Fenton Darien: Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill — In CommitteeText is incorporated into the Bound VolumeFenton Darien: Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill — In Committee[Sitting date: 17 June 2014. Volume:699;Page:18578. Text is incorporated into the Bound Volume.]DARIEN FENTON (Labour):I am happy to take a call on Part 1 of the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill. My initial interest in this bill was in the issues around employee and employment rights but I am also keen to take a call on Part 1 which basically sets the annual rates of income tax for the 2014-15 year. I agree with my colleagues. I think this is a missed opportunity. I think that Part 1 does not describe what we should really be doing in this bill.The first thing that comes to my attention is the fact that we are not in this bill and in Part 1 dealing with the 107 out of 161 high-wealth individuals who own or control more than $50 million worth of assets and declared that their personal income in the last financial year was less than $70000—the starting point for the top tax bracket of 33c in the dollar. What we are not dealing with in Part 1 and in the rest of this bill is the fact that these multimillionaires used a variety of 6800 tax planning devices such as companies trusts and overseas bank accounts to avoid paying tax. I can see the Minister in the chair Todd McClay pulling faces and he may not agree with me. Maybe he wants to take a call after me and give us the facts if they are not correct. Apparently according to our statistics one individual had a network of 197 entities. So I am a little bit confused about setting the tax rates for 2014-15 in a bill that deals with employee allowances and accommodation and a range of other things but does not deal with the fundamental problem that we seem to have in New Zealand which is around tax avoidance by the top 1 percent—or is it the top 10 percent—of people who are not paying the tax that needs to be paid and that should be paid to allow the rest of us in New Zealand to have a decent life to allow young families to enter into homeownership and to allow young families young workers and middle-income workers to save for their retirement. We are ripping off New Zealand at the moment.The problem that we have also got in Part 1 of this bill is the fact that we are not addressing the issue that we have had from this Government almost 6 years later where—I know you are agreeing with me Mr Chairman; you are totally agreeing with me I know—a huge number of people actually received the highest tax deductions under this Government. So a huge amount of money was taken out of the tax take by this Government giving tax breaks to the very well off.Let us not forget GST of course. This Government as I remember promised that there would be no increase in GST but what happened?Dr David Clark: John Key?DARIEN FENTON: John Key promised that there would be no increase in GST but the tax rates for 2014-15 include GST which has gone up to 15 percent. That has an impact on ordinary families. What is really interesting when we look at the record of this Government is that we have actually had the biggest reduction in taxes in the OECD. Some people might think that is something to be proud of. Sure we do not want ordinary working people to be paying more tax than they should but the record of this Government is that it taxes ordinary people and it gives its rich mates a break. That has resulted in the biggest reduction in the OECD of Government programmes since 1986.Let us talk about what those Government programmes are. We are talking about health care we are talking about education we are talking about people being able to buy their homes and we are talking about child poverty. What a disgrace that is. What a disgrace it is that we are now in a situation where we have a quarter of a million of our children living in poverty. How disgraceful is that and how did we get to that? I believe that we got to that by reducing the tax take and the distribution of that tax take under this Government and under previous Governments in the 1990s so that they could look after their friends—their friends at the big end of town—and make sure that they earn bigger profits and ordinary people pay the price.We have had a bit of a debate and discussion in Parliament today about the outcome of that and we have seen the Glenn report. It is a shameful record for a country like ours—a relatively wealthy country—where we are now in a situation where domestic violence is pervading our families. It affects everybody. It is not just those at the bottom. It is not a poor people’s issue; it is a middle-income issue as well. That has an ongoing influence and creates a problem for future generations. If our children today are being beaten up by their families and if they are living in poverty who is going to be paying the price for that? When they grow up they will pay the price for it and the next generation and the next generation after that. I was surprised to learn that one of the results of the reduction in our tax take is that we have the sixth-highest level of infant mortality in the OECD. How can that be? How can that be in a country like New Zealand which has a proud record of a great health service? How can we have got into that situation? It has not really made any difference when it comes to things like the current account deficit. We have the third worst current account deficit after Iceland and Turkey. What a proud record for this Government—what a proud record this tax bill is entrenching!There are many many things that this tax bill in Part 1 entrenches. It entrenches the policies of a failed approach to taxation over the last 6 years a failed understanding that taxation is actually about redistribution or it should be so that we look after the people in most need in our society and so that we make sure that we continue the tradition of good health and education so that people can earn a decent income and earn a decent living.Those things are not contained in this bill. Instead we are dealing in this bill with employee entitlements—which I am of course very interested in—and accommodation entitlements but we are fiddling around the edges. We are fiddling. As my colleagues have said—and as I am sure my colleague David Parker will spell out soon—Labour has a much different approach to taxation and redistribution. It is a much more progressive approach so that we get away from this record that we have now of having high infant mortality high child poverty the highest tax reduction in the OECD since 1986 and the biggest reduction in collective bargaining and unionisation which of course has had a huge impact on the redistribution—[Interruption] Of course the member over there laughs because you are not allowed to mention the “u” word in this Parliament without the National members showing their cynicism. Unions are about redistribution as well I say to the Hon Jo Goodhew.Hon Jo Goodhew: I’m sorry I wasn’t actually in control of peoples’ minds.DARIEN FENTON: Well you did. You sniggered. I saw you snigger. Of course we have come to expect that from the members opposite.You know you cannot mention anything about redistribution about poverty or about the really serious issues that are facing our country. You cannot mention them without this kind of high-handed sniggering that we get from the members opposite. We know that their whole agenda is about looking after their mates. It is about looking after the 10 percent who are doing really well. They still believe in trickle-down that failed policy from the 1980s. They are still living in the last century. They are still trying to push the neo-liberal agenda of the 1980s which has failed right across the world. Yet when it comes to taxes they expect ordinary people to pay more than their fair share and expect their mates not to pay their fair share as well.As Andrew Little said change is coming. We have a progressive agenda around monetary reform around tax reform around collective bargaining and workers getting their fair share around child poverty and around doing something about the really really difficult problems that we have in this country. If members opposite think that they can just turn their backs on these problems and pretend they are not happening I think they are going to be facing some very very serious issues in the future when their children cannot afford to pay their pension and when their children have children in poverty as well. Thank you.