Copeland Gordon: Taxation (Venture Capital and Miscellaneous Provisions) Bill Taxation (Annual Rates of Income Tax 2004-05) Bill — Third Readings 
Text is incorporated into the Bound Volume 
Copeland Gordon: Taxation (Venture Capital and Miscellaneous Provisions) Bill Taxation (Annual Rates of Income Tax 2004-05) Bill — Third Readings 
[Sitting date: 14 December 2004. Volume:622;Page:17833. Text is incorporated into the Bound Volume.] 
GORDON COPELAND (United Future) 
: 
 There will be no Christmas bonus for the taxpayers of New Zealand. There will be no good news for the taxpayers of this country and it did not need to be that way. I brought to this House a perfectly reasonable Supplementary Order Paper that would have put in place some good news for New Zealand taxpayers and would have delivered additional money into the hands of every taxpayer in the country who earns more than $9500 a year which is the vast majority of them as from 1 April next year. As others have mentioned that Supplementary Order Paper 284 was vetoed by the Government but I would like to put on the record exactly what that Supplementary Order Paper would have done and what it intended to do. It would have shifted the tax brackets from 1 April 2005. The 15c in the dollar rate would have moved from $9500 to $10750; the 19.5c rate from $38000 to $43000; the 33c rate from $60000 to $68000; and the 39c rate from income over $60000 to income over $68000. 
So why was the United Future Supplementary Order Paper to make that change vetoed by the Government? I would like to record tonight how the voting on that Supplementary Order Paper would have gone if the Government had had the courage to put it to the vote. It would have looked like this. Those in favour: National with 27 votes New Zealand First with 13 votes ACT with 9 votes and United Future with 8 votes—a total of 57 votes. Those parties would have voted in favour. But the other parties in the House would have voted against it: Labour with 52 votes Progressive with 2 votes and the Greens with 9 votes—a total of 63 votes. So unfortunately my Supplementary Order Paper was destined not to be approved by Parliament in any event. Let me make it clear; I will explain it to members so that they do not have to figure it out. The reason that my Supplementary Order Paper cannot become the law of New Zealand is the Green Party. If members look at the figures I have just given they will see that I am right. 
I asked the Green Party members why they were not voting for my Supplementary Order Paper and this was their response. They said to me: “We’re not going to vote for your Supplementary Order Paper because we are quite happy to see inflation affect the tax brackets and to see the Government’s revenue coffers bring in more money so that we can redistribute more money and spend more money.” At least the Green Party has the courage to come out and say upfront that that is its policy and its position. Dr Michael Cullen on the other hand has never said that. He has never come into the House and said: “My party’s policy is to collect as much tax as we can so that we can distribute as much money as we can and spend as much money as we can.” However I want to say to Dr Michael Cullen tonight that even though he has not said the words at the end of the day actions speak louder than words and New Zealanders fully understand that that is the ideology that drives this Government. 
I wanted to mention the reality that my Supplementary Order Paper would not have succeeded because the Greens were against it because of the false claims that have been made in this Chamber tonight by ACT New Zealand First and National that United Future should renege on its deal with the Government and that that somehow would reduce taxes. Well it would not and I will explain why. If United Future broke its word and walked away from its support role on taxes and the Budget that role would be immediately assumed by the Green Party. Would that be good for New Zealand? No it would not. The shallow National ACT and New Zealand First analysis overlooks that reality and a very grim reality it would be. Imagine if the Greens in this Parliament were in the position of United Future and supporting this Government! That would be grim for business grim for international traders grim for road users and grim for families. Quite frankly it would be thoroughly bad—bad for New Zealand. 
The New Zealand economy has been booming in the last several years. The Government is collecting tax like never before. In the last 3 years alone the Government has collected $4.5 billion over and above its own annual Budget estimates. In yesterday’s Budget Policy Statement there is a table that shows that over the next 4 years the Government will collect another $5.7 billion over and above the estimate in this year’s Budget which was announced in May. I say to the Green Party and to Rod Donald that that is after it has paid for the Working for Families package which we supported. Over a 7-year period that is a total of $10.2 billion over and above the Government’s own estimates. Yet still according to Dr Cullen there is no room for tax cuts. 
Well yesterday in this House the Prime Minister in commenting on Judy Bailey’s salary increase said that TVNZ had “a culture of extravagance” but I tell the House tonight that TVNZ is a babe in the woods compared with this Government. Here is this Government with an extra $10.2 billion coming into the coffers and what does it intend to do with it? It intends basically to blow the lot on extravagant extra expenditure on God only knows what. We will have to wait to find out. United Future members will certainly not be going along with that but—as I have explained before—it will happen because of the presence of the Greens in this Parliament and the reality that those members’ votes will carry the day. 
So what has Dr Michael Cullen said he will do with that extra $5.7 billion over the next 4 years? Well I will tell members. Yesterday he said that he planned to bank some of the windfall and to direct the rest of it into new spending initiatives. That is quite unacceptable in the circumstances. He continues to tell the country that there is no room for tax cuts. Well I am sorry but I do not buy it. Our economy might be booming the Government might have repaid debt and the Government might have a fabulous balance sheet at the moment but it is a very different reality for New Zealand families. New Zealand families in fact are feeling the pinch. Household borrowings are at an all-time high and New Zealanders are basically living at the moment by drawing down on their own capital base. The Finance and Expenditure Committee which considered this legislation has talked to Dr Alan Bollard for the past 2 years about this. Every year New Zealanders are spending more than they earn and every year they are going deeper into debt. Currently New Zealanders are spending 11 percent more each year than they are actually earning. We see the result in massive credit card debt and massive additional mortgages. 
Dr Cullen seems to be unable to see what is plain to the rest of us. He is busy hoarding our money—money that belongs to taxpayers—in the bank while people are being forced to borrow to stay alive to keep body and soul together. New Zealanders should assess these realities carefully in deciding how they vote next year. Would they like to be able to keep more of their earnings through tax cuts and begin to pay down their debts or are they content to allow Dr Cullen to increase their taxes so that he can bank and spend? 
Let me say that United Future would adopt a completely different approach. It would include tax reductions by income splitting for couples adjusting the tax brackets for inflation and reducing the corporate tax rate coupled with reining in the Government’s extravagant spending habits. That would be good for families that would be fair and that would be just. It is thoroughly reasonable the case is compelling and I continue to express the hope—even at this late date—that the Government will act to give Kiwis a tax cut as part of next year’s Budget. I very much doubt though whether those hopes of mine will be fulfilled. I suspect I will be hoping in vain I am sad to say.