4. JOHN KEY (National—Helensville) Link to this
to the Minister of Finance
Will he be acting on the recommendation in the briefing to the incoming Minister of Finance from Treasury that the Government “Reduce the higher marginal rates on personal income (33% and 39%), the marginal rate on company income (33%), and the high effective marginal tax rates at low to medium incomes (in particular for secondary earners).”; if not, why not?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
In the case of the 33c and 39c rates, no, presumably for the same reasons that that was not National Party policy either—that is, equity reasons. In terms of the company tax rate, of course, work is proceeding on the structure of company taxation and on other matters.
Can the Minister confirm that there are literally thousands of low-income New Zealanders enrolled in the Government’s Working for Families package who earn under the average wage, yet face a tax rate of well over 50 percent; if so, why is Treasury’s suggestion to reduce this crippling tax rate mere “ideological burp”?
Hon Dr MICHAEL CULLEN Link to this
A bill referred to a select committee yesterday reduced that tax rate by 10 percent for 100,000 New Zealand families.
Hon Mark GoscheWill the Minister be acting on the recommendation in the briefing to the incoming Minister of Finance from Treasury that the Government maintain the current debt to GDP ratio?
Hon Dr MICHAEL CULLEN Link to this
Yes. Indeed, of course, that was one of the key issues during the election campaign, with the Government pledging to do so and the Opposition pledging to lift the debt to GDP ratio—which is specifically rejected by Treasury in the briefing to the incoming Minister. So Mr Key would have faced an equal level of difficulty with the incoming briefing had he been Minister.
When the Minister said today that he might dump the proposed personal tax threshold changes, and if he were to do so, does he agree with United Future MP Gordon Copeland when he said he was “dumbfounded by the suggestion” and said that it would represent a breach of the parties’ no-surprises agreement with Labour; if not, why not?
Hon Dr MICHAEL CULLEN Link to this
Part of our agreement with United Future is to review the carbon tax. That review is under way, as recommended by Treasury. Unlike the situation of the National Party, when over $300 million of revenue is given away, something else has to give.
Peter BrownIs it true that the supply and confidence agreement between Labour and New Zealand First provides for a review of current business taxation regimes, which is expected to result in lower taxation for business, and is that not something National promised would occur some 3 years hence; so by achieving it now, is that not a pretty darn good bauble?
Hon Dr MICHAEL CULLEN Link to this
Yes. The Government is committed to a review of the corporate taxation regime, and that review, led by Mr Dunne and me, is already under way. National promised that it might happen in 2008, if by any strange chance it had any money left after all the other bribes had run out.
Heather RoyCan the Minister confirm that it was only the ACT party that campaigned at the election to lower the 39c and 33c rates of personal taxation, to reform the Resource Management Act, and to privatise State assets, and that got only 1.5 percent of party votes, and why will he not second Treasury to the ACT research unit where it would be truly appreciated?
Hon Dr MICHAEL CULLEN Link to this
I can confirm that of the 2.2 out of 14 recommendations of the incoming briefing I disagree with, all of them represented policies close to those of the ACT party, which just shows that the 1980s do live on, on the Terrace.
Has he decided 2 weeks into the Parliament to start publicly fighting with the Government’s support partner, United Future, because he has noticed what a wonderful job Phil Goff is doing of fighting with its other support partner, New Zealand First?
Hon Dr MICHAEL CULLEN Link to this
No, we consult carefully, unlike the first day of this Parliament when National ended up voting by itself, with all other parties voting against it.
When he said yesterday that he rejected Treasury’s advice because “I’m elected, they are not.”, has it dawned on him that well over 50 percent of the votes cast in the last general election were for parties that advocated personal tax cuts, including National, United Future, New Zealand First, ACT, and the Māori Party, along with the Government’s own Minister of Revenue; if so, what is he going to do about it?
Hon Dr MICHAEL CULLEN Link to this
What Treasury’s briefing paper states is not at all what the National Party said in the election. Firstly, Treasury said to maintain current projected surpluses and savings. Mr Key promised to lower the surpluses and borrow more. Secondly, Treasury said: “Do not cut the bottom rate, cut only the top rates.” That was not National Party policy; it did not promise to cut the top rate at all, only the ACT party promised that. Thirdly, Treasury did not say to lift thresholds, it said that that was not a good policy. It said cut the rates. That was only the ACT party’s policy. ACT got 1.5 percent in the election, which, to be fair, is 1.5 percent more than Treasury got.
