Clark David: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — In CommitteeText is incorporated into the Bound VolumeClark David: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — In Committee[Sitting date: 10 February 2016. Volume:711;Page:8892. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): I appreciate the member Michael Woodhouse’s wide-ranging and interesting contribution. I intend to focus on the title and commencement clauses myself but I understand now that the debate has been broadened so I would not wish to limit any other colleagues who want to expand their portfolio of complaints against the Government beyond those that you might expect to find in a tax bill.This bill does confirm the existing tax structure—in that the Minister of Revenue is correct. It affirms the tax structure that we have currently which sees this Government borrowing more money than any other Government in New Zealand history. This is the Government that has borrowed more than any other Government in New Zealand history and so it is a bit rich for that Minister to come to the Committee and talk about a tax and spend Labour Party. His Government has borrowed more than Muldoon’s Government did. That is how shameless it has been. It has returned one surplus. Despite years and years and years and years of promises it has delivered but one surplus to this country and it was manufactured. This is the borrow and borrow and borrow and borrow and borrow and hope Government—this Government right here in the House that is pushing through a bill that it is borrowing to pay for.We are being asked to support it. Let me make it clear. We will support it on the basis that we need a robust tax system on the basis that the remedial changes in this bill help to make our tax system more robust but we do not support the rates of tax in there that that Government pushed through to ensure that the wealthiest 10 percent got 40 percent of the value of the 2010 tax cuts. The wealthiest 10 percent got 40 percent of the value while the bottom 20 percent earning the least got just 2 percent—just 2 percent—of the value of those tax cuts. Of course we know that at the same time John Key broke his promise—broke his promise; that was the start of many broken promises—not to put up GST. That meant that the small the very modest pay increase that people thought they were getting with that initial tax cut—that those at the bottom of the tax structure and in the middle of the tax structure thought they were getting—was swallowed up immediately in that GST increase.Of course this change that that Government made in 2010 which we are affirming again today is part of what has driven that growth in inequality under this Government that sees middle New Zealand getting left further and further behind—robbed of opportunities robbed of the Kiwi Dream. So I want to suggest a title for this bill an alternative title which is to replace the material in brackets with the words (Suffocating the Kiwi Dream) because that is what this bill does. That is one of the things this bill does. It does the remedial matters; I am happy to leave that part in the title because we support the remedial matters. What we do not support is this constant drip drip drip of making sure that the 1 percent have that little bit more in their pockets. Those who are in the Cabinet in-club get that little bit of extra handout while those in small business put their own shirts on the line day after day. Small-business people put their shirts on the line and face excess regulation under this Government. Tax changes and child support changes and constant changes and more red tape from this Government which cripples middle New Zealanders as they try to do their bit to get ahead—all so that the top 1 percent can have their interests looked after and so that the very very close friends the in-club of the National Party can enjoy their lifestyle in Hawaii.I want to suggest a second alternative title for this bill and that is the “Can They Deliver Bill” because one of the issues that I do not feel has been covered enough in the debate so far is the history that goes with the child support reforms that we are dealing with here today. In here are child support reforms that are “intended to reduce the implementation costs”. Why would the Government be trying to reduce the implementation costs of our new child support changes? Well the answer is that originally the changes were estimated to cost $30 million—$30 million. Then what happened? That was in 2011. In 2014 the cost estimate for changes to the child support system blew out to $210 million. That is a sevenfold increase—a sevenfold increase.Is anyone on that side of the Chamber prepared to defend a sevenfold increase in the cost of implementing the child support changes? I hear silence opposite.It had blown out to $210 million in 2014 and on top of that the implementation of the child support changes was delayed by a year—by a year. So families that had made arrangements based on the existing child support legislation—including things like putting money into a mortgage or investing in new clothes for their kids and so on because they thought they had a bit more money in their pockets—were forced to go back to the old system and could not necessarily cover the debts for all the changes they had made.That was a treacherous mistake by this Government but it was also a costly one because the taxpayer picks up the extra hundreds of millions of dollars to implement this legislation. Now we are told this bill aims to reduce the implementation costs to $163 million for that legislation. Remember the original estimate in 2011 was $30 million. Now the Government is hoping through these changes—which make it a less effective system I might add—to reduce the costs to $163 million.This is a Government that is not across the basic details. It was told years ago in its first briefing to the incoming Minister—in fact Peter Dunne knew about it in the previous regime—that the tax system needed to be upgraded. The Government has dillied and dallied and it has taken for ever and it has pushed out the capital spend and we have a tax system that is creaking. We now find ourselves in this Parliament putting through legislation that a few months later we will have to reverse out and there are all the costs of running legislation through Parliament—and they are not insignificant I might add. This is a Government that is not across the basics and so we ask ourselves and we could rightfully put in the title “Child Support Changes (Can They Deliver?) Bill” because I am sceptical—I am sceptical. We have twice brought changes in child support legislation back to this Committee and we have seen the costs mount further and further.I wish the new Minister of Revenue well in this responsibility because he does have a challenge ahead of him. It is not his doing in this case I would say although there is an element of collective Cabinet responsibility. The problems go back beyond this Minister. He has his work cut out for him and I do wish him well in achieving a fair tax system that does the duty which we all want it to do of collecting taxes so that we can afford as a community to supply things like roads and hospitals and schools—those things we all need but cannot afford from our own pockets. We need an effective tax system. We need a tax system that collects the revenue to afford those things that we need as a community if we want to live in a modern way and in a way that ensures our future prosperity: hospitals schools roads and at its most basic a justice system and so on. So I wish the Minister well with that but I do question whether this Government will be able to deliver on the things that are promised in this bill.I am also concerned as I said at the outset of my speech about the chilling effect of this legislation which is slowly suffocating the Kiwi Dream through reinforcing the kinds of tax changes that have driven a 15 percent anchor on our economy over recent decades according to the OECD. There is growing inequality. We have the lowest homeownership rate in 60 years in this country. The gap has been growing every year under this Government between the very well-off and the rest of New Zealand. Those people in middle New Zealand who aspired to own their own home who might have aspired to own their own business and so on are struggling more and more and more as this Government looks after the interests of a very select in-crowd those who are its closest mates.We challenge the Government to try to shift to being a fairer Government but we ask in this bill that consideration be given to the name change of “Suffocating the Kiwi Dream Bill” or “Can They Deliver on the Child Support Promises Bill”. We will support the bill for the fact that it makes our tax system through the remedial changes more robust to do the basic things a tax system has to do but we do it with reservations and we put forward those suggestions for consideration. I am interested to hear whether the Minister will consider them in a thoughtful way and respond because these changes in here are political. They do have an important bearing also on the future shape of our society. Tax bills often are considered not very exciting but the stuff that goes through in this bill affects every single New Zealander.