Copeland Gordon: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
Copeland Gordon: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
[Volume:644;Page:13696] 
GORDON COPELAND (Independent) 
: 
 I am delighted to take a call on Part 1 of the Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill because 17 December 2007 just 6 days away is the 20th anniversary of the start of my long campaign to advocate for a far fairer and more generous tax rebate scheme in respect of gifts made to charities and churches in this country. Over those 20 years I have been involved in advocating this to every single successive Minister of Finance. Oddly enough the only one I missed out was the Hon Peter Dunne who is the Minister in the chair tonight. 
I think this is a day not only for me to celebrate this achievement but also more important for churches and charities to come to grips with the reality that the rebate that until now has been only $630 per annum following a gift of the massive sum of $1890 maximum will now be entirely uncapped for both individuals and companies. Now even a $1 million gift made by an individual will receive a full 33.33 percent rebate or in that case $333333.33. Companies will go from just 5 percent of net income to potentially 100 percent of net income and that is something that as I say is to be celebrated. 
I am also delighted that the business tax reduction from 33c to 30c which is reflected in Part 1 only because of the consequential amendments that follow from it is occurring. I remember taking part in the debate in the 2005 election—when of course I was a member of the United Future party—among all the financial spokespersons of all the parties. There were only two spokespersons in that debate who were advocating for a reduction in the business tax rate: myself and Rodney Hide. No one else was. No other party in this House had that as its policy and I say that because the commentary always refers to this legislation as a confidence and supply win for both United Future and New Zealand First. Well if New Zealand First was in favour of business tax cuts at that stage it certainly kept it a very well-kept secret from the rest of us. 
I also applaud the KiwiSaver changes that are made in Part 1. I have long been an advocate for tax credits which this bill now provides for both employees and employers to encourage savings. It always seemed to me to be an anachronism that whereas such incentives to encourage savings apply in virtually every other Western jurisdiction that I know of in the late 1980s and the early 1990s we became purer than pure in attempting to have a system that was supposed to encourage savings by having absolutely no tax breaks whatsoever. I think that was a ridiculous step and I am very glad to see it is now being changed. 
So far I have been praising Part 1 but I want to say as the Southern Man said it is a hard job to find the perfect income tax bill. There is a great failure in this particular bill and that is that of the Hon Michael Cullen who contrary to the undertaking he gave in Budget 2005 did not adjust personal income tax rates for fiscal drag. Even the very small movement which Michael Cullen promised in Budget 2005 and reneged on in Budget 2007 was in itself in any event totally inadequate. If we adjust for inflation from the year 2000 the 33c tax bracket should now move from $38000—which is now well below the average full-time wage income of about $44000—to $46000 which indeed would be above the average income figure. That means a great deal for hundreds of thousands of middle-income New Zealanders. Likewise the 33c bracket should have moved in this bill from $60000 to $73000. 
I say tonight that in respect of my new party Future New Zealand we are committed to regularly adjusting personal income tax rates in this country to reflect inflation. It is unconscionable to do otherwise. For many many years not just Michael Cullen but other Ministers of Finance have allowed fiscal drag deliberately to work in favour of the Crown and against the taxpayers of New Zealand and that is unacceptable. The taxpayers of New Zealand should come first.