Nash Stuart: Taxation (Budget Measures) Bill — In Committee 
Text is incorporated into the Bound Volume 
Nash Stuart: Taxation (Budget Measures) Bill — In Committee 
[Sitting date: 20 May 2010. Volume:663;Page:11145. Text is incorporated into the Bound Volume.] 
STUART NASH (Labour) 
: 
 I heard the most amazing thing in the Chamber when my colleague the Hon Damien O’Connor was speaking a few moments ago. He asked what this Government had done to increase the growth of this economy and Dr Wayne Mapp who is the Minister of Research Science and Technology said it had cut taxes. That was what the Minister of Research Science and Technology said about how to grow the economy. He said the Government had cut personal taxes. My colleague David Shearer stood up here and asked what had happened to the funding for research and development which we need in order to drive the economy forward. The best answer that the Minister could come up with was to cut personal taxes. 
I can picture National Ministers sitting around the Cabinet table and Bill English asking what the Government could do to drive the economy. Dr Wayne Mapp would have had his head down and Bill English would have asked Dr Mapp what he thought the Government should do to drive economic growth. His reply would have been that National should cut personal taxes. Why did he not stand up and say the research and development spend needed to be increased or that we should at least go back to what Labour did? Did he stand up and say that? Did he stand up and fight for those companies in this country that require research and development funding in order to drive this economy forward? That is what is needed. We have the smart men and women of this country saying we need to invest in research and development and develop a high-class highly educated economy. We need companies that can take things to the global market. The Government has done nothing about that. It has cut research and development spending to half of what Labour provided. It is one of the more ridiculous things that I have heard in this House and I think it is a crying shame. Quite frankly it astounds me because I really thought Dr Mapp was better than that. 
I would like to talk about another thing that astounds me— 
Craig Foss 
: Satisfaction! 
STUART NASH 
: —because we cannot get any satisfaction from this Budget. The vast majority of Kiwis have got no satisfaction. A speaker stood in this Chamber and talked about the shameful Dr Cullen. I will not hear a bad word said about that man in this Chamber. Do members know why? It is because under his management we halved gross Crown debt and when he left office there was no debt. Dr Cullen had to listen to John Key and Don Brash baying for tax cuts. They said New Zealanders must have tax cuts. If Dr Cullen had listened to them then we would be in the same situation as Greece. Dr Cullen paid down debt. In fact the Governor of the Reserve Bank in his latest  
Financial Stability Report 
 
said the reason that the New Zealand economy is doing as well as it has in this recession is the state that Dr Cullen left the books in. He did brilliantly and his legacy is sound. 
This Government is destroying Dr Cullen’s legacy. Dr Cullen refused to borrow for tax cuts. Dr Cullen knew that an economy has to be managed prudently. He knew that tax cuts are inflationary. I will tell members one thing that Dr Cullen never did: he never looked at the camera and said he would not increase tax then increased tax. That is what John Key did. He stood in front of the camera in front of every New Zealander and said he would not increase GST. Well he has done that; he has increased GST. He also said he would not borrow in order to fund tax cuts. Well he has done that. 
I turn to clause 45 of this bill which deals with increasing the rate of GST. The GST rate is increasing from 12.5 percent to 15 percent so one assumes that everything will increase by 2.5 percent. I have news from this side of the Chamber: that will not happen and I will give members an example of why it will not. Retailers price things with psychological considerations in mind. That is why we pay $49.95 not $50 for goods. The GST increase on that amount means that the price should go up to $51.06 but no retailer will price anything at $51.06. The next level is actually $54.95 which is a 10 percent increase. This also comes back to the poll done in the  
New Zealand Herald  
where 33 percent of small to medium sized businesses—