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:17810. Text is incorporated into the Bound Volume.] 
JOHN KEY (National—Helensville) 
: 
 I am happy to engage in the Committee stage debate on Part 5. This legislation really cuts to the heart of the problem with the Labour Government. This is a Government that believes that it can spend taxpayers’ money better than they can themselves—a Government that thinks that if it spends money it has no impact on monetary policy but if taxpayers go out there and spend money themselves it has an impact on monetary policy. 
Yesterday we saw a classic moment in voodoo economics from Michael Cullen. It was unbelievable. He was out there telling the business community of New Zealand he was going to give them some indirect tax cuts—because he does not believe in direct tax cuts—but what he did not quite tell them was that he will introduce his carbon tax credit on one hand but he will tax them with his carbon tax on the other hand; he will get that money and give it to businesses on the other side. That is right—I see that Darren Hughes has finally woken up to realise that the infamous indirect tax cut is not a tax cut at all; it is just another tax being added to the other 30 tax increases we have had this year. 
National will support United Future’s Supplementary Order Paper on indexation. We will proudly support this proposal which is a lot better than what the Government did with its plans to index petrol. Darren Hughes is looking equally confused. He needs to get with the programme and find out what is actually going on in the economic department of his own Government. The Government decided that it was going to index petrol in New Zealand. That is a very significant event. It is going to allow the Minister of Finance every year to increase petrol tax at the rate of inflation without coming to Parliament. 
And guess what the Minister of Finance did with that little piece of information? He forgot to tell the people of New Zealand. He left it off the press release. In February 2 months afterwards we pointed out to him that he had forgotten to tell the people of New Zealand that he was introducing an indexation of petrol taxes. At exactly the same time with his coalition partner over there—his confidence and supply partner—he did not want to have a bar of indexation when it came to income tax. 
There is a very good reason why income bands in New Zealand need to be adjusted. When Labour came into office it told New Zealanders that 5 percent of all New Zealand workers would pay the top personal tax rate. 
Rodney Hide 
: It wasn’t true back then! 
JOHN KEY 
: Mr Hide is quite right. 
Rodney Hide 
: It was 7 percent. 
JOHN KEY 
: It was 7 per cent back then. Interestingly enough the Government did not quite mention the number of full-time taxpayers the top rate would apply to. Back in 1999 the figure was about 10 percent—one in 10 full-time taxpayers paid the top rate of taxation in New Zealand. They were the elite rich of New Zealand and they paid the top rate of personal taxation because they were lucky enough to earn income of over $60000—one in 10 of them. Interestingly enough when we look around today the number has risen from one in 10. I see Mr Cosgrove is holding up a sign saying that it must be 11 percent I hear the Hon George Hawkins is saying that it has to be 12 percent and Darren Hughes always thinks big so that might be 15 percent. No it is not 15 percent 11 percent or 12 percent. Think big—that was a good idea back in the old days—22 percent of New Zealanders now pay the top rate of taxation. That is one in four. 
Rodney Hide 
: No 22 percent of full-time workers. 
JOHN KEY 
: Twenty-two percent of full-time workers pay the top rate of taxation. One in four secondary school teachers in New Zealand pay the top rate of taxation. One in four secondary school teachers—they are the elite rich of New Zealand! They are schoolteachers—one in four of them which is 22 percent. Well yesterday when Dr Cullen was swiftly telling the country how he has so much more tax revenue but he does not have anything to give back to anybody else he forgot to tell the good people of New Zealand that he does not change the income brackets where tax rates cut in in New Zealand. That will take until about 2009 when one in three full-time workers in New Zealanders will be paying the top rate of taxation—one in three. They are the elite rich are they? 
Darren Hughes 
: Give us a detailed alternative. 
JOHN KEY 
: Well why do we not look at what the OECD said to Australia when it criticised that country for having the top personal rate of tax that cut in at A$80000? 
Darren Hughes 
: Name it. 
JOHN KEY 
: The OECD—it is a Paris-based organisation. Darren Hughes may have heard of it. That Paris-based organisation criticised Australia for doing that. This is a disgrace. This Government wants to take hard-earned taxpayer dollars from New Zealanders but it does not want to give anything back to those people. It does not want to do that slightly but in a big way.