Wong Pansy: Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill — Instruction to CommitteeCWH In Committee 
Wong Pansy: Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill — Instruction to CommitteeCWH In Committee 
[Volume:613;Page:10101] 
PANSY WONG (National) 
: 
 If that is the type of reply speech we get from the Minister in the chair Mr Cunliffe I think we should be spared. That was a very tiring speech—one that is always being trotted out. Without the 1990s the Government would not have got the gains it is getting in 2003. The National Party is definitely voting against Part 1 and the reason is very simple. I am an accountant by qualification. When we have a company that reports and says: “Wonderful! We have had a great year. We have sales and profits exceeding our budget.” everybody is overjoyed because the company earns its way and provides employment. The minority Labour Government announced that it has a bigger surplus than it had last year. Maybe that Minister can take a call and explain how the minority Labour Government earned a surplus that was bigger than budgeted for last year. It was achieved largely through taxation. Tax is not something that individuals and companies can volunteer and say: “Well because I think this Government provides a better service so we volunteer to pay more.” 
No it was compulsory. It is as my honourable colleague Dr Lockwood Smith said. It was statutory—it was achieved by legislation. People had no choice. They had to pay that tax. So in effect the minority Labour Government overtaxed people. Largely that surplus has come from business. Some people may argue that they are happy to pay more tax if the Government provides more services and they may say that the extra services are a justification. 
I want to come back to a tragic incident that the public can relate to. Miss Trish Grant who wrote the report on the latest tragedy from the Office of the Commissioner for Children—the tragic deaths of the two girls—asked why the priority for Government spending is on setting up a database for dogs and not a database for children at risk. That is a very sad reflection on this minority Labour Government. It is actually celebrating the overtaxing of our very hardworking small-business owners and it is upsetting the public in terms of how it is spending that money. 
So before that Minister gives us a lecture on how we are doing better than Australia he should reflect on the fact that the average income for an Australian is $200 per week more than it is for a New Zealander. He has given misleading quotations about the taxation rates of Australia. He has not told the New Zealand public the full story which is that although the top personal income tax rate in Australia may be higher they have a higher threshold. 
I think everybody owes it to the public to tell the truth. Members should give the public the whole picture and not mislead them. If anybody would buy into that argument of the Minster of Finance and say that higher taxation is good for the economy I wonder why he has stopped at 39 percent. 
The truth is that when this minority Labour Government put up the taxation rate it sent a very clear message to New Zealanders: “The more you earn the more you will be taxed.” The underlying assumption is to say that if people earn more and become well-off if they become high-income earners somehow they are doing something wrong and because they are doing something wrong the Government—[ 
Interruption 
] Rod Donald says that people who are hard-working are not contributing to society. When people earn more they can discretionally spend more and thus contribute to society. 
JOHN KEY (National—Helensville) 
: 
 What a woeful bunch of speeches from the Minister the mini-Minister and whatever Mark Peck calls himself! They need a good economic speaker. If I were any of those three I would go over to Treasury I would sit down and I would say: “Help! Shut the door don’t tell anyone we’re over here we don’t know anything we’re totally clueless. Could you possibly give us a hand?”. There are some very intelligent people in Treasury who will help and will keep it confidential. Those members have spent 15 minutes of our day in the Chamber today declaring to the people of New Zealand in their speeches that they are absolutely clueless. They do not know what drives the economy what takes things forward or how to build a growth economy. Why do we know that? It is because this is a Government that will not declare to the people whether its surpluses are structural or cyclical. 
Why will it not do that? It is because the Government knows they are not structural. It knows it has not done anything since it has been in power that has been pro-growth. It will not tell people when we are to go back into the top half of the OECD because it cannot work that out and every time Government members go over to Treasury the boys and girls there tell them that their policy and planning systems are so anti-growth that we will not get back into the top half of the OECD any time in our lifetime. 
The Minister in the chair David Cunliffe stood up—and misquoted me might I say: he said that I said that the top rate would affect 5 percent. What I said was that one in five—19 percent—full-time taxpayers now pay the top tax rate in New Zealand. That is a statement of fact. 
What a hopeless situation we have when somehow people think it is OK to increase the top rate because it affects 5 percent only—people earning NZ$60000. We think it is OK to increase the top rate to penalise those people and to tell them not to go out there and work harder. We do not want to give them incentives because they are rich by virtue of earning $60000! Do members know what the top tax rate in America is? People who pay that tax rate are earning US$500000. If we want to create incentives in this country and get people going they will have to have some real incentives. 
I refer to the Minister trying to tell us that the Paritai Drive sector were not the only people creating wealth. Members should think about this for just a moment. Maybe the Minister can pay some serious attention because clearly Labour Party members need an economics lesson. If the average growth rate can grow by just 1 percent more than Treasury’s long-term forecast which is currently set at about 2 percent—and we will be lucky if we can achieve that with this Government in action—the average income of all New Zealanders would double in 30 years. If we do not grow by 1 percent more it will double in 50 years. 
What do New Zealanders want? Do they want to double their income in 30 years or in 50 years? The Government thinks that putting in a progressive tax system that discourages entrepreneurs risk-taking and making the economy go faster is a really good thing to do. Why do we not put up the top tax rate to 95c in the dollar and while we are doing that why do we not bring in 4 weeks’ holiday in a couple of weeks’ time because that sounds like a really good idea as well. If we really get the boat rocking and rolling we will see how many people leave and get on those 747s. The Minister cannot tell us that we have positive migration that is a result of the Government’s pro-growth economy either because we all know that what is actually happening is that natural New Zealanders are leaving and going to Australia America and the United Kingdom and that we are letting a whole load of other people come down here. 
Frankly the whole population of the country could leave if it wanted to and we could still replace it with net migration. The Government may not have noticed but there are a billion people living in China. If China wanted to send 10 million of them down here we could have a population that is 2.5 times the size of the current one. No one should be fooled by thinking that we have positive net migration so that somehow this is a pro-growth economy. There is nothing pro-growth about this Government. If we can get growth out of the economy it will be superannuitants who will benefit. The people who will benefit are the very people Rod Donald was talking about. 
If Mark Peck does not know that—which he does not—maybe he should go up to Auckland and ask the average plumber what he or she is earning. The answer will be that it is double what he or she was earning before the growth rate happened in Auckland. That is what growth does. Growth needs economic incentives. Let people work hard enjoy those rewards and be investors and entrepreneurs. That is what we have to do if we want to get the country going forward. We will not get it by putting up an envy tax for no good reason.