3. CHARLES CHAUVEL (Labour) Link to this
to the Minister of Finance
What significant economic initiatives come into force on 1 April 2008?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
A range of significant initiatives come into force today—news, obviously, for Dr Smith. The company tax rate has been cut for the first time since Labour was last in office and, indeed, as I said before, I cannot find a historical precedent for National ever cutting the company tax rate. Combined with the research and development tax credits, which come into force today, this cut will allow businesses to invest more in their workers and in their long-term success. We are also today, of course, lifting completely the cap on charitable giving, both for individuals and for companies. We are increasing the minimum wage—
David BennettHon Dr MICHAEL CULLEN Link to this
The difference is that Labour Governments do it; National only ever promises in Opposition and does not do it in Government. We are also increasing the minimum wage for the ninth time in 8 years. Today marks the commencement of employer contributions to KiwiSaver, and the tax credits for employers that go with them—good news for over 500,000 New Zealanders.
Hon Dr MICHAEL CULLEN Link to this
I have seen widespread support for these initiatives. I have also seen reports that the Opposition voted against the company tax cuts, and never made any cuts when it was in Government. I have seen reports that it voted against the research and development tax credits. I have seen reports that it opposed all nine increases to the minimum wage, and, finally, that it voted over 40 times against KiwiSaver and still has no policy on that matter.
Rt Hon Winston Peters Link to this
Can the Minister of Finance confirm that the increase in superannuation rates effective from today, as well as the previous increases this parliamentary term, are a direct result of the confidence and supply agreement between New Zealand First and the Government, in which the Government agreed to ensure that the base rate of New Zealand superannuation would not fall below 66 percent of the net average wage?
Hon Dr MICHAEL CULLEN Link to this
That is correct. Of course, when this Government came into office the floor had been lowered to 60 percent of the average wage, and we raised that immediately to 65 percent of the average wage, and now to 66 percent as a result of the confidence and supply agreement. The result of that is that a married couple on New Zealand superannuation are now receiving approximately $35 a week more than they would have done, had the National Government stayed in power.
R Doug WoolertonCan the Minister of Finance confirm that the cut in the business tax rate effective from today is the result of the review of the business taxation regime secured by New Zealand First in its confidence and supply agreement with the Government—a review carried out in part to improve New Zealand’s competitiveness with Australia and to boost productivity—and what impact does he think that this rate cut will have in these areas?
Hon Dr MICHAEL CULLEN Link to this
I can confirm that a commitment to a business taxation review was included in the confidence and supply agreements of both United Future and New Zealand First, and it resulted in the lowering of the corporate tax rate to 30 percent. It also needs to be mentioned, of course, that although KiwiSaver contributions are coming into force today for employers, offset in very large part by tax credits, in Australia employers pay into superannuation schemes a compulsory 9 percent on all employees.
Peter BrownWill the Minister confirm that it is written into the confidence and supply agreement between Labour and New Zealand First that the minimum wage should rise to $12 per hour by 2008; if so, will he state whether he is aware that New Zealand First wants this to be an ongoing process and will not settle for the miserly increases that occurred in the 1990s, when the National Party was in Government?
Hon Dr MICHAEL CULLEN Link to this
Indeed, and it needs to be noted that during the 1990s there was only one increase in the minimum wage, and that occurred only when New Zealand First was in coalition with the National Party. Left to their own devices, National members fail completely to increase the minimum wage, and, no doubt in conjunction with Sir Roger Douglas as a Cabinet Minister or, indeed, a prominent backbencher, they might be looking—
Hon Dr Nick SmithHon Dr MICHAEL CULLEN Link to this
He is certainly not one of us any longer. He is one of them, and they are welcome to him. They are going to have to put up with him in the future.
Hon Bill EnglishI raise a point of order, Madam Speaker. In the interests of accuracy under the Standing Orders, it may be helpful for the House to know that Dr Cullen was Roger Douglas’ Associate Minister of Finance.
Hon Dr MICHAEL CULLEN Link to this
I need to say that it is worth noting that I was removed from that post at the request of Sir Roger Douglas.
Rt Hon Winston Peters Link to this
I seek leave, because Dr Cullen’s answers on the last few questions have been so potent, telling, and important as a tribute to what does happen in politics as opposed to people who just make promises, that he table all those answers for our ready digestion.
Madam SPEAKER