Prebble Richard: Taxation (Base Maintenance  and Miscellaneous Provisions) Bill — Second Reading Instruction to Committee In Committee 
Prebble Richard: Taxation (Base Maintenance  and Miscellaneous Provisions) Bill — Second Reading Instruction to Committee In Committee 
[Volume:626;Page:21456] 
Hon RICHARD PREBBLE (ACT) 
: 
 Before I get on to the populist nonsense that the Associate Minister of Revenue put forward let me just go to a technical point. He suggested that what I had said about clause 110 is wrong. What is a way of settling that? Well KPMG which is one of the world’s largest accounting firms said this about clause 110: “If clause 110 is enacted non-resident businesses engaged solely in taxable activities outside New Zealand may at the commissioner’s discretion have their GST cancelled. The effect of this would place New Zealand at a disadvantage in attracting non-resident businesses as non-residents would be treated less favourably. … The unilateral and retrospective cancellation gives potential for significant losses.” I say to the Minister that that is an arbitrary use of power. I suspect this is the first time he has ever looked at clause 110. 
Then the Minister came up with an argument that makes me take back everything I said about the New Zealand First MP—compared with the Minister he is highly mature. The Minister told us that we cannot have a cut in tax rates because if we did so an overseas firm would be paying less tax. I say to the Minister that that may well be so but his attitude also means that every New Zealander has to pay more tax just because this Minister is concerned that some overseas taxpayers will pay less. What a load of nonsense! That is exactly what the Minister said. Members can look at his  
Hansard 
. 
If the Minister wants to know why he will be in Opposition—because I do not think he will lose New Lynn—within the next 3 months it is because the Labour Government for ideological reasons refused at Budget time to make a cut in tax rates that all New Zealanders thought was reasonable. He can try to tell us that the books are cooked and that it is not really a $7 billion surplus. Good luck to him. I say to him that every New Zealander knows that this Government has been collecting record tax receipts and that the average New Zealander—the person who pays tax—according to Treasury is now in no better financial position after tax than he or she was 5 years ago. The country is more prosperous the Government is much much more prosperous but not the people paying tax because of the increased amount of tax they pay—and people are paying more tax because inflation has put them in higher tax rates. In spite of the Minister’s promise or the promise made on his behalf that only 5 percent of all New Zealanders were going to pay a 39c tax rate I say to the Minister that now 20 percent of all New Zealanders pay it. Now people are being told that they have to pay 39c in the dollar because if they do notWestpac might get a tax cut. I would like to be on a panel with David Cunliffe debating that during the election campaign to see what the average New Zealander thinks of that particular argument. 
But let me make it quite clear to the Government the real reason the 38000 reasons that Dr Cullen feels he cannot cut tax—apart from his ideological belief in tax. He has increased the number of civil servants and bureaucrats in New Zealand by 38000. He has a paper from Treasury which has a lot of experience in how much it costs to employ civil servants which states that as a result of that the Minister will be in deficit within the next 3 years. That is because the cost of employing those 38000 people includes of course not just their salaries but also their accommodation and the like. 
The interesting thing about employing civil servants is that they actually cost more every year. Why is that? Well out of that 38000 about 1000 will probably bring a personal grievance case against the Government next year. Another number will be pregnant. Another number will actually do some work—they will produce some papers—and then the Government will have to hire some consultants to look at the work that is being done. Every year they cost more and more money and Treasury which has a great deal of experience in these matters has told Dr Cullen that he will be in deficit as a result of the 38000 extra civil servants. 
They are not actually producing any more hospital operations—there are more bureaucrats more costs but no more hospital operations. We all know that the result of the extra bureaucrats is a scholarship system that is a disaster. They have not resulted in higher educational standards and they have not resulted in the elderly getting better social services—no not a thing. But they have meant that the Labour Government feels completely unable to make any cut in tax rates. 
That is the real reason I tell Mr Cullen; it is not because he is trying to catch the Westpac bank. The reason Dr Cullen cannot make a tax cut is that he has 38000 bureaucrats who are not producing any more hospital operations.