Russell DeborahHon Dr DEBORAH RUSSELL (Labour): Thank you Mr Chair. I want to come back to a point I raised earlier around the abatement rates and particularly—James Meager: Oh has it already been covered?Hon Dr DEBORAH RUSSELL: —how quickly—take a call; take a call—the tax credit abates. Now I hadn't done the math so I hadn't worked out exactly how much a family could earn before the tax credit ran out.Carl Bates: So you want people to get tax cuts?Hon Dr DEBORAH RUSSELL: The Minister—take a call Mr Bates; take a call.Carl Bates: Do you want people to get tax cuts? Are you encouraging us to give more tax cuts?Hon Dr DEBORAH RUSSELL: Mr Bates stand up and take a call instead of shouting across the Chamber. I am going to carry on with my allocated time but I notice that the members are very engaged. If they would take a call that would be fantastic.Getting back to these abatement rates. Fortunately either the Minister of Revenue himself—because I know he is quick of mind—or perhaps his officials were able to tell us that the tax credit fully abated away at $180000. So that means that the maximum amount that can be received—a person earning $140000 can claim the maximum amount but then after that it abates away at whatever the rate is until at $180000 the person or the family can't get any more of the tax credit. So that's quite a steep abatement rate across $40000 of income. It might be $40000 of family income or it might be that $40000 split between the two incomes—whatever it works out to be.But my question is to do with whether any modelling was done by the Minister's officials—and I'm assuming he would have asked them to do this because it's quite important—around EMTRs effective marginal tax rates. Now here's the thing. If someone is earning say $150000—so their marginal tax rate at that level is 33 percent—but if they have a student loan as well then there'll be another 12 cents going on to their effective marginal tax rate. So their effective marginal tax rate would be up to 45 percent. Then I think at that stage they run out of family tax credits and things like that. So that's not going to affect the EMTRs. But if the Minister could clarify that for me.But what I'd like to know—and it's a pretty simple example to work out mathematically and I'm sure the officials can do it for them fairly quickly. Let's assume we've got someone who's got an income of $150000—just one income in the household; let's assume a spouse who is fully occupied in other activities or may be a sole parent or whatever. So their marginal tax rate is 33 percent under the new tax scale as well and maybe they have a student loan of 12 percent so our effective marginal tax rate is up to 45 percent. What is that effective marginal tax rate increased to thanks to the abatement of this childcare tax rebate? So that's the first question—just exactly what that EMTR is. And I'd like to know if there's any modelling done around that. I'm assuming there was; or if not I actually know that those officials will be able to come up with that number fairly quickly for us.But here's the other thing: I just want to know what analysis was done on the effect of that increased EMTR on whether or not a person is liable to go and look for more work or look for other income. Every time we have a look at EMTRs we know that it impacts a whole series of other decisions that people make. So I wonder if the Minister could just add that little bit of detail around those abatement rates. It might be in the regulatory impact statement—I'm sorry given the speed with which we've had to deal with all that I haven't seen it. But I would like to understand the effect of the abatement on the effect of marginal tax rates. I think it's a fairly important one to understand as we understand the impact of this policy on ordinary New Zealanders.