Turei Metiria: Taxation (Budget Measures) Bill — In Committee 
Text is incorporated into the Bound Volume 
Turei Metiria: Taxation (Budget Measures) Bill — In Committee 
[Sitting date: 20 May 2010. Volume:663;Page:11146. Text is incorporated into the Bound Volume.] 
METIRIA TUREI (Co-Leader—Green) 
: 
 It is a shame that we do not have the pleasure of John Boscawen’s company. In his earlier contribution he said that those on the very lowest incomes should be terribly grateful that they got 85c or some such in the Budget because they could have got nothing. He is quite right. John Key’s Government had a choice about who would benefit the most from this Budget and who would benefit the most from the personal tax cuts in the Taxation (Budget Measures) Bill. His decision was that those on the lowest incomes would not benefit the most and certainly that we should not have a progressive and fair tax system or progressive and fair tax cuts in this Budget. John Key’s choice was that the richest people in this country—the richest New Zealanders—should benefit the most. We certainly see that that is the case. Of course John Key could have chosen differently but he did not. He has chosen to increase the gap between rich and poor. 
Earlier I talked about an alternative—and I see that John Boscawen is now here—to this tax cut regime that would be progressive and fair which is having a zero tax rate for the first $10000 of income earned. I mention in relation to that alternative that not only is it progressive fair and cheaper than the current tax cuts proposed in this Budget and in this bill but also it is used in many other OECD countries. In Australia the zero tax threshold is $16000 in Canada it is $10000 in France it is $5600 and in Germany it is $7800. We certainly would not be leading the charge on a tax-free band of income that is progressive and benefits those on the lowest incomes. Of course in those countries too they have much higher tax rates at the top. In Australia for example there is a 45 percent tax rate for those who earn over $180000. So it is a more progressive system of tax than we have here. 
One of the other provisions in this part of the bill is the increase in GST. That is an additional regressive tax on top of the regressive personal tax cuts that are being proposed. The increase in GST is not fair because it will hurt the poor more. We know that those on the lowest percentile or 10th percentile pay 14 percent of their income in GST and those on the very top percentile pay only 4 percent. So proportionally those on the very bottom percentile will pay more GST in proportion to their income than those at the very top. Therefore any increase in GST is grossly unfair. 
That is why the Green Party continues to propose the much fairer system of a capital gains tax excluding the family home. In the long term that system would return some $4.5 billion to the income sector. It would also broaden the tax base across the community and provide significant incentives for a shift in investment away from the property sector into more productive investments. The John Key Government says it wants to do that but it has done nothing to make sure that it happens. It has no kind of strategy to ensure a genuine shift of productive investment away from a property boom into more productive areas. 
The Government had another choice with tax cuts whereby people on the lowest incomes could benefit. Inequality is one of the bigger issues that this country faces. The Greens released the Mind the Gap package on Monday and in it we proposed that the in-work payment which replaced the child tax credit and applies only to some families should be extended to apply to families at the very bottom of the income sector. Those families are beneficiary families; 140000 families do not qualify for the in-work payment because they are beneficiaries or they do not meet the working hours criteria. The children in those families live in the worst poverty in this country. Some 200000 children live in the worst poverty and they are the children of these families. Why are these children suffering just because John Key wants to put thousands of dollars in the back pockets of some very very rich people? 
It would cost around $300 million a year to extend this payment so there is a cost.