Smith NickHon Dr NICK SMITH (National—Nelson): I'm going to join with my National colleagues and question why this Parliament would want to impose the level of income tax that is proposed within Part 1 of this bill. I'd firstly remind the committee that this bill in this part proposes an income tax rate of 33c in the dollar for those earning over $70000. Do members opposite really believe that $70000 is a high income that warrants the highest rate of tax in New Zealand? We've got many nurses doctors policemen very average hard-working New Zealanders—in fact we are approaching the ridiculous position in New Zealand where people earning the average income are having imposed the highest tax rate and members on this side of the committee say that is wrong. What is wrong with this part is that the Government is benefiting from fiscal drag—that is that with inflation in our economy running at about 2 percent per year even people when their standard of living is static are facing the prospect of more and more of their income being taken in taxes by this Government. Now the member Michael Wood challenged National members in saying that the only way that you could agree to lower rates of tax would be lower levels of expenditure. That is incorrect. National left this Government with a legacy of huge surpluses. There is not a Government in the history of New Zealand that has been bequeathed a set of Government books as good as what National left for the incoming Government: surpluses looking out into the future of $8 billion a year; in this financial year over $3 billion. So for members opposite to argue that none other than these tax rates are appropriate for the workers of New Zealand is factually wrong and is around the Government building up a war chest to be able to buy votes rather than being genuinely concerned with our position on this side of the House—and that is that Government should in tax take no more money than what is absolutely needed to provide good quality public services for New Zealanders. I look for instance at the rates that are being confirmed in Part 1—clause 3—of this bill where a New Zealander who is earning just over $21000 a year is being proposed to be hit with a tax rate of 30c in the dollar. I remind the Parliament that the very first thing that this Government did when it came to office was remove the tax relief that members on this side of the House had passed in Budget 2017 and I believe the onus is on the Minister in the chair and on members of the Government to justify why people earning those very modest incomes should be having to give up 30 cents in the dollar on their income when the Government has the fiscal room to be able to provide tax relief. We say let those hard-working ordinary Kiwi families keep more of what they earn; that before we start doling out a whole lot of benefits—a whole lot of bribery to try and get voters suckered on to support the current Government—shouldn't we just let Kiwi families and Kiwi workers keep more of what they earn?I also draw attention to that lowest rate—the 10.5c rate—that again members on this side of the House supported changing and lifting that income threshold to take into account inflation so that Government is not benefiting from fiscal drag. So my question for the Minister in the chair is: why not adjust these rates relative to inflation? We insist on benefits being adjusted for inflation we insist on all sorts of Government funding being adjusted for inflation why not give the average Kiwi battler the hard-working Kiwi a break on their tax and ensure that those thresholds that are provided for in this clause—that threshold at $14000 that threshold at $48000 that threshold at $70000—why should that not be adjusted for inflation so that the average Kiwi worker is not being socked with more and more tax as is the habit of this Government?