Key John: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee Procedure 
Text is incorporated into the Bound Volume 
Key John: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee Procedure 
[Sitting date: 14 December 2004. Volume:622;Page:17815. Text is incorporated into the Bound Volume.] 
JOHN KEY (National—Helensville) 
: 
 The Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill is pretty important legislation going through Parliament at the moment. I want to raise if I can what is so wrong not just with the education policies of the Minister of Education—that is until he gets the flick or whatever will happen to him on Monday in the Cabinet reshuffle because if Margaret Wilson is to be the Speaker goodness only knows where Trevor Mallard will go! Anyway we will assume that he will be the Minister of Customs on Monday. 
This is what is so wrong with annual rates being confirmed in this legislation. This is about a Government that came into office and told the people of New Zealand that 5 percent of all taxpayers would pay the top personal rate—and that was wrong. It was wrong then it is wrong now and the number of people paying the top personal rate is progressively getting larger and larger. However the Government says that it does not want to give anything back to the people who actually make income in New Zealand irrespective of whether they pay the top middle or bottom rate. It does not want to give anything back to the people who contribute to our society and work very hard. Dr Michael Cullen wants to keep the money so that he can go on a bit of a vote-buying exercise. The tragedy of that position is that so many New Zealanders at this time of year will be feeling the pinch. They will look at their credit card bill and rising mortgage and they will wish that they had a little bit of extra money. 
The Reserve Bank made an interesting observation. It noted for the Finance and Expenditure Committee just recently that household debt in New Zealand has moved in the last 5 years from being 100 percent of average household income to 130 percent. At a time when the economy has been doing pretty well when the growth rate has been on average about 3.7 percent for the last 10 years not just the last 5 years—through nothing of this Government’s doing—at a time when it has been lucky enough to babysit one of the largest surpluses in New Zealand’s history New Zealanders up and down the country are being overtaxed and having to raise money on their own mortgage to make ends meet. That is what is happening out there. 
It is OK for Dr Cullen to improve the Crown’s financial balance sheet OK for Dr Cullen to have plenty of money to spend on anything and everything in the weird and wacky file but it is not OK for New Zealanders who are struggling to make ends meet to have a little more. 
I want to refer to just how large that spending programme has been funded on the back of those annual rates. Yesterday we had the Budget Policy Statement—the 6-months stocktake if one likes. Basically Dr Cullen did not have quite enough courage to tell the people of New Zealand that there would not be a tax cut. He sort of tried to meander around that issue. He did not quite say whether there would be or would not be one but essentially in his press release he said there was no room for tax cuts. When he was asked a hard question at the press conference he did not quite want to answer it because he knows that the case for tax cuts is now irrefutable. 
He knows that because he has looked at the numbers just as the National Party has looked at the numbers. The Government is telling the very New Zealanders who are being told there is no room for tax cuts that next year after the Government has paid its entire operating surplus—everything it does to run the country—and after it has paid its entire capital budget everything it wants to spend in funds on student loans the New Zealand Superannuation Fund roads in Auckland and anything else it might want to spend money on after it has paid for all of that it will have $1.5 billion in cash hanging around. 
That is absolutely unbelievable. The Government is so flush with cash that it cancelled the 2005 January bond tender. It does not need it. At a time when household debt is going through the roof because New Zealanders are being squeezed and it is OK for them to have three credit cards it is OK for New Zealanders to work hard on two or three jobs to pay the bills the Government has $1.5 billion of surplus cash. It is a disgrace.