Williamson Maurice: General Debate 
Williamson Maurice: General Debate 
[Volume:667;Page:14213] 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
: 
 Before I start I join with a number of other people in passing on my sincere condolences on the death of Sir Archie Taiaroa. I worked with Archie a lot in the early 1990s on Maori broadcasting and the establishment of Maori radio and as recently as last year I worked with him on the issue of the “h” in the spelling of Wanganui. He was a man amongst men; he was a legend. He was spectacular and I will always feel richer in this life for having known him and worked with him. 
On 1 October this year a great event will occur. It is an event that is in line with what I have wanted as a politician for the entire time that I have been in this House. It is a move away from taxing incomes and a move towards taxing spending. This is a spectacularly good move which the Minister of Finance Bill English brought in in the Budget this year. It comes into effect on 1 October and it will be one of the most important things to stimulate our economy. It is a tax shift away from taxing earnings because earnings are a good thing and towards taxing spending especially consumption-type spending because spending is a bad thing in my view. If people choose to go out and buy plasma screens and splash out on all sorts of consumer luxuries that is fine but that is where people should be paying tax and I absolutely congratulate Bill English on this rebalancing. 
This change does a number of things that are just fantastic which Mr English referred to in his speech. The first one is that nearly three-quarters of all taxpayers will pay a maximum tax rate of 17.5c in the dollar. That is outstanding. I remember times in this country’s history when the marginal tax rate was 66c in the dollar; people kept a third of what they earned and the Government took two-thirds. Now Mr English has rebalanced the taxation system and got it to a point where most taxpayers—three-quarters of them—will pay a maximum of 17.5c in the dollar. 
Yes there is an increase in GST. I find it interesting that Labour is so opposed to that because I remember a couple of things. First of all GST came in at 10 percent. I was around in those days in the mid-1980s and I am sure a lot of members of this House were in politics then. Do members know what happened? There was not a mutter not a murmur and not a whisper of GST until Labour got into power. Was it in Labour’s manifesto? No. Was it mentioned on the hustings? No. Was it canvassed with anybody at all? No. Suddenly Labour got into Government and it did not increase GST by 2.5 percentage points as this measure does but it slammed it in as a brand new tax at 10 percent saying “Here take that”. There was no consultation; it was a done deal. 
One might think I was criticising Labour for that but I am not. I think introducing GST at a rate of 10 percent was a very good first step and I congratulate Labour on doing it. But not long after that again with no compensation and with no discussion Labour put the GST rate up from 10 percent to 12.5 percent. That is a 25 percent increase—2.5 percent on 10 percent is a 25 percent increase. We have not done even nearly that because our 2.5 percent increase is on the 12.5 percent. Yet Labour did that with no compensation to income earners no compensation to superannuitants and no compensation to people on lower incomes. And guess what! That was all OK. It was perfectly acceptable for Labour to do that. 
Now Bill English has come out with a complete rebalancing package where people will get a lot more of their income in their hands to keep. Let me give members a couple of examples. The average wage earner will be about $15 a week better off even after paying the increased GST. Did that happen when Labour did its increase? No it did not. The average family—so this is not the average income earner; we are going to the family level—in New Zealand based on their circumstances and spending will be $25 a week better off under this package than at present. Here is the question: who would reverse that? I guess the question is whether the Labour members will get up in the House today and say that if they back get into Government which I do not think will be for a very long time GST will go back down to 12.5 percent. Not on your nelly! Labour thinks this is a great idea and it is just posturing on this issue.