Cosgrove Clayton: Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill — First ReadingText is incorporated into the Bound VolumeCosgrove Clayton: Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill — First Reading[Sitting date: 11 June 2013. Volume:691;Page:10996. Text is incorporated into the Bound Volume.]Hon CLAYTON COSGROVE (Labour):You have just heard the age-old sort of explanation for providing massive tax cuts for the wealthy and providing very few cuts or little assistance for the middle and low-income earners. It is called trickle-down. It did not work for Thatcher and it did not work for Reagan and these geniuses over there are sort of clawing back into history because they have not got any innovative vision or policy to the old trickle-down theory which for the uninitiated goes like this—so I am told. You fund massive tax cuts to those on the top—first step. So what did those members do? The top 10 percent got 40 percent of the tax cuts so they put a tick next to “income tax”—they put a tick in the box there. The theory goes that if you give massive income tax cuts to those on the top then somehow in some quasi-religious beneficial way those at the top will shell out these wonderful hundred-dollar notes and they will trickle down to the masses the proletariat those poor souls at the bottom who have very little income who scrape for it every day and who cannot make ends meet. And from this great trickle-down theory nirvana will occur. Everybody will be rich. Everybody will be better off. Unemployment will disappear. Economic growth will be sparked. The veil will fall from the temple—as I am sure Mr Clark would know from his religious experience—and all will be well.Well there is a wee problem with that: it has not actually worked. It did not work for Margaret Thatcher. It did not work for Ronald Reagan. George Bush had a crack as well. It just does not work. It is a bankrupt invalid economic policy. But oh no these guys are dusting it off yet again—for the last 4 years—and having another crack. They are having another crack. John Hayes who with a haircut like that looks like he is sort of morphing into or sort of channelling Peter Dunne I have to say—Dr David Clark: He’s lost the bow tie.Hon CLAYTON COSGROVE: He has lost the bow tie though—that is true. This bill the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill comes on the back of a series of botched tax proposals—botched tax proposals—like as my colleague said the car-park tax. John Hayes I have got to say—he will not thank me for saying it but I have got to pay tribute to him—showed a tonne of guts did our Johnny. He opposed the car-park tax in the privacy of the select committee room where it was not public. He opposed it on principled grounds and I admire him for that. He always shows a ton of guts does John Hayes. He opposed the iPad tax. He had somereal problems with the student loan tax of course. I think he also opposed the paper boy tax—these groundbreaking reforms that National bring into this House.Well it just shows how bankrupt these people are because on the back of those botch-ups on the back of that we have this sort of trickle-down theory which is not working. Those members talk about how they gave a bit in GST so they dropped the tax rates down. The top 10 percent get 40 percent of the tax cuts. John Key gets a thousand bucks a week. The new Minister who—forgive me I should congratulate Mr McClay who was not a bad chair of the Finance and Expenditure Committee. I wish him well in a limited way but a hundred bucks a week Mr McClay did get. Now he has gone up a bit because his salary has doubled. Those on the middle and low incomes those who actually spend money and actually grow the economy because they have no choice but to spend their income they have not got any spare money to save. They cannot ferret it away. Often they have mortgages and debt. They actually have to spend their money on school shoes school fees food and basic things like that and electricity of course which apparently is very competitive and no one is paying too much for their electricity according to the National Government in its small myopic bubble of a little world which no one believes. But if you actually want to grow the economy what these guys could have done is—Dr David Clark: Geniuses!Hon CLAYTON COSGROVE: —geniuses yes—do what the Aussies did and that is target the tax cuts one at those who need it and two at those who are going to spend it and those who are going to create jobs by spending that money that they get back—their own money—not give it to the top as these guys did because the most wealthy do two things. They have got a ton of dough anyway. So what do they do? They either retire debt with their tax cut or they save it and put it in the bank.Andrew Williams: Or buy more champagne.Hon CLAYTON COSGROVE: Or buy more champagne. So they are not actually providing the juice and the lifeblood that the economy needs by getting those dollars moving. But of course over