Dunne Peter: Taxation (Budget Measures) Bill — First Reading Second Reading In Committee 
Text is incorporated into the Bound Volume 
Dunne Peter: Taxation (Budget Measures) Bill — First Reading Second Reading In Committee 
[Sitting date: 24 May 2012. Volume:680;Page:2441. Text is incorporated into the Bound Volume.] 
Hon PETER DUNNE (Minister of Revenue) 
 on behalf of the Minister of Finance: I move  
That the Taxation (Budget Measures) Bill be now read a second time 
. Ours is a broad - based low rate tax system that aims to raise revenue in the most efficient manner to support the Government’s aspirations for the economy. We value fairness in the system to ensure that everyone pays their fair and proper share of tax. For this reason this bill seeks to repeal two existing tax credits replace another and also remove the voluntary repayment bonus for student loan repayments as well as introduce new changes to livestock regime rules. I will not go through each of these in detail because they were covered during the first reading debate but let me take some time to discuss some of the issues that have been raised.  
I want to talk first about the tax credit for income under $9880. This was originally devised as a temporary means for compensating a small group of workers following the 1986 tax reforms which I think Mr Mallard will recall—maybe other members will have read about them in the history books. The important point is that today none of the original target audience of those reforms actually qualifies for the credit but it is still being claimed by other people for whom it was not intended. There is no clear policy rationale why people who currently claim that credit such as those who work full-time for a small part of the year should pay less tax than others with the same income but who earn it a different way such as someone who works part-time for the whole year who is not eligible for the credit as it stands. It is also not fair— 
Hon David Cunliffe 
: We see him in full flight tonight! 
Hon PETER DUNNE 
: Well there is a long night ahead of us I am told. 
Hon David Cunliffe 
: You’ll need all your flair. 
Hon PETER DUNNE 
: Just be patient Mr Cunliffe; it will come.  
It is also not fair that although the majority of farmers— 
Hon David Cunliffe 
: How long has the member been in the House? We’re still waiting. 
Hon PETER DUNNE 
: A lot longer than that member has been and is likely to be. What I was saying is that although the majority of farmers comply with the letter and spirit of the existing tax law some farmers have been exploiting some of the existing rules with regard to the herd and the livestock schemes the herd and the standard cost schemes to their tax advantage. In respect of those measures we announced in last year’s Budget a consultation process for change. This Budget gives effect to the outcome of that consultation the decisions of which were announced in around March of this year.  
I want to say a little word or two about the student loan repayment bonus changes. The important point here is that that bonus was introduced as a way of encouraging people to make their repayments but it is being abolished now because what we have actually discovered is one that some of the other measures that have been put in place subsequently have been far more effective in terms of encouraging repayment and two as with the transitional tax measure I referred to earlier the purpose is being distorted and we are getting people claiming the repayment bonus in the same year that they are making a repayment and actually benefiting from the system. That was not what was intended at all so that is why that is being repealed.  
I want to talk now about paper boys which Mr Mallard will be delighted about. It was interesting during the first reading debate how paper boys somehow seized the public imagination. At a somewhat frivolous but none the less relevant level I should point out that since the demise of evening papers we actually no longer have paper boys. Mr Mallard is a wily character. He may well say— 
Tracey Martin 
: We have paper boys! 
Hon PETER DUNNE 
: There is a squawking creature to my right whom I will ignore. I come to Mr Mallard who—[ 
Interruption 
] I cannot understand a word you are saying I am sorry. Mr Mallard may well say in response— 
Hon Trevor Mallard 
: Community newspapers. 
Hon PETER DUNNE 
: Exactly and I shall tell him that community newspaper workers are actually funnily enough described as “pamphlet droppers” and were never covered by this regime anyway. In fact their income will be under the $2340 threshold which will still apply.  
What we are doing here—and I thought that the member would be interested in this—and what we are putting in place is the last nail in the coffin of Muldoonism. The existing child tax credit was introduced by Sir Robert Muldoon in 1978 as a temporary measure because at that time— 
Hon Trevor Mallard 
: At the point he put taxes up to 66 percent. 
Hon PETER DUNNE 
: Probably. At that time— 
Paul Goldsmith 
: That was later—1982. 
Hon PETER DUNNE 
: You can have this argument all you like—I think you are right actually Mr Goldsmith; it was because there was the caravan and the boat tax at the same period. But the point I was making was that in 1978 this was put in place because at that point most— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! My left and my right: you cannot interject on each other. The Minister has the floor. 
Hon PETER DUNNE 
: In 1978—this is a riveting story I know but it needs to be placed on the record to put some context around this debate—very few employers deducted tax at source. A number of the people in the category of being paper boys and girls and others of that ilk found themselves facing the potential of tax bills at the end of the year because the tax had not been properly deducted. So this temporary transitional measure was put in place. Thirty-three years later most of the paper boys and girls have long since ceased to be in that role but more important most employers now actually make deductions at source anyway. So the purpose for the concession if you like has become outdated. It is no longer necessary. The people who are affected if they are earning above the $2340 threshold will be able to file their tax returns in the normal way that they have been able to do for some time. 
Hon Trevor Mallard 
: And if they are earning under? 
Hon PETER DUNNE 
: And if they are earning under that we are not particularly interested in them frankly; the exemption will remain. 
Hon Trevor Mallard 
: No it doesn’t. The member is absolutely wrong. He should read his own bill. 
Hon PETER DUNNE 
: Well I drafted it and I should know what it says Mr Mallard. I appreciate that that is not something— 
Hon Trevor Mallard 
: He should read his own press statement. 
Hon PETER DUNNE 
: Well it is rather difficult to make that claim when you actually write your own press statements.  
Anyway the point is that this is not a significant measure. It is removing something that has become completely outdated. Frankly a lot of the heat that has been generated about it has been good fun in the context of the debate but members opposite complained earlier about I think a couple of million dollars being spent on Parliament passing this allegedly unnecessary legislation and that is a pretty expensive price to pay for a little bit of fun. I commend this bill to the House and move its second reading.