Income Tax Bill: Second reading

Hone Harawira, Member of Parliament for Te Tai Tokerau
Thursday 16 August 2007

In considering policy, the Maori Party always gives consideration to the view that everything has a whakapapa, or a genealogy, just like this Income Tax Bill.

And perhaps we might want to consider this Bill's parentage, and even consider the possibility of doing something to reduce the retard factor brought about by too much in-breeding between Labour and National, by introducing some strong, fresh, positive genes from the mighty Maori Party.

And the major question I have been asking myself while reading every single line of the 2700 pages of this Bill, is why does income tax legislation have to be so complicated?

And this is where the history of this Bill becomes so interesting, because the Bill's purpose states that:

“The key aim of the rewrite project is to reduce compliance costs by producing tax legislation that is clear, uses plain language and is structurally consistent. Clear legislation makes an important contribution to increasing voluntary compliance with tax laws because it makes it easier for readers to identify and observe their income tax obligations.”

Well that’s all well and good – making the law clear, so that people will hopefully pay their taxes, but I gotta tell you, that tax clarity is hardly a topic of hot discussion in my electorate, let alone the complex jungle of new terms that the Bill uses to try to make it "so-called" easier to understand.

Take family support for example.

Now when my wife and I were bringing up our kids back in the 70's and the 80's, we could get the Family Support Tax Credit and/or the Guaranteed Minimum Family Income - two terms - two different sorts of payments.

Now however, when my kids are having children, they are being confronted with a barrage of terms, all of them in this Bill:

family scheme,
tax credit,
child tax credit,
family assistance credit,
family plus family credit abatement,
in work payment,
family support,
family tax credit,
parental tax credit,
social assistance payment, and
family scheme income.

And all these terms mean completely different things to people. The three most well known terms are probably Family Support, Family Tax Credit and the In-work Payment, but now this Bill has just changed them all again !!!

Family Support becomes the Family Tax Credit

Family Tax Credit becomes the Minimum Family Tax Credit and

The In-work payment becomes the In-work tax credit

So having gone from two payment types to eleven, we now find that three of them have just been reworded.

So you know how they talk about how people are getting off the benefit, well, that's because people have simply lost touch with what benefit they're supposed to be eligible for, and aren't getting them anymore.

And I'd like to remind the House that the purpose of the “rewrite project” is to make the legislation clear! Just imagine how bad it would be if they were wanting to make it complex.

Mr Speaker, I'd like us to also take a look at the In-work Payment as yet another example of Labour : a Tale of Two Ditties.

Now one of the ditties Labour likes to warble on about is how they "promote fairness for all", but last night, Labour was pushing for a direct contradiction to that, a blatant discrimination in the young slave rates Bill that will see young workers get only 80 cents to every adult’s dollar.

And again, in contradiction of their "fairness for all" claim, they've also introduced a Working for Families package that clearly discriminates against those families most in need. In fact, this particular matter made me think about something I read in Charles Dickens’ Tale of Two Cities:

"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way"

And that’s exactly what this Income Tax Bill reminds me of.

Mr Speaker, this Labour government crows about helping to eliminate child poverty in the world – and yet in their own backyard they have just withheld, just under three billion dollars, from the nation’s poorest children by their deliberate discrimination, in the form of the In work payment.

And I note that despite protesting against National’s version of the Child Tax Credit when Labour was in opposition - the first policy by the way to discriminate directly against the children of beneficiaries - and promising that they would change the policy when they became the government, it took them 6 years before they actually introduced Working for Families.

And then Mr Speaker, to add insult to injury, they chose NOT to extend the child tax credit to children of beneficiaries, instead selecting only ‘worthy families’ to qualify for the In Work Tax Credit.

What that means Mr Speaker, is that for 250,000 children discriminated by Labour’s ditty of deprivation, this is indeed 'the worst of times, the age of foolishness, the long winter of despair' for it seems patently clear that the point of the discrimination in the Working for Families package, is to punish the unworthy poor – those who would dare to be on benefits and ACC.

But in fact Mr Speaker, the pain … is all for the children.

Mr Speaker, it would only cost $450m to extend the in-work payment to the parents of beneficiary children, but instead, that money – stolen from the poorest homes – is propping up this government’s coffers as surplus, and is now being re-routed to those individuals who can afford to participate in Kiwisaver.

Now the Government calls this justifiable discrimination. Get that.

Rippin' off the poor is now called justifiable discrimination.

The Child Poverty Action Group says that passing laws which impact negatively on the health and well-being of children can never be considered justifiable.

And they point out that the Income Tax provisions which mean that some people won't get the In Work Payment because they're on a benefit, are the basis of their discrimination case against the Attorney-General, which charges that such discrimination is directly in breach of the Human Rights Act and the Bill of Rights.

Mr Speaker, the Maori Party believes that the fruit of economic growth, should mean a more equitable distribution of wealth, through wages and benefits.

We want to raise the standard of living of all individuals in Aotearoa, especially those on lower incomes.

We want to maintain and raise our international competitiveness, but as long as it is measured against a reliable Genuine Progress Index.

We want tax reductions driven by improved efficiencies in the public sector.

We want to ensure that taxation revenues and government expenditures result in acceptable surpluses.

We want our nation’s focus to be on re-distribution of wealth so that everybody has enough income, to participate fully in their communities, and in society.

Mr Speaker, we want legislation that reflects the best of times, the age of wisdom, and the spring of hope.

This Income Tax Bill does not reflect that philosophy – and so we will be voting against it.

Ends

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