Foss Craig: General Debate 
Foss Craig: General Debate 
[Volume:673;Page:19824] 
Hon CRAIG FOSS (Minister of Civil Defence) 
: 
 Congratulations must be due to Mr Norman and the Greens—congratulations because it now looks like they are writing the economic taxation and fiscal policies of the Labour Opposition. I disagree with their policies but at least they have been clear and certain about those policies for quite some time. I say well done and congratulations again to the Greens. Perhaps they have Mr Cunliffe’s spreadsheet—we will see how we go. 
It is important to note in this debate that right now about 72 percent of New Zealanders face a highest marginal tax rate of no more than 17.5 percent. But Labour members are up to their old tricks. We last saw those tricks in 2008 and Labour is back to them: Labour taxes Labour taxes Labour taxes; Labour spends Labour spends Labour spends Labour spends. Labour increases taxation regardless of the impact on the economy. It taxes and spends regardless of the impact on the economy. 
Let us remember recent history. Labour put New Zealand into recession one full year before the rest of the world went into recession. Members should also note that the export sector the tradable sector under the economic mismanagement of the previous Government went into recession in 2004 early 2005. There was no real growth in the export sector but there was phenomenal and scarily worrying growth in the public sector over that time. Those same policies created the decade of deficits. Members opposite are reinventing history looking at Budget 2008 from then finance Minister Cullen. The one to look at is the pre-election update which is independent and transparent. 
Labour loves taxation. Labour members are now talking about a capital gains tax. What do they do in bed at night? They lie in bed at night and think of new things to tax and new ways to tax. Goodness gracious! What do they want to tax next? We know that they love selling assets and trade sales offshore. We learnt today that there was $9.6 billion in trade sales offshore mostly by members of the current Labour front bench when they were in Cabinet. 
We know Labour members love spending. We know they love spending those increased taxes. But we also know that the increases in their tax policies distort the economy and the property market—the same property market that they allege they are trying to address. Over the period of the Labour Government debt doubled and housing prices increased through the roof. Home affordability decreased and homes became less affordable. 
The capital gains tax that Labour is now promoting is essentially double taxation. We already have a tax on intent. Taxpayers must declare a trading or capital account. The Opposition has actually supported legislation that has gone through changing the rules on “associated persons” in taxation. It supported changes to loss attributing qualifying companies without a murmur. That was it. Labour members support GST without compensation. They love taxation as we saw when Mr Goff was in Cabinet in the late 1980s. Labour would raise business taxes as well. That hurts plumbers that hurts builders that hurts “subbies” and that hurts apprentices. We know that Labour is looking to increase income taxes. To be fair it has been quite public about that but we are interested to know where that will kick in. If Labour increased income tax and brought in a capital gains tax without making some of the other changes the property market distortions will be exactly where they were. 
Labour cannot be trusted on taxes though. It cannot be trusted on taxes. We can recall the last big tax promise that Labour made in Opposition. In 1999 when Labour promoted the increase in the top marginal tax rate from 33 percent to 39 percent the then finance spokesperson Mr Cullen declared that only 5 percent of taxpayers would be in that top bracket. By the time that party left Government over 20 percent were in that top marginal tax bracket. The resulting increase in extra taxation earned was $20 billion every year and there was $20 billion of extra spending every year which crowded out the export sector. That is the reality of Labour’s capital gains tax mismanagement and proposals. 
A capital gains tax will result in higher rents. It will make homes less affordable to those who are trying to enter the home market for the first time. It is a tax on the aged and it is a tax on those who have done the right thing in looking after their retirement by saving—be it through cash bricks and mortar homes or whatever. It is a tax on those New Zealanders who have done the right thing over many years.