Key John: Questions for Oral Answer — Questions to Ministers 
Key John: Questions for Oral Answer — Questions to Ministers 
[Volume:625;Page:20660] 
5.  
JOHN KEY (National—Helensville) 
 to the  
Minister of Finance 
: Does he believe the tax cuts announced by Peter Costello in Australia last week put pressure on New Zealand to follow suit; if not why not? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 No. The Australian objective as stated by Mr Costello is to have 80 percent of taxpayers paying a top rate of 30 percent or below. In New Zealand around 75 percent of taxpayers are on a top rate of 21 percent or below. 
John Key 
: Can the Minister confirm that even before the recent Australian Budget official New Zealand statistics showed that 600 people permanently migrate to Australia each week—which is the equivalent of 4½ Boeing 737s leaving full and coming home empty—and does he concede that the Australian Budget will make this even worse; if not why not? 
Hon Dr MICHAEL CULLEN 
: No. The numbers leaving in net terms have gone up and down quite a lot over the last 10 years. They have tended to fall for most of the last 5 years. Apart from that the changes in the Australian Budget for the great majority of workers mean no more than about $6 per week. Even on the cheap fares available through Air New Zealand it would take quite a few weeks to make up the difference. 
Deborah Coddington 
: How come Australia can afford tax cuts on the basis of a 1 percent of GDP surplus when we are sitting on a 4 percent of GDP surplus yet he keeps saying we cannot afford a tax cut for every worker? 
Hon Dr MICHAEL CULLEN 
: The Australians report their surpluses rather differently from us in New Zealand. But the member will find out tomorrow that as I have said many many times the Budget shows cash deficits— 
Opposition Members 
: Oh! 
Hon Dr MICHAEL CULLEN 
: —I am sorry the members are so disappointed after their calling for them for so many years—in the out-years. What the member has to understand even in her new sharing and caring mode is that a tax cut is something that goes through every year not just this year. 
Peter Brown 
: Noting those answers will the Minister give the House a categorical assurance that as a result of the tax changes in Australia we will not be losing any more skilled people than we have been losing already? 
Hon Dr MICHAEL CULLEN 
: I am not the Minister of Finance in a police State and what New Zealanders choose to do is a matter for them. 
John Key 
: Does the Minister agree with Peter Costello that reducing the tax burden helps attract and retain the skilled workers upon which a growing economy is built; if so why has he done exactly the opposite in the last five Budgets? 
Hon Dr MICHAEL CULLEN 
: Actually the proportion of GDP taken by way of revenue is slightly lower now than it was previously. But of course one of the issues around Mr Costello’s Budget—as much as I agree with a very large amount of what he says—is whether in fact his tax cuts are affordable and many Australian commentators have questioned that fact. 
John Key 
: Is the Minister in any way concerned that Australia’s free-trade agreement with the US and new tax measures will together attract the investment and skilled workers that will see the income gap continue to widen between Australia and New Zealand? 
Hon Dr MICHAEL CULLEN 
: Contrary to the claims frequently made by the Leader of the Opposition that income gap has not been widening. He is simply using the wrong figures in that particular respect. We are keeping under advice some of the less - well reported taxation changes in the Australian Budget around the business tax area—but of course we have the largest array of business tax changes and business tax cuts in this year’s Budget of any Government since the 1980s. 
Peter Brown 
: Will the Minister re-evaluate the position if he is wrong and we do lose a lot of skilled workers or corporates to Australia as a result of the Australian tax structures? 
Hon Dr MICHAEL CULLEN 
: Unlike minor parties I cannot pretend to print money to make up gaps between expenditure and revenue. One of the attractions of Australia has been that because of the rundown in our services through the 1990s it has better health systems than we do and in many areas better education systems. Those are also attractive to people wanting to migrate. New Zealand First of course believes that we can have Australian levels of expenditure on New Zealand levels of revenue. 
John Key 
: Does the Minister believe that all Government spending undertaken by his Government in the last 6 years has been warranted and of acceptable quality; if he does not what particular areas of his Government spending concern him the most? 
Hon Dr MICHAEL CULLEN 
: No I could not give the House such an assurance. Almost every dollar spent on the Opposition over the last 5½ years has been a waste of money