New Zealand Parliamentary Debate

Questions for Oral Answer [4414]

Hon Dr MICHAEL CULLEN

: Yes, I do indeed. It is significant that much of the negative comment has come from so-called tax experts who are obsessed simply with the rate, not with other ways in which the tax system can help the economy grow.

John Key

: How much money does the Minister think he can allocate to the business tax review and to any subsequent changes he might make to personal taxes, or is that a minor detail he has not yet bothered to calculate?

Hon Dr MICHAEL CULLEN

: Only time will tell, but I would note that if we aligned all personal, company, and other rates to a top rate of 25 percent, which some people seem to think should have been in the document, the annual cost would be 4. 3 billion.

John Key

: How can he afford any of the changes proposed in the business tax review, let alone his late-night musings last night about personal taxes, when he still cannot confirm whether the changes he announced to personal tax thresholds in Budget 2005 will go ahead, and they would cost only 360 million?

Hon Dr MICHAEL CULLEN

: If the member bothered to read the Budget documentation, he would know there is a large difference between Inland Revenue Department and Treasury forecasts of revenue over the next couple of years. Secondly, if he cared to open the newspaper, he would notice that there was a certain degree of uncertainty in world affairs at the present time, which could impact on New Zealand's economy. Thirdly, of course, my colleagues will have to show some restraint about future spending proposals, if we are to achieve anything in the taxation area. Unlike Mr Key, I do not get up and say that we can do everything that everybody wants and it is all just easy.

Shane Jones

: What support has he received for the proposals?

Hon Dr MICHAEL CULLEN

: I have indeed received some support. In particular, I was very pleased to see very positive feedback-though it did not seem to be widely reported-from Mark Weldon of the New Zealand Exchange, whom Mr Key was reported as trying to get into Parliament on the National ticket. He commended the focus on productivity and investment.

John Key

: Did he find his road to Damascus experience last night on Television One's Close Up programme, when he argued the merits and affordability of tax cuts, as bizarre as the viewers did, his having spent the entire election campaign doing the complete opposite?

Hon Dr MICHAEL CULLEN

: What I did say in the election campaign was that 2. 3 billion of tax cuts on 1 April this year would have had to be paid for by cuts in health, education, and superannuation. The National Government in 1999 cut taxes by a small amount and cut New Zealand superannuation to pay for it. Mr Key wants the elderly to pay for a tax cut for him.

Peter Brown

: Is it not true that in the confidence and supply agreement that the Government has with both United Future and New Zealand First there is a commitment to look at levels of taxation-to some degree, at least?

Hon Dr MICHAEL CULLEN

: Indeed, that was a condition of the confidence and supply agreements of both New Zealand First and United Future. I worked in great partnership with the leader of United Future, the Hon Peter Dunne, on the report that we released yesterday. I repeat that it goes much further than National's policy on corporate taxation, because it goes about three times as far, in dollar terms, as National's policy does.

John Key

: When he said last year that some of the options he was considering might prove to be too big and too bold for a wide variety of stakeholders, can he confirm that, sadly for him, the stakeholder who held that view turned out to be none other than