Flavell Te Ururoa: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — First Reading 
Flavell Te Ururoa: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — First Reading 
[Volume:639;Page:9416] 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
Tena koe Madam Assistant Speaker. Kia ora tatoui te Whare teneipo. I as a representative of the Maori Party come to the House tonight confident of course that the grand total of 3 hours that we have had to consider the Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill has been sufficient to analyse the mere 258 pages of the bill! All jokes aside this is the big wash-up bill which includes amongst other remedial matters tax credits for research and development tax credits for employers of up to $20 per employee tax incentives for giving to charitable organisations and a whole host of amendments to the income tax rates. 
The initiatives on research and development and on skills training are going to be good for business and we hope that the proposals will do something to address the state of emergency that the manufacturing sector has reported over recent weeks. This bill introduces tax credits for science and technology - based research and development conducted predominantly in New Zealand by New Zealand businesses. Of course it is probably too late to prevent our iconic industry Fisher and Paykel from moving itself and its manufacturing operations to Thailand. It is unfortunate that Thailand pulled out all the stops—offering tax breaks and helping with training and other incentives—while this Government unfortunately just waved its premier washing machine and clothes dryer manufacturing business offshore. We said at the time that the Government must do something to address a manufacturing strategy—a strategy that will benefit those low-income workers who will be unlikely to be able to support the 4 percent contribution required for KiwiSaver. We remind the House this evening that the manufacturing sector is a major employer of Maori workers. In fact some 32900 Maori were employed in 2005 and another 23200 Pasifika workers. 
Of course the jury will be out in relation to whether the announcements are too late to stop Dynamic Controls Click Clack G L Bowron and possibly Sleepyhead Manufacturing from being able to stay in the “land of milk and honey but not much money”. We have all heard the warning signals about the exorbitant costs of retaining large-scale facilities and employees in Aotearoa and we will be watching with interest to see whether these incentives will make much of the difference that is needed. We also know that there is a huge demand for research and development which begs the question as to whether the $88 million injection announced today will respond to that. We have to wonder whether setting an entry point of $20000 is just too high a threshold to really enable companies to enter into the scheme. 
With regard to giving tax credits to employers it begs the question of why we do not do away with all the red tape and introduce tax cuts for those on low incomes. Although we support the intention of KiwiSaver to address our relatively low personal savings rate as a nation we cannot avoid the fact that hardship is increasing. The level of social deprivation in Aotearoa is deplorable. It was only a few weeks ago that the OECD economic survey of New Zealand reported that our living standards have remained some 16 percent below the OECD median for some years now. I remind the House that New Zealand suffers from what economists Dr Susan St John and Dr Steve Poletti describe as “an intractable child poverty problem”. 
I was interested to read the release this afternoon from the Auckland chamber of commerce in response to the Budget in which the chief executive Michael Barnett said: “… but to my mind our problems are urgent; we need to get beyond gradualism. If we are going to be an exceptional country and transform our economy we need to do exceptional things that are transformational.” It could be said that investment in research and development compulsory employer contributions and personal tax breaks of about $20 a week are steps towards getting the economy back in balance but I ask: what about the greater society? How do we as a Parliament address the ever-growing gap between rich and poor? The social cost of being unexceptional is too high. The issues of economic insecurity that Mr Jones referred to earlier tonight will still remain long after urgency has been wound up and we all return home. 
I want to refer to the initiative to set a 5 percent deduction limit on donations made by companies and Maori authorities. Like many multifaceted bills this bill has some good changes alongside some not-so-good changes and this initiative is a good one that responds to our culture of giving—the sense of manaakitanga that some 1.3 million people in Aotearoa represent through their dedicated commitment to the community and the voluntary sector. This bill introduces amendments that substantially increase the tax relief for donations of money made by individuals companies and Maori authorities to charitable organisations including removing the Maori authority net deduction limit of 5 percent of an entity’s net income. 
Finally I refer to the confusing picture of changing names. In the current names we have family assistance which now becomes Working for Families tax credits. Family support becomes family tax credits. The in-work payment now becomes the in-work tax credit. The parental tax credit has not changed but the family tax credit now becomes the minimum family tax credit. Some basic questions have not been able to be answered in the quick scan of the 258 pages we have had to look at but here perhaps are some. Why has there been no consultation about the decision to change the name from family support to family tax credit? The name change adds another complicating layer of confusion to an area that is already fairly confusing. We can ask anyone on the street what family support is and they would have a pretty good idea that it applies to every child regardless of whether the parents are in paid work. Whereas the old “family tax credit” previously referred to payments for children whose parents were in work it will now be the term for family support. The family tax credit now becomes the minimum family tax credit. If that is confusing to anyone in this House members should spare a thought for the many New Zealanders at home tonight. 
An obvious outcome of the confusion is that families will find those forms of assistance even more confusing to apply for and they will be more difficult to get. Evidence already shows that that will be disastrous for Maori communities. Whenever complications have been introduced Maori are more likely to miss out than other people because we simply do not know what we should be receiving. We wonder too whether the name changes will be the justification for yet another round of expensive advertisements regarding the name changes. Another important outcome of the confusion is that using the name “family tax credit” which meant one thing but will now mean something else raises concern that the field becomes very difficult to analyse and write about with any ease or coherence. 
Those are all questions that cannot be answered tonight and no doubt they will be just the start of many more discussions. In light of such great uncertainties and unknowns the Maori Party will be abstaining from voting on the first reading of this bill.