McKelvie IanIAN McKELVIE (National—Rangitīkei): Thank you Mr Chair. I want to take a call in support of Mr Bayly's Supplementary Order Paper (SOP)—a very good SOP it is—but I want to explain before I do why I'm interested in taking this call.The tax system is all about fairness—and I think it probably is all about fairness. I agree it should be fair and I think that one of the problems we have in this country in my view is that our low-income earners pay an excessive amount of tax for the amount of money they earn. Now the reason I say that is because they're subject to GST like everyone else they're subject to a whole lot of other taxes—fuel taxes and every other tax that comes along—and the one way we can relieve some of that tax is through individual tax rates. That's the reason I support Andrew Bayly's SOP—and a very good SOP it is too.But I think the issue that we need to investigate a little bit further is the way we develop policy that then enables people at the lower end of the income scale to I guess firstly retain more of their income and secondly aspire to earn more as they move forward. I don't think for a minute that subsidising people's way of life is the ideal method of doing it. I think we're much better to reward them through a tax system that enables people who don't earn so much money to find themselves much better off and at least they've got the dollars they've earned. They can then take them out and spend them rather than taxing them and then finding a way through Working for Families or whatever of putting the money back in their pockets. I don't think that's a logical way of dealing with these things at all.All Governments will come under significant pressure around tax because effectively it affects people's pockets on a daily basis. But the thing that really intrigues me about the tax system is that the tax system for most people is to some extent invisible in that the money is taken off them through various methods and particularly PAYE and they don't really know it's gone until they get to the end of the year. Of course the Inland Revenue Department has now come up with a new scheme of contacting every taxpayer in New Zealand and of course people are going to become much more aware of their tax situations as a result of that. Whether that's good or bad I'm not so sure because if you look at the way rates are dealt with through councils everyone's hugely aware of the rates they pay councils and they complain about that endlessly.I think that the new method of drawing attention to people's tax rates and the amount of tax they either pay at the end of the year or get sent back to them is going to significantly impact on the attitude people have towards tax. That might not be a bad thing because if people knew how much money they were paying in tax or were conscious of it—I shouldn't say knew" because many of them will. If they were conscious of how much money they were paying in tax on a monthly basis or a weekly basis or in fact a fortnightly basis they're going to pay a whole lot more attention to the activities of the Government. Now that might actually if you take it to its extreme engender more interest in politics which wouldn't be a bad thing maybe—although some politicians might not like that either because they would be under a bit more scrutiny than they otherwise would be.But we have a tax system in New Zealand which—you can argue whether it's fair or not. That's an argument—and both sides of the House will agree or disagree on many parts of that. But I do think that it does penalise our lower-income earners and it does—as people creep up the income scale the tax rates have not moved in a manner that was appropriate. That's the basis of Mr Bayly's Supplementary Order Paper (SOP) aside from the fact he wants to change the whole structure of the Government's tax regime which wouldn't be a bad thing.But I think that it's important that people as I said a little earlier retain as much of the income as they can that they earn themselves rather than having to go out and look for accommodation supplements or supplements for large families and small families. I think we'll be much better if they are enabled to keep the money they earn. The other factor in that of course is that if people earn more—and we have seen some in the last seven or eight years in New Zealand; we've seen a significant increase in the amount of money people are able to earn—putting a whole lot of people into a tax rate that they weren't in before so they consequently pay a lot more tax. We're seeing that as a consequence in Inland Revenue's tax take on a weekly or monthly basis. So it's made quite a significant difference.So for that reason Madam Chair—Mr Chair. Sorry Madam Chair—Mr Chair. That's the second time you've been called that in the last two speakers! I apologise but for that. For that reason I support Mr Bayly's SOP and I don't support the bill and this particular part of it."