Speaking to the Parliament’s Finance and Expenditure Committee, Parker was asked various questions about whether the Report would be used to change the tax system, here's his response to different questions from both the Greens and National. Also, Grant Robinson called it "an information gathering exercise".
Green MP Chlöe Swarbrick pushed on the other obvious point: what if Inland Revenue’s research discovers that the wealthiest aren’t paying their “fair share”? What would Parker do if he discovered the tax system wasn’t fair?
“Perhaps nothing,” Parker said.
“It just gives us an information base on which to base future decisions.
“We’ve made commitments that we’re not making new taxes this term, other than the 39 per cent tax increase,” Parker said.
“It’s become apparent that the traditional measures of income and wealth distribution in New Zealand are inadequate,” he said.
Swarbrick came around for another go, asking whether Parker would use the research to make sure the tax system treated all sorts of income fairly – that is income generated from ordinary work and income generated from wealth, often called “economic income”.
“Who is the arbiter of that – do you intend to set out a definition of what fairness looks like?” Swarbrick asked.
Parker was noncommittal: “those decisions haven’t been finalised, but I think most people would be interested in the economic effects of income rather than its name” he said.
National, sensing Labour might be about to budge on its pre-election commitment not to introduce any taxes that weren’t in its manifesto, quickly got Parker to rule out any big changes.
Housing spokesperson Nicola Willis led the attack.
“Is it anything more than a research unit to provide you with the database for campaigning for a wealth, inheritance, or death tax at the next election?” Willis asked.
Parker denied that it was: “I’m not planning a wealth, inheritance or death tax, and I’m not seeking advice from my ministry on those issues, so the answer to those questions is it isn’t any of those things”.
The suspicion the Government might use the research to implement new taxes largely stems from the fact that the appropriation runs for just two years, rather than the usual four. This means it expires in 2023 – election year – leading some to speculate that whatever emerges from the research might be taken to the 2023 election as Labour policy.
On his way into the house, Finance Minister Grant Robertson said the money wasn’t intended to form the basis of any tax policy the Government would take to the election.
“That’s not it’s intention – it’s an information-gathering exercise,” Robertson said.
The quotes are from this article...
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Less than two years later, based on the information prepared in a report (which had a budget of $5,000,000 to prepare), both Parker and Robinson were going to introduce a wealth tax.... until Hipkins stopped it. Oh, and the changes to the lowest tax bracket to not tax the first $10,000 of income would have given people a larger tax cut than the income tax bracket changes National campaigned for.
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