Moroney Sue: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
Text is incorporated into the Bound Volume 
Moroney Sue: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
[Sitting date: 28 August 2012. Volume:683;Page:4838. Text is incorporated into the Bound Volume.] 
SUE MORONEY (Labour) 
: 
 Thank you very much for the opportunity to speak on the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill. I am speaking on Part 1 which I think is the most disappointing part of this bill because it simply reinstates or puts in place the annual taxation regime that was brought in by this Government in 2010. I have called Part 1 disappointing but in fact it is actually damaging. It is actually damaging because as we have heard from many of my learned colleagues it is actually reinforcing and endorsing the tax switch from 2010—or as many of the people I come across these days call it the tax swindle of 2010—and that is in fact hurting our country. It is damaging to our country because this is the part of the bill that entrenches the growing inequality that is happening in New Zealand society. And it takes only three lines in this particular bill to do it. 
It might be interesting for members of the public who are listening to this debate to know that all of the issues that we are traversing here from the Labour side of the Chamber are because we are concerned about the direction of the country. We do not accept that it is OK for the economy to be tanking in the way it is. We do not accept that it is OK for people’s incomes to be dropping versus their cost of living. We do not accept that it is OK that the only brighter future New Zealanders are finding at the moment is to buy a ticket to go across the Tasman and relocate their families there. We do not believe that that is OK and is a good enough future for this country. 
It takes only three lines in this particular bill that does all this damage because effectively what this part does is say that we are going to just continue on with the regime that has got us in the place that we are in. That regime is one that this Government particularly put in place and specifically put in place and it is one that grows inequality. It did in 2010. It increased GST. GST of course impacts on every single person but it impacts mostly on low-income people because low-income people spend every cent they earn just to make ends meet and just to get by on a week-to-week basis so that means that every dollar they earn is subject to GST. However for people on very high incomes they are spending only a small proportion of their weekly income and therefore having to pay out the higher GST that that Government put in place. Let us not forget that the Government put that higher GST in place without telling the electorate it was going to do it if it was elected. It went to the election pretending that it would not raise GST. In fact John Key promised he would not raise GST and then after National won the Treasury benches what did it do in one of its very first Budgets? It raised GST. And it had told the New Zealand public that it would not do that. It promised in fact that it would not do it but there you go; that is what it did. The Government did that on the basis of a so-called fiscally neutral tax switch which brought in the income tax regime that we are reinforcing and endorsing in Part 1 of this bill here this evening. 
That new income tax regime is the very mechanism combined with the GST that I have just described that has specifically driven the growth in inequality in New Zealand. It has specifically revved it up. When Government members talked about supercharging the economy actually they planned to supercharge the growing inequality gap. That is what they supercharged and they supercharged it by bringing in this particular set of income tax changes which we are now reinforcing and endorsing in Part 1 of this bill. What we know is that the top 10 percent of income earners in this country got vast amounts of income back. In fact I have stood in this House before and accused the Prime Minister of pocketing personally $1000 extra in tax cuts from that particular regime and he has never denied it. If it was not true I would expect the Prime Minister to actually be denying that in Parliament but he never has because the truth is that people on very high incomes did pocket in the order of an extra $1000 a week. That is not just what they are earning; that is the extra amount that they got at the same time as lower-income people actually got a tax cut that was way way smaller. It was certainly smaller than $1000 a week. Most of the people in the area that I come from in Hamilton record having got about $20 a week in tax cuts. By the time they had suffered that increase in GST that tax cut was wiped out. Also if they had young children it was more than wiped out by the increase in the early childhood education fees that happened in the same Budget in 2010. 
The costs on New Zealand families have increased under this Government but this income tax regime which we are reinforcing here in Part 1 is actually the very specific mechanism that has grown inequality in New Zealand and that is not good for anyone. What is particularly not good for those people who are suffering the inequality and suffering at the poverty end of the spectrum is that actually we all lose. We all lose from an unequal society because there is research for Africa literally—and I probably should not talk about that continent when I am referring to inequality and poverty. There is a lot of research that reinforces that unequal societies actually have the largest amount of social problems. We see that reflected in our own country do we not with growing inequality that is reinforced by this income tax regime which we are now establishing in this bill that we are talking about tonight. With that growing inequality come growing crime growing underachievement in education and all the associated problems that come in society. So we all pay when we get this wrong and Part 1 is reinforcing a tax regime that is growing inequality in our country. 
It shows that the Government does not have a plan to do anything different. It does not really understand the pressures on families at the moment and it does not think that there is anything necessary to change the current situation in this country. Government members find it perfectly acceptable that the economy is flatlining. They find it perfectly acceptable that thousands of New Zealanders are just leaving in their droves to go to Australia because that is the only way they can see a future for their families. They think that it is OK. Well on this side of the Chamber we do not think that it is OK. We think that the economy and the income tax regime do need a bit of a shake up and we particularly want to start thinking about other ways that we can get some income from tax reform. 
So it is Labour that is coming out with the fresh ideas that will give this economy a kick-start. It is Labour that has got the courage to actually address four big issues that are facing our economy. In fact if this Government had the courage to do the same thing— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! The member cannot imply that someone or a party does not have courage. I ask the member to withdraw that comment. 
SUE MORONEY 
: I withdraw that comment. What I was trying to describe was the difference between Labour and National with Labour having the courage actually having the courage to address these four big issues. 
And what are those four big issues? Well we actually need to deal with the capital gains tax issue in this country because we are one of only three countries in the OECD that do not face up to this issue. There is the unfairness that people with so much extra income can invest in houses—other than the one that their family lives in—as investment properties and when they sell those houses and earn a lot of capital gain from that there is not one cent of tax paid on that particular income. That is what we have. We have a capital gains tax problem in this country and that Government is not fronting up to that. 
We also need to increase our savings through universal KiwiSaver. It was Labour who actually had that vision. Talk about the brighter future; this is where it resides on this side. It was Labour that brought in KiwiSaver it is Labour that has the plan to move that through to being a universal savings scheme and it is also Labour that will establish research and development tax credits.