Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Unfair, unaffordable, unworkable and hypocritical

Hon Dr Michael Cullen
Minister of Finance

22 August 2005 Media Statement

Unfair, unaffordable, unworkable and hypocritical

Finance Minister Michael Cullen today described National’s big tax bribe as unfair, unaffordable, unworkable and hypocritical.

“The unfairness is obvious. There is no regard to family circumstance and it delivers the biggest benefits to those at the top of the income scale. A person on $20,000 a year would get a tax cut of $6 a week. Two thirds of taxpayers would get less than about $10 a week. Someone on $100,000 a year would get $92 a week. Every Member of Parliament would qualify for $92 a week.

“At 1 April 2007, all two child families on $45,000 or less and all three child families on up to $60,000 would be better off under Labour’s tax relief package. This comparison takes no account of the far greater support Labour is offering for childcare costs than National.

“Moreover, National would cancel the $10 a week per child Family Support increase scheduled for April 2007. That will mean many more children living in poverty as beneficiary families with children would miss out.

“It is reasonable to ask how multimillionaires like Don Brash and John Key can possibly propose tax cuts for themselves at the expense of poor kids.

“The unaffordability should be clear to all by now. It’s even clear to the National Party since John Key said only a few weeks ago that the cost would have to be about $1 billion a year, or $3.25 billion over the forecast period, to be affordable.

“Now, with the various tax rebates thrown in, it’s about $10.75 billion. It takes something to produce a $7.5 billion budget blowout in just a few weeks in Opposition. Just think what National would do if it was ever in government.

“National will need to raise billions of dollars extra in borrowing. And this is not for roads and other capital since National’s promised increased spend on roads last Friday is $630 million less than the government has already committed to since the budget.

“For the first time since the late unlamented Sir Robert Muldoon, we have a major political party promising to borrow to fund current consumption.

“Even then, major slashing will occur to areas of essential spending including health and education. By the end of 2006, hospitals will have to start cutting services because the National Party’s net new spending allowance for Budget 2006 is about what I had envisaged as needed for Vote Health alone.

“It is unworkable because there is no way there will be a majority in Parliament to support it. These are empty promises that cannot be carried into practice.

“Finally, it is hypocritical. National spokespeople have long argued the key taxes to cut were the 39 cent rate and the corporate rate. The former stays and the latter is the last tax to be cut – this despite a promise from Dr Brash only last year that under a National government, there would be an immediate cut in the company tax rate to 30 per cent.

“It is also hypocritical because National in the build up has laid great stress on the issue of big cuts in marginal tax rates. But for those moving off benefits, the cut is at best 2 per cent and for some there is an increase of 18 per cent.

“It is only between $38,000 and $50,000 there is a substantial difference so, despite John Key’s fervent desires, many people would still, thank goodness, choose to watch their kids playing sport on Saturday mornings.

“This is all about bribing people at the expense of core services and increased borrowing. It is fiscally unsustainable and would only lead to another round of savage cuts, asset sales and restructuring which is clearly the hidden agenda in today’s release.

“This shows what Dr Brash really came into politics for: to pick up where Ruth Richardson left off in 1993,” Dr Cullen said.

“For the 66 per cent of taxpayers, who would get around $10 a week tops, this would be a big price to pay for a comparatively small return.”


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines


Also, Loan Interest: Productivity Commission On Tertiary Education

Key recommendations include better quality control; making it easier for students to transfer between courses; abolishing University Entrance; enabling tertiary institutions to own and control their assets; making it easier for new providers to enter the system; and facilitating more and faster innovation by tertiary education providers... More>>


Higher Payments: Wellington Regional Council Becomes A Living Wage Employer

Councillor Sue Kedgley said she was delighted that the Wellington Regional Council unanimously adopted her motion to become a Living Wage employer, making it the first regional council in New Zealand to do so. More>>


Scoop Images:
Dame Patsy Reddy Sworn In As Governor-General

This morning Dame Patsy Reddy was sworn in as the New Zealand Realm’s 21st Governor-General. The ceremony began with a pōwhiri to welcome Dame Patsy and her husband Sir David Gascoigne to Parliament. More>>


Ruataniwha: DOC, Hawke's Bay Council Developer Take Supreme Court Appeal

The Department of Conservation and Hawke's Bay Regional Investment Company (HBRIC) are appealing to the Supreme Court over a conservation land swap which the Court of Appeal halted. More>>


With NZ's Marama Davidson: Women’s Flotilla Leaves Sicily – Heading For Gaza

Women representing 13 countries spanning five continents began their journey yesterday on Zaytouna-Oliva to the shores of Gaza, which has been under blockade since 2007. On board are a Nobel Peace Laureate, three parliamentarians, a decorated US diplomat, journalists, an Olympic athlete, and a physician. A list of the women with their background can be found here. More>>

Gordon Campbell: On The Key Style Of Crisis Management

At Monday’s post Cabinet press conference Key was in his finest wide- eyed “Problem? What problem?” mode. No, there wasn’t really a problem that top MPI officials had been at odds with each other over the meaning of the fisheries policy and how that policy should be pursued... More>>


Mt Roskill: Greens Will Not Stand In Likely Post-Goff By-Election

“The Green Party’s priority is changing the Government in 2017, and as part of that we’ve decided that we won’t stand a candidate in the probable Mt Roskill by-election... This decision shows the Memorandum of Understanding between Labour and the Green Party is working." More>>


Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news