3. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
How much would someone earning the average wage of $50,000 per annum with two children in an early childhood education centre with 80 to 100 percent qualified staff be better or worse off by December 2011, after Budget 2010 tax changes, inflation, and if the full cost of early childhood education subsidy changes is passed through?
Hon PETER DUNNE (Minister of Revenue) Link to this
The question has actually two parts. Taking the first one, in terms of the tax impact the taxpayer would receive reductions in income tax and increases in Working for Families payments of $32.38 per week. The taxpayer will also face extra GST on spending. The question does not tell us about the household’s spending patterns, but, assuming they are typical, the additional GST would be $20.74 per week, leaving the family $11.64 per week, or $605 per year, better off. In terms of childcare costs, it is impossible to answer, as the question does not specify either the age of the children or their hours of attendance. The Minister notes, however, that the Government has continued to support the 20 hours’ early childhood education scheme for 3 to 5-year-olds, and the restriction on charging compulsory top-up fees.
Hon David Cunliffe Link to this
When he claimed yesterday that it was not logical to include all price increases when determining whether Kiwis would benefit from the tax cuts, did he mean that it was not, in fact, convenient for him to show that most New Zealanders would be worse off?
What the Minister of Finance meant was what he said. The figures show that the family in the case put forward by the member will be significantly better off as a result of these tax changes.
Hon David Cunliffe Link to this
How can the Minister claim that the vast bulk of New Zealanders will be better off under his tax switch, when he has given them only half the story, with New Zealanders being left out of pocket from trying to cover increases in early childhood education, power, petrol, and car registration costs?
The tax package that comes into effect on 1 October represents the most significant tax changes in this country in over 20 years, and, in fact, sees 73 percent of people having a top marginal tax rate of just 17.5c in the dollar. That is a huge improvement on the situation currently, and will leave significant numbers of New Zealanders substantially better off than they are at present.
Hon David Cunliffe Link to this
Is superannuation pre-funding due to recommence when the Government’s Budget returns to surplus, as he had previously promised; if not, why not?
Mr SPEAKERThe question is well away from the primary question, which talks about a particular family. If the Minister wishes to answer, I do not want to deprive him of the opportunity, but that question is well away from the primary question. [ Interruption] No, it is too far away from the primary question.
Hon David ParkerDoes the Minister understand that the $2 billion accident compensation surplus now projected for this year is close to $500 for every New Zealander, and shows that the steep increases in accident compensation levies, pushing up car and motorbike registration fees by between $30 and $200 per vehicle, are plainly excessive and cancel out any tax cuts?