3. Hon ANNETTE KING (Deputy Leader—Labour) Link to this
to the Prime Minister
When he said “In most cases the tax switch more than compensated people for the increase in GST”, in which cases had people not been fully compensated?
Rt Hon JOHN KEY (Prime Minister) Link to this
Budget 2010’s tax switch meant that at all levels of income the reduction in people’s income tax was greater than the effect of increasing GST, so ordinary people earning a wage or salary and paying income tax were better off as a result of the tax switch. Superannuitants were also better off. Benefit payments were increased to compensate for the increase in GST. The only people who would not have been fully compensated for the increase in GST were people who were sheltering income in trusts or otherwise earning income that was not fully taxed at the personal tax rates.
If a family, such as the Alexander family featured on Campbell Live, received an $11-a-week tax cut but their food costs alone increased by $25 a week—not just over 1 month but over 6 months—does he believe that they have been “more than compensated”; if so, how?
The family has been compensated for the change in the increase in GST by the reduction of their personal tax rates. That is absolutely factually correct. What is also correct is that there may be increases—or decreases, actually—in food prices. As I say to the member, in the last 2 years in which Labour was in office—I could have picked any two, frankly, but I could not get enough data going back—basically, cheese went up 50 percent, chicken went up 44 percent, milk went up 23 percent, petrol went up 22 percent, lamb chops went up by a certain amount, sausages and mince went down by a little bit more but I am not sure of the exact numbers, vegetables went up 21 percent, bread went up 20 percent, electricity went up 13 percent, and, from memory, people did not get much of a tax cut.
Mr SPEAKERI certainly will, thank you very much. What, then, is his response to people like Sharon, who does not think she has been “more than compensated”? She is a single parent who is a qualified financial worker, who knows how to budget, who has had to toss up between filling her car up with petrol or buying groceries, who is finding it very stressful to feed her kids, and who said “John Key will lose another skilled person. As soon as I finish my degree, I will leave New Zealand.”
I will be very disappointed if Sharon leaves New Zealand, because, by the sound of things, she could make a great contribution to New Zealand. What I would say to her is that in the 3 years that National has been in Government we have done the following things. We have reformed the tax system and made it more effective for people to work, save, and get ahead in their life. We have halved the levels of interest rates that are in place in the New Zealand economy today. We have reduced the size of Government as it operates today. We have saved billions of dollars of wasteful expenditure by the previous Government. We have made sure that her children—
Yes, it is a shame Helen bought those BMWs, but that is the way it goes, I suppose. I mean, it was a bit late once we arrived—but that is the way it goes.
Hon Trevor Mallard Link to this
In light of his comment that Helen bought the BMWs, why did the Prime Minister not read the papers in his office that confirmed the purchase this year?
I am the first to admit that the process was a bit sloppy and we should have had better paperwork, but, I tell you what, talking of papers, I was interested to read in John Armstrong’s column today that Labour is getting out of the gutter. We will see whether that lasts to 2:45 this afternoon.
We are not going to have any of this. I ask the member to resume her seat for a moment. Both front benches will come to order, and especially, on this occasion, the National front bench.
What does he say to another person who responded to his comments about the tax cuts—on Campbell Live, for those who do not believe it—and who is prepared to speak up? She said that she cannot afford the diet necessary for her diabetes and her husband’s heart condition, due to the rising cost of living and the GST rise, and that her family is not living now; they are existing. Is that what he meant when he said people would be better off under National?
There are a couple of things. Let us examine the facts. In the 9 years that Labour was in office, real wages went ahead 3 percent in the entire 9 years. Under a National Government real wages have grown considerably faster than that in the 2½ years we have been in office. Let us look at health, seeing that the member raised it. We are spending more money on health than New Zealand has ever had before. New Zealanders are waiting 4 weeks or less for cancer treatment. We had 20,000 more elective surgery operations committed this year than last year. More New Zealand children are being immunised than before. And tomorrow even more money will be going into health.
Does he think his lack of empathy towards people who are struggling, and his own nonchalant attitude towards his own finances, as shown in the Dominion Post today—that he has not had to check his superannuation balance for the last 8 or 9 years—makes him more or less likely to understand the pressures that a family has every day in counting their pennies?
There is a very good reason why I have not checked my superannuation balance, and that is because when one is Prime Minister one is extremely busy on the thing that really matters, which is the future of New Zealand.
Hon Trevor Mallard Link to this
I seek leave to table a Facebook page of the Hon Bill English where he says—
If it were not for the fact that the member is seriously injured and therefore takes longer to sit down, I would be dealing with him pretty severely. He knows he failed to establish the status of this document. If this document is from a website that has been taken down, then I am very happy to put the leave, but the member should have established what the document is before describing what was in it.
Hon Trevor Mallard Link to this
I can confirm that this document is a Facebook page from a website of the Hon Bill English saying stop asset sales that has subsequently been taken down.