6. HEATHER ROY (Deputy Leader—ACT) Link to this
to the Minister of Finance
How much additional tax revenue has been raised each financial year since he increased the top personal income tax rate to 39 percent, and will he admit that his overtaxing of hard-working Kiwis has far exceeded his December 1999 claims that “The increase will affect only about five percent of the workforce” and “The change is expected to bring in around $400 million a year”?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
The net additional tax revenue in the first year, which was 2000-01, was indeed around $400 million—it was $393 million. The excellent growth in the economy and in incomes under this Labour-led Government has seen that amount progressively rise to $447 million, $494 million, $540 million, $616 million, $699 million, and $791 million. I note the implication in the member’s question that only those earning over $60,000 a year are hard-working. If that absurd proposition were true, then there are a lot more hard-working New Zealanders under Labour than there were under National.
Given that the Minister has fleeced hard-working taxpayers by much more than he had expected, even in his wildest dreams, will he make a commitment now to abolish the 39 percent personal tax rate in the Budget; if not, why not?
Hon Dr MICHAEL CULLEN Link to this
Already we see the ACT party’s questions being written by Roger Douglas, only a week or so after he re-emerged from the crypt. I note that in that supplementary question the member again equates hard-working people with those earning over $60,000 a year. I tell her that the vast majority of New Zealanders in full-time employment earn less than $60,000 a year, and many of them work a lot harder than some of those who earn over $60,000 a year—not directing my gaze too intensely.
Louisa WallHow much less tax was paid by a single-earner family on the average wage with two children in December 2007 compared with December 1999?
Hon Dr MICHAEL CULLEN Link to this
Since December 2007 such a family has paid $1,941 per annum in tax, after allowing for the Working for Families tax credit. In 1999 they were paying $4,655, allowing for the then family tax credit. I notice that neither National nor ACT supported those tax cuts.
Hon Bill EnglishDoes the Minister regard people who earn the average wage who do not have children, and therefore do not qualify for Working for Families, as hard-working; if he does regard them as hard-working, why is he making them pay more of their income in tax now than they did when he came into Government?
Hon Dr MICHAEL CULLEN Link to this
Clearly, they are hard-working but, clearly—equally—they gain from a range of other policies, not the least of which being that, firstly, they now have assistance to get a work-based superannuation scheme, which National voted against 40 times; secondly, when they retire they will receive a higher pension than would have occurred under National’s policy; thirdly, if they need to go to the doctor they have a reduced doctor’s fee; and, fourthly, if the doctor prescribes medicine, they get that medicine more cheaply than they would have done under a National Government.
Can he foresee a situation ever arising where he would abolish the 39 percent rate of personal income tax; if so, what is it?
Hon Dr MICHAEL CULLEN Link to this
If the member is fishing about the Budget, I think I can say that the one thing people are not expecting is a cut in the 39 percent tax rate. I note, indeed, that the National Party, at the last election, did not promise a cut in the 39 percent tax rate.
I raise a point of order, Madam Speaker. My question was very specific and it did not relate to the Budget, at all. It asked whether he could foresee a situation ever arising when he would abolish it, and he failed completely to address that.
Madam SPEAKER