Court Simon; Parker DavidSIMON COURT (ACT): Thank you Mr Chair. I do appreciate getting the call. Minister Parker has raised a good point that actually this Taxation (COVID-19 Support Payments and Working for Families Tax Credits) Bill—the Working for Families component is not intended to address the shock the hardship the loss of income that families are suffering during COVID-19. It's part of the Government's much wider agenda clearly signalled over the last two generations of Labour-led Governments to bring more and more New Zealand workers and their families into the welcoming embrace of what turns out to be a permanent and disabling relationship for these people and their families. That's called Working for Families. A former leader of the once-great National Party described Working for Families as communism by stealth and what I understand that leader of the National Party at that time meant was that more and more people will become dependent on the State to define whether they will succeed in life and lose their independence and freedom. What ACT would propose is rather than the State collecting more and more taxation from New Zealanders: in the past year during the COVID pandemic when everybody is doing it tough around New Zealand—everyone who owns a business who employs people who is working from home and even if they're on a salary and they do get paid every fortnight—the tax take has gone up by over $10 billion to $98.5 billion. What that tells you is that the Government cannot actually keep its hands out of your pockets and now needs to find a way to redistribute the money so it doesn't end up looking guilty and ashamed by the time it gets to the next Budget. So when we look at this bill what this amendment proposes we look at the regulatory impact statement. What is the problem: Improve income adequacy for beneficiaries and low-income people"—yes. "Improve financial incentives to work"—yes says the ACT Party. "Pay welfare support at a sustainable cost to government"—yes yes yes says the ACT Party. The problem is clear: people work they don't get to take home enough of what they earn and that's primarily because the Government has its hands deep in their pockets in terms of income tax; GST of course; but on goods which are suffering from inflation so as the price of materials and goods supplied into New Zealand goes up—the inflation rate at 4.9 percent this year—the GST take automatically inflates with the bubble with the balloon with the waterbed that is the increase in consumer prices. ACT does not believe there's anything in this bill that will actually contribute to getting more people off benefits and off Government support and back into work so they can experience that feeling of making decisions for themselves about where they live the things that they choose to spend money on rather than becoming dependent on the Government on having to go through complicated tables and fill out forms—and I'm going to find one in the back here—which describe just exactly this. This form here describes just exactly what the abatement ratio is and if you earn a little bit too much then you'll lose your entitlements. These things are all disincentives for people to move from welfare and from low-paid jobs and to seek higher-paid jobs so that they can actually share those economic benefits of working and earning a good wage or salary with their families and with their communities if they choose to give to charity or to spend time coaching a kids soccer team or helping out with the PTA at school—all of those things that they can choose whether to do them or not if they earn a decent salary. That's why ACT would propose rather than this Working for Families tax credit—in other words we've taken it and we've managed to lose 30 or 40 percent in overheads in Government now there's 60 cents in the dollar to give back. What ACT would do is give middle-income New Zealanders a tax cut so that somebody earning $70000 a year had $2000 more in their pocket every year. That was their money to start with. They earned it. But the Government taxed it off them—an extra $10 billion in the last year. ACT believes workers should be able to keep more of what they earn. This won't do it.Hon DAVID PARKER (Minister of Revenue): Responding to the suggestion of Simon Court if you go back in history to the time when we had very high income tax rates in New Zealand under the Muldoon-led National Government income tax rates were 66 cents in the dollar for higher income earners. That was seen to be by parties all around this House as excessive and the Governments of the day changed the tax system so as to have lower income tax rates and more consumption taxes. Consumption tax in New Zealand is a broad-based GST and it is an effective tax but it is a regressive tax in that it's a higher proportion of the income of low- and middle-income earners than it is of higher-income earners.After those changes successive Governments including the last National Government led by the Rt Hon John Key who did prior to becoming Prime Minister call Working for Families "communism by stealth" and then kept it. But he came to the same realisation that we have on this side. That is if you have a system of lower income tax rates and a quite high consumption tax proportion of total tax take which we do in New Zealand then in order to enable families who have got additional responsibilities to raise children you need to have a tax credit in the system through the Working for Families tax credit system which is what we believe in on this side of the House and what this bill improves for the benefit of families who are eligible for it."