there National looks after its mates.It is interesting that in this bill there is talk of a limited amnesty. Well Peter Dunne was in charge of the bill and had Peter Dunne been the Minister today I would be asking a simple question: will that amnesty extend beyond the realm of tax to perhaps Mr Dunne’s own misdemeanours and difficulties? Will the Government extend or accept an amendment or will somebody propose one from that side that will give Mr Dunne an amnesty for the deeds that he has committed in the last few days or is this confined to just tax? Or is the fact that he has been removed from the revenue portfolio because the Government is going to extend an amnesty and there would be an inherent conflict of interest if he stayed as the Minister? I do not know. I know this is a simple question. I am sure somebody can perhaps answer that.We will support this bill to the Finance and Expenditure Committee. We have some reservations over a number of aspects but we do believe in simplicity. We do believe in transparency in respect of tax. The other thing that you have got to have in tax is confidence in the system. So GST as a tax is a pretty simple tax. It is a transparent tax and people generally have confidence in it apart from when they are told in an election that it is going to stay at the level it was and then they are lied to after an election and it is bumped up as this crew did for middle incomes and the lower incomes of course because they are the ones who pay the most of that. So it has got to be transparent it has got to be simplistic and people have to have confidence in it. But I argue that it also has to be fair.Mr Hayes got up and had a bit of a crack trying to talk about equity and fairness in taxation. Well this bill simplifies a whole series of processes but I do not see anythingin it that corrects the mass inequity where Mr Hayes’ Government gave the top 10 percent 40 percent of the tax cuts. Does anybody over there across the aisle—I am not an economist—think that it is equitable to provide the top 10 percent who are the wealthiest in our society with 40 percent of the tax cuts and give certain folk a thousand bucks a week while others languish down the other end and get a few cents the odd crumb off the National Party table? Do the colleagues across the aisle think that is equitable? Will anybody stand up over there—maybe I am going deaf. There is silence. Does anybody think that is an equitable proposition? Presumably they talk about equity and they talk about fairness. They have all these high and mighty visionary words but when it comes to actually finding some spine a bit of backbone and standing up for their own policy I just simply ask them again—Jonathan Young: Sorry we weren’t listening.Hon CLAYTON COSGROVE: I am happy to yield to them if they would like. Does Mr Young who has woken from his slumber think that giving 40 percent of the tax cuts to the top 10 percent—the top 10 percent getting 40 percent of the tax cuts—while those on the bottom languish is equitable? Oh I do not know whether the mikes are not working or maybe I have gone deaf or something has happened but there is silence. They cannot even stand up—even the Minister over there who is guarding the shop cannot stand up and we will love theHansard around this next year—and support the proposition that they have put forward that they believe their own tax policy is equitable and fair. I know that in the privacy of his own room Johnny Hayes will be grinding his teeth saying that this is not fair and this is not equitable but the whips will not let the reins off him so he can go public on it.So although these tax changes will provide some simplicity—some of them are positive but there is a gap in the detail in some of the superannuation propositions in them—the point about it is there is nothing in this legislation that corrects the mass inequity the mass unfairness that we now know even Government Ministers and members will not stand up for. Even Maggie Barry who is known for dishing it out around the place and being very vocal will not stand up in this House and say that giving 40 percent of the tax cut—revenue and income—to the top 10 percent is equitable or fair. Even she knows that over the bridge in her patch no one will believe her just like no one believes the Government proposition that says people are not paying too much for power. If those members really believe that and they really believe that their tax policy is fair and equitable I argue they should go out and make those claims publicly on the stump on every street corner and in every hall in the land especially about the electricity price issue and see what sort of a response they get.I invite Mr Hayes to continue to show a tonne of guts and oppose some of these tax proposals. I would like him to do it publicly but I give him credit for at least doing it privately. I invite some of his other colleagues perhaps who believe the same way he does to maybe use his example and step up to the plate.