Anderton Jim: Budget Debate 
Anderton Jim: Budget Debate 
[Volume:625;Page:20774] 
Hon JIM ANDERTON (Minister for Economic Development) 
: 
 The Progressive Party supports this Budget because it is both a pro-business and a pro - personal well-being Budget that will make New Zealand a fairer place to live for all New Zealanders. The driving force for the Progressive Party and its involvement in this and previous coalition Governments has been first to develop the full employment economy and secondly to win social justice for our communities our regions and the whole country after years of neglect from hands-off Governments. We believe that we cannot have a successful national economy unless we have successful regional economies; we cannot have a First World health or education service or even a decent infrastructure and environmental system unless we have a First World economy. 
But what I want to touch on in the few minutes I have is the credibility of the leader of the National Party. I was not really going to talk about that—I had a very positive speech prepared. But to be honest the fact is that the only claim to leadership that the leader of the National Party Don Brash has left is in terms of economic credibility. He constantly compares the New Zealand economy and tax system for example with those of Australia. I just point out that if he has any economic credibility he should stick to the facts of economics. The first thing is that in the 30 years between 1970 and 1999 New Zealand lost 30 percent of per capita income against Australia by comparison. That is a fact. The loss averaged 1 percent per year. Which Government was in power for most of that time? The truth is that National was. Labour was there as well—and I was part of it for 5 years—but most of the time it was National. So how come we lost 1 percent per year per capita income against Australia during that period? 
In the last 5 years—from 1999 to 2005—New Zealand has gained 1 percent per year per capita income against Australia. That is a gain of 5 percent in the 5 years that this coalition Government has been in existence versus a loss of 30 percent in the 30 years prior to that. That is a fact and Dr Brash has not mentioned that. Evidently those are not the sorts of facts he wants to deal with. 
He deals with tax. I will run through a few facts about the tax system in Australia versus that of New Zealand. It is a hard issue and people dodge it because they are not too sure but here it is. Australia’s highest personal tax rate is 47 percent; New Zealand’s is 39 percent. Is that mentioned by Dr Brash with his economic credibility? No it is not mentioned. It is not convenient. The extra tax in Australia for Medicare ranges from 1.5 percent to 3 percent; there are no extra health taxes in New Zealand. That is not mentioned by Dr Brash because it is not convenient to do so. If there is no private health-care and family income is above a certain level there is a health tax to pay. 
Nine percent of salary in Australia is compulsorily paid toward superannuation. How much is compulsorily paid toward superannuation in New Zealand—apart from in tax of course which is compulsory? In New Zealand superannuation comes out of the general tax rate. There is no 9 percent surcharge. Why does Dr Brash the economic credibility guru not mention that? He would have New Zealanders believe that when people go to Australia they get some sort of free ride through the tax system. In fact they do not. In Australia there is a means-tested superannuation payment as we used to have in New Zealand. Members will remember all the crusading about getting rid of the surcharge and all the rest of it; well in Australia there is one and in New Zealand there is not. Why does Dr Brash not mention that? If people go to Australia their income will be means-tested before they can receive superannuation. There is no mention of that. 
In Australia there is a thing called stamp duty. On a house purchase it equates to 6.5 percent of the price. Is there a stamp duty in New Zealand? 
Darren Hughes 
: No. 
Hon JIM ANDERTON 
: No there is not. Why is that not mentioned by Dr Brash? He knows all about economics but he does not mention it. He continually puts down New Zealand when he compares our system with the Australian system and he will not mention the facts that do not support that thesis. Australia has a land tax of 1.5 percent. There used to be one in New Zealand but there is not any more as it has been abolished. Does Dr Brash mention that? No. He said the tax system in New Zealand is a lot worse and more complex than the Australian system. It is not. It is simpler and cheaper. 
What about driving around Sydney and Melbourne? Sydney and Melbourne have pretty good infrastructure. I was there a few weeks ago for the Government at a leadership conference and I saw the brilliant infrastructure. But guess what? It is tolled and it costs the average motorist in Sydney and Melbourne about $50 to $100 a week. I am not totally against tolls but we need to have the facts. If motorists pay tolls to have decent infrastructure it costs. In Sydney and Melbourne it costs $50 to $100 a week for the average motorist. Where did Dr Brash mention that in his speech in which he said how bad New Zealand was versus Australia? This Government has put in $1.9 billion to help the Auckland infrastructure. The cost will not be tolled; it will come from general taxation. In Sydney and Melbourne residents are paying $50 to $100 a week in tolls. Dr Brash made no mention of that. 
The company tax advantage for Australia versus New Zealand is an absolute myth. The top rate is 33c in the dollar in New Zealand and 30c in the dollar in Australia. That sounds all right. But what about the fact that when the corporate tax rate was reduced in Australia a revenue-neutral change in depreciation was introduced which covered all of the income the Government lost in the tax reduction? 
Darren Hughes 
: What? But that is the opposite of what we do. 
Hon JIM ANDERTON 
: Exactly but it was not mentioned by Dr Brash. If he does not understand that then he does not have any economic credibility. If he does understand it why does he not tell us? 
Australia has a payroll tax. Does New Zealand have a payroll tax? No. How much is the payroll tax in Australia? It is 6 percent. 
Hon Paul Swain 
: They never talk about that. 
Hon JIM ANDERTON 
: No they do not. Apparently New Zealand has a terrible complex hopeless expensive tax system but I am only starting on all the taxes that Australia has. “Mr Economic Credibility” tells us how bad our system is compared with Australia’s but he does not mention any of these at all. Why not? Would that not be fair? I do not mind comparing apples with apples. We have New Zealanders leaving New Zealand for Australia. We have always had them leaving and they are leaving now so that is a fair point and if National wants to argue it we can argue it. But what about all of these taxes that he does not mention? He says that New Zealand is a terrible place and Australia is not. 
How much tax did the Australian federal Treasury get from the corporates over there? The latest figure we have got is $38.4 billion. But that is not the worst of it. The payroll tax is collected at the state level and that is another $10.275 billion. That tax is always conveniently not mentioned when comparing New Zealand and Australian corporate tax rates. 
If someone wants to run the country on the basis of economic credibility and wants to compare New Zealand with our nearest neighbour let us at least have the facts on the table. I do not mind having a tax debate with Don Brash on Australia versus New Zealand. I have got all these facts. And there are more. For example the corporate tax rate in Australia is 15 percent of GDP. In New Zealand it is 11 percent. The Business Council of Australia says that the simple fact is that Australia’s total corporate tax rate is the second-highest in the developed world. We know that New Zealand’s is lower so why does Don Brash not tell us that? He tells everyone to go to Australia because it is better when in fact it is miles worse. 
I could go on because I have more but in the end this Budget is a Budget for New Zealand’s future. The cumulative effect of what the Labour-Progressive Government has done in the last 6 years has lifted New Zealand from falling off the planet in terms of economic development. We now have the lowest unemployment in the OECD apart from South Korea with its dynamic economy as is shown in the latest figures. We have the highest rate of economic growth in the OECD and it is 5 percent better than Australia’s. If the Opposition cannot be loyal to New Zealand and defend it let it at least tell the truth about New Zealand. That would make a change.