Chauvel Charles: Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill — First Reading Second Reading In Committee 
Chauvel Charles: Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill — First Reading Second Reading In Committee 
[Volume:647;Page:16271] 
CHARLES CHAUVEL (Labour) 
: 
 Thank you Mr Assistant Speaker and may I begin by wishing you a happy birthday. 
I am really proud to speak in support of the Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill and I am very sad to have heard the previous speech. Let me tell the previous speaker Mr Power that one of the reasons why history matters one of the reasons why it is important to know where one’s country one’s party and the economy have been in the past and what positions were taken in the past is so one does not relive any mistakes. I point that out to Mr Burrows who is trying to interject. The problem with the speech we just heard from Mr Power is that it explains exactly why that member gave a speech some years ago saying: “Where Britain goes we go. Where America goes we go.” He is the Young Fogey of the National Party. With speeches and positions like that it is clear that he does not know his history; it is clear from the speeches on this side of the House that we do. We have learnt from our history and we make sure it informs our future actions. 
I want to praise Dr Cullen for the Budget that has been delivered today. It is no wonder that he is the longest-serving Minister of Finance since Walter Nash in the 1940s because he has delivered a successful economic record to this country and he continued to do exactly that today. I am very proud of the tax cuts that were announced in the Budget. I am very proud that they followed the four tests that Dr Cullen has been articulating consistently over the last year as part of the only coherent tax policy that is being articulated in this country at the moment. I am very proud that they are Labour policies. It is good just to measure these tax reductions against those four tests. 
The first test is that the tax reductions will not lead to greater inequality in our society and there are three reasons for that: they will be applied across the board they will be proportionate to income and they will benefit all households regardless of whether they have children. Also they will apply to all taxpayers—including superannuitants—regardless of whether they are in paid employment. 
The second test is that these tax cuts will not require cuts to public services. Having managed New Zealand’s finances responsibly throughout its term in office this Government can now afford both to offer tax relief to New Zealanders in need and to make new investments in the health education justice public transport roading science and technology and social services sectors. Those are great things and these are balanced tax cuts for that reason. 
The third test is that the reductions should not exacerbate inflationary pressures—and they will not. Labour has been careful to introduce these tax reductions over 3 years to avoid extra pressure on mortgage interest rates. This cautious approach is particularly important in difficult economic times and it is a tribute I think to this Government that in an election year when any other Government might have been tempted to offer full tax relief immediately this Government put New Zealand’s economic interest first with a phased-in tax reduction. 
The final test is that the Government will not need to borrow to fund these cuts. New Zealand is currently in a net positive financial asset position. This is thanks to the Government having reduced the country’s national debt significantly from over 30 percent of GDP at the commencement of its term in office to its current level of around 20 percent. Also having conserved resources the Government can now afford to offer tax reductions to recognise the contribution that hard-working New Zealanders have made to our economy and continue to do so. 
The bill’s tax reductions build on existing tax relief which this Government has not received a lot of credit for frankly and which is worth billions of dollars. Mr Carter over the way sneers in the way that he does in that little “born to rule” way; that will be National’s downfall. Let me remind the House that the tax cuts delivered already by this Government via a systematic programme since 2004 amount to many billions of dollars—[ 
Interruption 
] They stand at $4.6 billion as Mr Mallard points out. They stand in stark contrast to the policies of the National Party which as we have seen are just to promise tax cuts at any cost no matter what the consequences—that is a return to run-down public services higher debt and runaway inflation. Anyone who compares the two approaches will see which one is better for New Zealand.