20 May 2011

MPs clash over impact of tax cuts

2:00 pm on 20 May 2011

National and Labour MPs disagreed in the Budget debate in Parliament on Friday morning over the impact of the tax cuts introduced by the Government last year.

Labour's Dunedin North MP, Pete Hodgson, said the tax cuts went to the rich and now that it was time to get the deficit under control, expenditure should be cut and taxes increased.

"We want to know," he told the House, "why it is that when the tax cuts came they went to rich people but when the costs are going to be increased they're borne by low- and middle-income earners.

"That's what we want to know. That's the essence of this Budget and it's the essence of the past two years."

Government Whip Chris Tremain took exception to Labour's talk about tax cuts for the rich, saying that under Labour governments nurses, police, and wharfies were in the top tax bracket and when National took power it changed that.

"So on any level of the marginal or progressive tax rate," Mr Tremain said, "people in New Zealand on their income and earnings are paying lower tax rates. That is a fact."