Copeland Gordon: Appropriation (2005/06 Estimates) Bill — Third Reading Imprest Supply Debate 
Copeland Gordon: Appropriation (2005/06 Estimates) Bill — Third Reading Imprest Supply Debate 
[Volume:627;Page:22251] 
GORDON COPELAND (United Future) 
: 
 This year’s Budget contains massive operating surpluses. Those surpluses combined with the more than $3 billion that Dr Michael Cullen has stashed away in his slush fund mean that there is plenty of room for tax cuts and that is exactly what United Future will offer to all New Zealanders in this year’s elections—meaningful simple straightforward justifiable tax cuts. 
We will do this firstly by income splitting for couples with dependent children. As pointed out by the 1982 McCaw Task Force on Tax Reform this would create a fairer tax system for New Zealanders. The reason is that at any given level of income a couple with dependent children have less ability to pay tax than other taxpayers with no such dependents but the same income. It is actually pretty simple: if a couple have two children they have four mouths to feed; if they have three children they have five mouths to feed; and so on. By contrast single people have only themselves to feed as do couples with no children—“dinkies”—and that is simply completely unfair. Under the current system a couple with children where both spouses or partners work obtain a tax advantage in so far as they pay less tax than a single-income family with the same number of children. That is also unfair. The current tax system gives a tax rebate for the direct cost of childcare incurred by a family whilst failing in any shape or form to recognise the indirect cost of income forgone by a parent who stays at home while caring for children and that is unfair. 
All of the four points I have just outlined to the House were identified in 1982 by the McCaw Task Force on Tax Reform. I was actually speaking to Malcolm McCaw yesterday and he said to me that the task force was greatly disappointed that at the time the Government of the day simply rejected its recommendation. In fact every Government whether Labour or National has consistently ignored the recommendations of the McCaw task force since 1982 and they have been wrong to do so. 
United Future aims to change all of that. There are 325000 couples—that is 650000 taxpayers—who will benefit from this change to income splitting. Indeed for a couple with dependent children on the average household income level in New Zealand as put out in this year’s Budget our change together with the other changes we are proposing will give them up to an extra $163 per week in the hand. No other party in this Parliament is able to offer such generosity to couples with kids. 
The 420000 graduates who are now in the workforce and who have student loans will be better off with United Future. They will pay no tax at all on the first $3000 they earn each year. Under Labour they pay 15c in the dollar. Those on incomes of between $38000 and $43000 will pay 19.5c in the dollar. Under Labour they pay 33c. People on incomes of between $60000 and $65000 will pay 33c. Under Labour they pay 39c. If we do the sums based on those realities this is what we discover. If a graduate who is now in the workforce is earning $35000 which I guess is probably almost a starting salary for graduates he or she will save $585 in tax a year. If graduates are earning between $45000 and $55000 they will save $1260 a year. If they are earning $65000 the saving will be more than $1560 a year. That beats by a large margin the measly $450 per annum—that is right; just $450 per annum—that they save under Labour’s zero-interest offer. That is based on the average student debt of approximately $15000. The zero-interest offer of Labour compared with United Future’s interest offer saves graduates only $450 at the average level. Therefore it is quite clear on those numbers and on that arithmetic which I invite graduates to check that they would be much better off under United Future. We are offering real and substantial tax gains; Labour is not. 
Superannuitants will also be better off with United Future. We will increase the total for married couples on New Zealand superannuation by $21.34 a week or $1110 per annum. An equivalent increase for singles will give them about $720 per annum extra. In addition we will remove GST from rates. GST should not be charged on rates because it is simply a tax on top of a tax. It is not charged in Australia Canada or the European Union. Taken together those measures will increase the household income of senior citizens on the married couple rate by an average of about $1300 per annum. It will more than ensure that our seniors can cover the increased cost of electricity and rates both of which have increased dramatically in the last 3 years. The Labour Government says it has cared for the elderly in the last 3 years by bringing the superannuation rate back to 65 percent. But I tell members that since it did that to this day rates have gone up in this country by something like 40 percent over inflation electricity has gone up by something like 50 percent over inflation and Labour has done nothing about them—and nor is National offering to do anything about them I might add. So if people over 65 vote Labour or National in this election they will get zip. Under United Future they will get a significant increase which will enable them to pay their rates bill and electricity bill and to live with the dignity that surely all of our senior citizens deserve. We will address that issue. 
United Future will reduce the company tax rate to 30c. Under Labour companies pay 33c. We have that policy in common with National. Both of us are intent on bringing the company tax rate down. Why? Because it is important to incentivise additional investment in and through New Zealand companies. Why? So that we can increase productivity. One of the craziest arguments that I have heard from Labour in the debate since the Budget is that somehow or other those measures will lead to inflation. They will not. That is nonsense. In short every single taxpayer and every single company in New Zealand will pay less tax under United Future. 
We can pay for those commitments and still maintain a surplus in the Crown accounts of almost $10 billion over the next 3 years. We believe that that is more than enough for capital expenditure. Dr Cullen having told the country that it must wait for 3 years to receive a tax cut of—wait for it; we all know it—67c per week has now revealed that that is only because he has reserved a slush fund of $3.6 billion. Members can see that on pages 71 and 99 of the Budget if they want to check out the figure. He has put away $3.6 billion as a slush fund for election lollies such as the “no interest on student loans” policy with its moral hazard but there is nothing for couples with kids nothing for senior citizens nothing for companies and an inferior deal for graduates in the workplace with student loans. 
 At least the people of New Zealand have some clear choices in this election. We have Labour on the one hand saying: “We know best how to spend your money.” versus United Future saying: “We will leave it to you to decide how to spend your money.” We should never forget that leaving money in the pockets of families at this stage will build strong families and without strong families we cannot have a strong nation.