Sharples Pita: Taxation (Annual Rates of Income Tax 2007-08) Bill Taxation (Business Taxation and Remedial Matters) Bill Taxation (KiwiSaver) Bill — Third Readings 
Sharples Pita: Taxation (Annual Rates of Income Tax 2007-08) Bill Taxation (Business Taxation and Remedial Matters) Bill Taxation (KiwiSaver) Bill — Third Readings 
[Volume:644;Page:13781] 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Tena koe Mr Deputy Speaker. At the end of this month all Ngai Tahu whanui who have joined the Whai Rawa programme will be eligible to receive the next distribution from Te Runanga o Ngai Tahu. The distribution of some $250 is twice as much as last year. Every dollar that a member contributes to his or her savings under Whai Rawa will receive $1 in matched savings from Ngai Tahu. It gets even better for Ngai Tahu rangatahi youth who are matched at a ratio of 4:1. So if one of their young people under 16 years of age saves $15 Ngai Tahu will match it with $60. This is Maori enterprise and success at its absolute best. It is a programme designed to provide a base level of saving for all registered Ngai Tahu members as well as supporting a culture of savings and asset building. 
At the end of July 2007 there were over 6300 members and over $1.5 million invested. But the entrepreneurial capacity of Ngai Tahu is confined not only to their steady membership and the fund size of their medium to long term savings scheme. The influence of Te Runanga o Ngai Tahu is also felt in this legislation. Ngai Tahu specifically lobbied to ensure there was creativity and clarity around the retirement scheme contribution tax. Their efforts have been rewarded through the provisions that Ngai Tahu have promoted which means that contribution tax can be directed at source rather than 6300 members having to make their own individual contribution. 
We commend Te Runanga o Ngai Tahu for their efforts and we acknowledge also the sponsor of this legislation the Hon Peter Dunne for being willing to do what was necessary to achieve simplicity and clarity. We also note that this legislation enables the retirement contribution to be offset by any imputation credit or Maori authority credit. These two initiatives we believe will avoid setting up a whole new raft of compliance issues that can only run the risk of creating non-compliance breaches at an individual level. 
The legislation we are debating today sets the annual income tax rates for the 2007-08 year introduces amendments to encourage voluntary compliance with tax obligations and amends other Acts and regulations such as the KiwSaver Act 2006. In many respects there are some positive proposals included within the legislation. We welcome the tax credit for research and development and support the changes made in the select committee to the eligibility criteria for clarity purposes and to make them less restrictive. 
We believe that it is a very positive initiative to establish a tax credit for science and technology - based research and development conducted predominantly in New Zealand by New Zealand businesses and we are confident that such support will pay dividends in the long run. We support also the tax incentives for charitable donations. We accept the rationale of submitters who suggested that increasing the tax incentives will in itself increase the opportunity for charitable giving. We will be interested to learn how the Inland Revenue Department will take this into account in its review of tax incentives which is to be reported back on 31 March 2008. 
The other major development we wish to speak to in this legislation is the recommendation that the minimum employee contribution be reduced to 2 percent to facilitate greater participation in the KiwiSaver scheme. At the second reading of the legislation my colleague Hone Harawira revealed the results of the  
Marae 
 DigiPoll carried out just 1 month ago in which it was disclosed that 84 percent of the 1000-strong group polled had decided not to join the KiwiSaver scheme—84 percent. 
Yet although there was such little interest in KiwiSaver there was enormous interest in the issue of tax cuts. Tax cuts were one of the highest priorities. We in the Maori Party are very interested in the whole concept of support for tax cuts. Manaakitanga and rangatiratanga lead us to address the impacts for low-income taxpayers. We certainly are of the view that those people on lower incomes should carry less burden proportionately than those who are on high income levels. We know for instance that 1.9 million taxpayers are on an income of $25000 or less and that these people are paying $1.5 billion in tax while the Government is accumulating surpluses of $4 billion to $7 billion per year. It is this group that should benefit from tax cuts. 
I come back to the issues with KiwiSaver. We are pleased to note that following advocacy from the New Zealand Council of Trade Unions the National Distribution Union and the New Zealand Nurses Organisation the minimum employee contribution will be reduced to 2 percent in order to facilitate greater participation in KiwiSaver. The recommendation that came back from the Finance and Expenditure Committee duly included a minimum contribution rate of 2 percent of gross salary until 31 March 2010 3 percent from 1 April 2010 and 4 percent from 1 April 2011. 
Although we are pleased that the recommendation for a lower contribution rate for KiwiSaver was accepted we were disappointed that another recommendation from the combined unions that under 18-year-olds should be eligible for KiwiSaver was not accepted. We did have to wonder at the evident flaws in the argument that opening up the door for people under 18 might reduce incentives for young people to remain in education and training. We have to ask whether this will be another piece of legislation that acts against the interests of our young people just as for instance we saw the Minimum Wage (Abolition of Age Discrimination) Bill have the words “age discrimination” removed from the title and promptly do exactly that. 
Like many of thesemultifaceted bills some very positive changes are included alongside the not so desirable changes. We support the tax credit facility for research and development tax relief for donations tax exemptions for Tokelau and Niue trusts and the lower contribution rate agreed to for KiwiSaver. But we have to once more temper our support by asking the constant question: when will we see tax changes for the poor that will bring about justice for those who are not currently enjoying an enviable standing of living? We wonder why the endless name changes are necessary. The terminology that has been associated with tax—for example credits for families the in-work tax credit the parental tax credit Working for Families tax credits family assistance family support and minimum family tax credits—just adds layer upon layer of confusion which makes an already alien concept like taxation even more inaccessible to the general public. It is just as nonsensical as the logic around excluding 18-year-olds from being able to join. 
We will be supporting this legislation and we hope that some of the issues we have raised here tonight will be given further consideration in the interests of the well-being and the wealth of all peoples of Aotearoa.