Smith Lockwood: Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill — First Reading Second Reading In Committee 
Smith Lockwood: Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill — First Reading Second Reading In Committee 
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Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 Any New Zealanders listening to this debate tonight would be disgusted at what they have just heard. When a New Zealand family has to spend more than 100 bucks to fill up the family car when the cost goes up every time they get groceries to feed the children and when they hear a senior Cabinet Minister make a speech like that it is little wonder that New Zealanders are disgusted with this Labour Government. All they need to remember is that that member Trevor Mallard is the Labour Minister who thinks the way to solve problems is to punch someone. New Zealanders remember seeing him standing in the dock in disgrace. That is the standard of Labour Ministers today. They think the way to solve differences is to punch people. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. The member to whom that member refers is not currently able to defend himself but I take exception to the personal nature of those attacks by that member. He should know better. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Members must be here and do that themselves. 
Dr the Hon LOCKWOOD SMITH 
: Thank you Mr Assistant Speaker. I am only reciting the facts. Let me say to the member who has just intervened David Cunliffe that it is time he told this Parliament what Graham Fortune told him about the immigration scandals. We know what Graham Fortune told him and we know he is not being forthcoming about the briefings he received and it is time that New Zealanders know he is not being upfront about them. 
Hon David Cunliffe 
: Absolutely upfront. 
Dr the Hon LOCKWOOD SMITH 
: We will get it out. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. That member is clearly a slow learner if his response to a comment about his not being allowed to pass personal reflections on one member is then to pass personal reflections on the integrity of another. In this case I take offence. I value my integrity and I tell nothing but the truth. 
Rodney Hide 
: With due respect to the Minister I say that he cannot possibly take exception to that. Well he can but it is certainly not something for the Speaker to rule on. To suggest that a Minister’s integrity is not all that it should be or that he may not have been entirely upfront with the House is entirely within the Standing Orders and is a debatable point. If the Minister wants to debate it that is fine but I do not know what we would end up debating if it were ruled out of order. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Can I just refer members to Standing Order 116 which is about personal reflections. It refers to “an imputation of improper motives” or “an offensive reference to a member’s private affairs”. The member is getting fairly close to that so I would just ask the member to be careful in the way in which he addresses the House. 
Rodney Hide 
: I raise a point of order Mr Speaker. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I have made a ruling Mr Hide. 
Rodney Hide 
: Yes I know. I just want to ask for your clarification. It is a mystery to me—and I know that you know the Standing Orders very well—as to how what Dr Lockwood Smith was saying in any way got close to offending against Standing Order 116. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I can only repeat my comment about the imputation of an improper motive under Standing Order 116. I have asked Dr Smith to be careful; I have not ruled it out. 
Dr the Hon LOCKWOOD SMITH 
: Thank you Mr Assistant Speaker. Let me come back to this tax bill. Just a few years ago we had the “chewing gum” tax cuts which were such an insult to New Zealanders but worst of all Labour then reneged on them. It broke its promise. Now today we have the “block of cheese” tax cuts. For the bill we are debating tonight the Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill to deliver to New Zealanders 2 weeks before the election $16 a week after 9 years of this Labour Government is frankly an insult to New Zealanders. It is too little too late and it will not save this Labour Government. New Zealanders are sick of the kind of behaviour we have seen in this House tonight by the “Honourable” Trevor Mallard. They are also sick of the kinds of cover-ups we have had to witness recently by the “Honourable” David Cunliffe. 
I ask this Government why it is necessary to pass this legislation under urgency. Nothing in this bill has to be passed under urgency. National is voting for this bill so it is not that we are troubled by it because we disagree with it. That is not the problem. But I invite the “Honourable” Minister David Cunliffe to have a look at for example clause 33. Clause 33 deals with the family tax credit legislation. I would suggest to that member that the family tax credit legislation is some of the more complex legislation in our Income Tax Act. It is hugely complex legislation. The risk of clause 33 being not quite right is huge. Already in this bill we are amending matters that were passed through this House only a few weeks ago and the bits of previous tax legislation that we are amending tonight actually went through the select committee process yet we still got them wrong. Tonight we are passing this bill without it having been referred to a select committee. We do not get the chance to question officials about the accuracy of all the measures in this bill and we run the risk of this legislation having to come back again to be fixed up. 
The only reason we can conclude for Labour to push this bill through the House under urgency is that Dr Cullen’s own colleagues do not trust him. His colleagues are frightened that if these measures are not pushed through when the Budget is being debated he will renege on his promise straight after the election—if Labour gets the chance to run Treasury again. He reneged last time and his colleagues are frightened he would renege again. 
What troubles me the most about this tax bill as I look at it is that nothing in it actually improves the dynamics of the New Zealand economy. Nothing in it improves our tax system. I think Rodney Hide mentioned in his Budget debate contribution that nothing in this bill improves the incentives for New Zealanders to be more productive and I want to mention that before I finish tonight. Under this Labour Government of the last 9 years New Zealand’s productivity has collapsed. That is a serious issue. Productivity is one of the central issues to New Zealanders being able to achieve higher standards of living without inflation. I have searched this Budget document for anything that indicates that the Government has thought about how its measures might improve productivity. I would appreciate it if officials could tell me where this Budget 2008 document which contains the Budget Speech the Fiscal Strategy Report and the Economic and Fiscal Update shows how this Government’s Budget measures will improve productivity. 
Even if we put aside the issue of labour productivity—because the Government has said that labour productivity has declined because employment has grown and there are fewer unemployed people; it says that that is why labour productivity has collapsed—and look at multi-factor productivity we see that during the 1990s it averaged 2 percent growth a year and under Labour it is down to less than a third of that. It is down to a fifth of that for the 9 years that Labour has been in Government. And we wonder why the economy is screwed! It cannot grow without inflation. It cannot grow without inflation because Labour’s policies have destroyed the productivity growth of our economy. 
Taxation measures to improve productivity would have been hugely valuable but the taxation measures in this bill do not do that. They do not deal with the high marginal tax rates that people face. After all the changes to the Working for Families package and the change to the tax threshold from $42500 to $100000 of earned income the lowest marginal tax rate that people with dependent children face is 50 percent. This bill does not change that. Sure for people trying to work their way off a benefit the reduction down to a 12.5 percent rate for the first $20000 of income will eventually bring the effective marginal tax rate that some families face down from 91 percent to 82 percent or thereabouts. This bill has not solved the problem. 
So I put to the Labour members in the House tonight that this tax bill fails totally to improve the incentives the dynamic impacts of our tax system. It does nothing. Sadly it could have done something to improve the productivity of our economy but it does not. I simply say again to the Labour members: let whoever takes the next call for Labour explain seriously how concerned those members are about ordinary men and women families and their children in this country today who are struggling to make ends meet instead of giving another of the pathetic political speeches we have heard in this House this evening. They should be ashamed of themselves.