Flavell Te Ururoa: Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill — In Committee Third Reading 
Flavell Te Ururoa: Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill — In Committee Third Reading 
[Volume:647;Page:16340] 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
Tena koe Mr Deputy Speaker; kia ora tatou katoa. The tax cuts programme is apparently all about fairness and social justice according to the Minister in his speech earlier. So the question is: what does nearly $11 billion worth of personal tax cuts mean for the wallets of most New Zealanders? 
We know in dollar terms that high-income earners will get back 2½ times more tax dollars than those working full-time on the minimum wage and around 3½ times more tax dollars back than families supported by benefits. So although someone living in poverty will get an extra $12 or $15 or so per week someone earning $80000 will receive around $55. I suggest that many New Zealanders would say “Big deal!” to that. With price rises and so on these days $12 will disappear pretty fast. You see every day of the week newspapers have headlines describing the scourge of poverty affecting an increasing number of New Zealanders. Insufficient disposable income substandard housing inadequately nutritious food and unequal access to health care all contribute to an increasingly desperate state of health. 
This Budget has been a long time coming and the drive for personal tax cuts has pretty much dominated public discussion for years. So the question is: who gains the most from the Taxation (Personal Tax Cuts Annual Rates and Remedial Matters) Bill 2008? Where will the bulk of the $10.6 billion go? 
The Minister has been upfront about the fact that personal tax cuts have been specifically designed not to exacerbate inflationary pressures in the economy. Those are flash words but what do they actually mean? I think they mean that the money has been directed more to those who will be able to save money rather than to those who will spend it given that consumer spending causes inflation to increase. We know that this Budget is a sweetener for Generation Y. The bulk of the $10.6 billion will also go to those middle-income earners—those classic swinging voters—on the flawed assumption that they will be more likely to save than to spend and that giving money to the poor is pointless as they will just waste it. In fact the poor are far more likely to repay debt than to go on a consumption blowout. 
The question that everyone has been asking is: where is the relief for the poor for Maori and for Pasifika in this great tax cut package? Where is the tax cut package that will mean that Maori and Pacific Island women whose lives are currently tied up in gambling will have another pathway forward? Where is the real and meaningful tax relief to confront all the other social hazards that are symptoms of poverty such as the fact that Maori and Pasifika people are especially vulnerable to unethical lending practices? Where is the genuine tax relief that will make a difference to Maori and Pasifika families who are disproportionately affected by reduced housing affordability and as a consequence are most likely to live in inadequate overcrowded housing? Does this tax bill do anything to make a difference to the demands on the Auckland City Mission where 50 percent of the users of the food banks are Maori with Pasifika making up another 25 percent? 
The tax changes announced today will not eliminate this poverty. We in the Maori Party really do want to see this tax cut programme come in and start to make the difference we urgently need in our personal tax system. But we are genuinely torn by our knowledge that it will not make a tangible difference to those who suffer—those we may refer to as te pani me te rawakore those who are the most vulnerable members of our community. It is because of what appears to be crumbs from the tables of those of us in this House who are privileged that we abstain on the basis of principle. We are referring to those whose lives were changed for the worse by the “mother of all Budgets” in 1991. This House will remember that Budget as one that reduced the income of beneficiaries by 24 percent. It was a Budget in which the economy suffered and the social impact on New Zealanders was immediately felt in health education and social services. For the last 17 years this group of New Zealanders have been struggling to get back on their feet. 
We know that this group of New Zealanders were looking for a break yet just weeks ago the Minister of Social Development and Employment announced in the now infamous  
Pockets of significant hardship and poverty 
 that beneficiaries are now comparatively worse off than in 1991. We now have a situation where the Budget legislation that was passed by this House in 1991 which slashed benefit levels and forced New Zealanders into recession has still not been rectified in 2008. What is the big relief in store for those who are most in need? When we really drill down into the detail of the 2008 Budget and look at the breakdown we find benefit reductions: the unemployment and emergency benefits by $39 million the sickness benefit by $13 million the widows benefit by $3.5 million and special circumstances assistance by about $635000. 
It has been disappointing that much of this Budget debate has been reduced to some comments of ridicule about a bigger block of cheese. As boring as they may be for the purposes of debate bread butter milk and cheese are vital elements of the daily budget for far too many people. It is in the absence of such basic provisions for instance that people are forced to ask for help when they are in severe and significant hardship. It is in the absence of such provisions that people may be catered for through special circumstances assistance—assistance that has now been cut. That appropriation is to assist people in financial difficulty: with clothing allowances domestic violence and witness protection relocation home help civil defence payments civilian amputees assistance and other forms of welfare assistance. But all have been cut reduced diminished. 
It is probably no wonder that cerebral palsy sufferer Helen Capel thinks that beneficiaries are the forgotten people. It is no wonder the Salvation Army has come out and said that there is nothing to support the hard-end group of people who are really suffering. It is no wonder that economist Susan St John has described people who cannot do paid work because of a disability or family responsibilities as being “totally invisible”. The 2008 Budget could have introduced a tax change to restore benefit levels to what they were before the “mother of all Budgets”. 
Some of the speakers in this debate have asked what some of the solutions are. Here are a few and there are more on the way. The Maori Party believes that lower-income people should carry less of the burden proportionately than those on higher incomes. We know that 1.8 million taxpayers are on incomes of $25000 or less. It is this group that should have benefited from tax cuts not the other way around. We need to pledge to end child poverty in terms of all poverty measures by 2020 and one part of this is to introduce an official poverty line so we actually know where we are. We could follow the lead of the New Zealand Council of Trade Unions and introduce a new minimum wage of $15 an hour. Food could be exempt from GST on the grounds that it hits low-income people struggling to buy food with the same burden per dollar as rich people. It makes the difference at the checkout and the petrol pump. 
We need to address Maori unemployment. The fact that unemployment rates for Maori have shot up to 8.6 percent and for Pasifika peoples to 8.2 percent compared with 3 percent for Europeans is really a national shame. One way we could achieve our objective is by encouraging Maori enterprise and encouraging Maori iwi economic development not just by setting up another Crown agency to call the shots. Why not give us a break? Maori innovation could be a major contributor. Let us determine the solutions; this House might well be surprised. 
This is just the start; there is much more to come. The Government could have done this—it could have been bold and it could have made a difference. Instead as others have said already its tax cut package has won some favours and perhaps gained some ground but for some New Zealanders it has been merely more of the same. This is a Budget where they are forgotten where they are invisible and where they continue to suffer.