Dyson Ruth: Taxation (Budget Measures) Bill — First Reading Second Reading In Committee 
Dyson Ruth: Taxation (Budget Measures) Bill — First Reading Second Reading In Committee 
[Volume:663;Page:11092] 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 For members and those of the public who may have been listening to the contribution from the member who has just resumed his seat that was Dr Paul Hutchison— 
Hon Trevor Mallard 
: Who? 
Hon RUTH DYSON 
: Dr Paul Hutchison who is a National member of Parliament. Dr Paul Hutchison is from somewhere just out of Auckland and is also the chair of the Health Committee. I find it extraordinary that in a 10-minute contribution on a tax bill he did not mention the Taxation Budget Measures Bill. I am not all that surprised; I would be ashamed too if I were the member. Also despite being a doctor and the chair of the Health Committee he did not mention the $300 million hole that today’s Budget has left in our health budget. Any basic calculation will show that with inflation at the level it is and with the 2.5 percent increase in GST which came in with the Budget there is now a $300 million hole in the health budget. I could say that this makes the job of an Opposition health spokesperson a dream come true in many ways because all we have seen over the last few months is health cuts. That may make an Opposition health spokesperson’s job easier but they do not make the lives of good hard-working ordinary New Zealanders any easier. It has not made the lives of people in Otago and Southland who have had their home support cut very easy. It has not made life any easier for the people in Palmerston North who are terminally ill and who will have 8 hours a day cut from the district nursing services they were receiving. It does not make their lives any easier either. 
So I am not surprised that Dr Paul Hutchison is so embarrassed that during a 10-minute speech he not once mentioned the tax cuts or the $300 million gaping hole in the health budget that was announced today. Nor did he did not mention that the Budget was a Budget of broken promises. The first broken promise was a promise made by John Key before the last election that GST would not be increased; today we saw it increased to 15 percent. Before the election John Key categorically denied that there would be an increase in GST but today in the House we saw him as Prime Minister break that personal promise. 
The second broken promise from the Prime Minister Bill English and National was an earlier promise that they would not increase borrowing for tax cuts. What did we see in the Budget today? We saw exactly that; there is increased borrowing for tax cuts and not even fair tax cuts. [ 
Interruption 
] The woman from Christchurch who has taught Aaron Gilmore everything he knows about economics says that that cannot be right. But one just has to read the Budget to see that we now have increased borrowing in order to deliver tax cuts. That is another broken promise from John Key Bill English and National. 
The third broken promise was that there would be no cuts to public services and I am sure my friend and colleague the member of Parliament for Wellington Central will have further contributions on this later. What are the services that are delivered through our education system and our health system? Are they front-line services are they public services and are they being cut now? They certainly are. That was the third broken promise. 
New Zealanders are pretty tolerant; they understand when we are going through hard times. They understand when we all need to work together—central government local government and members of our community. They understand the need for people to tighten their belts and do a little bit more in hard times so that our country can get ahead. However what they will not and do not understand and what is making them very angry is that this Budget and this legislation that we are debating had an opportunity to lift New Zealand out of the recession to give people an opportunity for jobs and to create a fairer tax system in any changes that were being introduced. But that is not what happened at all. We see that the people who are doing OK still despite everything—the people who are in the very very top income bracket in New Zealand—are doing the best out of tax cuts while people who are on the average wage or below doing very very badly. 
Yesterday in the House I heard the Prime Minister announce—it certainly was an announcement and news to everyone including Treasury—that Treasury had told him that GST was a progressive tax. Well it is not. It is a regressive tax. It means that people who have less income spend a higher proportion of that income on items that have GST attached to them. Those people do not have a lot of spare money so a higher percentage of their income goes on items that attract GST so when GST goes up it is harsher on people who are low and middle income earners. On the Government’s own figures now we know that most people will not be compensated for the GST increase. Many people will be worse off. People on $70000 a year and that is well above the average will be $45 a week worse off with the tax cuts and GST increases. That does not factor in some other situations—for example people in an income-related rental house whose income goes up as it will for many people who are beneficiaries or on superannuation. Their rent will go up as well. So as their income goes up their rent goes up. That means they will not be better off but when they go into the supermarket they will not get a discount; they will pay an increased level of GST. 
We see that 41 percent of the tax cuts go to the top 10 percent of income earners and 15 percent of Bill English’s tax cuts go to the top 1 percent of income earners. How can that be fair on people who are just getting through a recession many of whom have lost their jobs and have had to get another job at a lower income. They work as hard as people on the top income bracket. I was appalled when John Key said to them to wait for the Budget and the Government would give the biggest tax cuts to the highest income earners but not to get jealous because those very very wealthy people are the backbone of the country; they are the people who are important to New Zealand! 
I think those people are important to New Zealand but I think the cleaners who work in this building are important to New Zealand and as much of importance to our country as the people who are on the highest income. The average-income earner and people earning right up to $70000 a year will be worse off under this legislation. Today the National-led Government squandered an opportunity to put a fairer tax system in place and create a more modern economy where people would have open opportunities. When we look into the other budgets—like the education budget and the health budget—we see more cuts to adult and community education introducing costs on people with children in early childhood education reducing the number of qualified teachers in early childhood centres and leaving a $300 million gaping hole in the health budget. 
The Government has not introduced a fair tax system as National promised. It is not the $50 a week tax cut that National promised before the election. This Government has introduced a tax swindle. It has broken three promises. It has increased GST when John Key promised personally to this nation that National would not increase the level of GST. It has cut public services and certainly it has not introduced a fair tax system. This legislation will be a huge disappointment. It will cause more unfairness in our community and a lot of anger. Labour will oppose this legislation.