Norman Russel: Taxation (Budget Measures) Bill — First Reading Second Reading In Committee 
Text is incorporated into the Bound Volume 
Norman Russel: Taxation (Budget Measures) Bill — First Reading Second Reading In Committee 
[Sitting date: 24 May 2012. Volume:680;Page:2432. Text is incorporated into the Bound Volume.] 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 Speaking briefly to this bill the Taxation (Budget Measures) Bill because I do not think it is worth a very long speech the Greens will also be opposing the bill on the basis of the elements in it that are punishing hard-working children which seems a very strange thing for the National Party to be doing by introducing a scheme that makes it harder for children to go and earn a bit of pocket money. I would have thought that the National Party was of the view that we want to get people into the work ethic early on. So we want to encourage them but then the Government is introducing a special piece of legislation to punish newspaper boys. It is having a special piece of legislation coming into the House and there will be millions of dollars spent on it—because you have got all these people sitting around and they are all going to discuss it—so that we can punish kids who are earning a little bit of pocket money. That seems a very strange thing for the National Party to bring to this House as part of its great tax reforms.  
Of course what is really needed in this bill the missing pieces of this bill are the structural transformations in the economy driven by the tax changes. Where is the thing in this bill about introducing a capital gains tax? Why is that not within this bill? If we were talking about making the structural changes in the New Zealand economy so that we can actually move capital into the productive sector then we would have a bill in front of us and part of the bill would be that it was introducing a capital gains tax. When you look at the projections that are in the Budget that was just put out they are for the current account deficit to get worse. Let us be clear: the Budget papers put out today which form the background to the bill in front of us were for the current account deficit to get worse over time. The background to the bill that we have in front of us is the Government’s Budget analysis and it says that as a result of what this Government is doing the imbalances in our economy will get worse. If it was serious about dealing about the real imbalances in our economy then surely it would deal with that and that would be something that would be within this bill.  
I mean to look at it in a larger picture when this Government came in during 2008 the real economy was in trouble. There was a very large current account deficit and large private sector debt but the Government books were in excellent shape. During this period of economic crisis the Government has been able to use the fact that there has been a lot of leeway to borrow money on the Government account so it has borrowed a lot of money on the Government books to buffer the situation we have been through. It had the advantage of that very low Government debt. However when it is kicked out of office in 2014 we are going to have a situation where not only will the real economy still be in deep trouble—because its projections are that it will still be in deep trouble with a large current account deficit and the net international investment position getting worse—and in a bad position like the one National inherited but also there will be no opportunity to buffer it through Government borrowing because National is borrowing $75 billion.  
The big picture that sits behind this Budget is that National is ruining one of the good things it inherited from the Labour Government that came before it which was that the Government’s debt was very very low. That has given it the opportunity to buffer the situation that we are in. When National loses office in 2014 not only will the real economy still be in deep trouble because of the huge current account deficit the huge imbalances in our economy which Bill English quite rightly identified when he first became finance Minister but has done nothing to fix according to his own projections in his own Budget. He has done nothing to fix it but then by 2014 the big buffer that the Government had available to it which was the ability to borrow money on the Government account will be gone. Not only will we be left with very large levels of Government debt but also we will have an underperforming economy with huge imbalances. That will be the legacy based on the projections in the Budget that was presented today of this Government.  
We have a bill in front of us to make some very small changes in terms of “broadening the tax base” as I believe Bill English described these things—putting a tax on newspaper deliverers is broadening the tax base these days—when the real thing that we should have been doing to broaden the tax base and to actually make structural reform within the New Zealand economy is not happening. That is the reality of what this Government has done. That is a terrible travesty; that is a missed opportunity. It had the opportunity to actually begin the rebalancing of the New Zealand economy and it has failed to do it.  
One of the things of course that the Government talks about a lot is Kiwi mums and dads. Well I think in the context of this bill we should also talk about Kiwi mums dads and kids because you know the Government is putting a tax on children. The Government constantly tells us that Kiwi mums and dads have all of this special cash out there which they are going to be using to buy shares in the State-owned assets when they are privatised—and children perhaps as well; I do not know—but the reality for actual real New Zealand mums and dads is that they are struggling to pay the bills. The reality because this Government is so wildly out of touch with the real world is that real Kiwi mums and dads are struggling to pay the bills so they do not have lots of cash out there that they can use to buy shares in these State-owned enterprises which they currently own as taxpayers. They are actually struggling to pay the bills because GST was put up by the Government in order to pay for tax cuts for upper income earners. The reality for real mums and dads is that they have to pay more for their food because the Government increased GST. Why did it increase GST? In order to pay for tax cuts for the wealthy—for upper income earners. That is a ridiculous fiscal strategy and it is an offensive fiscal strategy.  
The Green Party will not be voting for the bill to tax hard-working kids. We think it is a ridiculous proposal. What we would like to see the Government bring to this House are some actual proposals that will rebalance the economy and make some real reforms rather than this kind of legislation.