Robertson GrantIn CommitteePart 1 Amendments to Income Tax Act 2007GRANT ROBERTSON (Labour—Wellington Central): It is a pleasure to take the first of several calls that I am going to be taking on this bill and indeed looking at this specific part. What I want to focus my first call on is indeed the tax cut changes that are put in place by this particular part of the bill and they are the reason that the Labour Party is opposing this piece of legislation. This piece of legislation if we look at the 2018-19 year in purely dollar terms creates nearly $2 billion worth of tax cuts—$1.9 billion—and it provides around $371 million for Working for Families. The Labour Party has done a pretty simple calculation here. We obviously think there does need to be more money for Working for Families. There are parts of the way the Working for Families package is structured here that we do not like—and we will go on to talk about that—but by and large we all agree that that is the way that we can get more money into the pockets of the people who need it. However the calculation of $1.9 billion versus $371 million of that is pretty simple. The $1.9 billion worth of tax cuts here is poorly targeted unfocused irresponsible and unfair and I am going to work through all of those things in this call. I think in these situations it is sometimes easier to visualise what people get. So let us take the example of some of the people who will be affected by these tax cuts. Firstly let us take the example of the great person who cleans my office here in Parliament. He is a single man and he gets paid just over the minimum wage. He would have been entitled to the independent earner tax credit. That would have been worth $10 and that has been taken off him. He gets $11 from the tax cuts minus the $10 from the independent earner tax credit and so each week he gets one tin of Home Brand Corn Kernels. That is it. That is what this person gets. So that is the cleaner in the office—that is their benefit. The National Government might say: Oh but it's not just about single people. It's about families as well." So according to its own fact sheet on the tax cuts part of this package a family earning under $24000 will be getting $5.13 a week—$5.13 a week. It is worth these two packets of soup mix—that is it. Two packets of soup mix for a family earning $24000 a week. So we have got one tin of corn for the cleaner and two packets of soup mix for that family. Then we come to people like Steven Joyce and me who are going to get $20 a week each out of this. So what would that get us? Well that would get me not one lovely pre-prepared meal of butter chicken not two of your beef stroganoffs but in fact three pre-prepared meals. That is what somebody earning $200000 a year can get out of this versus the cleaner in our office who gets one tin of corn a week out of this Government. That is the point—these tax cuts are unfair. They are weighted towards the wrong people and the legislation we are debating today is instituting unfair irresponsible tax cuts. Why are they irresponsible? They are irresponsible because the Government has choices about what it does with the revenue it gets. It has a choice about how to spend the best part of $2 billion. So who is paying for these tax cuts that are being legislated for here? The people who are really paying for them are the parents who will be dipping into their pockets once again to pay higher early childhood education fees because the funding for early childhood education has once again been frozen by this Government. Yesterday the Early Childhood Council said 150 bucks per child per year has been taken out of early childhood education by this Government so that is who is paying for me to get my three pre-prepared meals a week. That is who is paying for it—the parents who end up with higher early childhood education fees. Who else is paying for it? Any New Zealander who goes to the GP next year—any New Zealander—because in the Budget there is $1.9 billion for tax cuts and $9 million for primary healthcare. That is who is paying for it. So when New Zealanders go to the doctor and they discover that the whole value of their tax cut has been whacked out because the cost of a GP visit has gone up they will know who is paying for the tax cut. It is them. That is the priority for the National Government. So if you look at the homeless New Zealanders they are paying for it as well because this Government is not building the emergency housing that we need. So homeless New Zealanders are paying for me to be able to get my three pre-prepared packaged meals. These are irresponsible tax cuts. They are irresponsible because this Government has a duty to New Zealanders to rebuild the social foundations that are in front of us to rebuild our health system with $1.7 billion taken out of it over 6 years and to ensure that our schools get more than just a 1.3 percent increase in operational funding which is not even enough to be able to pay the increased power bill that those schools have had over the last few years. So these tax cuts are not only unfair; they are also irresponsible and they are unfocused because the reality is that if this Government had wanted low income New Zealanders to get money out of this this is not the package it would have put up. There are 500000 New Zealanders who are losing the independent earner tax credit which is repealed in the clauses in this bill—500000. Half a million New Zealanders are having that $10 taken off them and that is why the cleaner in my office ends up being able to afford one of these packets of soup mix a week. That is unfocused. Eight hundred thousand New Zealanders earn less than $14000 a year. They get nothing—they get absolutely nothing—from these tax cuts. Hon Nicky Wagner: That's not true. GRANT ROBERTSON: It is completely true. Minister Nicky Wagner does not even know what is in her package. We are talking about the tax cuts here. We are talking about the tax cuts and the tax cuts do not deliver. I refer Nicky Wagner if she has not read it yet to page 3 of fact sheet one of the Family Incomes Package table No. 1 which shows that a family in the lowest quintile gets $5.13 a week and a family in the highest quintile gets $34.65. That is it—that is the priority for this Government. That is what it has decided to put before the House to put before New Zealanders—no plan no vision no creation of jobs. No just an election-year Budget 9 years in from the campaign manager / finance Minister Steven Joyce—$35 a week. This is not me saying this; this is the Government's fact sheet. This is what it is putting out in front of New Zealanders. Low income New Zealanders do deserve more but it is not the tax package in this part of the bill. We have been very clear that Working for Families—there are parts that we do agree with and there are parts of that we do not agree with in this bill but overall we are proud of that package and it is ridiculous to hear people like Alastair Scott say the Labour Party opposes Working for Families. I was here. John Key called it communism by stealth—that is what John Key called it—and what we have got today is a partial package to give some relief to families dressed up with $1.9 billion worth of tax cuts. So we are not going to take that from the other side. What we are saying over here—and there is an amendment that is on the Table from the Labour Party that says let us take the Working for Families elements and put them out to one side. We will vote for that amendment—it is our amendment. I invite all parties in the Committee if they believe that the answer here is Working for Families increases to support our amendment. But we cannot support the parts of this bill that create an unfair tax cut package. This is not about bracket creep. This is not about inflation adjustments. This is a straight-out election-year bribe. It is a straight-out election-year bribe—Brett Hudson: Says the man who is behind interest-free loans. GRANT ROBERTSON: —an irresponsible one an unfair one and one that greatly benefits people like me to buy my pre-prepared meals. It does not benefit a family who gets two packets of soup mix and it certainly does not benefit the cleaners who work so hard in this Parliament for just over the minimum wage. And if they are a single person the independent earner tax credit is gone. Eleven dollars a week—11 minus 10 Mr Hudson is one. One dollar a week—a "One Dollar Bill Budget"—which is so unfair and so ridiculous. New Zealanders can do a lot better than this and we will talk about that in the coming calls."