Boscawen John: Taxation (Budget Measures) Bill — In Committee 
Text is incorporated into the Bound Volume 
Boscawen John: Taxation (Budget Measures) Bill — In Committee 
[Sitting date: 20 May 2010. Volume:663;Page:11175. Text is incorporated into the Bound Volume.] 
JOHN BOSCAWEN (ACT) 
: 
 We are debating clauses 1 and 2 of the Taxation (Budget Measures) Bill—that is the title and the commencement date. I note that the Labour Opposition has focused its efforts on renaming this bill. I would like to focus on the second clause which is the commencement date. The substance of this bill starts on 1 October. I know that various provisions come into effect on the day after the date of Royal assent but the substance of this bill commences on 1 October. 
Hon Clayton Cosgrove 
: The man’s a genius! 
JOHN BOSCAWEN 
: I thank Mr Cosgrove. We have a GST increase from 1 October and we have the start of the personal tax cuts and the income tax cuts on 1 October. 
I suggest that this legislation should start on 1 July. I actually think the country needs to have tax cuts on 1 July. The reason I say that is that National has been at absolute pains over the last 4 months to say that if it went ahead with an increase in GST it would make sure that there were at least equal compensatory reimbursements or equivalent tax cuts. Well we have another tax coming into effect on 1 July and it is the emissions trading tax. I know that National does not like me referring to that as a tax and no it is not a tax in the true sense of the word. It is not revenue collected by the Government and redistributed but the substance of it is a tax on electricity and petrol. Treasury estimates that the impact of that emissions trading scheme tax is to add 5 percent to the price of electricity and 3c or 4c a litre to the price of petrol and that will double again on 1 January 2013. The effect of that the Reserve Bank tells us is to add 0.4 percent to the cost of living. That starts on 1 July. 
We could actually bring this legislation further forward than that. We could introduce the tax cuts in June because Contact Energy a company that generates electricity from gas and that has to pay for its emissions from 1 July has already announced tariff increases effective from the middle of June. Naturally the electricity companies will not all come together and increase their prices on 1 July. So what has happened? Contact Energy has the early running. It has moved to increase its tariffs 3 weeks before 1 July. So we do not need to wait until 1 October for the tax reductions; they need to be brought forward to at least 1 July. 
Finally I will comment on the Minister’s Budget speech. He said when referring to tax cuts: “First for all income earners at all taxable income levels the reduction in personal income tax will be sufficient to match the increase in GST.” The Prime Minister and Government Ministers including the Minister of Finance have been at pains over the last 3 or 4 months to say they were going to reimburse people for the increase in GST. The Prime Minister even went and gave a speech at North Shore Grey Power back in April about that. But this Government has continuously refused to acknowledge that we have a tax being put on electricity and petrol and that that tax will make its way through the whole economy. It puts a cost on every single individual in this country.