Burns Brendon: Financial Review Debate — In Committee 
Burns Brendon: Financial Review Debate — In Committee 
[Volume:661;Page:9464] 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am pleased to speak following the Minister of Finance as we debate the Crown accounts this afternoon. I will pick up on some of the comments from my colleague the Hon David Cunliffe about GST. I address to the Minister some questions about the Government’s proposals for GST and ask exactly what increasing the GST rate will do to advance the rate of increase in jobs in New Zealand. What would an increase in the GST rate do to improve economic growth the economic recovery or indeed the Crown’s financial balance? The indications thus far from the Government are strongly that for every extra dollar it takes in from the GST increase it will compensate New Zealanders. If one believes that difficult though it may be it begs the question of why the Government would bother to introduce a tax increase that was certainly not judged by our GST bus tour as being by any means popular—absolutely the contrary of that. 
I think the answer to that question is simply this: it is payback time for the Government in terms of cutting the top tax rate again. We saw that in the rushed legislation prior to Christmas of 2008 where the tax changes were such that about 3 percent of taxpayers received a third of the gains from them. One suspects from the newspaper projections of a cut in the current top tax rate from 38c in the dollar to 33c in the dollar that we know which end of town that cut will fall in. On behalf of my electorate of Christchurch Central which although it has its leafy suburbs is certainly not a wealthy electorate I have to say I know where the impact will fall. The figures for my electorate show that 76 percent of people earn less than $40000 a year. They spend every dollar they receive on the basics of life. They do not have discretionary income. They do not have overseas holidays and they do not have much capacity to save. So they will be whammied by an increase in GST effectively of 20 percent. That is why people are concerned about that and that is why they were turning out in large numbers in support of the bus tour that Labour recently took around the country. They know what that tax increase will mean for them and their families. 
I say to the Minister that OECD statistics show that in terms of consumption taxes already New Zealand has the fifth-highest rate of consumption tax with GST. We do not have the highest rate itself at the current 12.5 percent but we have virtually no exemptions. So currently we have the fifth-highest rate of consumption tax in the whole of the Western World. Where does the Minister want to take us to? Do we want to go to second or third in terms of the consumption tax? What benefit will that bring to ordinary people? 
I will touch upon the financial review of Radio New Zealand. During the course of the Commerce Committee hearing into Radio New Zealand’s financial year we were given a letter from the Minister of Broadcasting Jonathan Coleman to the Radio New Zealand board in which he said the board needed to change its mind-set— 
The CHAIRPERSON (Lindsay Tisch) 
: We are concentrating on the Finance and Expenditure Committee’s report not on Radio New Zealand. The member will have an opportunity to debate that later if he wishes. 
BRENDON BURNS 
: I think what has happened across the whole spectrum of the Cabinet spend is the Minister of Finance has remonstrated with some of his Ministers and the positions they have taken in the past are now contrary to where they are at today. In the case of that particular entity it had a charter introduced to the Parliament only last year which said it would not go into the commercial sponsorship of programmes. But that is now specifically what the Minister is proposing to that entity. I think we are seeing that happen not just in Radio New Zealand but across the spectrum of Government departments. We also see in the broadcasting portfolio that the broadcasting Minister suggested to Television New Zealand that it now needs to look at funding— 
The CHAIRPERSON (Lindsay Tisch) 
: I have said to the member this is a debate on the Finance and Expenditure Committee’s report not on Radio New Zealand. He will have the opportunity to debate that matter later on so I ask the member to come back to the debate. He has 30 seconds remaining. 
BRENDON BURNS 
: I pick up on comments today from the Prime Minister in relation to the funding of literacy as funded through the Crown accounts and as reflected on in the financial statements of the Government. The suggestion today was that the funding of literacy has been improving. I know again in my electorate that the YMCA has lost its funding for programmes for literacy for the worst-off young people—for those youths who are at the bottom end.