Cunliffe David: Taxation (Budget Measures) Bill Student Loan Scheme (Budget Measures) Amendment Bill — Third Readings 
Text is incorporated into the Bound Volume 
Cunliffe David: Taxation (Budget Measures) Bill Student Loan Scheme (Budget Measures) Amendment Bill — Third Readings 
[Sitting date: 24 May 2012. Volume:680;Page:2486. Text is incorporated into the Bound Volume.] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Here we are in the dead of morning on the morning after Budget day urgently taxing toddlers—urgently taxing toddlers. It is so important that we have suspended the Budget debate suspended the normal business of the House suspended all select committee process and imposed retrospective tax legislation to turn the country round on whom? Paper boys and paper girls are going to be pickpocketed by this Government. It is so laughable so risible so pathetic that it would be funny if it was not so sad. So sad because as the nation’s press has woken up imagine the feeling in the Government’s procedures room this morning when confronted by the headlines in the country’s largest newspaper the  
New Zealand Herald 
 “[A] big fat zero Budget” zero ideas and zero hope. In the nation’s capital there is this charming cartoon in the  
Dominion Post 
 of the most important feature of the Budget which is what the Government is doing to the nation’s children.  
Is it those members’ best idea really—is it really—to take the nation’s paper boys and shake their pockets shake their pockets? Look at them squirming look at them squirming. I almost—almost—feel sorry for them but I say “almost” because I am looking at such charming Ministers as the Minister of Health and the Minister of Police and the feeling has strangely left me. The feeling has strangely left me.  
Before the Budget came out there was speculation in the media that there were going to be some major what they call base-broadening measures and this was an important little narrative for the Government to get out because of course Labour’s pro-growth tax reform had been courageous and was well-received by both the business community and the general press. Labour campaigned in the last election on a pro-growth capital gains tax that would get money going where business investment needed it and on a research and development tax credit so this Budget was National’s answer. It let the media know there were going to be pro-growth base-broadening measures and here they are—taxing toddlers by going for the pockets of paper boys and paper girls. Well is that not just amazing.  
The centrepiece of this Budget is the raiding of the piggy banks of 68000 kids. It is hardly strategic hardly fair on some of the lowest-earning people in the country. But as I said yesterday the test of a Budget is not only what is in it. I think we have got common ground now by the time we have got to the third reading of this legislation for saying that that part of this legislation is just a joke but we have not spent as much time talking about what else is in the legislation. I think in fairness to the Government it is appropriate to mention the two other significant—well that might be overstating it—the two other measures in the legislation. The first one we might call the “David Bennett special”. There is a new member from the Waikato a relatively new member who has come here to earn a decent living sustained only by the three dairy farms that he has had to disclose in the pecuniary interests register and one wonders how such a young man has come into such largesse.  
I now understand it. I mean I am not taking his personal finances as an example as of course that would be inappropriate but taking that kind of thing as an example I dare say it was not because he was a paper boy when he was at school. Rather I suspect as a savvy Waikato accountant he has made an art form of precisely the provision that it has taken this Government—out of shame now—4 years to fix.  
How do you like this mum and dad workers in our cities? If you are a dairy farmer and the market is rising you can classify your cows as capital so that you do not pay any tax on them when the price goes up. But—but—if the price starts going down you can reclassify them as revenue and claim a tax loss on them. Then when the market goes up what do you do? You classify them as capital so you do not pay tax. Why not? It is because we have no tax on capital or capital gains. Maybe that explains why a new member from the Waikato comes here with a mere three dairy farms in his back pocket. How come it took 4 years for the modicum of justice on that outrageous rural rort to be closed down? On that part of the Taxation (Budget Measures) Bill I actually agree with the Government but I ask why we are doing this in year 4 when it should have been done in year 1. That is appalling.  
Here is the next bit: what National did do when it came in was its little Christmas present for the trust fund babies. The trust fund kids we were hearing about at breakfast are so outraged that they are going to march on Parliament. There is going to be a new group set up called the trust fund babies action group—TFAB. The trust fund babies action group is going to be marching against this last part of the legislation the Student Loan Scheme (Budget Measures) Amendment Bill. I do not want to put too much weight on it but here is the thing: the repayment bonus on a student loan. If you paid it off quickly because you had millions in the bank—say you came from a dairy-farming community and you could afford to pay off your student loan—that would have been great and you would have got a bonus from the Government for doing it. If you happened to be on the bones of your bum doing a paper round which the Government is now taxing to get by or as when I was student pulling drinks or working in a shearing gang you did not get the bonus. Thank God that has been closed down. That was a National initiative that was driven by greed it did not work and now it has had to admit it. Those are three things in the Taxation (Budget Measures) Bill and Student Loan Scheme (Budget Measures) Amendment Bill. The first one is a joke the second one is 4 years too late and the third one only corrects a mistake that they cravenly made themselves in the first year.  
So what is not in the bill? That is just as important is it not—what is not in this bill? This is the Budget tax legislation. 
Dr David Clark 
: Pro-growth tax policy. 
Hon DAVID CUNLIFFE 
: My colleague rightly said: “Pro-growth tax policy”. Where is it? It is the elephant in the room. How can New Zealand have a zero Budget and ask for real cuts in the health system? There are massive health cuts coming—Tony Ryall knows it. Why are we getting increased class sizes? Why are we going to be 1000 teachers short? As Annette King knows why are we cutting back on the provision of housing when we have a housing crisis around the country and Government members are sitting on their fat bank balances and doing nothing about capital gains—nothing about capital gains?  
Why is it that of the 100 wealthiest New Zealanders only 50 are on the top tax rate at all? It is because they have capital gains tax free and because they use all those fancy accountants’ tricks like trusts and fancy company structures and they do that to avoid paying tax. Pro-growth tax reform would tax capital gains and it would sort out the trust rorts. Is there any of that in this Budget? No. Why? Why are we taxing paper boys but not the big end of town? It is because they are too busy having private dinners with the Prime Minister like Skycity Casino wherein— 
Peseta Sam Lotu-Iiga 
: What about Vector? What about Fonterra? 
Hon DAVID CUNLIFFE 
: The “member for Vodafone” puts up his hand. That is Sam Lotu-Iiga who as deputy chair of the Commerce Committee took an all-expenses-paid tour to Australia to see the footy courtesy of Vodafone. Was that not good judgment? It is going to take a wee while to live that one down. But there is a much more important issue here and it is this. We had a proper transparent tender around that conference centre. Labour does not think it is the be-all and end-all but at least there was a transparent process until one party had a private dinner with the Prime Minister and he then intervened to stop it. That is no way to run a country—that is no way to run a country. You end up looking like a banana republic.  
I will go back to the bills. There are three measures in the legislation: the first of them is a joke the second one is late and the third one corrects a mistake of National’s making. What is not in these bills? It is proper thorough-going capital gains taxation pro-growth tax reform around research and development tax credits and other measures to correct what are the big holes in the tax system. This is at best a wasted opportunity. For once I agree with the  
New Zealand Herald 
—it is our big fat zero hope Budget.