Bayly AndrewANDREW BAYLY (National—Port Waikato): I hope my honourable colleague Damien Smith will have the opportunity to speak because I know he will have a lot to contribute. On that note I'd like to invite the members from the Government party to stand up. I see Dr Deborah Russell. I know she's an expert in tax matters and I'd like her to stand up and tell us why fiscal drag is something we don't have to worry about—how New Zealanders should just pay more tax just because of inflation. I just urge her to take a call talk about it support her Minister in the chair and just give us the benefit of her wisdom on this matter. Anyway—hopefully. CHAIRPERSON (Adrian Rurawhe): Now come to the part. ANDREW BAYLY: Rapidly Mr Chair. I want to return to this thing about fiscal drag which is a dreadful term I know. It basically says that as you have inflation in the economy people's wages go up because of course everyone wants to make sure they're not missing out and going backwards in terms of wages. So their wages get increased and of course what happens is that people pop into the next higher threshold of tax. So at the end of the day we're talking about mums and dads paying tax—more money out of their household budget going to the Government rather than looking after their children paying for their school fees or paying for their sporting clubs. I just acknowledge Minister Parker who stood up and did at least talk about fiscal drag and read something from I presume the IRD—a report talking about it and saying it was a significant cost. I just remind the Minister that just prior to that I'd actually told him what the cost was. We costed it when we announced the policy. Back a couple of years ago it was about $660 million. We don't do things by halves on our side Mr Parker; we actually do things and when we prepare announcements we actually make an announcement and know the fiscal consequences of it of course. So the cost is $600 million - odd but you said it is a significant cost. Well I think you're only giving us half the story. You're always just giving the downside and I didn't take you for a pessimistic man Mr Parker. I thought you were an optimistic person. So you were highlighting the fact that it was going to cost you as the Minister of Revenue a lot of money: $660 million. Well that's fine but actually on the other side of the coin Mr Parker I'm sure you would know that the Government of course is raking in a lot more money—a lot more money. If you go back to the Budget prior to COVID actually the gross tax revenue of the Government was going to go from $85 billion to $100 billion - odd over four years and largely most of that was to do with fiscal drag or its inflation impact and of course assumptions around growing our economy. So I think it's wrong for you to talk about and highlight how you as the Government are going to miss out on this revenue. I think the question we should be talking about in the context of these tax rates is what is best for New Zealand and particularly what's best for mums and dads who are having to pay their sporting club fees for their children. I think this is a really important point and for some reason your Government and you as the Minister of Revenue seem to be just trying to blow it away and refer to some skewed report. The issue in another context: my colleague the Hon Michael Woodhouse has been talking about the impact on nurses which is a very interesting thing and of course it no doubt applies to teachers—two groups of New Zealand society that we're all deeply concerned about—and of course many are now going straight into very high tax brackets. Just for another context the Government just recently announced that it was going to increase benefits by $25 a week. We heard a lot of hue and cry about how we're looking after the most vulnerable members and of course talking about increasing benefits—as by the way the National Party did for the first time in 43 years when we increased them when we were in power I hasten to add. But of course that means that people were receiving more income but of course paying more tax. It's great to talk about the upside when you're trying to portray the Government as a caring Government but not talk about the downside which is the increased tax. I think that in this context we do need to talk about tax rates particularly at the lower rates with the $14000 tax rate cutting in at 10.5 percent. There's a whole range a gamut of opportunities there and nothing from the Minister on any of it.