Questions & Answers for Oral Answer TUESDAY

Questions & Answers for Oral Answer TUESDAY, 4NOVEMBER 2003 (uncorrected transcript,subject tocorrection and further editing)Questions to Ministers:1. Taxation,Policy2.Ministerial Confidence,Police, Minister3. Land TransportManagement Bill,Auckland Rosetta Stone software Issues4. Solomon Islands,Policeand Defence Deployment5. Child, Youth and FamilyServices, Department,Baseline Review6. Te WhareWhakapikiora O Te Rangimarie Trust,Funding7.Australia,New Zealand Relationship8. Child, Youth andFamily Services Department,Election Promises9.Ministerial Confidence,Health, Minister10. Corrections,Department,Supervision of Paedophile11.Students,Achievement Levels12. Environmental RiskManagement Authority,Policy back totopTaxation,Policy1. CLAYTON COSGROVE(Labour,Waimakariri) to the Minister of Finance: What arethe Government's priorities for changes to the taxsystem? Hon Dr MICHAEL CULLEN (Minister of Finance): TheGovernment is engaged in a comprehensive programme of taxsimplification and compliance cost reduction. We also planto introduce a package in the 2004 Budget to deliver incomeincreases, including through the tax system, to low andmiddle-income families.Clayton Cosgrove: Has the Ministerreceived any reports on other possibilities for tax changes?[Interruption] Hon Dr MICHAEL CULLEN: And can I add mywelcome to Dr Brash. I have seen a report advocating areduction in the top income tax rate and the corporate taxrate to 30c in the dollar. This would deliver nothing toanybody earning under $38,000 a year.John Key: Earningless under you.Hon Dr MICHAEL CULLEN: I notice the spyhas not come in from the cold, just yet! This would notdeliver anything to anybody earning under $38,000 a year,and would place considerable pressure, both on the fiscalposition and on the economy where the domestic sector ismoving very strongly. It is no wonder thatNational,post-coup,is described as a bunch of derangedhaemophiliacs arguing over Rosetta Stone Italian which is the best band-aid.MrSPEAKER: That last phrase was out of order, and I ask thatit be withdrawn.Hon Dr MICHAEL CULLEN: I withdrawit.Dr Don Brash: Given the Ministers own preferredmeasure of the Budget balance shows the surplus in the yearto June 2003 was $5.6 billion, is he determined to continueovertaxing hard-working New Zealanders, if so, is thisrelated to his need to fund his planned election yeargiveaways?Hon Dr MICHAEL CULLEN: It is a bit rich, as wemight say on this side of the House, to describe a programmedesigned to deliver better incomes to low and middle incomepeople as a give-away, but tax cuts for people on manyhundreds of thousands of dollars a year as, presumably, goodeconomics.Dail Jones: Why does the Government givegreater priority in its changes to the tax system to givingtax incentives for foreigners in the film industry, whilefailing to support New Zealanders in export businesses withtax incentives such as the New Zealand First proposal for a20 percent tax rate, especially bearing in mind thiscountrys seriously deteriorating balance of paymentssituation?Hon Dr MICHAEL CULLEN: The film industry offersthe opportunity for substantial development of employmentand wealth creation within New Zealand. But I think if themember actually looked seriously at his proposal on taxrates, which differentiates between an exporting business ora non-exporting business, and which part of it is exportingand which part of it is not, he would find that hugecompliance costs would be created in trying to operatingdifferential tax rates in that regard.Rod Donald: Whydoes the Minister continue to refuse to give middle andlow-income workers in this country Rosetta Stone Japanese the same 6 percent taxconcession that those who earn over $60,000 currentlyenjoy?Hon Dr MICHAEL CULLEN: The roughly $79 million ayear cost of that will be far better spent if there wereother mechanisms designed to address and to assist savings.