Parker David: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — Third Reading 
Text is incorporated into the Bound Volume 
Parker David: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — Third Reading 
[Sitting date: 25 October 2012. Volume:685;Page:6240. Text is incorporated into the Bound Volume.] 
Hon DAVID PARKER (Labour) 
: 
 We heard from the last speaker Todd McClay that New Zealand is doing well from the far north to the far south. Well from the north to the south people are losing jobs—from the north to Bluff. Today on the West Coast another 200 people lost their jobs. There are 160000 people seeking jobs and 170000 people under this Government have left for Australia after National’s election promise in 2008 ran on the slogan “Wave Goodbye to Higher Taxes. Not Your Loved Ones.” Since then more people have moved to Australia than is the combined population of Dunedin and Invercargill if you want a South Island comparison and more people than live in Hamilton if you want a North Island comparison. Yet this bill the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill does nothing substantial to change the economic fortunes of our country. 
What could this bill have done? Well this bill could have done something substantial but of course you never get that from a National Government. All National Governments have ever done through history—and this National Government is no different—is trim Government expenditure. That is appropriate; we are not arguing against that. Trimming Government expenditure to get back into Budget surplus is an important thing to do. National Governments deal with labour laws in the way they think fit which is always to reduce wages. Other than that National Governments never never embark upon substantial economic reform—never. They are conservatives and conservatives around the world trim expenditure cut back labour laws and do nothing else. It is always the progressive side of politics around the world whether it is in New Zealand Australia or Great Britain that pulls the levers that change the economy. If you look back at the history of New Zealand when New Zealand has been in the doldrums it has been progressive parties that have come in and made the fundamental changes that were necessary to the New Zealand economy. That was true following the Great Depression. What did the National Government do in relation to the reforms of the then Labour Government following the Great Depression? It followed them. We then got into a period of stagnation under Mr Muldoon and it was a progressive Labour Government that made the case for change and changed New Zealand’s economy fundamentally for the better. What did National do following that? Well what it always does: it attacked labour relations it did not change economic settings and it cut Government expenditure a little bit but it did nothing substantial to alter the shape of the economy. Here we are again with a global financial crisis and the greatest recession that the world has faced since the Great Depression in the 1930s and what is the National Government doing? Very little. 
What has happened to New Zealand? Well slowly we are getting back towards Budget surplus. That is the Government’s part of the equation. But New Zealand is getting poorer every year because we have a balance of payments deficit that is already second worst in the developed world after Greece. 
Hon David Cunliffe 
: What? 
Hon DAVID PARKER 
: The second worst in the developed world after Greece. Last year alone it was $10 billion. That $10 billion hole was plugged through more borrowing from overseas and the sale of assets and what is the Government’s plan for this 3-year cycle? Its big plan for this 3-year cycle is to sell what already exists to privatise our already profitable and successful power companies—what you do when you do not have a plan. Even that has gone amiss. What was its plan for its last 3-year term? Mining in national parks. Look where that is. What has been the big centrepiece of the Budget this year? Increasing student performance through larger class sizes. The Government is so bereft of vision and this bill amplifies the point. 
I see Dr Nick Smith there. I actually think Dr Smith has a good environmental ethic. I think he actually wants to make a difference to the environment. What is the measure that we have in New Zealand to control the growth in our emissions under this National Government? It is meant to be through pricing emissions to create an economic incentive for people to go green rather than pollute more. In this bill we have changes to emissions units law relating to forestry. The last bill we heard reduces the carbon price in New Zealand to 50c a tonne. As Brian Fallow estimated today for a major emitter if it has $1 million of turnover its emissions cost would be $200—$200—a fraction of a fraction of a fraction of 1 percent. How can you rely on a price to alter behaviour if the price is meaningless? 
What else could be done here? Well the International Monetary Fund the OECD the New Zealand Treasury the Reserve Bank the Labour Party the Greens just about every other Western country in the world and virtually all of the economists in New Zealand say that people should be investing in our economy on the basis of the profitability of investment not because of a tax bias. In New Zealand at the moment we lament the fact that we have got this enormous trade deficit and current account deficit—both—and the current Government refuses to pull the levers that will fix that including to bring forward some pro-growth tax reform either through a research and development tax credit or through a capital gains tax. The most important of those two is a capital gains tax so that people invest on the basis of the profitability of an enterprise rather than a tax bias driving too much investment into the speculative economy. It is not just the Labour Party saying that. It is not just the history of 30 years of current account surplus because we speculate too much in houses and do not invest enough in our productive export or import substitution businesses. It is the IMF the OECD Treasury and the Reserve Bank and yet it is not in this bill and the Government has put it off limits. 
What else is not in this bill? KiwiSaver. We heard the National Party talking about KiwiSaver. Actually it was not National’s policy; it was a Labour Party policy. I think the Budgets that introduced it were opposed by National from memory. Everyone knows that the biggest difference economically—or I believe the biggest difference economically—between New Zealand and Australia and its increasing rate of earnings compared with New Zealand over the years is not mining. It is not mining. Those gaps in earnings arose when mining was in the doldrums. Those gaps arose because Australia invests more in its productive enterprises whether it is in mining or in other parts of the economy and it does that because Australians save more. Its KiwiSaver equivalent is compulsory for everyone in the workforce except for the self-employed and the occasional exception for hardship. That is what the Labour Party proposes for New Zealand. What does this bill do? As Dr David Clark says it reverses the Government’s earlier reversal. Previously it reduced the rate of contribution to KiwiSaver; now it is increasing it again to “3 plus 3” but still it has not grasped the big nettle which is making it universal. We heard the last speaker say that the average number of enrolments to KiwiSaver was so many thousand per month. What a misleading use of statistics. In just the last week it has been announced that the rate of new sign-ups to KiwiSaver is dropping—dropping very substantially. It will not increase again until we have a stronger economy under a Government led by a party other than this backward-looking National Party and until we have a universal KiwiSaver scheme. 
Let us reflect on what this tax bill also does not do. It does not reverse the increasing inequality that we have in New Zealand. Whether it is income inequality or asset inequality it is going up under this Government. It is going up in part because 40 percent of its income tax cuts went to the top 10 percent of income earners. This bill does nothing to reverse that. The latest issue of  
The 
Economist  
magazine says there is a need for more progressivism in the world because of rising asset and income inequality in the world. New Zealand has had a higher rate of increase in inequality in recent years than America. We started from a better place and therefore we are not yet as unequal as America but we are heading in that direction because of policies brought forward from this National Government that gave 40 percent of its income tax cuts to the top 10 percent. We had the audacity of the Deputy Prime Minister the Minister of Finance turning up in the House this week and saying that average after-tax incomes had gone up. Well that is true but only if you include that top 10 percent. For more than half of all New Zealanders real incomes are down—real incomes are down. This bill is a missed opportunity. It only tinkers.