Key John: Questions for Oral Answer — Questions to Ministers 
Key John: Questions for Oral Answer — Questions to Ministers 
[Volume:625;Page:20315] 
9.  
JOHN KEY (National—Helensville) 
 to the  
Minister of Finance 
: What involvement if any did he have as Minister of Finance in the formulation of the carbon tax policy? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 My colleague Pete Hodgson was lead Minister but I was involved at all stages of policy design. I of course led the design of the business tax package to recycle revenue from the carbon charge back to business. 
John Key 
: What is the difference in disposable income for a consumer who faces a $210 increase as opposed to a $210 negative tax shift? 
Hon Dr MICHAEL CULLEN 
: One cannot equate the two because—[ 
Interruption 
] I think the member’s collar is turned up. He might need to turn it down. It is obviously affecting him a little bit. The tax from the carbon charge is a tax collected from business but in the end it rests upon the final consumer. The tax reductions for business are in areas such as compliance costs fringe benefit tax and depreciation. They are very much larger than the revenue from the carbon charge so the net effect on taxation is negative. That should reduce the cost to business and to the community. 
John Key 
: I raise a point of order Madam Speaker. I am surprised that the Minister did not understand such a simple question. I wonder whether you could ask him to answer it. What is the difference between a $210 tax increase on the pockets of a consumer and a negative $210 tax shift? I am not interested in how he is funding his so-called business tax cuts; I am interested in the impact on the consumer. I think the House deserves an answer to that. 
Hon Dr MICHAEL CULLEN 
: The negative tax impact on the consumer at the end of the day is substantially more than $210. The member has not grasped that fact yet and I suggest he waits for the Budget for the details. 
Larry Baldock 
: What plans does the Government have to avoid the situation where hydro generators may reap a windfall from the increased electricity price affected by the carbon tax; if he has no plans for that will he commit to returning that windfall which would come to him through State-owned enterprises back to taxpayers to help offset the carbon tax charge? 
Hon Dr MICHAEL CULLEN 
: What I can say is that the windfall tax will not fall only to State-owned enterprises it will fall also to Contact Energy which is a substantial hydro generator. So the Government will get some of that back presumably via tax on Contact Energy’s profits. Again even if one adds a reasonable estimate of the windfall gains that the State-owned enterprises will get and the dividend the Government will then get that still adds up to substantially less than the tax cuts that will be announced in the Budget. 
Kenneth Wang 
: Can the Minister name just one other Asian or Pacific country that is implementing a carbon tax; if not why is New Zealand out of step with all of its neighbours? 
Hon Dr MICHAEL CULLEN 
: Of course very few other Asian countries are signatories—Japan is a signatory—to the Kyoto agreement because most of them are not classified as developing countries and the one major one that is has so far decided not to join the Kyoto agreement. But I am surprised that an ACT member would be opposed to measures that are designed to send pricing signals around the use of energy particularly greenhouse gas - emitting forms of energy. 
John Key 
: Why are consumers being forced to pay for a tax cut for business? 
Hon Dr MICHAEL CULLEN 
: That idea is rich from a party that has promised a corporate tax rate cut as its first tax cut. 
Gerrard Eckhoff 
: Can the Minister confirm that it was in fact the National Party that signed New Zealand up to the Kyoto Protocol in 1997 and that the ACT party is the only party in Parliament that has constantly argued against the signing and the introduction of this foolish tax? 
Hon Dr MICHAEL CULLEN 
: I accept that the ACT party has been the only consistently troglodytic party on this matter. 
John Key 
: Can the Minister confirm that the real increase in cost to consumers will be far greater than $210 per year if the carbon tax is calculated off the higher rate of $25 per tonne and when the second-order issues are passed on to consumers in which case the likely cost consumers face will be much nearer to $400 to $500 per year? 
Hon Dr MICHAEL CULLEN 
: Absolutely not. The carbon charge is fixed at $15 per tonne for the first period.