Copeland Gordon: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee Procedure 
Text is incorporated into the Bound Volume 
Copeland Gordon: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee Procedure 
[Sitting date: 14 December 2004. Volume:622;Page:17809. Text is incorporated into the Bound Volume.] 
GORDON COPELAND (United Future) 
: 
 The fact is—speaking to my Supplementary Order Paper—that if the tax brackets are not adjusted for inflation taxes are increasing in real terms. I will give members an example. A person earning $38000 in the year 2000 now needs $43000 just to stand still in terms of purchasing power. However the tax rate on the last $5000 has moved from 19.5c to 33c an increase of 13.5c $675 per annum or $56.25 per month. In real terms people are now less well off than they were in the year 2000. I contrast that with the commitment made by Helen Clark in 1999. She said that there would be no rise in income tax for the 95 percent of taxpayers earning under $60000 a year and no increases in GST or company tax. The Minister was good enough to say a few moments ago that United Future was a party that kept its word. I challenge the Labour Party today as to whether it is a party that keeps its word. Because how is that commitment made by Helen Clark in 1999 to be understood? Is it to be understood as meaning that the current rates will remain unchanged in the long term? If not when will they be changed? Does it literally mean that there will be no rise in income tax etc.? If that is the case then the Government has clearly broken its promise and its commitment to the people of New Zealand. 
What about the fact that only 78 percent of New Zealanders now earn under $60000 a year? What about the missing 17 percent? Do they not matter? Let us look at the facts. The number of taxpayers paying the 19.5c rate has dropped by 144000 the number of taxpayers paying tax at 33c has increased by 106000 and the number of people paying tax at 39c has increased by 150000. How can that be squared with the statement and the commitment that there would be no rise in income tax? 
Why will the Government not move on this matter? Is it because the estimated $714 million per annum cost is unaffordable? That is hardly likely in view of the extra $4.5 billion over and above the Budget that has been collected in the last 3 years alone. Is it not about time to share some of that surplus with the people of this country? 
Believe it or not a couple of parties in this Parliament—I refer to the Labour Party and the Green Party—believe that the reasonable proposal in my Supplementary Order Paper to index tax brackets for inflation is no more than a tax cut for the rich. In response I say that under the proposal put forward by United Future every taxpayer in New Zealand earning more than $9500 a year would receive a tax cut. That is the first point. 
The second point is that if Green Party and Labour Party members believe that say a single-income person supporting a wife and three kids and earning 60 grand a year is rich my response is that those members should get real. That person is far from rich; he is struggling and is going more deeply into debt each day as we speak. 
Members also have to face the fact that the United States of America the United Kingdom and Canada have all adopted bracket creep legislation—an automatic adjustment to the brackets in a progressive taxation system when inflation moves beyond a certain level. If it happens in those countries why for goodness’ sake does it not happen here? 
I want to say very very clearly indeed that it is time for taxes in New Zealand to be cut to be reduced. There is no reason at all—economically fiscally socially and particularly in terms of social justice—to continue to take more money out of people’s pockets than the Government really needs. In fact Michael Cullen himself said in yesterday’s press release on the Budget Policy Statement that the Government is going to bank some of it and spend the rest. There is a great great future for the New Zealand taxpayer: “You pay more tax; we’ll bank some of it and spend the rest.”!