John Boscawen: Mr Speaker—
Mr DEPUTY SPEAKER: Is the member seeking the call?
John Boscawen: Yes.
Mr DEPUTY SPEAKER: You have not given your maiden speech. If you were to speak now, it would be deemed to be your maiden speech.
John Boscawen: Yes, it is.
Mr DEPUTY SPEAKER: Yes, it is? I take it that the member is seeking the call. If the member speaks now, his speech will be regarded as his maiden speech. He will not get another chance to make a maiden speech if he speaks now.
John Boscawen: I pass the call, then.
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Hon RODNEY HIDE (Leader—ACT) : I raise a point of order, Mr Speaker. I have looked through the Standing Orders and the Speakers’ rulings, and I can find no rule that precludes a new MP from speaking under urgency because if he or she did so, then he or she would have to forgo his or her maiden speech. The ACT Party agreed to the Address in Reply debate being broken into to do this urgency on the basis that we would be able to contribute to the debate. Mr Deputy Speaker, what you have done, I think, is make a new ruling—which is your right as Deputy Speaker—which essentially precludes the ACT Party from contributing to this important debate. I have two MPs here who are willing and ready to contribute, and I would like you either to point out to me the Standing Order or Speaker’s ruling that says that if John Boscawen or David Garrett speaks under urgency, he therefore cannot give a maiden speech in the Address in Reply debate when Parliament resumes it, or to tell the House that you are making a new ruling.
Hon TREVOR MALLARD (Labour—Hutt South) : It might seem somewhat unusual for me to come to the aid of Mr Hide, but I think the position that he has outlined is correct. There is an expectation that maiden speeches are made as part of the Address in Reply debate. That does not necessarily have to be the case, but as far as the Standing Orders are concerned, and given the times available and the approach we are taking, there is certainly that expectation. I am going a long way back in my memory, but I have vague memories of members back in the 1980s speaking on Committee stages of bills, or in fact on estimates, before they made their maiden speeches. They certainly asked questions before they made their maiden speeches. So the idea that people cannot get on their feet before their maiden speech, or that by getting on their feet they lose their right to a maiden speech, I think is incorrect. Mr Deputy Speaker, if it would help you, I indicate that the Labour Opposition would not object to a leave-type arrangement in order to protect you, but I think your ruling was wrong.
Mr DEPUTY SPEAKER: Thank you, Mr Mallard. The Standing Orders allow maiden speeches to be made during the Address in Reply debate—that is Standing Order 350—and provide for additional time to be made available for members to make maiden statements. The Address in Reply debate takes precedence over other business, and therefore in normal circumstances new members would make their maiden speeches before speaking in any other debate. One of the consequences of our adjourning the Address in Reply debate is that the opportunity for maiden speeches has been delayed. I take on board the point that Mr Mallard just made, and I am prepared to allow the member John Boscawen to seek leave to speak, if that is the wish of the House.
Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Speaker. I think I would prefer you to go further than that, to start with, and to rule that the speech he shall give is not a maiden speech, because it is not part of the Address in Reply debate. I think we should not have to seek leave to deviate from a ruling that appears to be wrong.
Mr DEPUTY SPEAKER: Thank you. I will seek some advice from the Clerk. I am prepared to allow John Boscawen to take the call. I make it clear that his speech is not his maiden speech. He will speak for 10 minutes, with a warning bell at 8 minutes.
CHRIS TREMAIN (Junior Whip—National) : I raise a point of order, Mr Speaker. I have a question: if this speech is allowed to occur, what precedent does that set for the rest of the debate on the items in the urgency motion in terms of allowing new members to take calls in the Committee stage and other stages of debate? I need to have that question answered first.
Hon RODNEY HIDE (Leader—ACT) : The point is that it is not a precedent. The point that Mr Mallard and I are making is that it is perfectly within an MP’s right to stand up and take a call to speak in Parliament, and then, when we go back into the Address in Reply debate, to give his or her maiden speech. The Deputy Speaker is not making a precedent with this ruling; the precedent would be to say that new MPs cannot speak under urgency unless they forgo making their maiden speeches. This is not a precedent ruling; it is simply the Standing Orders.
