Hide Rodney: Taxation (Venture Capital and Miscellaneous Provisions) Bill Taxation (Annual Rates of Income Tax 2004-05) Bill — Third Readings 
Text is incorporated into the Bound Volume 
Hide Rodney: Taxation (Venture Capital and Miscellaneous Provisions) Bill Taxation (Annual Rates of Income Tax 2004-05) Bill — Third Readings 
[Sitting date: 14 December 2004. Volume:622;Page:17829. Text is incorporated into the Bound Volume.] 
RODNEY HIDE (Leader—ACT) 
: 
 Just on 5 years ago this Parliament was plunged into urgency by the new Government. The Government said that it needed more money—so its first act in this Parliament was to bring in legislation under urgency to put up the top rate of tax to 39c. Why? Because it had done its sums and it decided that it needed an extra $400 million. Opposition parties explained that it would be counterproductive that it would not work that it would drive people overseas that it would make people less entrepreneurial and that it would cause less investment. But not only that we also pointed out that the Government did not need this $400 million and that it had been an election campaign as my friend the Hon David Carter says simply to punish the successful people of New Zealand. 
The Labour Party was able to go around and promise all sorts of good things and when questioned as to who would pay it it said: “Don’t worry the rich people are going to pay for it.” In actual fact everyone has paid for that tax because there has been that much less investment and that much less entrepreneurship. What did we discover? I remember this: there was a pledge card. Nothing was true about that pledge card. From the photograph down everything was a fraud and a phoney. Helen Clark’s airbrushed teeth-straightened picture was on the card and she stated that the tax increase would affect only 5 percent of taxpayers. What do we now discover? Eleven percent of all taxpayers are paying that top rate. As the National Party pointed out 22 percent of all workers are now paying that top rate of tax. So that promise has proved to be like so much of the Labour Government a lie. We have also discovered that the Government never needed that money. I ask Mr Copeland how much the surplus is now. 
Gordon Copeland 
: $7.5 billion. 
RODNEY HIDE 
: It is $7.5 billion yet the Government put up the top rate of tax to raise $400 million—less than half a billion dollars. So Mr Copeland who has loyally supported the Labour Party has come down here with a very modest proposal simply to hold Labour to account for its election pledge. He is simply saying: “We’ve said we would keep our word and support the Labour Government in power. Why don’t you keep your word and hold it to 5 percent? Here is how you do it.” Not only has Mr Copeland set out how it could be done he has drafted the Supplementary Order Paper. He has brought it down to Parliament. If one were supporting the Government one would expect the Government to consider it and to take it on board if it was a good idea. And if it did not think it was a good idea it could come down to this great Parliament of ours and put it to the vote. 
But Michael Cullen would not allow this to go to the vote so Mr Copeland’s Supplementary Order Paper was vetoed and we as elected members of Parliament do not even get to vote on it. So Mr Copeland who has been honest with his support of the Labour Party is now supporting a dishonest Government with his honesty. I think that at some point he has to ask why he is honestly supporting a dishonest Government. I think that the honest thing for Mr Copeland to do would be to put his vote where his principles are rather than putting his vote to where there are no principles which is Helen Clark’s airbrushed picture. 
Gordon Copeland 
: The principle is to tax and spend. 
RODNEY HIDE 
: Mr Copeland is saying that the Labour Government’s principle is to tax and spend. I have to say on behalf of the ACT party that I agree with him. I know that New Zealand First agrees with him. I know that Mr David Carter agrees with him on behalf of the National Party. Let us do a quick sum. [ 
Interruption 
] I know that the United Future party does not agree with the Greens and I know that it disagrees with the Labour Party; the only thing I am perplexed about is why it keeps voting with the Greens and with the Labour Party. That is the bit I just cannot get my head around. 
Rod Donald 
: We can’t figure it out either. 
RODNEY HIDE 
: The Greens cannot figure it out and the truth of it is that neither can Mr Copeland. He cannot figure out why he is doing it either. If he did he would get up and explain it all to us. Let us just put aside where we are in each party and think about the poor voters and in particular the poor taxpayer and remind ourselves what Michael Cullen told this House. He told us that yes the gross income for the average household had gone up but when one takes off the increase in direct tax and one then allows for inflation we discover—and this is not allowing for the indirect taxes or GST—that those people are no better off. That is why people are saying: “Well hang on this economy is going so well how come I am not feeling it?”. People are not feeling it because it has been completely eroded by extra taxes and as Mr Copeland has put out what is technically called fiscal drag. 
The money has been devalued by higher inflation. Sure people are getting a bit more because of growth but they are finding themselves in a higher and higher tax bracket and they are going backwards under this Government. They then discover that households have stood still in net terms—in real terms—but the Government is taking an extra $3000 off each household. So the entire gain has gone to Dr Michael Cullen. When it is suggested to him by the United Future party the ACT party New Zealand First the National Party and I should say the Green Party because they believe in lower income tax—they say “Let’s get income taxes lower and put taxes on other things”; I think I am representing their position fairly— 
Hon David Carter 
: I didn’t know that. 
RODNEY HIDE 
: The member has to stay awake. Let us just work this out. The National Party is for lower income tax. Am I correct that New Zealand First is for lower income tax? 
Craig McNair 
: Yes. 
RODNEY HIDE 
: They say “Yes”. The Green Party is in favour of lower income tax albeit with some extra taxes elsewhere. The ACT party is for lower taxes full stop. United Future is for lower taxes and bugger me Jim Anderton is for lower taxes on businesses. Let us just do the numbers. If all members in this Parliament voted according to what they believed in and what they expound publicly we would have lower taxes. 
Rod Donald 
: 68 votes. 
RODNEY HIDE 
: As Rod Donald says—he is much better at arithmetic than I am—that is 68 votes. 
Gordon Copeland 
: I think the Maori Party might be for lower taxes. 
RODNEY HIDE 
: If we included the Maori Party that would be 69 votes. Mr Copeland is getting excited. The only trouble is that he will stand up and vote for this bill which keeps taxes exactly where they are. 
Gordon Copeland 
: I can explain why. 
RODNEY HIDE 
: He is going to explain why. I can understand the Greens because they say they are in favour of lower income taxes only if there are other taxes to make up the difference. 
Hon David Carter 
: They voted for the 39c tax rate. That doesn’t make sense. 
RODNEY HIDE 
: Look we have to admit that we have all made mistakes in this House and the Greens made a big one. Here is the other astonishing fact in all of this. We have a Minister of Finance who thinks he has a magical touch that he can spend all this money that the Government spends better than the poor working people who earned it. He thinks that somehow when he spends $1 billion it has been to good effect compared with a worker spending $10. 
He thinks that somehow this Government—and I ask members to picture it with Parekura Horomia Steve Maharey Jim Anderton and Trevor Mallard sitting around the Cabinet table and spending billions—can spend it to better effect than each working person just spending an extra $10 or $20 a week. We actually know how little the Government cares for working people. Helen Clark says her salary is just petty cash because her comparison is with someone who earns $800000 not with the average working person whom she is supposed to represent to whom her salary is far more than petty cash. We also have a Minister of Finance Dr Michael Cullen who thinks that if we lower people’s tax it makes no difference. I have a message for Michael Cullen: it makes a huge difference. It makes a huge difference to the weekly pay packets of working people to keep more money. I am not surprised that there are 68 votes in this House not counting the Maori Party for lower income tax because members can see the logic of it. The Greens can see logic in it too. They say that if we lower income tax people will earn more and get more.