Tremain Chris: Taxation (Urgent Measures and Annual Rates) Bill — Third Reading 
Tremain Chris: Taxation (Urgent Measures and Annual Rates) Bill — Third Reading 
[Volume:651;Page:284] 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to speak to the Taxation (Urgent Measures and Annual Rates) Bill in its third reading. I start by thanking the officials who have worked diligently behind the scenes. There is an excellent Maori proverb that says: “Ka pai ki muri ka pai ki mua.” which means that when things are working well out the back they also work well out the front. That is definitely the case here in the third reading debate on this bill because New Zealanders up and down the country are breathing a sigh of relief. They have seen an Opposition that went to the electorate throughout an election campaign and faced with some pretty difficult times and pretty difficult decisions laid its decisions and its promises on the table to let the electorate know about them. The electorate voted on those promises we are here with legislation in the House within 32 days of taking office as the Government and on the 33rd day we are delivering upon those promises. Further evidence of that is the way that John Key brought about a coalition agreement with our partners United Future ACT and the Maori Party. He brought that together within a week of the election—fantastic. He brought together a Cabinet a brand new Cabinet and here we are today just 33 days after the election delivering on our promises in the third reading of this bill.  
There are four key parts of this bill: changing the tax rates—and certainly the threshold rates as well—the independent earner tax credit the changes to KiwiSaver and the research and development tax credit. Some tough decisions were made there but decisions have been made and here we are today delivering on them.  
I highlight the fact that we are in a really tough global recession now. The outlook for business is bad. Back in Napier when I was campaigning to retain the seat of Napier I was amongst many many businesses particularly our exporters and our retailers who were all really struggling. They were looking for a new Government and wanted someone who would come to the task of bringing this taxation legislation to Parliament and delivering on it. You see we are facing some tough times; they are not like the 9 years of fair weather that the Labour Government enjoyed over its period in office. Over that period that Government had $48 billion of tax surpluses. When there are tax surpluses of that magnitude the Government has the ability to spend as though there is no tomorrow and to make some easy decisions. There were some good decisions I might add in that respect; I think the bringing in of KiwiSaver was a good decision. But I say a Government is faced with easy decision-making in that situation.  
We have had a Pre-election Economic and Fiscal Update that shows 10 years of deficits. I remind the Opposition that at the start of last year we were already heading into recession. The outlook for growth was down compared with that of other countries we like to compare ourselves with so we were already heading into recession. Then on top of that the credit crisis came through and when the previous Government delivered the Pre-election Economic and Fiscal Update it outlined 10 years of deficits. That was the scope of what we had to campaign on and to deliver our election promises on. It meant there were some damn tough decisions. 
Hon Annette King 
: Name one! 
CHRIS TREMAIN 
: I will name three. There are three tough decisions we have had to make in this bill itself.  
One of them concerns the research and development tax credits. If we had been looking down the barrel in 2007 at a $8 billion surplus we could have said yes we will give people tax cuts and we will deliver the research and development tax credits. But quite frankly that was impossible. We have had to make some tough decisions and those tough decisions have been worsened by the fact that now we are in Government we find out there is a big hole in the Accident Compensation Corporation’s accounts. That was not disclosed in the contingency liabilities that are required to be disclosed. In those circumstances one has to make some pretty tough calls. We made those tough calls and have come to Parliament to deliver on those promises. Now 32 days after the election we are in the Chamber and delivering on them with this bill. I am proud to stand and talk to the third reading of the bill.  
Four keys parts of the bill deliver on those promises. The first is the changes to the tax threshold which are addressed at those Kiwis who have been left out of the previous Government’s taxation changes. They address people in the middle-income tax bracket who did not benefit from Working for Families specifically. Over the next 3 years the tax threshold will move up. We are starting to look at people in the middle tax bracket—people like teachers wharfies and police officers—who have not benefited from some of the other programmes that the previous Government was able to deliver from its $48 billion worth of tax surpluses over the past years. We are in the Chamber and delivering on that excellent promise.  
Dr Cullen stood up and said those taxpayers would be better off under the Labour package. I remind the previous Minister of Finance that he introduced a change to the tax threshold a few years ago which National nicknamed the “chewing gum tax cut”. That change was in the law just like what he says is in the law right now yet he changed that law. So how can the New Zealand public trust that member? He had a law in place aimed at reducing the tax threshold albeit in a small way in order to benefit the hard-working Kiwis in the middle-income bracket—the engine room of this county; the people who really drive the tax take. Labour had a programme for them—fantastic. But what happened? Labour said it could not afford the change to the threshold even though it had an $8 billion surplus! Would you believe it! So Labour axed that law.  
Hon Darren Hughes 
: He’s wired! 
CHRIS TREMAIN 
: Is it true or not? It is true so members opposite cry crocodile tears when they say this Government is not delivering for lower-income New Zealanders. Labour had an $8 billion surplus last year—and $48 billion over those 9 years—but said it could not deliver a small tax threshold cut to hard-working police officers hard-working teachers hard-working nurses and hard-working wharfies. It thought that no it would forget about them and spend that $8 billion on all sorts of other things.  
But despite all that spending by the previous Government by January of this year the country was already heading into a recession. Go figure that! The previous Government experienced the best economic situation in a generation yet it delivered us a recession before the credit crunch hit home. The combined result of that has put the National Government into the pretty damn difficult position of having to make some tough decisions. One of those tough decisions relates to the research and development tax credit. I think it would be wonderful to stand up and say we are delivering tax cuts and the research and development tax credit. That would be fantastic. I am like Dr Cullen—[ 
Interruption 
] It would be wonderful to be able to deliver that particular tax credit; it is unbelievable that we cannot. So here we are delivering on the changes to the tax threshold.  
The second area I want to focus on is KiwiSaver. We are again responding to the criticism of members opposite their crocodile tears about the reduction in the contribution threshold which is down to 2 percent. When I canvassed around the Napier electorate I spoke to hundreds of workers who are not in KiwiSaver. They will now be able to afford to enter KiwiSaver. In fact right now only one in five employees is in KiwiSaver. Let us remember that unless people are in KiwiSaver they cannot access the credit that is available—they have to be in it. By reducing the threshold we are allowing a lot of people who earn under the $40000-a-year income level to access those credits and give themselves a chance to save. The Government is doing a fantastic thing in delivering on that promise. That change will allow a lot of hard-working Kiwis to go into KiwiSaver access those tax credits and save. That is a step forward.  
There are only a few more speeches to go in the third reading of this bill. We are in the Chamber within 32 days of becoming the new Government and we are delivering on the promises that we took to the electorate quite transparently. It is fantastic that we are here to deliver on the things that we promised at the election. Thank you very much.