Burns Brendon: Taxation (Budget Tax Measures) Bill — First Reading Second Reading In Committee 
Burns Brendon: Taxation (Budget Tax Measures) Bill — First Reading Second Reading In Committee 
[Volume:654;Page:3993] 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am very pleased to follow the thrusting and hands-on chair of the Finance and Expenditure Committee Craig Foss who is marked for better things in this Government. Yet— 
Chris Hipkins 
: No he’s not. 
BRENDON BURNS 
: —supposedly—he has the temerity to say to the House that the previous Labour Government in its Budget of last year should have known what was coming. He is part of a Government that introduced the tax measures that this Taxation (Budget Tax Measures) Bill is repealing tonight and he stood up to defend that. 
There were to be three rounds of tax cuts and none of them were affordable or fair. Here we are on a Budget night under urgency. It is not unusual to have urgency on Budget night but normally it has something to do with a compelling initiative or change that introduces important and relevant measures. That is not the case tonight from this Government and this Minister of Finance. After the “doughnut” Budget—all hole and missed opportunities with just a bit of recycled dough—the Government introduces this bill. It is not a bill that truly requires urgency. Its main provision does not take effect for another 10 months and the rest 1 year after that. I say to members that yes this Labour Opposition supports the bill. We acknowledge that we are in a recession. We knew that last September-October when we as a party revised our pledges to the electorate in the face of what we knew was a gathering storm. But the National Party the then Leader of the Opposition and the then Opposition spokesperson on finance did not. They maintained the facade as the Crosby/Textor manual requires and told people that they could have their cake and eat it too. 
That facade told people that they could have most of what the Labour Government had given to them including Working for Families secure superannuation—although we know that that is now under some question—interest-free student loans and the whole package and that they could also have three rounds of tax cuts as well. That facade was maintained throughout September throughout October throughout the election campaign and throughout the introduction in this House of those tax cuts in legislation which was debated under urgency last December. We knew it was dubious we knew the fundamentals were simply not there to support it and now that is being acknowledged with this bill tonight. 
Those promises were made so the Government had to construct an escape route. It had to soften up the voters and tell them that the economic conditions known to most people by the end of last year were such that the second and third round of tax cuts could not now be afforded. Yet the Government still proceeded with round one of the tax cuts and it introduced those tax cuts in a way that gave a third of the money to just 3 percent of taxpayers. Those tax cuts ignored people who were on below the minimum wage. The Government refused to acknowledge that the first fundamental imperative of a recession is the need to put the money where it is most needed and to put it in the direction of people on the average wage or below who will spend every dollar they get—people who will not save it or use it to go on overseas holidays or to pay debt. That is why Labour accepts the need for this bill and why we support it. 
We knew that those tax cuts were a false premise and a false promise. We knew that last September last October and last December. The Minister of Finance knew that in December with Treasury’s financial update. He knew it in February when he spoke to the departmental chief executives and said there would be no new money. This bill now before the House is no surprise to anyone. It is part of a “cut and hope” Budget a Budget that took a line from Dickens’  
A Tale of Two Cities 
. It was described as a “worst of times” Budget. It could have also been to quote Dickens a “best of times” Budget that projected to the future and provided some investment for training. It could have done that but there is barely a word about training and investment in this Budget. 
It is also a Budget that had only one reference to the environment. That was in the context of water management and the need to allow for quick and efficient decisions for productive investment. I acknowledge the funding for insulation in the Budget an issue I have long championed; it has not been an exclusive issue for the Greens. We want to ensure as we look through the detail of the announcement on insulation that the legislation will extend to rented properties where many of the poor housing stock exists. One suspects that the Government’s motivation in respect of this issue is that this initiative will deliver quick results and that is great for people who live in cold uninsulated homes. There are 900000 homes across New Zealand that either do not have proper insulation or lack any insulation at all. But in terms of where the Government is coming from one suspects that it is part of that equation that asks whether there will be a quick return in the electoral cycle. We have seen that in the area of health. We have seen that with money spent on hospitals rather than on primary or public health initiatives which do not deliver the quick returns. We have seen it in transport where roading infrastructure gets funded but not rail or cycling. So much of the Budget is built around getting those sorts of early results. 
I will comment briefly on the Budget’s supposed focus on productivity and export-led growth which is an issue that some members opposite have touched on. I note comments tonight from the Manufacturers and Exporters Association saying that this Budget contains little in terms of changes to support any real economic development. It says that although some attempt at— 
Paul Quinn 
: What did Business New Zealand say? 
BRENDON BURNS 
: I say to Mr Quinn that the Manufacturers and Exporters Association represents the productive sector of this economy. The association said that incentives to invest in research and development of productive assets such as equipment and machinery are lacking. 
The research and development tax credit was cancelled to fund tax cuts elsewhere. Here we are with a bill in front of us that wipes the second and third tranche of tax cuts in part funded by the abolition of the 15 percent tax credit for research and development. What a travesty! This bill takes away the incentive for productive New Zealand for manufacturers and exporters to do well and grow the economy. To give it away in tax cuts of which one-third was taken by the top 3 percent of income earners is trickle-down economics if ever we saw it. It is an absolute travesty. Here we are axing rounds two and three. It is no real surprise. Most hard-working New Zealanders will be very disappointed by this Budget. They know they have been diddled. They know that this Budget should have focused on jobs but it did not. It is not a Budget that delivers for them. There is no mention of investment in training or of creating jobs. 
This is a Budget that had its focus on having an eye on the 2011 election. Those members opposite should be shamefaced. Two weeks ago we were in this House debating other legislation and members opposite were crying down at every opportunity the use of urgency to defend the rights of Aucklanders to have a say in the future of their city. Members opposite cried down that use of urgency but at least it was appropriate. It had a strong connection to a relevant issue. Here we are tonight under urgency debating a bill that takes effect in 10 months’ time and then 1 year on from that. It is not a matter that truly deserves urgency. We should be debating real initiatives to help New Zealanders to create jobs and to take the nation forward and not simply be debating a tax measure that was a failure in its inception—which should have been known and was known certainly by members opposite. It was pledged to this nation and now the National Government is backtracking using urgency to do so. Shame on it!