Key John: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — First Reading 
Key John: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — First Reading 
[Volume:626;Page:21215] 
JOHN KEY (National—Helensville) 
: 
 All I can say to the Minister of Finance Michael Cullen is that if this is a trap carefully laid then he must be a hunter who has gone into the bush laid a trap and like so many hunters unfortunately do somehow got a part of his body over that trap and had the trap snap firmly on his arm. 
As I picked up the  
Dominion Post 
 yesterday morning I saw the grovelling apology from the Minister of Finance as he begged the country—and I suspect the Prime Minister—for forgiveness for laying out a Budget that was so disastrous and that backfired so badly. He had no option but to apologise because as the cartoon so correctly showed in the  
Dominion Post 
 on Tuesday the Prime Minister Helen Clark was in bed at night dreaming of ways that Michael Cullen could disappear from her Cabinet. My goodness she has had plenty of Ministers go over the last few years so she is no stranger to bad news when it comes to Cabinet Ministers. 
National will be opposing the Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill and we will happily do so. The outgoing Labour Government will write to the chamber of commerce to beg for forgiveness and will include the apology that Michael Cullen made to the House. On the same morning that the chamber gets that letter it will get a letter from the National Party explaining exactly the reason. 
The reason is that the explanatory note very very clearly lays out the most important thing to the Government. The explanatory note of this 195-page bill states in respect of Part 1: “This provision sets the annual income tax rates that will apply for the 2005-06 tax year.” That paragraph can be put into any bill over the next 3 years if this Government remains in office. The Government sent the message pretty clearly indeed that there is no room for tax changes. That is what happened in the Budget. That paragraph states that the same tax rates can apply. The drafting team at the Parliamentary Counsel Office should not bother trying to think up a new paragraph; the same paragraph applies. If the Labour Government gets re-elected with the Greens—goodness forbid!—then the drafting team can just put “ditto”. Part 1 can state: “Ditto last year.” 
Brian Fallow is not somebody who is known to be an extremist. I know that Michael Cullen likes to attack every media journalist—he lashed out at TV3 wrongly the other day and had to grovel with another apology. Actually he is getting quite good at apologies. I know that he had to grovel and I know that he likes attacking journalists. 
Jill Pettis 
: That’s how marriages last. 
JOHN KEY 
: What was that? The seagull said something. 
Jill Pettis 
: Don’t be so rude and personal. 
JOHN KEY 
: Jill Pettis said not to be so rude and personal about Michael Cullen. I am very sorry. It is just that he apologises once or twice a week. 
Let us have a look at Brian Fallow’s comments in today’s  
New Zealand Herald 
: He wrote: “There is more to that reaction than disappointment engendered by false hopes raised in the days before the Budget although as the Finance Minister appeared to concede on Tuesday he blundered in not hosing those expectations down.” He went on: “It reflects a deeper sense of grievance a recognition that bracket creep or fiscal drag is a kind of stealth tax increase.” That is the truth of it—the absolute truth of it. 
I refer to a very well-written document from Westpac entitled  
How 
many hands are in your pocket? 
. It is a very good document—Brendan O’Donovan did a good job of writing it. He writes in the document about what adjustments would be required for taxpayers if they were to get just the adjustment for inflation. We are not asking for anything special from this Government which has collected $55 billion worth of additional taxes in the last 5 years. It is no wonder that every week 600 people are leaving New Zealand to go to Australia. They have got the message. They are the fast learners. They have learnt that this Government just wants to tax them. But let us not ask for anything special. Let us just ask for the impact of inflation—I might add in exactly the same way that this Government asked for the impact of inflation when it indexed the petrol tax. Westpac calculated quite correctly of course that if the tax threshold for the middle income rate—let us say the 33c rate—was adjusted for inflation it would no longer cut in at $38000 as it does today but at $46406. That would be the threshold rate that the middle income level would hit at. 
Let me have a look at what the Government is adjusting the threshold to. It is $40324. Let me just repeat that. The adjustment for inflation is $46406 and $40324 is the adjustment made by the Government. Lo and behold though it will not happen until 2008. 
The Reserve Bank governor said a very interesting thing today. He said that a material fiscal impulse on the economy happens at 1 percent. The entire tax package from the Government generous as it is—the chewing gum Budget if you like—is 67c in 2008. Those people who are earning $38000 or less will get 67c extra per week. That will cost $360 million. We have a $150 billion economy. I do not have a calculator with me but I am sure I can do the maths. I think that $360 million is a third of a percent of GDP. I happen to know that off the top of my head. 
Here we go. We have $2.4 billion of available cash so we have no problems with cash. While we are at it we have another $700 million that the Government is giving the Reserve Bank in actual cash and another $724 million whereby the Government is acting as the banker for a loan to the student loan scheme that is going to be repaid to it. That is a capital item according to this Budget. So the Government has $4 billion give or take the odd calculation of available cash and Michael Cullen had the audacity to come down to the House read out a Budget and expect people to be grateful that they will get 67c extra in 3 years’ time. He also had the audacity to argue he could not afford it. If he cannot afford it with $4 billion of available cash then he will never be able to afford it. 
Then Dr Cullen said that it will have an impact on monetary policy. No not according to the Reserve Bank governor. But Dr Cullen does not want to listen to market experts like Brendan O’Donovan. Dr Cullen does not want to listen to other bank economists who are market experts. Now he does not want to listen to the Reserve Bank governor because the governor is telling him that the way it is would not have any impact at all. 
It goes on and on. This Government is so out of tune with the public of New Zealand. It is no wonder that those members over there are feeling so glum. I noticed them this morning at the select committee. I wandered in. I was feeling pretty chipper. I had been up at Otaki winning a lot more votes than Nathan Guy. I was really chipper. I had been to a chicken factory. That is not a place the media would normally turn up at but I had so many media behind me it was unbelievable. Every local paper was there—the  
Manawatu Standard 
 and the  
Otaki Mail 
. I had to do a radio interview afterwards. The media were dying for material from the National Party because they are sick of the member for Otaki. That member is gone and he had such a bright future. 
It is no wonder the Labour members were so sour in the select committee. They were the bunch of people who Dr Cullen relied on to tell him that the Budget would be OK. He said to the chief of the Finance and Expenditure Committee: “I’m only going to give them 67c champ in 3 years’ time. Will that be OK?”. The chief said: “Three bags full Dr Cullen. Of course you’re right. They should be grateful to get 67c. They should thank you Dr Cullen”. And they will! They will thank him so much that they will vote in National in about 3 months’ time. 
National will not be supporting this taxation bill because it robs the people of New Zealand of what they deserve. We will be very happy for Michael Cullen to write to the chamber of commerce. We are opposed to this bill.