Swain Paul: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
Swain Paul: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
[Volume:644;Page:13698] 
Hon PAUL SWAIN (Labour—Rimutaka) 
: 
 I am totally bemused by what I am hearing from the National Party. You see the National Party has said for example that as far as the totality of the Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill is concerned it supports cuts to the business tax rate. It supports for example the new research and development provisions. National has always said that. Then I heard Pansy Wong say that she has long campaigned for and supported the provisions that allow tax incentives for people and companies to make charitable donations. She said all that. If one listened to such speeches one would not believe that National is going to vote against the bill. 
Hon Mark Burton 
: What are they voting against? 
Hon PAUL SWAIN 
: I am not sure. What I think would be a useful thing for National members to do— 
Hon Mark Burton 
: They always just vote against it. 
Hon PAUL SWAIN 
: Well they do; they just oppose oppose oppose. 
What National members could do is say: “We don’t like Labour’s tax policy generally. We don’t like the differentials in the tax rate even though the Government has indicated there might be some changes coming in but we think this is generally a good move and we should vote for it.” That would be a sensible thing for National to do and it could campaign on the bits that it does not like. But no National is going to vote against the bill. It is completely and utterly bemusing and I simply do not understand it. Pansy Wong said she strongly supports tax incentives for people and companies to make charitable donations and Gordon Copeland said he has campaigned on this issue for a long time. Everybody thinks it is a good idea so why does the National Party not vote for it? It is a very very simple matter. 
I want to talk about the redundancy provision. Once again this is taxpayer-friendly— 
Craig Foss 
: Declare your interest! 
Hon PAUL SWAIN 
: Well no this does not apply to the fact that redundancy provisions are not in our particular contract—more is the pity I say. The truth is that this will have a positive impact on low and middle income earners. 
Pansy Wong 
: What about accident compensation sufferers? 
Hon PAUL SWAIN 
: I am interested to know from Pansy Wong whether this is taxpayer-friendly. 
Pansy Wong 
: What about accident compensation lump-sum payments? 
Hon PAUL SWAIN 
: Yes but is this particular issue taxpayer-friendly? One has to say that it is. Therefore I ask why the National Party is voting against it. What has National got against helping out people who through no fault of their own get redundancy payments and getting better tax treatment for them? 
I want to speak now on behalf of the workers of South Pacific Tyres. Fortunately this legislation is effective from 1 December 2006 so it will be able to take into account redundancy payments that were made to those workers. What happens now is that people will be entitled to a rebate which will be based on a flat rate of 6c per dollar up to $60000 in redundancy. That means for example that if a worker gets a $60000 redundancy payout—and some people who have worked for 17 or 18 years in a particular place might be entitled to something like that—that worker is entitled to a tax rebate of $3600 which he or she applies for. If for example a worker is entitled to a $20000 redundancy payout then he or she is entitled to a flat-rate rebate of 6c which comes out at a $1200 rebate. This is money going back into the hands of those workers. I say to the National Party that this is a good thing. 
In the old days up until 1992 the tax rate on redundancy was 5 percent. Then the National Party changed that and introduced a system whereby people got taxed on their normal rate. The problem now is that workers can be earning during the year then get laid off and receive their redundancy payment and that takes them into the highest bracket because the total income is assessed for tax purposes in that tax year. What we are trying to do is say that in fact the redundancy payment is different from so many other things. It is compensation for loss of earnings and it will enable workers to try to put a bit away when they are out of a job until they get a new one. In this situation we should tax people more fairly and I say that is a good thing. People should be able to get some tax relief when they have lost their jobs through no fault of their own. 
I come back to my fundamental question. If the basic argument is to help these people out a bit because it is no fault of their own why is the National Party opposing this? It just does not seem— 
Pansy Wong 
: What about accident compensation? 
Hon PAUL SWAIN 
: Members are saying: “What about this? What about that?”. Why do they not support this legislation?