Dalziel Lianne: Appropriation (2011/12 Estimates) Bill — Third Reading Imprest Supply Debate 
Dalziel Lianne: Appropriation (2011/12 Estimates) Bill — Third Reading Imprest Supply Debate 
[Volume:674;Page:20507] 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I have listened to members opposite talk about the household and I consider that some of their comments have been somewhat patronising: “Don’t live beyond your means.” and: “You’ve got to make sure that you don’t borrow more than you can afford to service in terms of your mortgage.” But they do not take their analogy that one step further. And what is that analogy that they have not managed to bring into the debate thus far? The advice they would give the ordinary householder in New Zealand is to sell their house and rent it back from whomever they sold it to. That is exactly the advice they would give: sell the house and rent it back. Does that leave the ordinary householder with an asset? No that actually divests them of the one asset they will have in their lifetime that they can guarantee they are able to pass on to their children. They cannot pass on their rent situation to their children; they can pass on their asset. That is what National Government members never say when they are talking about this. 
Let us have a little unpacking of the asset-sale argument. National members are not telling the public that the asset-sale argument is fundamentally flawed in terms of the essential asset or dividend-stripping that it bequeaths to generation after generation after generation. This is not something that happens just overnight. The return is something that happens just overnight but the long-term effects are paid for not by us but by our children and our grandchildren and their children beyond. It is economically illogical to sell our country’s energy State-owned enterprises in order to pay down debt. The dividend yield of the four companies was 7.6 percent last year which exceeds the 10-year bond rate of 6 percent so the Government will be a net loser by selling half of each energy company to avoid raising new debt. 
John Key says he wants to give Kiwi mums and dads the opportunity to own a stake of the State-owned enterprises. But they already own State-owned enterprises; that is what public ownership means. I have a very old poster on my wall from the 1980s and it has a wonderful picture of these private sector vultures sitting on the sideline eyeing up the hospitals and the various other State assets. The subtext is public they’re ours; private they’re theirs and that is exactly what is going on here. The Government is willing to sell off this country’s future for the short-term gain it would provide to our balance sheet. 
Foreign investors—not mum and dad investors—are the true winners from privatisation. Since Contact Energy was sold offshore by National in 1999 it has paid $1.5 billion in dividends to its private mainly Australian shareholders. I do not think the people of New Zealand will fall for it. They know this election is a referendum on asset sales and I know on which side of that argument they want to fall. 
This bill represents a Budget that does not treat New Zealanders in an even-handed fashion. I think New Zealanders have that kind of fairness in the way they think about things the way we think about things. The fair suck of the sav I think is a Kiwiism if there ever was one. When everyone pays their fair share that is what it is about—people paying their fair share. What this Budget does however is reinforce the advantage this Government gave to the highest-income earners with massive unaffordable tax cuts. They were massive and they were unaffordable. They certainly advantaged those at the very highest rung of income earners in this country. The Budget has also exposed the impact that the GST increase has had on the economy as a whole but particularly on lower-wage earners and those on fixed incomes like superannuation. 
This Budget also reinforces the stark reality of a Government that simply does not have a plan. I cannot believe it. After 2½ years in Government—and National had 9 years in Opposition—those members still do not have a plan. They do not have a plan. I have developed a particular interest this year in something called disaster recovery because for obvious reasons in representing the eastern suburbs of Christchurch it is quite plain that disaster recovery is an important feature of our lives going forward. Everything I have read about disaster recovery starts with the planning process. It is so fundamental that it is an engaged process and one that really identifies any pre-existing vulnerabilities in order to ensure that when we build back we build back better and stronger and in order to ensure that we are better prepared to withstand future disasters. 
It seems to me that the situation we face in New Zealand in light of the impact of the global financial crisis is exactly the same as the one we face in Christchurch. I think we should take some of the lessons from the disaster-planning model and apply it to our own economy. I have to say though that international best practice on disaster-recovery planning is not happening in Christchurch at the moment but it should be. The principles that underpin it are what should guide our response to the recession. As in Christchurch there is no plan and despite all of the smiling and waving there is no one in charge. The Prime Minister said he would turbocharge the economy but he has not managed to get beyond kicking the tyres as we all know. 
If we look at our pre-existing vulnerabilities—and I think this is the most serious point—we see New Zealand’s love affair with property speculation gaming the absence of a capital gains tax to ensure that the income a sale generates is not taxed at all. That has been part of our problem. That is a pre-existing vulnerability and if we are going to withstand future crises—because they will come as sure as eggs are eggs; we are in a cyclical environment—we have to be better prepared and we have to deal with that anomaly. The reality is that not all income earned in this country is taxed and somebody has to have the courage to face up to that and to address it. Not only does that mean that people are not paying their fair share—and that is a huge issue but it is not the only issue—but it means that first-home buyers have no hope of owning their first home as property attracts investment dollars that are guaranteed a tax-free return. That is a fundamental problem and if we really want to take this country forward that is a problem we must address. 
National members have said in their contributions to this debate that Labour is wrong for promising to introduce a capital gains tax. I think possibly there are two reasons for that. One is that the increase National made to GST was not signalled ahead of the election. In fact it specifically said it would not increase GST so maybe members think it is a bad idea to tell people what they will do before they do it. We on this side of the House think it is better that we are upfront with people and tell people that we will introduce a capital gains tax. Let us not allow National’s approach of being not completely upfront about what it will do after an election to stand in the way of what needs to be done. 
The bottom line is this country needs to have a tax plan that does not skew investment towards unproductive speculation and away from the real economy. That is why Labour’s tax package has been welcomed by those who recognise that it is time for what is essentially a level playing field to attract investment dollars. We want to attract investment to our productive sectors to the real economy to the economy that generates real income: the well-paid jobs the ones that will not have to rely on Labour’s policy of increasing the minimum wage to $15 an hour. We are not ambitious for every New Zealander to be paid the minimum wage. We want people to have well-paid jobs and highly skilled jobs. We want to have an economy that is able to produce real jobs that take New Zealand’s small economy to the big wide world as it were and enable those companies with those big ideas to invest in those international markets. 
That is why the research and development tax credit is another critical component of our policy. It enables our companies to undertake the innovative work they need to in order to ensure that New Zealand secures its place in the world. That is the sort of Budget we should be debating at this time but tragically we are not.