Roy Heather: Taxation (Annual Rates and Budget Measures) Bill — First Reading Second Reading In Committee 
Roy Heather: Taxation (Annual Rates and Budget Measures) Bill — First Reading Second Reading In Committee 
[Volume:672;Page:18914] 
Hon HEATHER ROY (ACT) 
: 
 The ACT Party supports the second reading of the Taxation (Annual Rates and Budget Measures) Bill. First I have a few comments about the Budget generally. I agree with several of the comments made by the previous speaker David Clendon from the Greens about the need for vision and planning and to grow the economy but where the ACT Party differs from his ideas is on the means by which we would achieve those goals. The ACT Party has been quite disappointed in many areas of this Budget. There is too much tinkering in many areas we think rather than real solutions to the problems that this country faces. When we look at how to tackle the current fiscal situation that we find ourselves in coupled with the additional burden that the Christchurch earthquakes have added to our economy we see the need to look at a higher level. That is where I agree with the Green member David Clendon regarding his statements on vision and planning. We need to consider the state of our economy as it pertains domestically but we also need to look at the international situation. 
I would compliment the Minister of Finance on his statements today and on his actions to tackle the deficit and the debt that we face in this nation which are far too high. The focus in this Budget as he has outlined is on encouraging saving. Those things are all very commendable but they need to be coupled with actions the actual things that will make this saving happen and tackle the deficit and the debt in a meaningful way. 
The ACT Party was particularly disappointed in the way that student loans have just been tinkered with. If the Government really wanted to make an impact on tackling the more than $12 billion of student debt that is now owed to the country then we should have taken a long hard look at re-establishing interest rates on those student loans so that the incentives were in the right place. 
The other area which pertains directly to the bill that we are speaking about is Working for Families. We have seen just a skimming-off from the top. Working for Families should never ever have become the middle-class welfare for those on higher incomes that it became under the previous Labour Government. I will give this example. The member for Waimakariri was busy creasing his face and wriggling around in his seat before he stood up just now but he should remember that people who are capable of earning and of supporting their families should be doing that themselves. When Working for Families was first established in 2004 had I been the sole income earner in my household as a backbench MP on $122000 a year with five children I would have been eligible for $22 per week of Working for Families tax credits. Why on this earth would anyone ever consider it reasonable that a backbench MP could be eligible for welfare? That is nothing more than middle-class welfare and it should never ever have been on the agenda in the first place. Although I would have liked to see the National Government take a much more responsible look at Working for Families and tackle it in a much more meaningful way at least it has taken a knife to this area where doing that is absolutely warranted and that is why we support this bill. It is absolutely imperative that we grow this economy. That is the way out of this situation. 
I also compliment the Government on the two very thorough regulatory impact statements. I raise this issue because when Working for Families was first put forward in 2004 under the previous Government we hardly ever saw any sort of regulatory impact statement. Those statements were always in the drafting phase; they were always about to be tabled but never were. The regulatory impact statements that we have before us which have been tabled in the House today are very good and they clearly outline where we should be going. I would like to take the Government to task though—having just complimented it—on some of the things that are written here. It should have acted much more strongly to put many of these measures in place. 
I will pick out one paragraph from the introductory comments in the KiwiSaver regulatory impact statement and quote it here: “As the quickest way for the Government to improve national saving and reduce economic imbalances would be to improve its own saving position the identification and development of options quickly narrowed to those most likely to reduce Government spending without undermining the primary purpose of KiwiSaver.” That is very pertinent and as we put policies in place we should remember those things. I looked at the conclusions for the KiwiSaver changes and I also want to quote a piece from them: “The proposed measures could also encourage higher private contributions.” which is something that we should be very mindful of in this House. The Government is making a bit of a move towards that but looking to the future we should be acting very strongly in this regard. The comments also noted that “education … about the continuing importance of individual saving to ensure resources are over and above New Zealand Superannuation in retirement are highly desirable.” That is quite right. It is the benchmark against which we should always be measuring the policy initiatives put in place. 
I have already noted our concern about the skimming-off of just the very top level of Working for Families when much more stringent changes could have been made by the Government. Again the conclusion statements in Working for Families regulatory impact statement say this: “Officials consider that the majority of the options identified in this RIS including the preferred option will generate fiscal savings broadly protect lower income earners and better target WFF without”—and this is the important part—“having significant impacts on incentives to work child poverty or income inequality.” Again those are very good benchmarks and principles that all policy should be measured against. I compliment the Government on putting those forward. 
There has been plenty of detail in the discussion in the House tonight but I would like to come back to the point I made at the start of my speech which is that we should look at things at a very high level before putting detail in place. We see plenty of tinkering in this Budget. We see plenty of tinkering in a number of areas where we could have made much harder decisions that would tackle debt and the deficits more quickly than they are being tackled. We are moving in the right direction and that is why we support this Budget and this bill. But the ACT Party would have liked to see much more regard being given to getting the incentives right in all of those areas so that we could increase the rate of economic growth much more quickly than we will be able to do. Thank you.