Newman Muriel: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Newman Muriel: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 16 June 2004. Volume:618;Page:13636. Text is incorporated into the Bound Volume.] 
10.  
Dr MURIEL NEWMAN (Deputy Leader—ACT) 
 to the  
Minister of Finance 
: Following the Prime Minister’s answer yesterday “that the Budget shifts the inherent issue of effective marginal tax rates further up the income scale.” what is the highest effective marginal tax rate for a working family following the full implementation of the Government’s Budget and how many working families will face an effective marginal tax rate of over 80 percent? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The highest effective marginal tax rate following full implementation of the Government’s Budget is the same as it is now. 
Hon Roger Sowry 
: 101.2. 
Hon Dr MICHAEL CULLEN 
: I thank the member. He is correct. At this stage and within that time frame officials cannot provide an answer to the second part of the question. There are simply too many variables to take into account. 
Dr Muriel Newman 
: What is his advice to those many thousands of families affected by the high marginal tax rate on how they can improve their financial position when they get to keep only 20c or less of each extra dollar they earn? 
Hon Dr MICHAEL CULLEN 
: My advice is that they will be far better off under this package than they were previously. The member keeps ignoring the fact that those families will have a higher income than they have now. 
John Key 
: Does the Minister acknowledge that high effective marginal tax rates were a significant impediment for beneficiaries moving from welfare to work and if he does why does he think it will be different for middle-income New Zealanders moving up the income scale? 
Hon Dr MICHAEL CULLEN 
: I am not arguing that point. The difference in terms of the benefit issue is that people receive no encouragement to move off benefits at all in many cases and therefore remain on benefits. I thought that the National Party policy was to encourage people off benefits. 
Rt Hon Winston Peters 
: Has the Minister received any reports that suggest that the origins behind the primary question relate to the fact that a certain party has chosen a new man and a “Newman” but the same old policies that have failed in the past are still being supported by that party? 
Mr SPEAKER 
: That is a nice try but not quite within the Standing Orders. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I am not clairvoyant; however I fully believe that the Minister of Finance may have well received such a report and he should be given a chance to tell us whether he has. 
Mr SPEAKER 
: There has to be a report within his portfolio responsibilities. 
Rt Hon Winston Peters 
: That’s right. 
Mr SPEAKER 
: He can say yes or no to that. 
Hon Dr MICHAEL CULLEN 
: It is not worth answering just yes or no is it? No. 
Dr Muriel Newman 
: In light of his Government’s determination that anyone earning over $60000 a year is rich enough to pay higher taxes why under the Budget does Labour intend to give handouts to families that earn up to $109313? 
Hon Dr MICHAEL CULLEN 
: I am not quite sure where the member gets that number from. It would depend on the number of children. Perhaps the member could indicate how many children she is referring to. 
Dr Muriel Newman 
: Six or more children 
Hon Dr MICHAEL CULLEN 
: The member ignores the fact that the family support tax credits will keep increasing with the number of children a family has. Theoretically therefore it could be even higher if a family has say 20 or 22 children. I have not done the sums in that regard. I have to say that if we are dealing with somebody with 20 or 22 children I suspect that their needs are somewhat greater than a single person on $60000 a year.