Key John: Questions for Oral Answer — Questions to Ministers 
Key John: Questions for Oral Answer — Questions to Ministers 
[Volume:625;Page:20579] 
6.  
JOHN KEY (National—Helensville) 
 to the  
Minister of Finance 
: When he said on Friday that “There is little room for large new initiatives including tax cuts” did he mean he was ruling out changes to tax thresholds in Budget 2005? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I meant there was little room for large new initiatives including tax cuts. For any further details the member will have to wait until Thursday. 
John Key 
: Why when the Government has an $8 billion surplus is the public in store for yet another Labour lay-by Budget which is packed upfront with hollow promises while the real goodies get delivered in the never-never? 
Hon Dr MICHAEL CULLEN 
: As I have indicated the surplus/deficit position will move to a significant cash deficit in the out-years which will make life very difficult for a party that is promising every road and everything else that everyone in the country wants at the present time. 
Gordon Copeland 
: Does the Minister acknowledge that if the tax thresholds are not adjusted for inflation which has been at 13 percent since 2000 then in purchasing power terms which have increased under his watch an adjustment is now overdue? 
Hon Dr MICHAEL CULLEN 
: Whether anything is overdue is a matter of perception. I note that the Australian Budget which was much-lauded on this side of the Tasman by the right wing spent US$21 billion to give a tax cut of roughly $6 a week to most Australians. 
John Key 
: Is the Minister’s rumoured U-turn on changes to tax thresholds evidence that his rhetoric regarding the unaffordable nature of tax cuts was incorrect or has he just been plain overruled by an ever-desperate Prime Minister? 
Hon Dr MICHAEL CULLEN 
: The Prime Minister is never desperate in my experience. 
John Key 
: Is the Minister’s decision to break from tradition and refuse to be photographed with the Budget proof that he wants to be distanced from this document because he was rolled on the details of it by the Prime Minister in the same way that she rolled him on the tertiary savings scheme that he did not want to roll out but which was rolled out a few weeks ago? 
Hon Dr MICHAEL CULLEN 
: I thank my colleague for reminding me. I was the strongest supporter of the tertiary savings scheme. 
John Key 
: Not in the  
Sunday Star-Times  
you weren’t. 
Hon Dr MICHAEL CULLEN 
: If the member relies on the  
Sunday Star-Times’ 
 knowledge of life he will remain as ignorant for the rest of his life as he is now. 
John Key 
: What is the real value of the Minister’s billion dollars of corporate tax reductions when he deducts from it the following: additional revenue the Government will earn from carbon tax the fact that accelerated depreciation does not change the amount of tax paid but the timing of it and the fact that the tax treatment of managed equity funds is a personal tax benefit not a corporate tax benefit; and is he worried that corporates will see straight through the illusion of his numbers? 
Hon Dr MICHAEL CULLEN 
: No to answer the last part of the question. What I do know is that those who stand by the largest companies that are foreign-owned will call for a cut in the corporate tax rate because that is what benefits them most. Those who are interested in New Zealand - owned small to medium sized businesses will support the cost of tax simplification depreciation changes and other matters. 
Hon Richard Prebble 
: Is it still the Minister’s position that the payment of over $2 billion a year of taxpayers’ money into the Michael Cullen superannuation scheme not only limits the ability of the Labour Government to offer tax cuts but also limits the tax cuts that could be offered by a future National Government unlike the ACT party which has always opposed the idea of the Government saving for us and according to Treasury’s own costing says that we can afford to offer the people of New Zealand a low flat rate of tax so that they can save for themselves? 
Hon Dr MICHAEL CULLEN 
: On the last part the member is wrong. Treasury has never said that and the member’s own policies would lead to borrowing of the order of size of $7 billion a year by the end of the forecast period. I do not know why he bothered selling State assets in the first place if that is now his policy. On the first part of his statement he is absolutely correct and he might care to remind the National Party of that. One cannot have everything all the time. 
Hon Richard Prebble 
: I seek the leave of the House to table costings that have been done by Treasury of the ACT party’s proposed tax policies which show that they are absolutely affordable. 
Document not tabled.