3. SHANE JONES (Labour) Link to this
to the Minister of Finance
What reports has he received on how New Zealand ranks in the OECD for personal taxation on the average family?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
I am sure the member will be encouraged to continue asking such brilliant questions by the applause from members opposite. I am not sure they will welcome the answer quite as much. I received a report Taxing Wages from the OECD, which shows that for a single-income family with two children on the average full-time wage, New Zealand has the second-lowest tax wedge in the OECD at 2.9 percent, compared with the OECD average of 27.5 percent.
Hon Dr MICHAEL CULLEN Link to this
Indeed we are. In just exactly 1 month, the Working for Families tax credits will be extended by $10 per week per child, across the board. That will reduce the tax—
Hon Dr Nick SmithHon Dr MICHAEL CULLEN Link to this
Ah, “More welfare!”, says the member Dr Nick Smith. I invite him to go and tell that to the families who will be receiving it. That will reduce the tax wedge for an average family to close to zero. It will play a significant role in reducing child poverty, and that tax relief, like the tax cuts on savings and investments passed last year, is opposed by the National Party.
Hon Bill EnglishCan the Minister recall the Government committing itself some years ago to lifting the incomes of New Zealand families into the top half of those in the OECD, and can he confirm that the reason he stopped talking about that goal is that they were was slipping back, not rising?
Hon Dr MICHAEL CULLEN Link to this
Yes, the Government has committed itself over the long term to be in the top half of the OECD in terms of per capita GDP. However, it is not the only measure that this Government has, because, of course, one could be in the top half by having a very small number of extremely wealthy people and a lot of poor people—what some people have discovered is called an underclass, in technical language. This Government also believes in making sure that the average Kiwi battler family is better treated, comparatively, than similar families even in Australia—which the National Party opposed at every point.
Gordon CopelandIs the Minister aware that income splitting would further reduce personal taxation, especially for average single-income families; if so, should the New Zealand Government not follow the lead of the Canadian Government, which may introduce income splitting as early as this year’s Budget on 19 March?
Hon Dr MICHAEL CULLEN Link to this
There is to be a discussion about that matter before the next election—and, indeed, a discussion document that Mr Dunne and I will be working on. I do have to point out that now, for the average single-income family with two children, the net tax owing is almost zero after Working for Families is taken into account. It is hard, by splitting incomes, to get much below that level.
Heather RoyWhat will the Government do to restore Kiwis’ trust in Parliament and the public service, given that the OECD report Society at a Glance showed that the level of trust in this Parliament ranks third from the bottom of that in the OECD countries, ahead of only that in South Korea and the Czech Republic?
Hon Dr MICHAEL CULLEN Link to this
I thank the member for that patsy question. That survey was taken in the years 1994 to 1999, when a National Government was in office.
I seek the leave of the House to table a document that shows that, according to polls, income splitting is supported by 77 percent of all Canadians.