Robertson Grant: Taxation (International Investment and Remedial Matters) Bill — First Reading 
Robertson Grant: Taxation (International Investment and Remedial Matters) Bill — First Reading 
[Volume:668;Page:15137] 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I rise to speak in the first reading of the Taxation (International Investment and Remedial Matters) Bill. It is important to pause briefly to note the name of the bill—the Taxation (International Investment and Remedial Matters) Bill. The bill is not called the Taxation (International Taxation Life Insurance and Remedial Matters) Bill which was the title given in the speech that Jonathan Coleman gave to open the first reading. He gave the same speech that the Hon Peter Dunne gave when he introduced the Taxation (International Taxation Life Insurance and Remedial Matters) Bill. So Dr Coleman gave the wrong speech but I ask whether members know what makes it more interesting. The speech that Peter Dunne gave which Jonathan Coleman read out again tonight was given on 23 July 2008 when Mr Dunne was in fact a Minister in a Labour Government— 
Carol Beaumont 
: An oldie but a goody. 
GRANT ROBERTSON 
: An oldie but a goody indeed. I have Peter Dunne’s speech of 23 July 2008 in front of me and can clarify for Dr Coleman that it is word for word. 
Hon Dr Jonathan Coleman 
: I’ll have to have a word with him about that. 
GRANT ROBERTSON 
: I think Dr Coleman probably delivered it with slightly less enthusiasm than Mr Dunne certainly when Dr Coleman worked out that the speech was not actually about the bill we are debating tonight. I certainly will table that speech at the end of my speech just to make sure that we can all see that Dr Coleman read out the same speech that Peter Dunne did except it was about another bill. 
John Hayes 
: It’s consistency for you. 
GRANT ROBERTSON 
: Mr Dunne is the one who has been inconsistent I say to Mr Hayes. He was a Labour Minister when he gave the speech the first time anyway. I say to Dr Coleman that I am sure that we are all grateful for hearing that great speech from Mr Dunne from July 2008 once again in the House tonight even if it is not about the bill that is before us tonight. 
As Labour colleagues have said we certainly are supporting this bill to go to the Finance and Expenditure Committee. It is a dense taxation bill; it is not a bill that I would normally have much time to focus on but I have been pleased to look at it tonight. I can see elements in this legislation that look like they will be worthwhile and will make reforms in the way that New Zealanders are taxed for income from interests in overseas entities and the gains of foreign residents from interest in New Zealand companies. That is a difficult area of taxation and a complicated area of taxation and it therefore deserves select committee scrutiny. It aims to provide consistency of tax treatment between similar types of investment and it achieves that by extending the active income exemption and the active business test with some small modifications to non-portfolio foreign investor funds. This side of the House can certainly understand that the bill will be welcomed by a number of investors and that it deserves the attention of a select committee but some of the questions we will be asking on this side of the House are around just who will benefit from the changes. 
We have become suspicious over time about the way that National constructs its taxation programme and its taxation legislation. We certainly saw that when the tax switch—or the tax swindle as some people have called it—was brought into this House essentially tilting the tax system in favour of the top earners in this country. We heard from the previous Government speaker Sam Lotu-Iiga about the great programme that National has had in office and its fantastic track record when it comes to taxation. But all this side of the House sees in terms of a track record on taxation is taxation policy that favours the wealthy in our society. Although National might be prepared to go back two decades to trickle-down economics and hope for the best that that will lead to an economic recovery for New Zealand we do not believe that is so on this side of the House. We believe that when we look at the overall economic programme—and taxation policy is part of that—we have to adjust ourselves to a modern world; we will not go back to failed economic policies like trickle-down economics. We need a taxation system and an economic policy that will deliver for the exporters of New Zealand that will deliver high-quality jobs for New Zealanders and that will deliver high-tech clean green industries. 
Mr Lotu-Iiga stood up and talked about the changes that National had made. One thing that he did not talk very much about was the change to the research and development tax credits—the removal of the research and development tax credits. There are varying views about tax credit systems around the world but one thing is absolutely clear when it comes to research and development tax credits: Australia has a tax credit system and many people I spoke to when Labour brought in our tax credit system said that the best thing about it was that we were matching the Australians. It meant that the incentive to take their business—the research and development part of their business—offshore had gone. But National came into office and got rid of the research and development tax credits and that was a negative moment for businesses in this country. It took away an incentive to improve what most people acknowledge has not been a great record on research and development in this country. Mr Lotu-Iiga might be proud of National’s tax record but the truth is that National walked away from an opportunity to enhance investment in our businesses and increase research and development which is so vital for New Zealand. 
When Labour members look at this bill we are concerned about the way that National has gone about some other major elements of its tax policy—GST being the obvious one. On 1 October GST went up by 2.5 percent and it is worth reminding the House that John Key went into the 2008 election saying that GST would not increase. He said that GST would not increase. The video is out there for anyone who wants to watch it. Mr Key has stood up in this House and said that it all depends on what context he was talking in. The context he was talking in was whether GST would go up under a National Government and he said that it would not. 
David Shearer 
: You can’t get around it really can you? 
GRANT ROBERTSON 
: He cannot get around it and that kind of broken promise on taxation policy is the very reason why people on this side of the House look very closely at all taxation bills that come before this House to see who will benefit from them. We know that the people who will be most affected by the increase in GST are those on the lowest incomes. They got the least out of the tax cut package and they are most affected by the increase in GST. It is a double whammy and we know from talking to families all around New Zealand that the impact of this Government’s tax policy has been negative for those on the lowest incomes. Families who thought that they would be better off because the National Government had promised them tax cuts are actually finding themselves worse off—in some cases up to $50 a week worse off when we build in the impact of ACC levy rises and the cuts to funding for early childhood education. Those families are already struggling with cost of living increases. 
Here in Wellington people have come to see me about something as simple as bus fares going up. When bus fares go up it puts huge pressure on people who rely on buses as their mode of transport. In Wellington bus fares effectively went up for some people by $40 a month if they caught the bus every day—$40 a month. That is a big chunk out of people’s disposable income. Their power prices may have gone up; here in Wellington customers of two or three of the power companies have had letters telling of a 6 percent increase in power prices. That is an added increase for families who are struggling and not benefiting from the tax policy of this Government. 
I do not claim to be any kind of expert on taxation but as my colleague Raymond Huo said before it is about priorities. It is about the priorities this Government gives in terms of where it wants to take New Zealand into the future. I ask whether the priority is investing in people in skills in training in supporting people into work and making sure that all New Zealanders can achieve their potential or whether the priority is making decisions about trickle-down economics hoping for the best and rewarding the privileged few rather than developing the potential of the many. 
It is sad for me that we have a taxation bill here. Jonathan Coleman has nearly caught up now with which bill we are actually debating. But this taxation bill is fine it should go to the select committee and it should be discussed. But when it comes to tax policy this Government has sadly broken its promises as part of an economic plan that it has not provided to New Zealanders. What we see is a Government without vision and in the case of tax policy favouring the privileged few over struggling New Zealanders who need support.