Hon TREVOR MALLARD (Labour—Hutt South) : I would go one step further than Rodney Hide has gone. It is not a precedent, because it is not new, in my understanding. But to answer the question the junior Government whip asked, I say that it is clear that other new members will also be able to speak in the first readings of bills, the Committee stages, and the second and third readings and not lose their maiden status.
CHRIS TREMAIN (Junior Whip—National) : I want to indicate to ACT that if that is the case, then there is not a clear ruling, and that we would deny leave for that request.
Mr DEPUTY SPEAKER: We do not need to ask for leave. There is no precedent being set. I shall seek further advice, if members will wait for just one moment. Yes, I can confirm that allowing a new member to speak now does not curtail his or her opportunity to make a maiden speech of 15 minutes during the Address in Reply debate.
JOHN BOSCAWEN (ACT) : I thank the Deputy Speaker, and I thank Mr Mallard—
Hon Darren Hughes: The Labour Opposition is here to help.
JOHN BOSCAWEN: I thank the Labour Opposition, and I say long may it remain the Labour Opposition. I am proud to be part of the new National-ACT-M?ori Government, and to speak in support—
Hon Members: Say it again!
JOHN BOSCAWEN: I will say it again. I am proud to be part of the new National-M?ori-ACT Government, and to speak in support of the Taxation (Urgent Measures and Annual Rates) Bill.
I will start by referring back to yesterday’s Speech from the Throne. I quote: “The driving goal of the new Government will be to grow the New Zealand economy in order to deliver greater prosperity, security and opportunities to all New Zealanders.” The driving goal will be to grow the New Zealand economy in order to deliver greater prosperity, security, and opportunities for all New Zealanders, and nothing is more fundamental to driving prosperity than a taxation system that encourages thrift, enterprise, and hard work. How appropriate it is that one of the first moves by the new National-ACT-M?ori Government is the introduction of this tax bill, which makes a number of significant changes to our taxation system.
First of all, the bill introduces a regime where, by 1 April 2011, 80 percent of taxpayers will be paying 20c or less in every dollar in tax. Secondly, it introduces a reduction in the top marginal tax rate—initially from 39 percent to 38 percent, and then to 37 percent. I say that that is the first step, because I believe that the top marginal tax rate should be a lot lower than 37 percent. I thought it was very appropriate that the Hon Michael Cullen asked a question of the House a few minutes ago, when he asked what the main attraction was of going to Australia. What is the main attraction of going to Australia? Let me tell Dr Cullen that the main attraction of going to Australia is the standard of living in Australia, where net wages after tax are a full 25 percent higher than in New Zealand.
What a contrast there has been between the first move of the National Government and the first move of the previous Labour Government. When the Labour Government first came to power in 1999, it moved to increase the top marginal tax rate from 33c in the dollar to 39c in the dollar. Since that time we have had the Labour Government’s 2001 McLeod Tax Review, which recommended that the top marginal tax rate should drop back from 39c in the dollar to 33c in the dollar. Did the previous Labour Government listen to the advice of its own advisers on the McLeod Tax Review? No, it did not. I say that this is the first move of the National Government in this area, because we in the ACT Party believe that the top marginal tax rate should be a lot lower than 37c in the dollar.
When Dr Cullen introduced the bill in 1999 to increase the top marginal tax rate, he said that 95 percent of people would not be asked to pay more tax; instead, only the top 5 percent of income earners would pay more. That has never been the case, and over the last 9 years more and more New Zealanders have moved into the top income threshold of $60,000. More and more New Zealanders have been penalised for working hard and making sacrifices in order to get on and improve their lives. They have been penalised for doing that with the “envy tax” of 39c in the dollar. That overtaxation has cost New Zealand families hundreds of millions of dollars. It has cost New Zealanders jobs, growth, and lost opportunities. Why is that the case? It is because the taxation system has sent a message to all New Zealanders that we do not recognise hard work. It tells them we do not recognise hard work, thrift, and enterprise. It says we want to have a regime in New Zealand that penalises people who want to study, go into higher paying jobs, work hard, and try to provide a higher standard of living for their families.
