Copeland Gordon: Taxation (Annual Rates and Urgent Measures) Bill — Second Reading 
Copeland Gordon: Taxation (Annual Rates and Urgent Measures) Bill — Second Reading 
[Volume:628;Page:713] 
GORDON COPELAND (United Future) 
: 
 I just want to make a few brief comments on four aspects of the Taxation (Annual Rates and Urgent Measures) Bill. Firstly because I am continuing straight on from Dr Pita Sharples let me just reiterate a couple of things about the 2004 Working for Families package—what we might call Mark I. That measure cuts in in 2005 in 2006 and then in 2007. I just remind the member that in both 2005 and 2007 beneficiary families will be the recipients of extra money under that package. It was the National Party that in its policy in the election campaign said it would not give those families the extra $10 per week per child that is due to kick in on 1 April 2007. So in a very real sense it is probably just as well that National is not in a position to go ahead and implement that rather draconian measure. 
The second thing I want to refer to following on from the remarks made by Doug Woolerton is the policy of not paying interest on student loans announced as something of a surprise a rabbit out of the hat by the Labour Party during the election campaign. When I heard the policy announcement my thoughts were as follows. Firstly I thought it was a bad policy surrounded by a huge moral hazard. Secondly I thought it was devilishly cunning and would probably have a fantastic payback for the Labour Party in the election campaign. Thirdly I thought it would bleed support amongst students in respect of the Green Party to Labour. I think Nandor Tanczos will bear out my point. I think the Greens at that stage had roughly a 12 percent share of the student vote in polls. I said to my wife that if she waited she would see the student vote shift quickly from the Greens to Labour. That was borne out. 
The ramifications of Labour’s policy announcement were quite profound. I think Doug Woolerton is probably right: it probably was the deciding factor that meant that Labour by the narrowest of margins as Mike Williams said having dodged the bullet found itself back in this Parliament as the largest party. It also probably meant in a funny kind of way that Labour no longer had the numbers to form a coalition Government with the Greens. One might say it was a bit of a mixed blessing from that point of view. 
The next thing I want to talk about briefly is the wine equalisation tax rebate. Clayton Cosgrove who is in the House at the moment was part of the Finance and Expenditure Committee delegation that went to Canberra last year shortly after the Australian Government announced it was going to introduce a tax rebate for qualifying Australian winegrowers. We went across as a select committee and said that was not fair. We asked whether Australia had heard of a thing called Closer Economic Relations and of a commitment by both our Governments to the harmonisation of taxation matters trans-Tasman. We said that Australia’s introduction of a rebate in favour of its winegrowers would hurt Kiwi winegrowers. 
One of the amazing things about this bill is that that has been rectified in the most amazing way. This bill now provides that qualifying New Zealand winegrowers who meet exactly the same qualifications as their equivalents across the Tasman can go to our Inland Revenue Department apply for the Australian winegrower tax rebate and get the rebate paid to them in Australian dollars. So this is a kind of unique win-win situation. In our tax laws we are legislating today for the Australian Government to pay money across to New Zealand winegrowers. I think that is tremendously good news particularly given the history of things like underarm bowling and the latest incident about the Rugby World Cup when as we know Australia failed to support our bid. Is it not amazing that the National Party intends to vote against New Zealand winegrowers receiving a cash payment from the Australian Government as does the ACT party and the Maori Party? All these parties are against the Kiwi winegrower receiving a cheque from the Aussie Government. I find that to be quite amazing. 
The last thing I want to mention is the family tax credit. There is a little paragraph inserted in the select committee’s report back to this Parliament. I will read it out because I thought that Dr Lockwood Smith was somewhat uncharitable in his comments about me in relation to this matter when he spoke a few minutes ago. The select committee report states: “During our consideration of the bill advice was sought from officials concerning the continuing high effective marginal tax rates which flow from the Family Tax Credit. Some of us therefore request that this matter be considered by the Government as part of its ongoing policy review.” I wrote those words personally and they were included in the select committee’s report on my suggestion and by way of support for the very valid point that Dr Lockwood Smith made. I think he was somewhat uncharitable in then turning round and criticising me for voting for this bill when I am the person who brought that matter to the attention of the Parliament. The reason I did that is that I have heard Dr Lockwood Smith banging on about the issue for some time. He is dead right—I agree with his point entirely. 
The family tax credit was introduced into the tax laws of this country in 1986 by Roger Douglas and Trevor de Cleene. That is its point of origin. Although those guys did some good things—for example introducing GST which I think was a fantastic move for the country—they also got some things badly wrong and this is one of them. It is patently ridiculous as Dr Lockwood Smith pointed out to the Parliament for very very low-income working families to have a marginal tax rate because of the way the family tax credit works of more than 100 percent. That is crazy. Therefore I want to draw the House’s attention and particularly the attention of the Minister for Social Development and Employment and of the Minister of Revenue the Hon Peter Dunne to the committee’s recommendation that the Government reconsider its policy. As Dr Smith mentioned 4600 families are now the very very dubious recipients of the family tax credit given its perverse incentives. I would like to see that straightened out as a matter of priority. I would like for example to suggest to the Government that an adjustment to that be made in the 2006 Budget. 
With those few words I continue to signal that United Future will vote for this bill. To those who want to dispute whether we should or should not do that I simply remind them that we have had an election and the people have spoken.