Foss Craig: Taxation (Annual Rates and Budget Measures) Bill — In Committee Third Reading 
Foss Craig: Taxation (Annual Rates and Budget Measures) Bill — In Committee Third Reading 
[Volume:672;Page:19002] 
CRAIG FOSS (National—Tukituki) 
: 
 Hopefully there are still a few people listening to the radio. The third reading of the Taxation (Annual Rates and Budget Measures) Bill is associated with the Budget and the reconfirmation of the income tax rates PAYE rates changes to KiwiSaver and some changes to Working for Families. They have been well canvassed by some members of the House and extrapolated upon and fantasised upon by others. 
The Budget announced yesterday by the Minister of Finance is about savings. It is about building savings. It is about the integrity of savings. It is not about borrowing to save. 
Regardless of what we have heard from the previous speaker David Cunliffe and other speakers we have yet to hear where Labour’s $45 billion - odd of various promises over the forecast period will come from. We have no idea. But one thing I can say to the previous speaker is that if things were so rosy if the books were so good in the last year of the last Labour Government then why did New Zealand vote Labour out of office so convincingly? Perhaps it is because New Zealand also looked at the pre-election update which showed the decade of deficits and showed all those numbers that affected the fiscals as opposed to the 2008 Budget that members on the other side of the House keep referring to. The key document is the pre-election Budget and the travesty of the decade of deficits that it revealed to the public after 9 years of the previous Government. But the good news is that the decade of deficits is no longer upon us. This Budget showed us we will come very close hopefully to surplus in 2015. That is not too bad. 
I note a very interesting and good point that the Hon Peter Dunne made in his third reading speech. If the bill that is before us is so bad if Opposition members dislike the income tax rates in it so badly and think they should be altered if they do not like the Working for Families changes if they truly do not like the KiwiSaver changes and if they have a plan—maybe a decent spreadsheet as the member opposite apparently has; fully costed allegedly—then why did they not table an amendment to any part of the bill? During the Committee stage not one amendment not their tax tables or suggestions or an amendment to the KiwiSaver changes was tabled. This is the bill that would enable that. It points to the fact that perhaps Labour members do not have a plan costed or otherwise. Mr Cunliffe has his spreadsheet I am quite sure but I do not think Labour members actually have a plan. We might see it at the Labour congress over the weekend. That may come before or after the singing. Will members opposite be singing at this year’s election-year congress? We are looking forward to it because we so enjoyed it 3-odd years ago. What did they sing? 
Michael Woodhouse 
:  
The Gambler. 
CRAIG FOSS 
: That is right. Funnily enough that one might get rolled out. 
This Budget passes the four tests outlined by Mr Cunliffe in his article in the paper the other day. It creates and helps the export economy; it pulls back the State economy to allow room for the private sector to at least grow and at least start to create and hold jobs the tradable sector having essentially been in recession since 2005; and it shows a true and direct path back to surplus. It passes another one of Mr Cunliffe’s tests. I am interested that he keeps showing the test but we passed it with flying colours. I enjoyed his piece in the paper. I saw it and thought: “This is great. We will pass those ones.” Mr English’s Budget the National Government Budget passes all of those tests with flying colours. I am surprised that the member still keeps repeating it. 
Mr Cunliffe talked about the export market. In 9 years the Labour Government had the chance. Yes Labour is in Opposition now but as far as increasing exports goes the only thing that Labour did to try to compensate for double-digit interest rates for hyperinflation if you will for a 50 percent expansion in the State and a 50 percent expansion in the tax take was to declare 2007 as Export Year. That was it. Exports plummeted and New Zealand went straight into recession a year before the rest of the world. So it is interesting that there have been no amendments to this bill from other members during the Committee stage. I was quite surprised about that. 
I am also interested to see that 2 million people are still forecast to go into KiwiSaver up from 1.7 million currently. I think all members in this House hope that is the case. That will be an interesting judgment upon the changes within this Budget. 
The mixed-ownership model has been addressed. Even though it has been discussed a lot in the debate on this bill it is not in the bill but perhaps the KiwiSaver changes will help facilitate investments in the mixed-ownership model. Members opposite have positioned themselves so diametrically opposed to that. That is fair enough; that is their policy position. It has moved somewhat since Mr Cunliffe’s speech at Victoria University on 8 November last year. The Labour Party policy was to unleash the balance sheets of the State-owned enterprises and their associates to leverage up their balance sheets etc. I notice that in one of Mr Cunliffe’s speeches—I admit that I do read his speeches although I do not know whether anyone else does—he gave the other day that phrase was interestingly taken out. I do not know whether Labour members want to unleash the power of State-owned enterprises any more. But if they do not like it then why did they do it with Air New Zealand? 
Hon David Cunliffe 
: Why don’t we own it while we do it? 
CRAIG FOSS 
: We inherited from the previous Labour Government a mixed-ownership model for Air New Zealand. Air New Zealand diluted it down when it had to go and get some more capital. Did the Crown stump up? No. It was happy for it to be diluted down. It is very interesting. Actually that same Government at the time allowed Air New Zealand to issue a credit note which essentially meant that if it defaulted then the ownership of that entity would have gone offshore. It is very interesting. 
I must pull up the previous speaker on his comments about Standard and Poor’s. It was the member’s judgment of a C or D rating. Fair enough. He can pass those judgments. The key point to New Zealand mortgage holders is that after the Budget was released Standard and Poor’s confirmed reaffirmed New Zealand’s credit rating. That is worth one huge amount of money to the households of New Zealand to indebted New Zealand. We all acknowledge we are too indebted as a nation so each and every one of us be it via the Crown accounts or via our personal accounts have benefited instantly from this Budget as our mortgage rates and interest rates have stayed lower for longer as they have under this great Government. 
I make one final point. Why has the Opposition lost all faith in democracy? Why do those members not like democracy any more? At the election this year the public of New Zealand who are so wise that they threw out the previous administration will pass their judgment not only on this bill and this Budget but also on the three Budgets of this Government. They will pass their judgment and we will accept that judgment. They may keep us in; they may give us further seats or they may throw us out. Let us wait and see. But I have faith that opening the books and putting everything possible before the public of New Zealand shows that we trust them that we believe in democracy and that we have faith in their ability to make the right decision. That is why this bill is before us now taking effect in 18 months’ time. If—horror horror horror of all horrors—there was to be a change of Government and if members opposite were take these benches they would be totally free to change this policy in this Budget and it would be interesting to see their firm position on these exact points. 
I invite other members if they are talking much as they seem to be opposed to this bill and much as they seem to be opposed to this Budget to tell us which parts of it they will put before New Zealand to vote upon on 26 November. All we can see right now the only bits of firm information we have from Labour is that it will increase the top income tax rate. It may increase middle-income tax rates; we are not quite sure. Some Labour members were nodding and some were shaking their heads last night. They will not be changing GST except on cabbages. Mr Nash started to fly something about a turnover tax. I think Labour confirmed that it will not change the business tax. Of those members’ $7 billion or so of committed promises so far I ask how they will be funded. Will it be done through a capital gains tax? It is a credit to Russel Norman that at least he has a solid policy position absolutely clouding out the direction of the alternative supposed Opposition over there. I say good on him because Labour talks about painting Premier House as its solution—or not painting it—and about not having BMWs for Ministers and former Ministers and those members want to take these benches. I commend this fine bill based upon this fine Budget to the House.