Hutchison Paul: Taxation (Budget Measures) Bill — First Reading Second Reading In Committee 
Hutchison Paul: Taxation (Budget Measures) Bill — First Reading Second Reading In Committee 
[Volume:663;Page:11090] 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 The Hon Trevor Mallard really does display the huge muddle that Labour members are in. After all what did their leader say about vegetables and GST? Well this is what Trevor Mallard said in April. He said that it was a very silly idea to take GST off healthy food. He said on his blog: “Just imagine trying to define that. And how much of each we are allowed each hour/day/week before GST kicks in. And the army of inspectors to check the food. And increase the GST or other tax to cover the diff.” It is quite obvious that Labour will be in Opposition for a long long time; its members have very very muddled thinking. 
It is a huge pleasure to speak on this Taxation (Budget Measures) Bill because the purpose of this bill is to implement the extremely well-researched well-reasoned and well-received Budget decisions announced today. I say “well-received” because within about 30 minutes employers and manufacturers had said that it was the fairest Budget for many years and that it contained the biggest tax reforms in many years. Just listening to the news tonight I heard that five out of five commentators gave it seven points or higher. Even Guyon Espiner gave seven points for this Budget; that has to be pretty good. 
Hon Member 
: 7.5. 
Dr PAUL HUTCHISON 
: That is even better. But it is important to put this Budget in context because if one thinks back to 2001—if Labour members can think back that far—one can ask what the Labour Government did after organising a highly respected report the McLeod Tax Review. That Government totally ignored it. If it had actually implemented some of the report’s recommendations we would not have been in the pickle we now are. In contrast after this National Government had organised in 2009-10 a highly respected report known as  
A 
Tax System for New Zealand’s Future 
 tonight the National Government is implementing its measures or the thrust of most of those measures. It is salutary to record in the House what the Tax Working Group report said. It said: “The current system”—this was after 9 years of Labour—“is incoherent unfair lacks integrity unduly discourages work participation and biases investment decisions.” Those are the things that have been corrected and are being corrected in this Taxation (Budget Measures) Bill tonight. The working group explained that due to New Zealand’s current financial circumstances it accepted the constraint to consider tax reform on a neutrally fiscal basis. That is absolutely correct. 
So what does this bill do? Firstly it rewards effort and helps families to get ahead. Just in case Labour members do not know let me tell them that people respond to incentives. People think that it is fair and equitable that if they work hard they are rewarded. The great thing about this Taxation (Budget Measures) Bill is that it decreases taxes right across the board. These measures certainly make the system fairer. At all taxable income levels tax cuts more than affect the GST rise; furthermore two-thirds of the cost of the income tax cuts goes to reducing the bottom two rates. Two-thirds of these reductions go to addressing the bottom two rates. They are Labour’s people that this Government is looking after. 
The third thing this Taxation (Budget Measures) Bill does is help attract and retain skilled people. I was over in Australia a few weeks ago with the Health Committee and we were deeply concerned by the number of research institutes that had skilled New Zealanders in them. But those New Zealanders wanted to be here and the measures in the Budget are the very sorts of things that will attract and retain skilled New Zealanders here. 
The other important thing is that this Budget encourages savings and productive investment instead of the Labour Government’s 9 years of vacuuming up hard-working Kiwis’ important earnings and redistributing them in a nanny State manner. Kiwis had got so used to that that they had forgotten about it. But as Peter Dunne said earlier this afternoon when Labour put up the tax rate in 1999 it was a disaster. There are now 130000 loss attributing qualifying companies in New Zealand which is four times as many as there were in 1999. Gross distortion has occurred over the last 9 years. 
This bill is an extraordinarily great suite of measures to correct the disasters of the past. It will cement in a bright future for New Zealand and economic growth to ensure that New Zealanders get sustainable world-class health education and welfare.