1. Hon BILL ENGLISH (Deputy Leader—National) Link to this
to the Minister of Finance
Does he stand by his statement regarding tax cuts that “I am sure there will be something for everybody. But that means individual amounts are not likely to be large, given that the money is spread very thinly.”; if not, why not?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
Yes, but I am sure that the member has long since discovered size is not everything.
Does the Minister recall his statement less than a year ago that cancelling the “chewing gum tax cuts”, which would have come into effect yesterday, was not difficult, because “a small tax cut now would be spent and then gone”; and what is the difference between the small tax cut that he cancelled and the cuts he described yesterday as “not likely to be large”?
Hon Dr MICHAEL CULLEN Link to this
I said that size is not everything, but it is something. Certainly, what is announced in the Budget will be significantly larger than the simple threshold adjustment, and the tax cuts that were to flow from it, announced in 2005.
Charles ChauvelWhen the Minister made the statement that he believed there would be something for everyone, was he stating a personal view or his view as Minister of Finance?
Hon Dr MICHAEL CULLEN Link to this
Both; there is a pleasing identity between the two. That contrasts strongly with the view expressed by John Key this morning on breakfast TV, where he said: “Well, I mean, in a sense—I never have a personal view these days. I mean, if I express a personal view, that obviously turns into the party view. I am the, the, the voice piece if you like—or the face—of the National Party. And so, no, I don’t really have the ability to give a personal view, um.”
Does the Minister stand by his statement that “tax cuts are not self-funding. If unaccompanied by expenditure cuts they simply lead to burgeoning deficits and debt.”, and that “across-the-board tax cuts are likely to be merely stimulatory and to prompt their own undoing by stoking inflation.”; if he does not stand by those statements any more, why not?
Hon Dr MICHAEL CULLEN Link to this
I have outlined—[ Interruption] My goodness me, he is chirping in again. I have outlined four tests for personal tax cuts. Each of those has been denied by the National Party—not least, of course, because John Key has now made it clear that whatever is in the Budget, he will promise more, no matter what it takes.
When the Minister said yesterday “I am sure there will be something for everybody”, does he mean people who earn less than $9,500 per year?
Hon Dr MICHAEL CULLEN Link to this
When I said “something for everybody”, I was expressing a personal view that is also the policy of the Government.
When the Minister said yesterday that “I am sure there will be something for everybody”, does “everybody” include people who earn under $9,500?
Hon Dr MICHAEL CULLEN Link to this
I have an array of dictionaries available for the member if he does not understand what “everybody” means.
When the Minister said yesterday “I am sure there will be something for everybody”, does “everybody” mean everybody?
Rt Hon Winston Peters Link to this
Does the Minister have any reports that reflect on political support for tax cuts; and, having regard to what happened yesterday and also in the 1998 Budget—when the Treasurer was not from the National Party—what is the record of National where tax cuts are concerned?
Hon Dr MICHAEL CULLEN Link to this
At best it could be described as cracked, I think. Actually, it is very weak indeed—in particular, in the business tax area. National has not made any significant moves in that area within living memory.
Can the Minister confirm that the only way to make sure that there is something for “everybody” is to create a tax-free threshold, where people can earn income up to a certain level, free of tax?
Hon Dr MICHAEL CULLEN Link to this
No, but let me just clarify one point. Of course, one has to be a taxpayer before one actually benefits from any tax cuts.
How much tax relief has the Labour-led Government delivered in recent Budgets, and what support has there been for this tax relief?
Hon Dr MICHAEL CULLEN Link to this
As at this year New Zealanders are receiving $4.5 billion in a variety of forms of tax relief. The biggest of those, of course, has been the Working for Families package, which has reduced by some 70 percent the amount of tax paid by a single-income family on the average wage with two dependent children. All of those tax cuts, whether for families, savers, or business, have been opposed by the National Party.
Rt Hon Winston Peters Link to this
Has the Minister any historical reports relating to a surtax where the promise was to remove it, but, in fact, under Ruth Richardson when the National Government came in, it moved the tax up to—effectively, as an impost—at its worst, 92c in the dollar?
Hon Dr MICHAEL CULLEN Link to this
I well recall a speech, in the Wellington Town Hall, given by the then leader of the National Party, which promised to remove the surcharge “no ifs, no buts, no maybes”—
Hon Dr MICHAEL CULLEN Link to this
Even 18 years on, we can still do it! At the next Budget the National Government announced not a removal of the surcharge but its replacement with a much more vicious income and asset test.
Rt Hon Winston Peters Link to this
So that the public can proceed into the next election with some confidence on this issue, has the Minister any reports as to which members of Parliament remain in that party, supporting the same policy today?
Hon Dr MICHAEL CULLEN Link to this
Not the least of them is the Opposition spokesperson on finance, who only last year, I think, said retirement income provision in New Zealand is too generous. One can understand what that means, in that historical context.