Parker David: Budget Debate 
Parker David: Budget Debate 
[Volume:631;Page:3376] 
Hon DAVID PARKER (Minister of Energy) 
: 
 I have listened to this debate for 3 days. For 3 days we have heard one of the most important debates of the year and it concerns the Budget. The debate has shown what National stands for and what it believes in and it is a very narrow vision indeed. It shows that National believes in tax cuts. 
What else does National believe in? Tax cuts. What else does National believe in? Tax cuts. When the Government cuts taxes moderately how does National respond? National members say: “More tax cuts.” Tax cuts are its religion; its article of faith. National says taxes are bad and must be cut. Tax cuts are the meaning of life for National. It has no other message. It is a one-policy party—tax cuts. If we ask the National members what the meaning of life is they will not say: “A fair and egalitarian society.” They do not talk above love. They do not talk about health or education services. They do not even give us the number 41. For them the answer to everything is tax cuts. 
Well tax cuts are not the only thing and most voters of course disagree with National. They do not think that the future of New Zealand lies in tax cuts tax cuts and more tax cuts. Most voters agree with the Labour position—that essentially taxes are good. I am happy to have this debate because I am sure that most New Zealanders agree with Labour that taxes are good. Tax is the glue that holds society together. It is the cornerstone of civilised Western society. Tax is good. Tax is crucial to social cohesion and low crime. Tax is essential if every New Zealander is to get the chance to succeed no matter how rich or poor the family he or she is born into. Taxes in New Zealand are low by international standards. They are not high—and that is an issue I will return to. 
In contrast National says tax cuts are necessary and that $11 billion worth of them are overdue. What an extreme position! It is obvious that National’s tax cuts would cut basic services like health education and superannuation. But perhaps even more important to me is the fact that National’s tax cuts would threaten the core egalitarian values that I and most New Zealanders hold dear. Tax cuts under National would lead to where we know its heart is. Its heart is in the right-wing vision where we would have increasing divisions between those who have and those who do not have between those who are born into wealth and those who are not. It would increase the gap between the wealthy and the less well-off. We would see more crime. We would see poorer health and education services for most people. Of course outside of the tax arena we would also see international policies like the disastrous war in Iraq. Under National we would have been part of that war. 
National’s assertion that we can afford grandiose tax cuts is based on an assertion that New Zealand is over-taxed. Well the OECD keeps statistics on taxation and it shows that for a one-earner couple with two children New Zealand is the fifth-lowest taxed country in the OECD. That is fifth-lowest out of 29. In respect of a single person without children we do even better. We are the third-lowest taxed in the OECD. On both measures we are better than Australia. So how responsible would $11 billion worth of tax cuts be at this point in the business cycle? A recent OECD report states: “It is important that temporary revenue gains and economic upswings not be used as pretext for permanent tax cuts that exacerbate inflationary pressures and create a legacy of high structural Budget deficits that only become apparent during subsequent downswings.” That is exactly what National is proposing. 
On the subject of tax cuts I have to say that some are appropriate. That is why the Government this year and next is funding $1.6 billion of tax cuts for families with children which is an average of $88 per week in tax relief. A family with three children on $60000 gets $130 a week. That is affordable and prudent. Members should not be swayed by the notion that tax is bad. Tax is good.