English Bill: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee 
English Bill: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee 
[Volume:621;Page:16499] 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 I have to agree with the previous speaker. Mr Tamihere did have an obligation to pay tax at those rates on the income. Every taxpayer is responsible ultimately for his or her own liability and Mr Tamihere is responsible for his. Of course he will be voting for this legislation even though he has been away. 
The big issue here about these rates is really quite simple. There is no doubt that the Government is collecting billions more in tax than it ever expected and that has allowed Dr Cullen to do two things. Firstly because of the surplus he can claim he is a fiscal conservative and secondly he can spray money all over the place. He can spend up faster larger quicker and at lower quality than any Minister of Finance in my adult lifetime—he has had so much money coming in. In fact he has so much money now that he is paying for his long-term investments out of cash. Who else is doing that? How many of us would love to be able to buy our houses out of this year’s surplus income? 
John Key 
: Out of petty cash. 
Hon BILL ENGLISH 
: Out of petty cash. That is what Dr Cullen is doing. Why does that matter? It matters for two reasons. The first is simply that— 
Rodney Hide 
: He’s got so much money Cabinet Ministers don’t have to pay tax. 
Hon BILL ENGLISH 
: That’s right but I can tell members that what they pay the Queen’s Counsel to find out that he is not paying tax will more than make up for the tax that was not paid. 
This is a double hit for the Government’s fiscal outlook. There are two reasons. The first is thatthe people who are doing overtime to pay off their mortgages are simply paying more tax than they need to pay. The Government does not actually need the money but because it has the money coming in it comes up with all sorts of wild and woolly ways of spending it. 
 I can quickly tot up $60 million $80 million $90 million that is pure political puffery on the part of Mr Maharey and Mr Mallard who are spending a bit and then there will be an announcement next week and beforethey know it they have spent $100 million. 
Rodney Hide 
: What about the CDs? 
Hon BILL ENGLISH 
: There was $15 million worth of CDs that no one looked at. There is another reason we should be opposing these rates and it is simply that they are unfair. They are unfair because we have now had strong economic growth for 7 years which is of benefit to everybody. These are the best economic conditions in a generation but the working people that the Government pretends to represent have not had their fair share of it. The Government’s revenue and surplus have risen dramatically faster than after-tax wages. 
John Key 
: Seven times faster. 
Hon BILL ENGLISH 
: They have risen seven times faster. The Government has simply taken much more than its fair share of the economic boom which should have belonged to the working people who took so many hits during the restructuring of this economy. They took the knocks and now Dr Cullen is taking the gold that is flowing. The people took the hits; he is taking the cash. That is unfair and it is what these rates are doing. 
If Parliament passes these rates then it is building in reconfirming and continuing the basic unfairness. The civil service and the Labour Government are taking much more than their fair share of the economic boom and the real pity of it is that those working families will by this time next year be paying significantly higher interest rates on their mortgages. They will be seeing that economic growth has slowed down and they will be feeling less secure—and the Government will still be sitting on a mountain of surplus because of these tax rates. For the next couple of years the Government’s books will be in brilliant shape but the working people will have missed out on the best opportunity in a generation for higher net incomes which is after all what really matters to them.