than 2.53 million people employed—that is a 17.6 percent increase from when we first took office. Budget 2017's Family Incomes Package will also help low and middle income families in particular. As of 1 April next year 1.3 million families will be better off by around $26 a week on average through a combination of tax threshold changes family tax credit increases and additional support through the accommodation supplement ensuring families benefit further from the benefits of growth.Jonathan Young: How do the tax threshold changes in particular help New Zealand families?Hon STEVEN JOYCE: The tax threshold changes in Budget 2017 are focused on the bottom two thresholds and they mean that anyone earning over $22000 a year gets an additional $11 per week or for those earning over $52000 a year they get $20 per week more. These changes will significantly help in particular low and middle income families who have been pushed into higher tax brackets because the thresholds have remained unchanged as incomes have risen. Some people may be ideologically opposed to these tax threshold changes but 1.3 million families will be better off by $26 a week and actually 750000 superannuitants will also benefit by $13 a week per couple.David Seymour: What is the size of the forecast 4-year surplus after these tax changes take effect?Hon STEVEN JOYCE: Well I do not have that exact figure to hand for the member but I can tell him that of that surplus we are reinvesting all of it actually back into infrastructure over the next 4 years—including that I have allowed an additional $4 billion for currently unallocated matters that may come up over the next period of time. But it is a very big investment in infrastructure—$32.5 billion. It is like the country investing in its own growth and it will bring great infrastructure for New Zealanders.Jonathan Young: How is the Government able to afford the $2 billion Family Incomes Package?Hon STEVEN JOYCE: By ensuring that the economy is growing which allows us to not only invest in the Family Incomes Package but also make very large investments in public services and infrastructure. That is only possible because of the strong economic plan. Through that plan businesses have the confidence to make investment—investment is up again—and hire more people. We are seeing the results of this with 181000 new jobs created in just the last 2 years. What businesses do not need of course is uncertainty whether it would be through a water tax a fuel tax or a capital gains tax.Jonathan Young: How else is Budget 2107 helping Kiwis to get ahead?Hon STEVEN JOYCE: A benefit of economic growth is that more Kiwis are choosing to stay home and make their futures in this country rather than over in Australia or the UK. That of course means building more houses in our cities—residential construction is at record levels—and Budget 2017 helps that further with initiatives like the Housing Infrastructure Fund and the Crown Building Project which together will facilitate the building of 94000 new houses over the next 10 years. We recognise that the way to get more Kiwis into homeownership is to build more houses which is why we are making these investments—and because we know a capital gains tax would not build a single extra house.David Seymour: How can the Minister be Minister of Finance and not know that his own Treasury documents forecast a $21 billion surplus over the coming 4 years?Hon STEVEN JOYCE: Because the member asked it as a supplementary question this afternoon and I did not have the figures and I would not want to mislead him. But given the numbers are as they are I would point out to him again that the reality of it is that that money is allocated towards infrastructure investment over the next 4 years.David Seymour: Is the Minister saying that Treasury has it wrong when it counts infrastructure investment as part of the capital account and says that the Government has $21 billion in surplus over the next 4 years?Hon STEVEN JOYCE: I have to explain this to the member. The operating surplus is operating expenditure before capital and then capital is invested out of the operating surpluses. That is where that money has been allocated. Once the surplus is declared it is then spent on capital expenditure. If the member would like to look at residual cash over the 4-year period which is effectively the Government's bank account it is approximately neutral over those 4 years.David Seymour: Why then that being the case was the Minister's predecessor happy to claim a surplus even when the capital account was in deficit only a few years ago?Hon STEVEN JOYCE: Well an operating surplus is what it says on the tin: it is an operating surplus. That is what it is and then after that you decide whether you pay down debt or you make capital investments or whatever you would like to do with the money that you have made through the surplus. That is how it works.David Seymour: Supplementary question. [Interruption]Mr SPEAKER: Order! The member has a right to ask supplementary questions.David Seymour: So given the Minister cannot have it both ways can he confirm that in the operating account he has $21 billion over 4 years that he could deliver substantial tax cuts with but he will not; if that is not true why did he not know what the surplus was at the start of this series of questions?Mr SPEAKER: There are two supplementary questions and the Minister can address one.Hon STEVEN JOYCE: For the member's benefit we are of course allocating $2 billion a year to the Family Incomes Package over the 4-year forecast period which is just about $6.5 billion in net terms given it starts 1 April next year. But yes we have taken the decision to invest the surplus that is in the books into infrastructure for New Zealand's future. We are a growing country and we have taken the decision—the member is right; you could take a different decision. That is the decision we have taken.