Source: New Zealand Parliament – Hansard
Question No. 3—Finance
3. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: Does he think New Zealanders are being fairly taxed, and is he satisfied that the Government has delivered value for the $53 billion increase in annual spending since 2017?
Hon GRANT ROBERTSON (Minister of Finance): It is the Government’s role to ensure that we have a tax system that is fair and balanced, and that we all pay to ensure a fair society where we look after each other. We have made progress towards this, particularly by increasing the top rate of tax to 39c, closing loopholes, changing unfair settings, and improving the collection of taxes from those who seek to avoid tax. But there is always more to do, including making sure that some who do not pay their fair share—including some multinationals—do so. As a point of comparison, I would also add that according to the OECD, New Zealand has some of the lowest tax wedge on labour income among the 38 OECD nations. In answer to the second part of the question, the Government’s increased investment has delivered, among other things, a record 2.855 million people in work, an increase of close to 12 percent above 2017; unemployment at historically low levels of 3.4 percent, compared to 4.8 percent in 2017; more than 50,000 new apprentices and more than 200,000 people in industry training; a significant increase in the number of nurses and doctors, and also making sure that those people are paid more; a world-leading COVID response, which saw tens of thousands of lives saved and the livelihoods and businesses of thousands protected; an additional 10,000 public housing places, as well as thousands more transitional and emergency housing places; and many more things besides, and all the while we’re making sure that public debt is at one of the lowest levels internationally and that deficits, on average, are at lower levels than the global financial crisis.
Nicola Willis: Was the Prime Minister correct to claim yesterday that the Government is taking less tax as a proportion of the economy?
Hon GRANT ROBERTSON: The Prime Minister has today acknowledged that that was a mistake.
Nicola Willis: Does the Minister think it’s fair that the Government is taking more tax from New Zealanders—the equivalent of $17,000 more per household—during a prolonged cost of living crisis?
Hon GRANT ROBERTSON: It is true that the amount of revenue that the Government has taken in over the last few years has increased. A big part of the reason for that is that more New Zealanders are in work, more New Zealanders who are in work are earning more money, more companies in New Zealand are making more money and making more profits, and more activity is occurring in the economy and generating other forms of taxation. So I know that the National Party like to talk down the New Zealand economy, but the reality here is that, actually, the story of the New Zealand economy over recent years is one of strength. During that time, an enormous amount of cost has fallen on New Zealanders and on the Government to respond, among other things, to a global pandemic. So, yes, there is more revenue coming in; there are also significantly higher expenses.
Nicola Willis: Is the Minister’s position, then, that if New Zealanders want a job under a Labour Government, then the price for that is paying higher tax and putting more money into Labour’s pet political projects and wasteful spending, and, at the end of all of that, they should thank the Prime Minister and the finance Minister for spending more, taxing more, and delivering less?
Hon GRANT ROBERTSON: No, that is not the position. The position I have is that we are a Government that has focused from the first day that we arrived on making sure that New Zealanders stay in work. We have unemployment at 3.4 percent—it is historically low—we have more New Zealanders in work than we have ever had before, and, what’s more, on this side of the House we also care how much those people get paid. So we’ve lifted the minimum wage and we’ve supported businesses across the economy to be able to keep people in work and pay them well.
Nicola Willis: Isn’t it the case, however, that comparing the labour cost index with the Consumers Price Index proves that real wages have declined for 2½ years under Labour, and that’s before you count the extra tax they have to pay under his big-spending Government?
Hon GRANT ROBERTSON: As the member knows, the measure that—when I sat in the seat that she’s sitting in now—Governments have used for a considerable amount of time is not the measure that she has put forward. When it comes to annual ordinary hourly earnings, we can see that New Zealanders have—particularly in recent times—been keeping up with inflation. That doesn’t stop it being hard for households. It is tough out there for many households to meet their cost of living pressures. That is why the Government has stepped up time and time again to support New Zealanders through lifting the family tax credit, through improving the rates of main benefits and superannuation, through the winter energy payment, and through the cost of living payment. And, as I noted yesterday, every time the National Party has an opportunity to support a measure to help people with the cost of living, they oppose it.
Nicola Willis: Does the Minister agree that a tax reduction for New Zealanders would help them with the cost of living?
Hon GRANT ROBERTSON: A tax reduction for the highest-earning New Zealanders, which is the policy that the member favours, is one that would have inequitable outcomes. Every Government everywhere in the world would want to be able to say that people could pay less tax, but what a Government has is to do is make sure that the books add up and that we do continue to look to the long term and that we meet the cost of public services that are here in the here and now. The member is at great risk of repeating Paul Goldsmith’s fiscal Bermuda Triangle.
Nicola Willis: Can he confirm that in the last financial year, Government spending reached 35 percent of GDP, higher than at any time during the Key-English Government, even at the height of the Canterbury rebuild, and isn’t the reality that every single Minister opposite knows how to spend New Zealanders’ money but wastes it and doesn’t deliver results?
Hon GRANT ROBERTSON: The height of the spending during the post – Canterbury earthquake period was just around the 34 percent market; we’re up around the 35 percent mark. I don’t want to compare the different impacts of disasters, but I think everybody in this House would accept that a global pandemic of the nature of COVID required a significant response from the Government. I also recall, having been in this House for the last few years, hearing members opposite asking for more spending during the COVID period, not less.
Nicola Willis: Does he share the view of Chris Hipkins MP, who said in a 2011 Tweet, “They like capital gains tax, they think it’s fairer. Me too.”, and will he rule out introducing a capital gains tax while he is the Minister of Finance?
Hon GRANT ROBERTSON: The Government has been very clear about the taxation package that we have put in place to this point. That is the extent of the taxation package that the Government has agreed for this term. I’m pleased that the member is looking forward to my future terms as the Minister of Finance, but we’ll deal with those when they come up.
Nicola Willis: Is it correct that the Minister of Finance is using publicly paid officials to put together tax proposals that he may take to the Labour Party manifesto in the 2023 election, or is it the case that those officials have been told to work on those tax policies because they are, indeed, potential Government policy?
Hon GRANT ROBERTSON: No.