My colleague the Hon Sir Roger Douglas commented on Government expenditure in his speech to the House yesterday. He talked about how the rate of Government expenditure had increased over and above the rate of inflation by $18 billion over the term of the last Labour Government—by $1,000 a month, or $12,000 a year, per capita. In order to have lower taxes, one has to first get Government expenditure under control. By allowing Government expenditure to grow by more than the rate of inflation on a per capita basis, Labour has cost the average income earner in New Zealand over $12,000 a year.
I say to Mr Cullen—who asked what the main attraction was for people to go to Australia—that the main attraction is for people to enjoy a higher standard of living, with a top marginal tax rate that does not cut well into incomes in excess of $100,000. What has the regime been under Mr Cullen’s Government? It has been a top marginal tax rate of 39c in the dollar on income over $60,000 a year.
The ACT Party, as the party that encourages individual responsibility, enterprise, and thrift, has always opposed Labour’s tax hikes. ACT has been the only party in this House that has been consistent in its approach to tax. We have advocated tax cuts since the party’s inception in the mid-1990s.
Hon Darren Hughes: Why is the member voting for increases?
JOHN BOSCAWEN: I am voting for a reduction in the top marginal tax rate from 39c in the dollar to 37c in the dollar, and I am saying that it is far too high at 37c in the dollar. I say to the member that if his Government had managed to control Government expenditure and keep increases to the rate of inflation, the average New Zealander on the average income in this country would be $1,000 a month, or $12,000 a year, better off. I campaigned at the last election on a policy that would hold increases in Government expenditure, going forward from 2009, at no more than the rate of inflation. We are five MPs, and by 2011 we expect to be a lot more than five MPS. Our forecasts show that if we can maintain increases in Government expenditure at a rate of no more than the rate of inflation, by 2018 we can have a flat marginal tax rate of 20c in the dollar.
In 2005, the Labour Party had the opportunity to reduce the tax burden on hard-working New Zealanders. If the Labour Government had implemented the tax rates that the ACT Party suggested at that time, the previous Government could have added 1 to 1.5 percent growth in the economy, which would have put New Zealand in a much better position to cope with the recession that we are now in. We have now led the OECD countries into the recession.
This bill talks about tax rates, changes to KiwiSaver, and a number of other tax-related issues. Let us talk about KiwiSaver.
Hon Darren Hughes: Yeah, let’s—
JOHN BOSCAWEN: Let’s talk about KiwiSaver, and let us talk about the people that you purport to represent.
Mr DEPUTY SPEAKER: The member cannot use the word “you”. That word brings the Speaker into the debate.
JOHN BOSCAWEN: I am sorry, Mr Deputy Speaker. We have 800,000 people enrolled with KiwiSaver, and, without doubt, KiwiSaver has been a tremendous success—far in excess of what the Labour Government expected. But we have to look at who those 800,000 people are. Are they ordinary working men and women on the average ordinary wage? Can those people afford 4 percent, or are they people who have been attracted by the massive incentives, and particularly parents who have encouraged their children—and infant children in some instances—to take advantage of the very generous incentives? As the Hon Bill English said when introducing this bill, the recession is now upon us, and we have reached the stage where we can no longer afford those incentives.
If we are to improve the livelihoods and living standards of ordinary New Zealanders, we have to increase productivity in this country. There is more to it than reducing taxes. There is more to it than the changes to the KiwiSaver scheme. There is a need to reform the Resource Management Act. There is a need to build infrastructure. There is a need to improve the roading system, and to complete the roading system in Auckland.
Thank you for the opportunity to speak. I say the ACT Party will be supporting this bill.