Pillay Lynne: Taxation (Urgent Measures and Annual Rates) Bill — In Committee 
Pillay Lynne: Taxation (Urgent Measures and Annual Rates) Bill — In Committee 
[Volume:651;Page:161] 
LYNNE PILLAY (Labour) 
: 
 As I was saying before the lunch break the personal tax cut part of this bill is actually a redistribution of wealth; a redistribution from working New Zealand families from modest-income earners and from beneficiaries to the wealthiest who are the biggest beneficiaries of this bill. Every worker earning under $44000 and particularly those who have families will be worse off yet those are the people who need tax cuts the most. Over 2 million New Zealanders—65 percent of New Zealanders—will not benefit and some will be disadvantaged by this bill. That shows how out of touch the National Government is. 
Let us look at the 800000 people who have signed up to KiwiSaver. They have committed to saving 4 percent of their incomes with fair employer contributions—and 4 percent is a fair employer contribution—[ 
Interruption 
] Yes this change is on top of the tax cuts. Now the employer contribution will be slashed to 2 percent and that will have a dramatic impact on those people’s ability to save for their future on their children whom they have signed up to KiwiSaver and also on their dream of having a sizable deposit for a new home. National members have said they will maintain Working for Families; after their calling it “communism by stealth” and pouring vitriol over us for introducing that policy they are going to maintain it. But indeed working families are going to be much worse off under National’s tax policy. 
I think many many Kiwis have been conned. They are expecting a sizable tax break. When Kiwi battlers get their first pay cheque in April they will realise that oh my goodness the future is not very bright for them and they will wonder what they are going to do. They are on a low income and they have not had a tax cut. Their income has been cut—not their taxes. They may think that State housing can help them get ahead but guess what? Building new State housing has ceased under the National Government as well. They may think about compensating for the cut in their income that effectively the tax increases have given them. They may try to get a better-paid job so that they can break even and be where they were before. If they get a new job they may get an extra 50c an hour but guess what? They will have no security of tenure in that job. Under National’s policy in the future they can be sacked any time within 3 months after being hired. That will be a big risk for them to take if they want to better their income to get ahead and to get back to where they were before. Kiwis have been conned. They believed that there was going to be a brighter future. I say that if this is a brighter future I would hate to see a gloomy future for Kiwis. 
Another implication of the tax cuts is that we will have less money in the tax take. There will be a big drain of money from the tax take because of the big tax cuts for those on high incomes. People such as members of this House will benefit tremendously at the cost of low and modest income earners and Kiwi families. The implications of the tax cuts will affect us all. They will affect health spending. They will affect education. They will probably affect early childhood education tertiary education and apprenticeships—all the trade training that started under this Labour Government.