Barry Maggie: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeBarry Maggie: Questions for Oral Answer — Questions to Ministers[Sitting date: 22 October 2013. Volume:694;Page:14047. Text is incorporated into the Bound Volume.]1.MAGGIE BARRY (National—North Shore) to theMinister of Finance: What impact have the Government’s across the board tax cuts and other tax changes in 2010 had on income tax paid by higher and lower income households?Hon BILL ENGLISH (Minister of Finance): Estimates of net income tax paid by household income indicate that the tax system has become more progressive since the Government’s tax changes in 2010. Households earning less than $60000 a year are expected to pay less in percentage terms towards net tax this year than they were paying in 2008-09. Households earning more than $150000 a year are generally expected to pay more of the total net income tax this year than they did 5 years ago. Only 6 percent of taxpayers earn over $100000 a year. They pay around 37 percent of total income tax. Three years ago they paid around 29 percent of total income tax. That is why calls to increase the top tax rate are misguided because by dropping the top tax rate and closing the loopholes higher-income earners are paying proportionately more tax.Maggie Barry: What changes has the Government made to income tax rates and other taxes to help families get ahead?Hon BILL ENGLISH: The tax package in 2010 reduced tax on work and savings and increased taxes on consumption and property speculation. In particular it reduced the top tax rate from 39c to 33c and closed the loopholes that had been left wide open by the gap between the top tax rate and the company tax rate which allowed high-income earners to avoid paying 39c in the dollar. Now that we have cut the top tax rate to 33c higher-income earners are paying proportionately more tax than they did when the rate was higher.Maggie Barry: How significantly do the income tax and income support systems redistribute incomes for New Zealand households?Hon BILL ENGLISH: The tax and income support systems provide a significant amount of income redistribution—in fact a bit more redistribution now than 4 or 5 years ago. Households earning over $150000—that is the top 12 percent of households by income—will pay 46 percent of income tax. When benefit payments Working for Families paid parental leave and accommodation support are taken into account households earning over $150000 will pay 76 percent of the net income tax. Households earning under $60000 a year—half of all households—are expected to pay around 11 percent of income tax. So households earning over $150000 pay 76 percent of net income tax and households earning under $60000 pay 11 percent of income tax.Maggie Barry: What broader measures has the Government taken to support families most in need particularly to ensure that the tax and income support systems are fairer?Hon BILL ENGLISH: The Government has despite a recession and large deficits maintained the large-scale income support measures for low and middle income families. But of course measures of gross income are not the only measure of the welfare of a family. Over the last two Budgets the Government has invested more than $470 million in helping more New Zealanders out of welfare dependency and intowork because even though that is not a cash transfer to the individuals concerned it greatly improves their prospects and improves equality if people move from welfare dependency into work.Dr David Clark: No matter how much he tortures the statistics do not the figures actually show—[Interruption]Mr SPEAKER: Order! I ask the member to assist the order of the House by phrasing his question more correctly and starting with a question. Otherwise it leads to the sort of disorder that I then have to deal with. If the member could attempt to do so I would appreciate that. In the meantime the front bench on my right-hand side will stay quiet while the question is asked.Dr David Clark: Do not the figures actually show that his 2010 tax changes are a measure that has cemented a gap between rich and poor which is higher under this Government than it ever was under the previous Government and made worse by unemployment still being higher than it was during the global financial crisis and by wage growth being at its lowest in over a decade?Hon BILL ENGLISH: No no and no. The recent Ministry of Social Development social report shows inequality in New Zealand reducing. It shows it reducing from a peak of inequality under the Labour Government. It does not matter how often Labour members want to say that the rich are getting richer and the poor are getting poorer they are wrong. Inequality is reducing.