Key John: Questions for Oral Answer — Questions to Ministers Questions to Members 
Key John: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:631;Page:2981] 
3.  
JOHN KEY (National—Helensville) 
 to the  
Minister of Finance 
: Does he intend to make any reductions to personal tax rates or increase personal tax thresholds in Budget 2006; if not why not? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 No because at this point neither the fiscal nor the macroeconomic position would make that a sensible move. 
John Key 
: Does he seriously think in a week when Australia announced $45 billion of tax cuts that a New Zealand campaign launched today in Australia and costing $400000 with such clumsy billboards as “In New Zealand a cultural wilderness is a concert at a vineyard” will really make a blind bit of difference in attracting back the half a million Kiwis who now call Australia home? 
Hon Dr MICHAEL CULLEN 
: If the member lived as close to the Church Road winery as I do he would not sneer at concerts in vineyards. Also if he lived almost next door to a New Zealand family that has just returned from Australia he would not sneer about New Zealanders returning from Australia. 
John Key 
: Is this ham-fisted campaign not just further confirmation that privately this Government is deeply concerned about the impact that Australian tax cuts are having on attracting and retaining New Zealand’s skilled and motivated workforce and if he is not concerned about that why is the Government bothering to launch the campaign in the first place? 
Hon Dr MICHAEL CULLEN 
: Clearly we want to attract New Zealanders back home to New Zealand from Australia and we are so generous that we would like to attract Australians to come to New Zealand. There is a competitive market out there in the world in that respect. We can be sure that if we saw a National Government again people would flee the country as they did during the 1990s. 
John Key 
: Has it come to his attention that 680 people leave New Zealand each week for Australia in which case will the Government be running this clumsy campaign not only in Australia but here in New Zealand as well in a bid to stop the flood of talent across the Tasman—or has the Government reconciled itself to the fact that those New Zealanders already know that this administration will not be cutting taxes as he pointed out in his answer to a question today at least as long as he is Minister of Finance which we all mercifully know is not for much longer when Mr Cunliffe will move along one seat? 
Hon Dr MICHAEL CULLEN 
: I think that is what psychologists call projection though in his case it is two seats. 
Rt Hon Winston Peters 
: Has he received reports in a historical context about political parties and tax cuts namely in the late 1980s and in the latter part of the 1990s and does that not suggest that although the National Party talks about tax cuts in contrast to the Labour administration under Douglas and Caygill the record of the administration under Ruth Richardson and Birch is not to have introduced tax cuts when it got into office and that the last and biggest tax cuts of $1.1 billion happened when New Zealand First provided the Treasurer in this country? 
Hon Dr MICHAEL CULLEN 
: It is certainly true that the top tax rate when we became the Government was 33 percent and the company tax rate was 33 percent. It is certainly true that National became the Government in 1990 and the top tax rate was 33 percent and the company tax rate was 33 percent and that those rates were put in place by a Labour Government. It is also true that the highest level of net out-migration to Australia from New Zealand occurred in late 1998 1999 and early 2000. 
Shane Jones 
: Does he intend to introduce a general capital gains tax impose stamp duties or introduce a dedicated health tax in Budget 2006? 
Hon Dr MICHAEL CULLEN 
: No certainly not. However of course if the Opposition wants to talk turkey and lift the top tax rate to 45 percent and the second rate to 40 percent introduce a stamp duty and have a general capital gains tax we could talk about some tax gains for low to middle income New Zealanders. 
John Key 
: Why is Jason Walker from Hays Specialist Recruitment wrong when this morning he said on National Radio that the impact of tax cuts would have “pretty serious ramifications with individuals crossing the ditch.”? 
Hon Dr MICHAEL CULLEN 
: I invite the member to think for a moment and look in the mirror. In the year 2000 this Government put up the top tax rate; Mr Key came back to New Zealand. 
Rt Hon Winston Peters 
: Is it correct in a historical context that the highest-ever personal taxes in this country occurred under a National administration with a Minister of Finance called Ruth Richardson when she imposed a surtax increase in 1991 of effectively in its worst case an impost of 92c in the dollar? 
Gerry Brownlee 
: Why did the member vote for it? 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. Again Mr Brownlee shouted out during the question. 
Madam SPEAKER 
: No it was after you had finished the question. 
Rt Hon Winston Peters 
: And the answer is that I did not vote for it. I was expelled from the National Party. 
Madam SPEAKER 
: That is not a point of order. 
Hon Dr MICHAEL CULLEN 
: It is certainly true that in the 1991 so-called “mother of all Budgets” the National Party attempted to introduce a very rigid income test on the State pension which it subsequently had to abandon. I do note that in Australia such an income test still exists so presumably we can expect to see New Zealanders come home again when they get to about 55. 
John Key 
: Why is the Australian Chamber of Commerce and Industry wrong because it believes that low taxes play a part in attracting skilled workers and welcomes the fact that the Australian Treasurer has had the courage to cut personal taxes in Australia for 4 years in a row and why does he think that that has a significant impact on attracting New Zealand workers over to Australia? 
Hon Dr MICHAEL CULLEN 
: If we look at the total migration flows we see in fact that over the last 5 years net migration flows as a percentage of population have been higher in New Zealand than in Australia. 
John Key 
: Is it not a fact that when it comes to tax cuts Kiwi workers contrast his inaction with the action of an Australian Government that for 4 years now has cut taxes and shared prosperity; if so does he agree it will not be Australia but New Zealand that will wake up one day soon looking for its skilled and motivated workforce and asking the most obvious question: “Where the bloody hell are ya?” 
Hon Dr MICHAEL CULLEN 
: I am over here. I do not know where he is but I am right here and I intend to stay here for the long-term future. The public was offered the chance to have unsustainable tax cuts at last year’s election and it did not get over the line and now all National can do is to wobble across the plank and try to get to the future. 
Rt Hon Winston Peters 
: In the context of the history of tax reform and tax changes can he recall the commitment made by a political party to remove the surtax “no ifs no buts no maybes” and then having got into power on that promise—much like a used-car salesman with plenty of pre-sales talk but no after-sales service—can he recall that it increased the worst impost of that tax to 92c in the dollar; and what was that party called? 
Hon Dr MICHAEL CULLEN 
: As the Minister of Social Welfare at the time the promise was made I well recall a former member of the National Party—who has since seen a great deal more sense about life—promising in an address in the Wellington Town Hall that “no ifs no buts no maybes” the surtax would go then trying to introduce an income test and never removing the surtax until it was a condition of coalition Government with New Zealand First. That was the National Party and indeed in 1999 once no longer in coalition with the New Zealand First Party National cut New Zealand superannuation again once it had a tax cut legislated for. 
John Key 
: Can the Minister of Finance recall a Government that left office telling the people of New Zealand there was an $89 million surplus when there was actually a $3 billion deficit and can he name that Government? 
Hon Dr MICHAEL CULLEN 
: If the member had bothered to check his facts—[ 
Interruption 
] 
Madam SPEAKER 
: If I cannot hear the member then I am sure those at the back cannot. Would the Minister please start his answer again. 
Hon Dr MICHAEL CULLEN 
: I wish the Leader of the Opposition would not wave his pinkie at me when the rest are waving their forefingers. In fact if the member cares to consult his facts he will find out that the party he belongs to was saying before that election there was a $1.8 billion deficit.