Tremain Chris: General Debate 
Tremain Chris: General Debate 
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CHRIS TREMAIN (National—Napier) 
: 
 From 1 October New Zealand will introduce the biggest tax reform package that this country has seen in a generation. This tax cut package is the commitment that the National Party made to the electorate when it went to the polls at the last election and the National Government is delivering upon it. The tax cut package puts a whopping $4 billion into the back pockets of hard-working Kiwis. Yes GST will rise providing $2 billion but the net benefit to Kiwis will be positive. It is projected that the average family on $70000 will be $25 per week better off after accounting for the GST increase. This has to be good for New Zealand. 
From 1 October Kiwis will see significant increases in their wage packets and will have the choice to spend that money or to save it. Importantly real after-tax wages are forecast to rise by 1.2 percent in the last 3 months of this year. This is an excellent result. I am confident that we will look back on this initiative in many years’ time and say that this was a pivotal point for the future of New Zealand’s prosperity. 
There is an inconvenient truth for the Labour Party in this package. Many high-income property investors will now face higher taxes as depreciation is removed from commercial and residential property. The Labour Party wants to paint this package as tax cuts just for the rich. How far from the truth can that be? In fact many property investors will now be paying higher taxes. Previously property owners have been able to claim losses through the non-cash accrual of depreciation but they will now face paying tax on their property investments. Given that most investment properties generally rise in value not fall this is a sensible move. This is part of the rebalancing of the economy and it will help to change investment decisions from non-productive investment in residential property towards productive investment in the production engine of the economy. That rebalancing needs to take place and this Government is delivering upon it. 
We throw lots of different statistics around this House in a game of ultimate one-upmanship. We are all guilty of this as we attempt to manoeuvre our political chess pieces in an effort either to regain or to retain the Treasury benches. Of all the statistics that have been thrown around this House since I have been an MP for some 5 years it is the ability of a Government to lift the wages of its constituents above the rate of inflation that I believe is most important. Real wage growth is the genuine measure that indicates whether a Government has been able to improve the lot of its citizens. This should be the focus of any Government and particularly for those parties that claim to represent low-income earners. 
The previous Labour Government achieved real wage growth over the 9-year period it was in office but it achieved real wage growth of just 3 percent. That is an annual real wage growth over that 9-year period of 0.3 percent per annum. It is absolutely appalling. It is unbelievable. The interesting point is that most of that wage growth was achieved in the first 4 years of that regime. Throughout the period when we had some of the highest-ever surpluses in the economy of this country of $6 billion and $8 billion the previous Labour Government achieved virtually zero real wage growth for cleaners for factory workers for the people whom it claimed to represent. That is an indictment of the worst kind. 
There were three failings at the nub of this result: firstly a failure to control inflation and we heard today that towards the end of the term of the previous Labour Government inflation was over 5 percent; secondly the fact that many Kiwis were continually being pushed into higher and higher marginal tax brackets; and thirdly a philosophical opposition to allowing taxpayers to keep more money in their back pockets. Even when Michael Cullen was forced into adjusting the level of marginal tax rates he reneged. He reversed them. 
It was not until the death knell of the previous Labour Government that Labour finally accepted that the workers of this country deserved to be rewarded. That last-minute decision was far too late to impact upon its record of real wage growth of just 3 percent. Let me say that again—Labour achieved 3 percent real wage growth over 9 years. What sort of record is that for the cleaners and the production factory workers of this country? It is abysmal. Thank you.