Dyson Ruth: Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill — First Reading Second Reading In Committee 
Dyson Ruth: Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill — First Reading Second Reading In Committee 
[Volume:647;Page:16268] 
Hon RUTH DYSON (Minister for Social Development and Employment) 
: 
 At peak viewing time it gives me great pleasure to contribute to this the first reading of the Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill 2008. This bill primarily deals with two issues: tax rates and changes to the charities regime in relation to ensuring that the charities registration process and the tax process are better aligned. But most important this bill delivers a fair deal to New Zealanders. All those in paid work will benefit as will those on a benefit with children and superannuitants. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Hon RUTH DYSON 
: As I was saying the Budget and the subsequent tax legislation deliver a fair economy and a strong future. I commend the Hon Dr Michael Cullen for the ninth Budget in a row in which he has made progress on both those fronts. I look forward to the next nine Budgets to be delivered by the Hon Dr Michael Cullen. Over the last 8 years the Labour-led Government has delivered major reinvestment in public services and infrastructure—public services that were run down by National and infrastructure that was neglected by National. We have delivered substantial tax relief to businesses savers and families with children. On every occasion when tax legislation has been before this House the National Party has voted against tax relief. National members voted against tax relief for New Zealand businesses for New Zealand savers and for New Zealand families with children. The personal tax cuts in this legislation are the next step in our Government’s programme to build a fair and strong economy and society in which all New Zealanders have a strong stake. 
Our Government through the leadership of our Minister of Finance Michael Cullen has managed our public purse responsibly. We have not squandered resources in times of great optimism; nowhere is that more obvious than in New Zealand and at no better time than now as we watch what is happening internationally. We see that even in these times New Zealand can deliver a $10.6 billion personal tax package. 
Over the last 8½ years we have seen 377000 more jobs created in our economy giving more families a stake in our future. The unemployment rate has fallen by more than half and it has stayed below 4 percent for over 4 years. We are the only country in the OECD that has been able to achieve that record. We have had less than 4 percent unemployment for 15 straight quarters. We now have 140000 fewer people on a benefit. 
Our child poverty rates have also fallen dramatically. Earlier today I heard National members talking about our OECD ratings. It is very interesting that they focus only on the areas that are of interest to them. The level of child poverty was a disgrace in New Zealand a decade ago. We were in the bottom quarter of the OECD in relation to child poverty and by the middle of this year we will be in the top half. We have a way to go; we still have children living in comparative poverty in our country and our goal is to work towards the elimination of that. 
Of particular interest to me as Minister for Senior Citizens is the fact that we have ensured that those people who are dependent on superannuation are included in the benefits of this tax package. Superannuitants in New Zealand have had substantial financial support from the Labour-led Government. We restored the relative rate of superannuation for a married couple to 65 percent of the average weekly wage; it was 60 percent under the previous National Government. If National had continued in power after 1999 with the same level of superannuation a married couple would be $34 a week worse off. 
Hon Member 
: How much? 
Hon RUTH DYSON 
: They would be $34 a week worse off under National—and that is before this tax package not after it. We know that this package delivers substantially for superannuitants. 
We have also been able to reduce the cost of visiting a doctor by on average $22 a visit. We have reduced the cost of prescription medicines from $15 an item to $3 an item. We have expanded access to health services screening and immunisation. These are the areas that make a difference to the most vulnerable people in our community—those who are dependent on a benefit or superannuation or who are on a low income. They are able to access those services that are critical to their health. 
We have also provided 20 hours’ free early childhood education. Again the National Party opposed that policy day in and day out when it was debated in this House. National opposed access to free early childhood education for thousands and thousands of New Zealand children many of whom would not have been able to access early childhood education had it not been made free for those 20 hours. We have also kept the cost of tertiary education under control. Every year we have improved access to tertiary education and there has been another step forward in the Budget today. We have also built thousands of State houses while restoring income-related rents for those on the lowest incomes. Those substantial gains have been made in the last 8 years under a Labour-led Government and I am looking forward to another decade so that we can continue on this path toward improving the lives of ordinary New Zealanders. We have begun a major assault on income inequality in retirement through KiwiSaver. Over 600000 people are now part of the KiwiSaver regime. 
The tax package to be delivered through this legislation is part of the overall contribution we have been able to make. I mention one other aspect of the tax legislation—a point the Hon Peter Dunne referred to earlier. I refer to the provisions that deal with charities and tax. We have uncovered uncertainties in the law with regard to the continuing tax-exempt status of some organisations. It is really important that this be clarified because the deadline for charities to register with the new Charities Commission is 1 July. From that date charitable entities have to be registered with the Charities Commission to be entitled to the charity-related income tax exemption and for gifts to charities to be exempt from gift duty. Obviously there are no difficulties with those principles but uncertainties between the tax legislation and the charities legislation have arisen. 
It has been unclear whether entities such as universities and schools also have to register with the Charities Commission in order to maintain their tax-exempt status. It is clear there has been uncertainty in the legislation and it is better for us to use this opportunity to resolve that uncertainty. Legislative changes are being made to provide tax certainty for a range of entities in those circumstances. These involve changes to the Income Tax Act and the Estate and Gift Duties Act. Those Acts will be amended to confirm that tertiary education institutions as defined in the Education Act are exempt from income tax and gift duty. They will not have to register with the Charities Commission to remain tax-exempt. Of course if they want to register in order to gain access to other benefits they will be entitled to do so. However they will not be required to register in order to retain their tax-exempt status. 
Another provision in this legislation relates to a discretion given to the Commissioner of Inland Revenue. It is a very limited discretion and it is very important that charitable organisations that are considering registering or are in the process of registering with the commission recognise that the discretion is very limited. The provision gives the Commissioner of Inland Revenue discretion to ensure that an organisation that has started the application process to register as a charitable organisation before 1 July and that intends to complete the application but for reasons beyond its control has not been able to do so will not have its tax-exempt status nullified. So it is a very limited discretion. It will be of assistance to organisations but I repeat that it is a very limited discretion and should be applied only when there are exceptional circumstances and a charitable organisation has not been able to progress its registration to fruition. 
In conclusion it is a privilege for me to speak in this debate on the Budget which was released this afternoon. The Budget makes a huge $10.6 billion personal tax cut contribution but more important— 
Simon Power 
: That’s the first time she has said it. 
Hon RUTH DYSON 
: That is the third time I have said it. But more important the Budget contributes to a fair economy and a strong future.