English Bill: Taxation (Annual Rates of income Tax 2005-06) Bill Taxation (Urgent Measures) Bill Student Loan Scheme Amendment Bill — Third Readings 
English Bill: Taxation (Annual Rates of income Tax 2005-06) Bill Taxation (Urgent Measures) Bill Student Loan Scheme Amendment Bill — Third Readings 
[Volume:628;Page:789] 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 When it comes to political parties staggering that member should look along his front bench. 
Judith Collins 
: They’re not there. 
Hon BILL ENGLISH 
: That is right. Actually the taxpayer’s dollar is much safer when they are not here than when they are. 
One has only to look at the issues this Parliament has been dealing with in the last few weeks to see why taxpayers are so resistant to the level of taxation that Labour is reaffirming in this legislation. I will come back to that. You see the tragedy of today—and it is a tragedy of a lost election from our point of view—is what this Parliament could be passing as a tax bill. We could have been passing legislation by which 85 percent of wage and salary earners in New Zealand faced a tax rate of 19c in the dollar. That is what we could have had—85 percent of them facing 19c in a dollar. 
We could have done that with the support of parties that are actually supporting this legislation by which I mean United Future New Zealand First—at a bit of a stretch—and maybe even the Maori Party too. They have a much better understanding of how New Zealanders want to get ahead and what they need to do to get ahead then the Labour Party ever does. If it were not for the accident of those parties promising to support after the election the party that got the most number of seats they could be supporting tax legislation today—as they are supporting this legislation—where 85 percent of New Zealanders faced a statutory tax rate of 19c in the dollar. What better incentive would there be to get ahead not only for all those people Dr Cullen says he cares about but also for all the ones that he does not care about? 
Actually he summed it up in his argument about participation rates and employment rates. The Government is priding itself on economic growth that was essentially built on increased employment. So more New Zealanders now work. We have more workers. I agree with that; growth has flowed from it and people getting jobs has been a good thing but it is no credit to the Government because it has done nothing to contribute to it. But that is not the point now. The point now is not more workers but better workers— 
Dr the Hon Lockwood Smith 
: More productivity. 
Hon BILL ENGLISH 
: —and productivity. Is it not typical of Dr Cullen to be spending tens of millions of taxpayers’ money on seminars workshops advisory groups and industry advisory business council consulting strategic groups talking about productivity when he does not believe a word of it himself? Productivity needs workers with strong incentives to lift their skills and their levels of education to be more productive. The days of easy economic growth are gone which is a truth the Labour Government will find out to its political cost over the next couple of years. That is why National’s tax policy is the one that should be being passed by this Parliament. It would give all workers in New Zealand the incentive to get ahead because we can all contribute. 
But that is not what the Government thinks. One reason it needs to confirm the current tax rates is that it needs to pay the burgeoning State sector wage bill. From looking at the figures one would think—and Government members somehow think in so far as they have paid any attention to productivity—that the most productive people in New Zealand were in the public sector. When we look at the Labour Cost Index we see that every single day this Government has been in power public sector wages have gone up faster than private sector wages. In the last 12 months the difference has accelerated. 
Hon Marian Hobbs 
: Nurses! 
Hon BILL ENGLISH 
: That is excluding nurses and teachers. When we include them it is more but when we exclude them it is still faster. 
It is no wonder that private enterprises are struggling hard to get labour because the Government is out there outbidding them. Why is the Government outbidding them? It is not because civil servants are more productive. It is not paying more to the civil service because it is more productive. That is clear in Treasury’s briefing paper to the incoming Minister which states that there is no evidence that for the much greater expenditure on public services taxpayers are receiving better services or a better deal. So private enterprises are out there trying to get skilled people and what is outbidding them? It is the Government. The public sector wage bill will rise by $1 billion per Budget for the rest of the life of this Government and everything New Zealand First wants to get is in hock to that first billion dollars in public sector wages. That is why New Zealanders are resistant to paying the amount of tax that Dr Cullen wants them to pay. 
Is it just National Party voters MPs or ACT supporters who are saying that? No it is not. It is the membership of the Council of Trade Unions. In its brief to the incoming Minister of Finance the leadership of the Council of Trade Unions recognises in a polite way the pressure coming on from its own membership. It says of its own membership that they believe the surplus is too big and that they should get some of it. We absolutely agree. The group of people in New Zealand who best reflect the interests of the membership of the Council of Trade Unions are those who make up the National Party. It is not the Council of Trade Unions leadership and it is certainly not the Labour Government—which keeps taking dollars out of the workingman’s pocket to put them into the bureaucrats’ pocket. That is what happens; it is as simple as that. 
The Council of Trade Unions goes on to make one constructive suggestion which I hoped Dr Cullen would have addressed during this debate: why does the Government not bring forward its inflation indexation of tax thresholds from 2008 to 2006? Dr Cullen said one thing about it. He said: “At least someone now thinks it is a good idea.” Well they do so because it is the only option for reducing the overtaxation of the New Zealand worker. It is the only option on the table because he has ruled all the others out and as part of the coalition agreement with New Zealand First and United Future those parties that are now part of the Government have made mention of that. 
Dr Cullen did not address it. He has plenty of money to do it. I do not think he realises how silly it now looks to be the only person in the country who thinks the Government does not have enough money. 
Lindsay Tisch 
: Everyone else does. 
Hon BILL ENGLISH 
: Everyone else knows the Government has more than it can handle but over the next 2 years we will see the odd situation unfold whereby on the one hand Dr Cullen has to tell his colleagues he does not have enough money for things that matter but on the other hand he has far too much so that he is wasting it on all sorts of things from the TVNZ charter to something I came across the other day. It is costing the Government $141 million by its own figures to run the tertiary education system. That is just the Wellington bureaucracy; it costs $141 million. I can tell Parliament that I have spent 2 years looking at what those bureaucrats do and they do nothing. There is no evidence of the spending of that money benefiting any single New Zealander. 
So that is why National does not support this bill. We could have been passing a much better one that would have put 85 percent of taxpayers on a 19c tax rate. We know that if the Government sticks to this overtaxation of the New Zealand worker it will continue to waste money and now it has incompetent Ministers like Steve Maharey and David Benson-Pope to do it with which will make the problem twice as bad. What is more the Government is getting the message from its own people—some of whom voted for the Labour Government—that the membership of the Council of Trade Unions is saying that the surpluses are too big. Those people want a reasonable and small amount of it now but Dr Cullen has thrown that back in their faces with this bill and he will pay a price for doing that. 
Debate interrupted.