Copeland Gordon: Budget Debate 
Copeland Gordon: Budget Debate 
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GORDON COPELAND (United Future) 
: 
 In the brief time I have this evening I will not be able to comment extensively on the Budget so I want to just pick out one or two things that are near and dear to my own heart and to that of my party and comment on those. 
The first thing is that United Future is fully supportive of the Working for Families package. I do not care too much about what it is called; I think we should say that there is a mixture of targeted tax relief in it and to the extent that some people receive more back from the Government than they pay in tax there is also an element of what is technically called negative taxation in the package. But the really important thing is that the package is making a real difference to life on the ground for families with dependent children. My wife and I happen to be privileged enough to know quite a number of young families with dependent children and I tell the House that those families are absolutely delighted with the additional amounts coming into their households each week through the Working for Families package. People are saying to me that it is good and that at last they can send their children to school adequately clothed and buy them some decent presents at birthdays and Christmas and they feel like they are back in mainstream society. 
I think it has to be admitted that when people leave the workforce get married or move into a relationship and have children they feel a very real sense of having moved out of mainstream New Zealand. Other people are still going ahead buying new cars and taking overseas holidays and suddenly these people are in a different situation where they face the hard task day in and day out of making ends meet for their families. For those people the Working for Families package has undoubtedly made a huge difference. United Future is very proud not only to have had input into the design of the package but also to have supported it through the parliamentary process. 
Having given credit where it is due I say that United Future differs from the Labour-led Government when it comes to tax thresholds adjustments for personal taxation. In our view those thresholds should have been adjusted in last year’s Budget for the movement that has occurred in the rate of inflation since 1 April 2000 when the present tax rates including the top rate of 39c in the dollar came into being under the stewardship of Dr Michael Cullen. The Government I believe in failing to do that has created some real problems and real difficulties within New Zealand society. Dr Cullen’s inaction in that regard last year means that many thousands of taxpayers have moved up from the 19.5c band which goes up to $38000 and are now paying 33c in the dollar and many more taxpayers have gone from the 33c band which goes up to $60000 and are now paying 39c in the dollar purely because of inflation and the increase in the cost of living. To put that another way because the cost of living has moved significantly since 1 April 2000—by around 14 percent—in real terms many hundreds of thousands of taxpayers are now paying more personal tax than they did in the year 2000. 
Dr Cullen in doing nothing about personal taxes has allowed that to happen for the thousands of ordinary New Zealanders who are working people—the very people who in the past the Labour Party has traditionally sought to look after. So United Future and I are baffled at the way in which that group of people has been ignored by the Government after 7 years in office. For example in 2000 average full-time workers in New Zealand were earning less than $38000 a year and were therefore paying tax at 19.5c in the dollar. Now according to the information released with the Budget average individual wage earners earn $43756 a year and those people pay tax at 33c in the dollar—an increase of 13.5c in the dollar at the top end. In real terms they are therefore in some cases earning very little more than they were in 2000. Wages have gone up but as people shift through the brackets at that top end taxes have gone up quite disproportionately and those people are now no better off. 
The result is that we have created a dichotomy in New Zealand society. On the one hand we have people getting tax relief from Working for Families while on the other hand we have all the other people who do not have dependent children and who have seen no shift in their tax position since this Government came into power. I think that that is fundamentally wrong and fundamentally unjust and it is also fundamentally unnecessary. Dr Cullen has hinted today that as part of the business taxation review he may be able to also look at doing something about personal tax rates for those people who have seen no change in their position. I for one urge him to do so because I think it should be done. It will make our society more inclusive and will send a positive signal to all New Zealand working people that regardless of whether they have dependent children whether they are single or whether their children are now off their hands and they are back to the “Darby and Joan” type of situation they will also benefit under this Government. 
The other example I will talk about briefly is the quality of spending. I have been critical of the fact that the Government is spending too much but there is also the question of quality. I will give a couple of examples. The Budget proposes $8.9 million to tackle bullying in our schools. I could tell people how to fix that problem much more cheaply than that. We could hire Ian McKinnon the former principal of Scots College and he could run seminars right throughout this country for secondary and primary school principals and teach them how to eliminate bullying from their schools. The point I am making is that we need to make sure that we are using real people to do real things that have real outcomes—that we are not just engaged in window dressing. 
Another example I would mention is the $64.2 million that has been set aside to help exporters or people who want to go into export markets develop their overseas markets. I thoroughly applaud the intention behind that measure but again I would ask the Government to think very carefully about what the delivery mechanism is whether it will work and whether it will actually produce real results in real time for real people.