Hide Rodney: Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill — Instruction to CommitteeCWH In Committee 
Hide Rodney: Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill — Instruction to CommitteeCWH In Committee 
[Volume:613;Page:10109] 
RODNEY HIDE (ACT) 
: 
 I rise in support of my colleague Mr Copeland. He has absolutely hit the nail on the head because in New Zealand the more capital we have in our country the more productive we are. The more productive we are the more we produce and the higher our income. I see the Minister of Finance is shaking his head in disbelief. 
Hon Dr Michael Cullen 
: It’s crude but it’s roughly true. 
RODNEY HIDE 
: It is roughly true. Perfect! One of the things we can influence in New Zealand is the cost of capital and as my new-found friend and colleague Mr Copeland pointed out one of the things we can influence regarding the cost of capital in New Zealand is the tax rate on income. I know that Dr Cullen sat there and said: “If we lower the tax rate what can people do? A third will work hard and a third—well it will all balance out.” That was what we heard before tea. But we should think about it in terms of capital because people make decisions about where they invest their money. 
Hon Dr Michael Cullen 
: What has this got to do with Part 2? 
RODNEY HIDE 
: I am commenting on Mr Copeland’s speech. I know that Dr Cullen does not like to hear this. He would rather get up and give a stage I history lecture confuse the income effect with the price effect and then say that when it comes to tax the income effect always overwhelms the price effect because that is what he said before tea. He is certainly wrong on that in terms of the work-leisure trade-off and he is absolutely wrong in terms of capital because we live in a free world. I know that Dr Cullen would like to put an end to it but people choose where they invest their money. They decide whether to invest in New Zealand Hong Kong Japan the United States South Korea or Timbuctoo. 
What do people look at when investing? They look at two things: expected return and risk. After adjusting for risk they look at the expected return. I ask Mr Copeland what that is. It is the expected return after tax. So when we try to raise capital in New Zealand—Mr John Key from the National Party knows this and Mr Rod Donald from the Green Party knows this—the tax on capital income in New Zealand grosses up the cost of capital. It has to. So the higher the tax on income in New Zealand—including capital income—the higher the cost of capital in New Zealand the less capital we have to work with the less productive we are and the smaller our income is in consequence. I wish we had a Minister of Finance who understood that. Mr Copeland understands it and John Key and the National Party understand it. 
Hon Lianne Dalziel 
: What about secret commissions? 
RODNEY HIDE 
: I know that Lianne Dalziel the Minister of Immigration does not have a clue what we are talking about. I cannot help that—she is a member of the Labour Party. Labour members were too busy studying what was happening to the Sandinistas in Nicaragua to learn any basics about how to work or earn an income—basic economics. No they were into world-saving theories. I wish Mr Copeland would say: “Actually I am right”. 
David Benson-Pope 
: Taint. Smells doesn’t it? 
RODNEY HIDE 
: David Benson-Pope sits over there. Has anyone ever heard Mr Benson-Pope say anything positive in this Chamber other than growl and grumble? What a miserable life he must have. I say to Mr Copeland that he is absolutely right and that he should get rid of this rotten Government. He should not vote for this bill; he should vote for lower taxes more capital and a more productive and prosperous New Zealand. I ask him please to stop his support for this mad Labour Government because we can have— 
Hon Lianne Dalziel 
: The ACT party stands for secret commissions unpaid bills— 
RODNEY HIDE 
: Do members not love Lianne Dalziel? Has anyone heard Lianne Dalziel being positive? This is the most negative Government I have ever seen in my short time in Parliament; it has nothing positive to say. It starts from the Prime Minister and goes all the way down to David Benson-Pope who has never smiled in his life and never had a happy day in his life.