Seymour DavidDAVID SEYMOUR (Leader—ACT): I rise on behalf of ACT in opposition to this Taxation (Budget 2021 and Remedial Measures) Bill. This is a piece of legislation that raises the threshold for people receiving the minimum family tax credit and it's been done to reflect the fact that this Budget this Government brought down which ACT also opposes has raised benefits so much that if this change wasn't made there'd actually be a group of people who would find it was not only of marginal benefit to actually work actually they would be worse off if they went and worked. That's why this is necessary. It was really interesting in the committee stage to find out how many people are affected by this change and what sort of income changes they get if they actually go from being on a benefit to working. Because unlike the Green Party the ACT Party believes in human action. We believe people actually make choices that their actions can make a difference in life and that they respond to the incentives they face including those created by Government policy. We actually see each person as a thinking and valuing individual with agency not just fodder for the great social engineers the philosopher kings of society. We analyse Well how many people are affected?" Well about 4800 people the Minister told us would be affected by this change. That's the number of people whose after-tax income is between about $30500 and about $31096. Those are the people who are affected by this legislation because the amount that their income gets topped up to if they work 20 or 30 hours a week—and the 20 or 30 depends on whether they are single or have a family—the people that work the necessary number of 20 or 30 hours depending on their family status they will get topped up to the new level of $31096. There's 4800 people who are between the old threshold and the new threshold who are going to be affected. That's what we learnt. Then I asked the Minister "Well you know what happens for people who are currently at the old threshold earning say $30000 or $30600 and if they get offered extra hours or a small pay increase that would increase their income up to $31000?" Well the answer is they will get no extra benefit from their extra work because their incomes now are going to be topped up to $31096 anyway. Not necessarily a reason not to do it or to be against it but it's a really interesting discussion because it shows that one of the impacts of the welfare system that we have is that a lot of people find themselves in positions where actually the effect of doing more work is that they are very little better off.We heard that somebody who gets $375 a week on a benefit if they were to go and start working then they'd basically be getting an extra $8 or $9 for every hour that they went to work. So you start to understand why the changes that this Government is making to benefits are going to have the effect of giving people more money but they are also going to change the incentives and change the amount of work that people do. That's why among other things I think the Treasury's forecasts of 4.4 percent unemployment in a couple of years' time are rather heroic. Besides that discussion that the committee stage had about the effects of benefits on people's incentive to work it's also really interesting—we heard from the Minister that it's people's after-tax income that will be topped up by this minimum family tax credit. You know what's interesting is actually how much tax a person earning $31000 pays. People might be astonished to know. I mean I just did a little bit of work on it: on your first $14000 you pay 10.5 percent. Well that's $1470. On your remaining $17000 or so you're going to pay 17.5 percent income tax on your money. That gives you about $3010 if you're earning 600 bucks a week 30 hours a week minimum wage which is the threshold to qualify for this thing. That means someone on $31200 is paying $4480 in income tax.But then let's imagine they have a car and they have a tank that's 60 litres. They only fill it up half every week—30 litres; 95c a litre of tax is to the Government. Well that means that they're actually going to be paying—and that's just the excise tax; that doesn't include the GST—about $30 a week in petrol excise tax. Fifty-two weeks a year that's $1500 in petrol tax that someone's paying to half fill their tank each week. And then you've got GST. It's 15 percent on the money they do spend. Now we'll guess someone on an income of that level they're going to be spending at least half their income on rent—and thankfully they don't pay GST on that—but still the 15 percent they're going to pay that's $2250 in GST. I was going to try and calculate how much they'd pay if they liked a cheeky ciggie but the truth is they won't be able to afford that at current tax rates totally out of reach and actually becoming a status symbol because they've become so expensive. It's true. Some people are laughing but it's actually a trend amongst younger people. Because it's so expensive to smoke they've become a status symbol. I'm not kidding. The perverse—Hon David Parker: Sounds like an Epsom problem.DAVID SEYMOUR: And David Parker is saying it sounds like an Epsom thing. I can tell you the percentage of people that smoke in the Epsom electorate—or at least admit to it to the Government officials—is 5 percent. I don't know; the member over there he's from Dunedin and I've seen a few people having a durry down there. But anyway that's out of the question given the taxes for people on these incomes. But they might like the odd can of Lion Red.Hon Peeni Henare: Heeey!DAVID SEYMOUR: That's right; Peeni Henare he's had a few Lion Reds in his time. And it's not difficult to spot! You know the excise tax is about $30 per litre on beer. So if you have 20 beers that's a litre of alcohol. That's $30 excise tax. It's about 50c a can. If our friend in this example has a dozen Lion Reds each week they're going to be paying $300 in excise tax on their beer.So so far we've talked about income tax about $4500; petrol tax $1500. That's $6000. GST $2250. That's just over $8000. We're off the baccy but we've still got the beers. They're actually paying about $8500 or nearly 30 percent of their income goes to Government. And that is on a person who's on a very low income someone who works 30 hours a week on the minimum wage. So one of the reasons that we need this income tax credit or at least the reason the Government argues we need it is actually because so much of people's money is taken away by Government in tax.Now I heard one of the Green members carping away as they do—as they try and decide whether or not to vote for a bill and then fail and have to abstain—before saying "What about all the things you get for it?" And I think people especially people on low incomes wouldn't resent paying so much tax if they were getting a lot of value out of it. But we see so much low quality spending. We've actually got a Government that is trying to take us back to the 1970s and have a State-funded train factory in Dunedin. There's a billion bucks right there. That's the kind of thing this Government is spending its money on. So you can understand why people have a certain amount of scepticism about paying their taxes and that's why this kind of policy is necessary.I should also just comment briefly about the quality of debate. You know you've got all these larrikins in the Labour Party getting up and saying that they're socialists. They don't know what words mean. To be a socialist is to believe that the State should actually own and control the means of production. They don't believe in that. They all go and—Anna Lorck: That's communism.Hon David Parker: That's communism.DAVID SEYMOUR: "No no. Communism" he says. "That's communism." Communism is socialism organised into little villages. Now they don't believe in that because every single Labour member I can guarantee you gets up in the morning and goes and buys a latte or a flat white probably with oat milk—and it comes from a global supply chain that gets the coffee to the small-business owner—and they happily hand over five bucks that they get paid by the taxpayer to buy their coffee in the morning and then they come in here and they say they're socialist. They don't know what they're talking about. They don't know what the words that they use actually mean. The ACT Party opposes this bill."