Cosgrove Clayton: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — In CommitteeText is incorporated into the Bound VolumeCosgrove Clayton: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — In Committee[Sitting date: 03 November 2015. Volume:709;Page:7670. Text is incorporated into the Bound Volume.]Hon CLAYTON COSGROVE (Labour): Like Mr Robertson I am grateful to the Minister in the chair for answering some questions on the previous part and I hope that that will continue as we go on.In respect of Part 2—confirmation of the annual income tax rates—it is interesting to note as Mr Robertson has said that it raises an interesting question: as these rates are confirmed what could have been the alternative? I was debating with one Nicky Wagner on radio on Monday—Grant Robertson: A meeting of minds?Hon CLAYTON COSGROVE: —pass—about the skilled jobs that do exist in Christchurch in the private sector that are required. There are quite a few opportunities despite unemployment moving up—to 6 percent as Mr Robertson said—but the real gap in the whole system is training: training for those young people in apprenticeships and in other ways so that they can fill those jobs.The question that arises as we yet again reconfirm what happened when the Government took office—as Mr Robertson has illustrated—is one could look at the alternative and say that the money could have been redeployed and instead of providing tax cuts that enable the top 10 percent to reap the benefits of 43 percent of those tax cuts it could have gone to reducing unemployment and upskilling our young people and others. The earthquake then sadly rolls through and those young people are there ready willing skilled and able to fill those job opportunities as we go through. That is one alternative that could have occurred.If you look across at Australia at the time of course—unlike what this Government did and reconfirmed every year—during the global financial crisis they targeted their tax cuts at middle and low incomes at those people who cannot actually afford to save it. They have got to spend it and they have got to spend it on the basics of life. That allowed money to flow through the lifeblood of the Australian economy. Yes some people spent it on the odd Lotto ticket but in general people had to spend that money.If you are in the top 10 percent I would argue that well there might be a fair few cases of extra wine and a few other things but you will either retire debt generally or you will save it. It does not allow that money to flow into the lifeblood of the economic system. If Part 2 was to be amended to differing tax rates then those tax rates targeted at low and middle income people—they cannot afford the luxuries of life. They have to spend the dough. They have to spend it and that of course engenders money flowing through the system.That could have been an alternative but we sit here today looking at Part 2. As Mr Robertson has said we may as well get the rubber stamp out and bang it on. That Part 2 is sort of xeroxed out every year. It is just reconfirmed and reconfirmed and the Government is quite happy with the policy it has. However as has been stated—and I think people are getting a wee bit cynical with this—as we move to an election in another 24 months out comes the spectre of tax cuts. But the interesting thing will be whether as we revisit Part 2 prior to the next election—whether those tax cuts if they are going to be put in a bill like this will actually be targeted at people in need. Will they be actually targeted at folks who need them? I am sure that a number of people around here have studied history a bit of political science a bit of theory a bit of practical. I would have thought that the trickle-down theory was discredited 20 or 30 years ago. Maggie Thatcher tried it. Ronnie Reagan tried it. I think most people looked at it and went: “Well it doesn’t really work.” But these guys these geniuses on the Government benches feel that they can just reinvent a tired and discredited old political theory.Every year we come back and we have a Part 2 and they do it again and they compound it again and again and again. This stacks up against evidence as others have said of an income inequality gap that widens and widens and widens and the Government simply fails to acknowledge it through any change through a part like this. They seemed very very comfortable and they seemed extremely comfortable with spending the original tax cuts as we reaffirmed in this part. The top 10 percent gets a big whack. Not spending tax cuts on infrastructure and hospitals and capital expenditure putting value into the economy creating jobs—no simply lining the pockets of those folks who are the recipients of 43 percent of the tax cuts: the top 10 percent of the population. I would be really interested in a response from the Minister on those few points.The CHAIRPERSON (Hon Trevor Mallard): I have probably been negligent in that I did not intervene during Mr Robertson’s speech or at the end of it. I just want to remind members that this is a very narrow debate. The two speeches that we have had so far would have been marginal for a second reading and were certainly outside the scope of this debate. I just want to warn members that we have accepted the principles here and it is now just a question of whether the bill actually does what has been accepted or not. If members have not got some point to make on either side of that then they had better not talk.