Copeland Gordon: Debate on Prime Minister’s Statement 
Copeland Gordon: Debate on Prime Minister’s Statement 
[Volume:615;Page:10827] 
GORDON COPELAND (United Future) 
: 
 I want to devote my brief contribution to this debate to a matter that is of central importance to New Zealand families—namely their income. When one thinks about it the level of income is of fundamental importance to all New Zealand families and individuals since it determines so much about their standard of living and their ability to access core services such as health education and the like. 
United Future’s goal is nothing short of prosperity for all New Zealanders. We sometimes talk about the economy as if it had a life of its own separate and distinct from the welfare of our families. That is a false dichotomy. Indeed the words “economy” and “economist” originally in their Greek form were terms that applied to the management of the household. It continues to be true that economic goals are there to serve people and their families and not the other way round. At the end of the day economic growth is ultimately worthwhile pursuing only if it raises the average income of all New Zealanders. It is important that no one is left behind. For that reason we strongly support the family assistance package that has been announced in the Prime Minister’s statement today and that we understand will be the centrepiece of this year’s Budget. 
It is time to put something back into the pockets of hard-working New Zealand families. In real terms the rate of income tax paid by New Zealanders has increased by about $480 million since the present tax bands were established on 1 April 2000. I do not know yet what the total value of the family tax assistance package will be but if it is around $500 million then in real terms it merely returns the rate of tax paid by New Zealanders back to where it was in about 2000. We believe that the Government needs to be much more generous than that. Rather than simply rearrange the deckchairs we will continue to badger the Government to the effect that in addition to the family assistance package it should also adjust the tax brackets to offset inflation since 2000. That would leave $60 per year in the pockets of those earning below $30000 $540 per year for those earning under $60000 and $840 per year for those earning $65000 or more. 
Another way of boosting family incomes would be to drop the GST on rates. In reality it is a tax by central government on a tax by local government and cannot be justified on policy grounds. Dr Michael Cullen was against GST on rates when it was first introduced but he told the House that he has since changed his mind. Dr Cullen got it right the first time round and now he has the opportunity to put it right for the households of New Zealand. It would cost only in the low hundreds of millions of dollars—not much for the Government given the size of its surplus but a great deal for our families. It should be done without delay. The Government should also cut the company tax rate to 30c in the dollar as a key driver to generating wealth and enlarging the income take for New Zealanders and their families. 
 In my view the time is right for some fiscal stimulus as our economy cools down across the board from its 2002 peak. The Prime Minister today spoke about a smart economy and for a moment I thought she was going to say “a smarting economy” because it is true that whole sections of our economy—and I refer in particular to the forestry sector the farming sector and most of the other export sectors—are actually smarting at this point in time. Times are not good for them. The reality is that they will be tightening their belts very significantly during 2004 and probably on into 2005. Also it must surely be admitted that the fiscal stimulus effect is neutral as between high taxes and high expenditure on the one hand—the course that has been plotted by this Government—and a reduction in taxation accompanied by a reduction in expenditure on the other hand which is the course favoured by United Future. 
I believe that the Government still does not understand how we can foster real sustained economic growth in our country. For example there was nothing in the statement specifically about an export policy to offset the problems I have just mentioned in the smarting part of the economy where incomes are well down. The Government has admitted that it cannot control the exchange rate but it can do some other things. It appears certain therefore that in 2005 the voters of this country will be given a clear choice about which mix they would prefer. For our part we want to move in the direction of boosting after-tax income for families in New Zealand across the board.