Wang Kenneth: Questions for Oral Answer — Questions to Ministers 
Wang Kenneth: Questions for Oral Answer — Questions to Ministers 
[Volume:622;Page:17298] 
5.  
KENNETH WANG (ACT) 
 to the  
Minister of Finance 
: How many new taxes levies or duties or increases to taxes levies or duties have there been since he became Minister of Finance and how many more are planned? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I am advised that no new taxes levies or duties have been introduced since 1999 other than specific levies in areas such as horticulture and agriculture which are usually the result of requests from the industry involved. We have introduced six increases of any significance to existing taxes levies or duties since taking office. We are of course planning an increase to excise duty and light road-user charges on 1 April next year. The carbon charge is assumed to come in on 1 April 2007. That will be revenue neutral. That will simply take me through to the end of my next term in office. I am not looking out beyond that at this point. 
Kenneth Wang 
: What taxes levies or duties has he reduced and by how much has he reduced them? 
Hon Dr MICHAEL CULLEN 
: I have to say that the new member has found a better question to ask me than any other member has done so far in this Parliament. I cannot think of a single one that I have reduced at this point. 
John Key 
: Is the Minister ruling out a cut in the nominal company tax rate in Budget 2005; if so why? 
Hon Dr MICHAEL CULLEN 
: Nothing is ruled out at this stage but I draw the member’s attention to the latest OECD report which congratulates the Government on its fiscal management and points out that there is not room at the present time for a fiscal stimulus. Structural changes in taxation are a fiscal stimulus. 
Peter Brown 
: How much windfall tax has the Government collected in the time that the Minister has been the Minister of Finance by fiscal creep or whatever such as by way of example the $289 million he collected in the 3 months ended 30 September last? 
Hon Dr MICHAEL CULLEN 
: I do not have a breakdown in front of me of the exact division between bracket creep—the 39c in the dollar rate for example—and changes to excise duty and so on. I tell the member that over 80 percent of the increase in taxation revenue since 1999 is simply due to the change in GDP without any bracket creep. 
Gordon Copeland 
: Is he prepared to give an undertaking that the cost of the 5c per litre petrol excise increase planned for next year will be offset by a decrease in income tax so that New Zealanders will not face a net increase in their tax burden; if not why not? 
Hon Dr MICHAEL CULLEN 
: No I cannot because that money will be spent on new roading. If it was accompanied also by a decrease in income tax that would be a fiscal stimulus. I refer members again to the OECD report which is very important in a period when we face severe capacity constraints. 
Rodney Hide 
: Does it not concern him as Minister of Finance that he can rattle off a long list of new taxes and tax hikes but cannot think of one thing that he has done to lower the tax burden or the charges of Government on hard-working New Zealanders; if not why does it not worry him? 
Hon Dr MICHAEL CULLEN 
: Because the Government has produced 230000 new jobs the lowest unemployment rate in 18 years and strong growth in household incomes. Going by the latest opinion polls the public does seem to approve of that record. 
John Key 
: Has the Minister of Finance forgotten that he has reduced taxes in New Zealand—that he reduced taxes on Maori trusts to 19.5 percent which will give a lower cost of capital to amongst others Aotearoa Fisheries when competing with other companies that do not have a lower rate of company taxation? 
Hon Dr MICHAEL CULLEN 
: As the member well knows had the 33 percent rate been applied it would have been necessary to have a large number of individual tax adjustments at the end of the year a large proportion of which would have cost more to process than the actual level of the rebate. 
Hon Richard Prebble 
: Can the Minister explain with regard to his proposed tax on petrol why it is a good idea to index the taxes on petrol and cigarettes but it is not a good idea to index the thresholds for income tax; and is not the result of his policy that the Government is now inflation proof and that citizens and business are having to suffer the effects of inflation? 
Hon Dr MICHAEL CULLEN 
: On the first part of the question clearly what happens is that there is declining real revenue in relation to the demand for new roading etc. On the latter matter if the member cares to look at past Budget documentation he will find that the long-term assumption is that tax revenue remains constant as a proportion of GDP. 
Kenneth Wang 
: Is there anything that would convince him that New Zealanders are overtaxed; if so what would that be? 
Hon Dr MICHAEL CULLEN 
: It would be if we had for example substantially higher tax rates than Australia—which we do not—and if we had an average tax take that was higher than that of the rest of the OECD as a percentage of GDP. We are below the average of the OECD and way below the average of nearly all countries that have higher per capita GDP than New Zealand and certainly I will not be convinced by some strange argument that people will work harder if they are slightly lower taxed at the margin. I have not noticed anybody except for the National Party working less hard since the 39c in the dollar rate went on. 
Rodney Hide 
: I seek the leave of the House to table a list prepared by the Parliamentary Library of the 30 changes in taxes and levies since November 1999 that have gone upwards. 
Document by leave laid on the Table of the House.