Chauvel Charles: Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill — First Reading Second Reading In Committee 
Chauvel Charles: Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill — First Reading Second Reading In Committee 
[Volume:647;Page:16296] 
CHARLES CHAUVEL (Labour) 
: 
 It is a delight to rise to speak on Part 1 of the Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill which makes the necessary amendments to the Income Tax Act 2007. The bill implements tax cuts which everybody on this side of the House is delighted about. The important thing to note is that this Budget and the bill are in two major parts. 
The first major part is Part 1 which deals with the tax cuts and I will speak to those in a moment. But secondly a major programme of investment is carried on by this Budget. That is the important thing to stress to members opposite. It is not about just tax cuts. New Zealanders do not want just tax cuts. They want a Government that delivers social services of high quality. They want continued investment in public services. They want us to continue doing what we have been doing since we were elected; things such as increasing investment in public transport by 1000 percent over the figures we inherited in 1999. That is a huge level of investment. It is a doubling of spending every year on average. That is what we delivered to New Zealanders tonight; that is what is delivered through this Budget. It is all very well to go on about tax cuts—and I am very proud of the tax cuts that are delivered by this Budget—but they are only half the story. There is responsible investment going on here too and that is what distinguishes Labour from the party of the members opposite. 
Part 1 introduces the tax cuts I foreshadowed by amending the relevant income brackets in the legislation so that there will be a new low tax rate of 12.5 percent for the first $20000 of income. The 33 percent threshold is lifted by $4500 to $42500 and the 39 percent threshold is lifted by $20000 to $80000. That is a major achievement. The legislation establishes a staged implementation process. It is very responsible. It has regard to the need not to spike inflation so the proposed tax relief comes into effect over a 4-year period from 2008 to 2012. Part 1 also introduces the Working for Families tax credit increase by amending the relevant figures in the legislation to allow for inflation. That targeted policy that programme of delivering to families who need a bit of a hand up continues and is enhanced by this legislation. So again it is not just a tax cut that we are talking about even though the tax cuts are a very good thing. A responsible enhancement of targeted assistance is provided by this legislation recognising the particular strains experienced by low and medium-income families with young children at the moment. 
Part 1 goes on to make consequential amendments to the Tax Administration Act 1994 to adjust the requirement to file income tax returns to reflect the new income thresholds. As I said in my first reading speech this bill’s tax reductions build on an existing tax relief programme that—since 2004—is already worth billions of dollars. They stand in stark contrast to the policies of members opposite and I look forward to the debate on them.