Prebble Richard: Taxation (Base Maintenance  and Miscellaneous Provisions) Bill Privacy Amendment Bill (No 3) — Third Readings 
Prebble Richard: Taxation (Base Maintenance  and Miscellaneous Provisions) Bill Privacy Amendment Bill (No 3) — Third Readings 
[Volume:626;Page:21468] 
Hon RICHARD PREBBLE (ACT) 
: 
 I rise to speak to the third reading of the Taxation (Base Maintenance and Miscellaneous Provisions) Bill. It was agreed that we would take the legislation as one question. The Associate Minister of Revenue Mr Cunliffe was rash enough to decide to get up and make—I guess I have to say in fairness—a vigorous defence of the Budget and the decision of the Government not to grant tax relief. That resulted in a wide-ranging debate—which actually had been agreed to. Mr Cunliffe must have realised the position from the reception he got. For example I have just listened to the speech made by Mr Copeland whose party normally supports Labour. Mr Copeland in his gentlemanlike way completely lacerated the Government’s position. 
Mr Cunliffe wants us to believe that the Government does not have a $7 billion surplus. Of course to believe that one has to believe that the Auditor-General who signed off the Government’s accounts got it wrong; that Treasury which is required by law to state whether the Government’s accounts are correct actually got it all wrong; and that there is no $7 billion surplus. I just say to the Government that it has no chance at all of putting across that line. It is nonsense. The $7 billion surplus most certainly does exist and there is the ability to have tax cuts. 
The reason the Government is in trouble is that even someone such as the President of the Labour Party Mike Williams could not believe that the Government would not adjust the tax rates. The whole country expected adjustments because inflation has happened and because one of the promises that Labour was elected to Government on—I have a copy of the promise somewhere if it has forgotten it—was that no more than 5 percent of the population would have an increase in income tax but of course 20 percent of people in the workforce are now paying the 39c tax rate. The answers Dr Cullen gave in the House—apparently Mr Cunliffe was not listening because he denied that those answers were given—show that people in New Zealand on average incomes after tax are no better off today than they were 6 years ago. 
Of course that does not apply to the Government. The Government is much better off. It has been collecting revenue. As Kenneth Wang speaking on behalf of the ACT party pointed out this tax revenue has not come from a few overseas companies because although those overseas companies may pay some tax the vast bulk of tax in New Zealand is paid by average New Zealanders. 
 In the case of New Zealand companies 97 percent employ fewer than 20 people and I think about 97 percent of them are New Zealand - owned. The Associate Minister got up and said that the Government could not give a tax cut because it would help overseas companies and the banks but that argument just will not wash with the average small-business man. The reason why someone like Kenneth Wang is so upset about it is that he is a small-business man. He knows that it is companies like his that are paying the extra tax just as the average New Zealander knows how much money he or she has left. 
I believe that tax is going to be the big election issue. I have no difficulty in believing Mr Carter who told members that when he was at the Fieldays today the issue that people wanted to talk about was tax. That has been my experience. 
I know what has happened to the Labour Government. It has looked at the polls and found that the polls say—and they still say—that 66 percent of people would pay more tax in return for a better health system. Well I come from the ACT party I believe in low tax but even I would pay more tax to have a better health system. But I just know that if I paid more tax I would not get a better health system. If we relook at those polls we also see that the other 30 percent of people who do not say they would be prepared to vote for more tax know that they would be the people who would pay it. Most of the people who answer yes to that question do not think they personally would have to pay the increase. When we put the question a different way as the  
National Business Review  
did—which again Kenneth Wang pointed out—before the Budget and I do not know why Dr Cullen did not notice it we see that two-thirds of all New Zealanders now think they are paying too much tax. 
I suspect that that figure has now gone up further. The result of the silly decision made by the Government to give the price of a packet of chewing gum in 3 years’ time in tax relief has caused everyone in New Zealand to look at the question and to realise that there has been inflation over the last 6 years and that the Government has not adjusted the tax rates. We also know that the Government across the Tasman both before the election and now after the election has dramatically adjusted tax thresholds for inflation. As we live in a global world we are aware of that fact. 
Of course we then have to ask why the Government is not prepared to adjust the tax rates. There are two reasons. The first is an ideological one. Dr Cullen firmly believes that he can spend our money better than we can. That is his view. So he is in favour of higher tax. If it were up to him I think he would lift it even further. That is the arrogance of a socialist. 
But the second reason is that we all know that Treasury has told him that the effect of the Labour Government employing 38000 extra bureaucrats over the last 5 years will blow out even the massive $7 billion surplus. That is because—and it is a well-established fact—when any one employs an extra person there are also extra costs in overheads but when an extra civil servant is employed his or her costs go up every year. The reason is that civil servants generate more costs. They produce new ideas and the Government then has to go out and hire consultants to find out whether those ideas are any good. 
I will use a parliamentary example which we all would have seen. We now have the Parliamentary Service Commission. The position I am in is that I find that about every 3 years somebody from the commission comes into my office and tells me that my desk which I thought was perfectly adequate has to go because a new Occupational Safety and Health Service study says it is not ergonomically efficient. The whole civil service is like that. It is always coming up with these things. When we pass these regulations most small businesses ignore them but not the civil service—it applies them! There is a huge cost in putting in new furniture putting in no-smoking areas training people to use non-sexist language training people how to be sensitive to Maori or whatever the latest cause is and the cost goes up every year. Imagine that there are 38000 new civil servants all of whom have to be taught about non-sexist language about bicultural New Zealand or about whatever the latest thing the civil service is into! Of course it is going to cost $7 billion! That is why Dr Cullen and a socialist Government cannot reduce tax. But of course an ACT party in Government could because we are not politically correct for a start. 
I point out a further reason. Let us take the Ministry of Health: with all its extra bureaucrats there are no extra operations—not one. If we asked the public whether they wanted more Ministry of Health bureaucrats all well trained in biculturalism and non-sexist language or whether they wanted granny to have her hip operation the answer would be that they wanted granny to have her hip operation. 
So if a Government were prepared to put a control on Government expenditure we could have very substantial tax cuts. The ACT party says we could go immediately to a low flat rate of tax. Where is the relevance of that to this legislation? The original bill was 170 pages long. With a low flat tax it would not be necessary.