Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
[Volume:616;Page:11777] 
2.  
CLAYTON COSGROVE (Labour—Waimakariri) 
 to the  
Minister of Finance 
: Has he received any reports on tax levels for average income earners compared with other OECD countries? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 Yes an OECD report out yesterday evening shows that the single average production worker in New Zealand pays the third lowest tax or at least the tax wedge is the third lowest of 30 OECD countries and that for the same kind of worker with two children it is the ninth lowest of 30 OECD countries. 
Clayton Cosgrove 
: Is the Government proposing further tax changes and what effect will they have on our OECD tax burden rating? 
Hon Dr MICHAEL CULLEN 
: The Government is certainly considering some major changes that will assist low to modest-income families. The effect of those is that the tax burden on the average production worker with two children will move from being the ninth lowest to the fourth lowest in the OECD. 
John Key 
: Why is the Minister gloating about the survey when new taxes introduced by his Government have cost the average Kiwi household $2600 the results of which show that New Zealand’s average tax rate has increased in the last 12 months at the fastest rate of all countries in the developed part of the OECD according to the same survey he cites? 
Hon Dr MICHAEL CULLEN 
: I am quite interested in the number of developed countries in the OECD that will be immensely offended by that comment that actually had a higher rise than New Zealand. New Zealand has the third lowest tax wedge of the average production worker of any OECD country. Of course the OECD unlike members opposite counts all the various forms of taxation and income not merely one form. 
Rod Donald 
: Is the Minister concerned that New Zealand is in the bottom half of the OECD when it comes to the use of eco-taxes because advanced OECD countries currently collect 8 percent—and rising—of their tax revenue this way compared to only 3 percent in New Zealand and when will he start to update our tax system to make greater use of environmental and resource taxes? 
Hon Dr MICHAEL CULLEN 
: I thank the member for his confirmation that in addition to the fact that we have a low tax wedge on income we also have other forms of taxation that are lower in New Zealand than in other OECD countries. 
Hon Richard Prebble 
: Looking at the OECD report and the Government’s intention to lower taxes to some workers why is the Government not in favour of giving a tax cut to all workers in New Zealand? 
Hon Dr MICHAEL CULLEN 
: That is even more interesting because when we move to somewhat higher paid workers New Zealand moves to an even higher ranking in the OECD; indeed to second lowest. 
John Key 
: Does the Minister intend to cut taxes in the forthcoming Budget or will he use the largest surplus ever accumulated in the history of New Zealand Governments in the last 50 years just to give more money to beneficiaries through the Future Directions programme? 
Hon Dr MICHAEL CULLEN 
: The Government of course is at the present time running a cash-neutral position over the current year—not the massive surplus that members are promising to spend. [ 
Interruption 
] If the member waits for the Budget he will discover that his spending room for massive tax cuts for himself and his mates will be very limited. In fact the bulk of the funding in the package is not going simply to beneficiaries; it is going particularly to low to modest-income families in work who gain more than beneficiaries. 
Mr SPEAKER 
: Before I move to question No. 3 I say to Mr Key that he brought me into the debate three times in three interjections and he is interjecting from a seat he is not entitled to interject from. That is his warning.