Boscawen John: Taxation (Tax Administration and Remedial Matters) Bill — In Committee Third Reading 
Boscawen John: Taxation (Tax Administration and Remedial Matters) Bill — In Committee Third Reading 
[Volume:675;Page:20786] 
Hon JOHN BOSCAWEN (Leader—ACT) 
: 
 It is a pleasure to stand and take a call on the Taxation (Tax Administration and Remedial Matters) Bill. As we heard from Mr Nash earlier most of the parts of this bill are not contentious. They are accepted by most parties in the House and by both sides of the House. Mr Nash used his speaking opportunity to focus on the abolition of gift duty. We have just heard an argument from Mr Norman that the abolition of gift duty is wrong. He said that one of the reasons we have gift duty is to restrict the transfer of assets into trusts away from an individual taxpayer and that it is done for the purpose of reducing one’s personal income tax. But interestingly he acknowledged that simply setting the top marginal tax rate which is currently 33c at the same rate as the rate for trusts negated the benefit of shifting assets into trusts. He tried to argue that the setting of those two rates at the same level would be a temporary measure until such time as a future Labour Government increased the top marginal tax rate. 
I suggest to Mr Norman that he is absolutely wrong. He talked about the reality as being that at some stage in the future that top tax rate will rise. My advice to the people of New Zealand is not to support any political party that would want to do that because as we have heard when we have a difference between those two rates it leads to tax planning and tax avoidance. If we actually wanted to grow the economy reduce tax avoidance and improve the incentives to work hard and save we would do exactly the opposite. We would be lowering tax rates—we would actually lower the tax rates. If there is one thing that the ACT Party stands for it is reducing wasteful Government expenditure and lowering taxes and letting the people of New Zealand retain more of the income they earn. 
It is interesting that Mr Norman talked about a top tax rate of 50 percent in the United Kingdom. It was only last week that Mr Norman was complaining about the social problems in the United Kingdom. We know that the United Kingdom is broke. We know that most of the major developed countries in Europe are broke. Why are they broke? Because they have huge amounts of wasteful Government expenditure they have high marginal tax rates and they provide a disincentive for people to work to invest and to get on. I suggest that Mr Norman look at countries in Asia—the countries in Asia that are growing—and look at the countries that are actually growing during this worldwide recession. What do we see in Asia? We see low rates of tax. I suggest that if the Green Party had the interests of this country at heart it would be looking at how we reduce rates of tax reduce wasteful Government expenditure and provide an incentive for people to work hard and to keep more of what they earn. 
Mr Norman talked about the inequality. He talked about the so-called rich and the wage and salary earners. If Mr Norman was really concerned about wage and salary earners he would be looking at how we could reduce waste and reduce the top marginal tax rate. If we had a top marginal tax rate of no more than 20c in the dollar we would actually have the right incentives. 
The ACT Party will be supporting this bill and we encourage New Zealanders to give further thought to how we can reduce wasteful Government expenditure and lower tax rates. Thank you.