Nash Stuart: Taxation (Income-sharing Tax Credit) Bill — First Reading 
Nash Stuart: Taxation (Income-sharing Tax Credit) Bill — First Reading 
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STUART NASH (Labour) 
: 
 I stand in opposition to Minister Dunne’s Taxation (Income-sharing Tax Credit) Bill at its first reading. There are two things I would like to say about this bill. First this proposal does not increase equity; rather it further increases the gap between those who earn the most and those who struggle to make ends meet. Second I will outline a couple of points made by experts—not in Parliament but in the real world—who have spoken on this bill. 
In reading this bill and listening to the Minister’s answers to oral questions in the House today it is hard to believe that this Minister of Revenue was also the Minister of Revenue under the previous Labour Government. His apparent lack of empathy with those who are really battling is baffling. Mr Dunne himself is about to get a tax cut of around $140 a week but a person on the median wage in the electorate he purports to represent will get about $5 a week. That is simply not fair or equitable. This bill is not fair either. Mr Cunliffe earlier alluded to the Minister’s passion about this issue and said it was commendable. Well I would not use the word “commendable”; I would use “misguided”. If the Minister concentrated his passion on securing real benefits for all Kiwis then I would commend him. But that is not the case with this legislation. It does not benefit all Kiwis at all. It is not about families; it is about high-income families who do have choices. 
The Minister speaks a lot about choice. However choice implies a level of economic freedom; necessity does not. As the Inland Revenue Department noted in its report on income splitting: “It might be perceived as unfair that the benefit from income splitting increases as primary earner income increases providing more benefit to couples with higher incomes.” So the real question is whether income splitting helps those who really need it—those who were torn between returning to the workforce full-time working part-time or staying at home to look after children. The answer to the question is no. We should remember that Mr Dunne’s proposal is applicable only to families with dependent children. It does not help those who really need assistance. Working for Families is in place to help struggling families and Mr Dunne suggests that we have both. The median household income is about $60000 and the median wage for those in paid employment is around $41000. Therefore many households have both parents working full time and they would not benefit from income splitting. Those families who genuinely do have choice around whether one parent works or both parents work tend to be those who earn the most. It just makes sense. 
For the benefit of members opposite who have no understanding whatsoever I will outline three scenarios. They assume a two-parent household with at least one dependent child and one partner who works. The first household with a salary of $40000 will get $8.65 a week under Mr Key’s tax cut and about $23 a week with income splitting. They will be about $32 a week better off. The second household with a salary of $100000 will get about $38 a week with the tax cut and $163 a week with income splitting. They will be $202 a week better off. However those who earn $140000 a year will get $66 a week with the tax cut and $180 a week with income splitting. They will be $240 a week better off. A household that earns $40000 a year—about 70 percent of Kiwis earn $40000 or less—will be $32 a week better off but a household on $140000 will be $240 a week better off. How does that promote equity? In fact the regulatory impact statement which accompanies the bill spells it out. It states: “The most significant gains would go to higher single income households with the lowest gains going to low-income families.” Nothing has changed on the other side of the House; it is simply not fair. 
A couple where one partner earns $140000 a year and the other earns nothing will get $9000 more a year. This bill is not about families; this is about high-income families. Mr Dunne said that not everyone would take this up. What? Of course they will take it up. Those people will say that they pay enough tax and will grab that $9000. It is the people who earn $140000 who will benefit not the people who earn low incomes. The Inland Revenue Department costed this proposal at around $500 million a year. We should remember that the Government cut the budget to the early childhood education sector by $250 million over 4 years. That will really cost struggling parents. I would have thought that pumping more money into high-quality early childhood education would be the type of policy that provided choice for struggling parents. Mr Dunne set up the Families Commission yet he sits with a Government that cut funding to the early childhood education sector. That has set that sector back 10 years. That is the real travesty that Mr Dunne and United Future should be fighting. That is what he should be standing up for if he value parents and children. Mr Dunne says that anyone who opposes this bill does not value families and is engaged in the politics of envy. That is the sort of rhetoric we hear when there is no logical argument to back up a claim. There is no logical argument to back up this bill. 
That brings me to my second point which is to relay the comments of a couple of experts who have spoken about this bill. First of all let us be honest and Amy Adams outlined it: the reason we are debating this bill is that it is a supply and confidence agreement between Mr Dunne and the National Government. When I questioned Mr Dunne about this at the Finance and Expenditure Committee he said it was in the supply and confidence agreement. That was all he said. When I questioned the Minister of Finance Bill English at the select committee about the possibility of income splitting he ruled it out. He said it was not well targeted it was inequitable and it probably would not go ahead. He also said that there were better targeted approaches to this. And there is a targeted approach; it is called Working for Families which was put in by the previous Labour Government and helps 300000 families in this country. That is targeted assistance; this bill is not. 
We are going through the motions. The National Government will vote for this bill to go through to the select committee we will sit there and we will hear submissions in the knowledge that the bill will be voted down in the second reading. Bill English has pretty much said as much. The Attorney-General Chris Finlayson has said as much. He said the bill was discriminatory and we all know that whatever Chris Finlayson says must be right as the guy walks on water—he has told us as much himself. The  
New Zealand Herald 
’s economic reporter called this bill unfair unaffordable and unlikely to happen. Mary Holm said that it was bad prioritisation of spending and would do nothing to help low and middle income New Zealanders. There are very very few people outside a little square box on that side of the House who actually think this is a good idea. It will definitely not help those who really need it. 
In conclusion I say that this proposal is not equitable. It will not help those families who are really struggling at the moment so make ends meet. It will do nothing to alleviate child poverty. It does not provide choice because choice implies a level of economic freedom. At the moment there are many families where both parents work out of economic necessity and earn $40000 or below. This bill will not help them and that is why I oppose this bill. Thank you very much.