Key John: Questions for Oral Answer — Questions to Ministers 
Key John: Questions for Oral Answer — Questions to Ministers 
[Volume:618;Page:13555] 
10.  
JOHN KEY (National—Helensville) 
 to the  
Minister of Finance 
: Can he confirm that 14900 fewer families are expected to receive family assistance when the “Working for Families” package is fully implemented in 2007 than received family assistance in 1999? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
:  
Yes which makes it very hard to understand why the member keeps claiming that the Budget package will put tens of thousands more families into welfare dependency. 
John Key 
: Can the Minister confirm that Labour’s refusal during the last 5 years to adjust tax or family assistance rates to account for inflation means that roughly half of the extra family assistance that has been promised to the average one-income two-child family in 2007 is needed just to restore their real disposable income back to the 1999 level? 
Hon Dr MICHAEL CULLEN 
: No. What I can confirm is that the main reason why there has been a decline in the number of families on family support since 1999 is partly due to inflation but substantially due to the large increases in household income that have lifted people beyond the target level. That of course is primarily due both to wage growth and to the big decline in unemployment. 
Jill Pettis 
: How much will families in receipt of the package gain on average? 
Hon Dr MICHAEL CULLEN 
: By 2007 an estimated 61 percent of all families with dependent children will benefit by an average of $66 a week. 
Heather Roy 
: Why does the Government not do what the majority of New Zealanders want—that is provide a tax cut for hard-working families instead of making them welfare beneficiaries through the Government’s system of income top-ups? 
Hon Dr MICHAEL CULLEN 
: The question that has been put to people in polls is whether they would rather have the package delivered by way of tax cuts. The answer of course from many people is yes. The problem is that it cannot be delivered via tax cuts. I remind the member that for the Waihi family on $55000 a year it would require a flat tax rate of 9.5 percent—costing $15.9 billion. That would mean that within 2 years Government debt would double. 
John Key 
: Does the Minister agree with the Prime Minister and fellow Cabinet Minister Steve Maharey that the very high effective marginal tax rates now facing working New Zealand families will have little impact on their workplace behavioural patterns; if so why? 
Hon Dr MICHAEL CULLEN 
: The Prime Minister certainly did not say that. I make it clear to the member that there is no change in the maximum effective marginal tax rates as a consequence of this package. Because there is an increase in the levels of family support which the member’s previous question seemed to imply he wanted to see it pushes the range further up the income scale. In life one cannot have it all ways. 
John Key 
: I seek leave to table the Prime Minister’s interview with Michael Laws when she said that working families who face very high effective marginal tax rates in excess of 90c in the dollar will act irrationally. 
Mr SPEAKER 
: Leave is sought to table that interview. Is there any objection? There is.