What was he thinking when he wrote in Treasury’s annual report: “As Minister of Finance I know I can look to the Treasury for high-quality analysis and policy advice in progressing Government goals and raising living standards.”?
I seek leave to table the annual report 2005 so that Michael Cullen can read all the great things he wrote about Treasury.
Madam SPEAKERHon Dr Michael Cullen Link to this
I raise a point of order, Madam Speaker. I take objection to that. When a member seeks to table a document he or she should seek to table it and not add little smart-arse comments like that.
Leave has been sought to table that document—a comment has been made on the way. I ask whether there is any objection to the tabling. There is objection; it will not be tabled.
Rodney HideI raise a point of order, Madam Speaker. It would seem to me, sitting here independently, that Michael Cullen has fallen into exactly the same trap that John Key did by way of point of order by making a—well, I will not repeat what he said. I would suggest to you, Madam Speaker, that he should be asked to withdraw and apologise for his comment said by way of point of order.
Gerry BrownleeI raise a point of order, Madam Speaker. Clearly Mr Hide has been very offended at the comment made by Michael Cullen.
Well why else would he raise it? We have only to look at Mr Hide to know what a sensitive man he is.
He had an opportunity to ask for it. It was not his comment. This is not a point of order, Mr Brownlee.
None the less, to dismiss it like that is unfair. He has obviously taken offence, and, if a member takes offence, the member giving offence should withdraw.
Hon Dr MICHAEL CULLEN Link to this
This is a very important point. Only the member who might feel offended can raise that point of order, not another member. I notice that Mr Key has not raised a point of order.
Hon Bill EnglishI raise a point of order, Madam Speaker. When you were elected not much more than a week ago, speeches were made about the standards that MPs expected you would apply in Parliament. As one of the longer-standing members of this Parliament I suggest to you that any other Speaker I can recall would have ruled that term to be unparliamentary. If you do not rule it to be unparliamentary it will then become part of the normal flow of conversation in the House, and I think that would demean us in the eyes of the public.
Hon Dr MICHAEL CULLEN Link to this
Madam Speaker, I am happy to withdraw but in my memory that particular member has used that word on a number of occasions in this House.
It is not necessarily an unparliamentary term; it depends on the context. The context here was an exchange between two members across the House. If we ruled those out of order every time, very little said in this House would be in order. I therefore ask that we have question No. 5.
I raise a point of order, Madam Speaker. That is a very interesting ruling and it perhaps needs some guidance put around it. You may not want to give us that guidance today you might want to consider it and come back to us next Tuesday but what are the other contexts in which one might use that term when it would be as acceptable? Is it just acceptable to describe a statement as being “smart-arse”, or are there other contexts in which that term could also be used?
The context that I relied upon was exactly what happened. Two members were exchanging what could be considered unparliamentary comments to each other in a somewhat inappropriate way, but in themselves they were not unparliamentary. I have ruled on that. The context was the manner in which the exchange took place.
I raise a point of order, Madam Speaker. It is really just a matter of clarification. I certainly did not say that Michael Cullen lied.
I simply asked to table the document. If Michael Cullen wishes to make those statements in the House, he must choose whether they are parliamentary.
Hon Trevor Mallard Link to this
I raise a point of order, Madam Speaker. I think that if the member had done as he has just said and just sought to table the document, then we would have got right through it. It would have been declined. Unfortunately he, in a disorderly way, added a comment to his request. The member has been here for only 3 years. He will eventually learn that if one really wants something tabled, one does it in an orderly manner.
The tabling of documents requires a point of order. The point of order should relate to what the member is seeking. The member was seeking leave. He asked for more than leave in the comments he made. That is the context I am talking about.
I raise a point of order, Madam Speaker. I ask you again to think about this matter for a period of time and come back to the House. It seems to me that you are telling us that if both parties were involved in a way that put the context of Michael Cullen’s statement in a place that was OK, then you have made a judgment about what Mr Key said. If that is the case, he should have been pulled up on the spot, not subsequently used as the justification for Michael Cullen introducing those words into the usual language of the House.
Thank you, Mr Brownlee. Once the Speaker has given a ruling, as you know, it is not open to discussion. Also, Speakers do not respond to hypothetical questions. I determined on this occasion, in this context, which is consistent with previous Speakers’ rulings, that one always takes into account the context before one rules whether something is unparliamentary, except in circumstances where terms such as “the member is a liar” are used.