Cunliffe David: Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill — Instruction to CommitteeCWH In Committee 
Cunliffe David: Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill — Instruction to CommitteeCWH In Committee 
[Volume:613;Page:10100] 
Hon DAVID CUNLIFFE (Associate Minister of Revenue) 
: 
 This debate reminds me a little of the ghosts of Christmases past; although perhaps we should call it the ghosts of decades past. This debate is all about tax rates and it reminds one of the early days of the 1990s. Let us recall some of the myths that have been sadly trotted out again today. 
John Key 
: What was the average growth rate in 1990? 
Hon DAVID CUNLIFFE 
: Let us start with that member—that newly ebullient deputy deputy deputy spokesperson on finance the man whom Merrill built the man who says that 20 percent of taxpayers are currently earning over $60000. 
John Key 
: They are. 
Hon DAVID CUNLIFFE 
: No I am afraid they are not. At the time this Government took office we upheld our promise. It was 5 percent. Now as a result of the growth in the economy and incomes that might have crept up a percentage or two but I would eat my hat if it were more than 7 percent. 
Rodney Hide 
: I raise a point of order Madam Chairperson. I am pushing it a little bit here but it is for the benefit of the new Minister. It was 7.2 percent at the time that this Government came in. Official records show that. It was not 5 percent. 
The CHAIRPERSON (Ann Hartley) 
: That is not a point of order. 
Rodney Hide 
: I am trying to save the Minster from his own ignorance. 
The CHAIRPERSON (Ann Hartley) 
: Please be seated. That is not a point of order. It is a debating point. 
Hon DAVID CUNLIFFE 
: It is good that the honourable member has become so self-aware. Mr Key also said that company tax rates were now 10 percent higher than in Australia. Well pinch me I must be dreaming because I just cannot calculate how that could be true. Our basic company tax rate is 33c; theirs is reduced to 30c. Let us look at some of the associated costs. In Australia they abolished accelerated depreciation rates when they reduced their company tax rate. We still have them. In Australia there is a payroll tax of 6 percent for large employers. In New Zealand we have none. The top personal rate in Australia is 47 percent. In New Zealand it is 39 percent. As far as paying for one’s health is concerned in Australia there is a compulsory Medicare charge of 1.5 percent. We have none. They have a compulsory superannuation charge of 9 percent of one’s salary. We have none. They have a house-purchase stamp duty which is 6.5 percent of the house price. We have none. They have a land tax which is set at 1.5 percent of land value. We have none. And here is the biggie—they have a capital gains tax and we have none. So when I hear people say they want to pack up their business and jump across the ditch to the land of milk honey and wallabies because they want lower tax rates I say: “Mate good on you! Go for it cos you could be just a bit disappointed when you get there.” 
Mr Hide talks about 20 percent tax rates. That is really a blast from the past is it not? He said that if we reduce tax rates we will always get increases in productivity. “Reduce them how far?” I ask. Should we reduce them to zero? How good would productivity look? 
Hon Maurice Williamson 
: Very good idea! 
Hon DAVID CUNLIFFE 
: That has Maurice Williamson excited. That got two thumbs up from him. But how would we go with no education system? How would we go with no police? How would we go with no judges to enforce contracts? The proposition is patently absurd. I could go on and on but I think that tells us that what we are encountering is simply the ghosts of decades past.