Lees-Galloway Iain: Taxation (Budget Tax Measures) Bill — First Reading Second Reading In Committee 
Lees-Galloway Iain: Taxation (Budget Tax Measures) Bill — First Reading Second Reading In Committee 
[Volume:654;Page:3976] 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 Before Christmas we were in this House late at night day after day ramming through tax-cut legislation under urgency. National could not get it done fast enough. Why? It was because the Government wanted to stick to Mr Joyce’s mantra: “Find out what they want; give them what they want; then tell them that you’ve given it to them.” The Government wanted to be able to say before Christmas “We’ve given it to you.” It wanted to put on the façade of a hard-working Government that was getting on with it but it was all smoke and mirrors. National knew before the election that those tax cuts were completely unaffordable. Now a mere 6 months later—not even that—we find ourselves under urgency with the Government running as fast as it can away from the broken promises that it knew it could not keep. The Government knew full well that there was not a chance that these tax cuts would go ahead—not this year not next year not the year after. Bill English was not talking about the tax cuts when he used those words but he may as well have been. There is no doubt that this Government cannot be trusted on anything. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
IAIN LEES-GALLOWAY 
: Before we headed off for the dinner break I was reflecting on the bizarre symmetry that has been created by this situation. Before Christmas there was a need for urgency to rush through some incredibly important policies that the Government needed passed by Christmas so that it would look like it was doing something. We forced through tax cuts under urgency yet tonight we find the Government under urgency running as far away as it can get from those tax cuts. The Government has done a handbrake turn so sudden and so violent that its members should have their cars crushed. It is just incredible how quickly the Government has turned around on this policy. 
When Bill English talked about not this year not next year not the year after he was talking about the cycleway but John Key crushed him on that did he not? Mr English was actually talking about the tax cuts—they will not happen next year or the year after. 
Before the election when all these promises were being made John Key liked to compare himself to Barack Obama. He knew that Barack Obama was on to a winner so he thought he would try to ride that wave and compare himself to Barack Obama. One could write a thesis on the differences between John Key and Barack Obama but I would like to focus on one difference in particular. Obama’s campaign phrase was: “Change You Can Believe In”. He was upfront he was honest and he delivered the tax cuts that he said he would deliver. He costed them out made his pledge and delivered on every single one of his promises. He promised to cut taxes for low and middle-income earners. Why? Because it was fair and it was the best way to stimulate the American economy. That is unlike what we have seen in this country where tax cuts have been delivered to the rich who will save them or spend them on overseas trips and where poor low-income families have been shafted by the Government and have received absolutely nothing. Obama delivered but this Government we cannot believe in. 
The one thing that this Government has not done a U-turn on is research and development tax credits. They were gone before Christmas and they are still gone. In my hometown Palmerston North research and development tax credits—Mr Power knows this—were welcomed with open arms. Palmerston North is an innovative city and so much of its economy is based on research innovation and scientific development. Those credits were something that this country could have seen as a way out of this recession. Recently Moana Mackey came up to Palmerston North and we spoke to the science sector there. Those people said that they wanted to be taken seriously as a sector that can lead New Zealand out of the recession. But what has this Government done? It has slashed those research and development tax credits and taken the Fast Forward Fund with them. What have we seen today? We have seen an attempt at an about-turn but it is not even half of what the Fast Forward Fund had and not even half of what Labour pledged. It has nothing like the security that that innovation fund offered to the science and research community. Those in the science sector want to know that their funding is secure and this Government cannot deliver them that level of security. 
How can we move towards being a high-wage high-earner economy? How can we catch up with Australia as this Government keeps insisting we can? Government members said over and over again when they were in Opposition that we were far behind Australia and they pledged that our wages would catch up to Australia’s. But how will we do that if we insist on focusing on being a low-wage no-innovation dumb economy with moves like scrapping research and development tax credits and the Fast Forward Fund? The talk is all about productivity. Well research and development is all about productivity. John Boscowen from the ACT Party said earlier on in this debate that it is all about developing productivity. But then he got into what he really wanted to talk about— 
Hon Darren Hughes 
: Himself! 
IAIN LEES-GALLOWAY 
: No no there was not a lamington in sight. What he really wanted to talk about was how awful Working for Families was. He absolutely slated it. In fact he was in good company because John Key called it “communism by stealth”. But not today! John Key was crowing today about the fact that the Government was able to maintain Working for Families and interest-free student loans. He even crowed about the tax credits that were delivered on 1 October. I know that John Key wanted to lead a Labour Government—he said so himself—but he is taking the flattery just a little bit too far. He should watch out for Bill English. The knives will be out and he will be in trouble soon if he keeps flattering the Labour Party with that sort of rhetoric. 
But the dark grey clouds are looming. There are ominous references throughout these Budget documents and they say that New Zealanders have to prepare for changes. There will be shifts in funding from low-priority unproductive areas to more productive areas. We know what they on the other side of the House do not like. We know what dead rats they had to swallow: Working for Families interest-free student loans universal superannuation—which is in a whole world of trouble now and will not be around by the time I retire that is for sure—and KiwiSaver. The Government has already put a dent in KiwiSaver and I tell you what it is lining it up. KiwiSaver is even referred to in this bill in the provision allowing mortgage diversion. I understand—although I was not in the House at the time—that that policy came from United Future. But that is OK it does not matter it does not mean anything to Peter Dunne. He has jumped ship before and he will do so again. He has jumped ship on the provision to allow mortgage diversion. 
The Government members are having a drag race to see who can get the furthest from tax cuts. They want to try to position themselves far away from the promise they made before the election. They want to get as far away from it as possible. The promise that John Key made at the National Party campaign launch was: “We all know what will be the first to go under Labour whether they want to admit it or not and that is the rest of their tax-cut package. Well unlike Labour I’m going to be straight-up about my priorities. That’s why I’m sending a card to all of you. It’s called My Key Commitments to You and it will be delivered to every household in New Zealand over the next 10 days.” His very first commitment read: “strengthen the economy increase after-tax incomes and ensure Kiwis can get ahead under their own steam by reducing personal taxes on 1 April 2009 1 April 2010 and 1 April 2011.” In other words next year the year after and the year after that. Mr Key went on to say: “And unlike Labour we won’t cancel our tax cuts.” He also said: “Most of all New Zealanders will be able to believe our tax cuts they will be able to trust our tax cuts … What is more we can afford to do it.” 
This bill is dastardly deceptive and dishonest. That is how this Budget has been and that is how this one-term National Government will be remembered.