4. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
Does he believe his tax cuts are fair; if so, why?
Hon BILL ENGLISH (Minister of Finance) Link to this
Yes; from today most New Zealand workers will receive a tax cut, whereas under Labour policy they would have received nothing. Many New Zealanders who got no reductions in tax in the 9 years Labour was in power receive a tax cut today.
Hon David Cunliffe Link to this
Can the Minister deny the probability that by 1 October 2011 New Zealanders will have experienced just two tax cuts over 3 years—$1 billion from National, skewed to the wealthy; and $2 billion from Labour, skewed to low and middle income New Zealanders?
There was a debate in election year about which tax package New Zealanders wanted, and, as I recall, that debate was settled quite decisively through the National Party winning the election by a long way.
Craig FossI have received a number of confusing reports about Labour’s position on tax cuts. A few weeks ago Labour members were advocating that the Government should do a lot more fiscal stimulation. Recently, they have called for today’s tax cuts to be scrapped. This would strip over a billion dollars out of the pockets of 1.5 million workers and take the independent earner tax credit off 600,000 lower-income earners who received nothing from the Labour Government until 1 October 2008.
Hon David Cunliffe Link to this
Is the Minister aware that the population of New Zealand is over 4 million and that if 1.5 million workers are getting a tax cut, the implication is that most New Zealanders are not; and does he accept that if these tax cuts were spread more evenly they would have had a bigger, more constructive, and more cost-effective impact on fighting this recession than robbing from the poor and giving to the rich?
I can confirm for that member that as of 1 April—today—every superannuitant will be getting an increase, and every beneficiary will be getting an increase. I also explain to the member that looking back over the tax cut debate since the 2005 election, National is pleased that it pushed Labour into finally making tax cuts on 1 October 2008. We have introduced tax cuts that spread those benefits to a wider range of taxpayers.
Hon David Cunliffe Link to this
Is the Minister, therefore, confirming that the only way he can get to his supposed number of 1.5 million people benefiting from tax cuts is if he includes superannuitants? On our analysis, 71 percent of New Zealanders will get nothing, and 3 percent of New Zealanders will get one-third of the money.
Well, superannuitants certainly will benefit from these tax cuts. Superannuation is adjusted according to the after-tax average wage, which will go up because we have given a significant tax break to people on the average wage. But the Labour spokesperson on finance needs to decide whether his problem is that the tax cuts are not big enough or that they are too big. It is pretty hard to understand his position, from listening to him today.
Hon David Cunliffe Link to this
Why is it, when so many New Zealanders down here on this graph are struggling to make ends meet, that 33 percent of the value of this tax package goes to the 3 percent of New Zealanders who are up here on the graph? What about that situation does that tweet think is fair?
The member should answer his own question. His party was in Government for 9 years, during the best economic times we will see for a long time. If people at the end of that period were struggling, then it is his fault, not ours.
Te Ururoa Flavell Link to this
What mechanisms does the Minister have to compensate for the lack of tax cuts for low-income New Zealanders?
This tax package has a specific feature designed for low-income New Zealanders, and that is the independent earner tax credit. The effect of that credit is that 630,000 New Zealanders who earn between the minimum wage and the average wage, and who do not have children, will for the first time get a tax cut, following on from some benefit that they got from the 1 October 2008 tax cuts under Labour. They deserve the extra $10 a week; Labour should say today whether it is going to take it off them.