Hayes John: Taxation (Annual Rates and Budget Measures) Bill — First Reading Second Reading In Committee 
Hayes John: Taxation (Annual Rates and Budget Measures) Bill — First Reading Second Reading In Committee 
[Volume:672;Page:18934] 
JOHN HAYES (National—Wairarapa) 
: 
 I would like to say to the listening public that that was the voodoo economist in this Chamber or possibly the “member for misleading information”. I accept that he is not a moron at all and I am pleased— 
The CHAIRPERSON (Lindsay Tisch) 
: No. I ruled against the use of that term and it is not appropriate to bring it into any form of debate following. I tell the member to not do that. 
JOHN HAYES 
: Thank you— 
Hon Rick Barker 
: I raise a point of order Mr Chairperson. The other point I would make—and you have been very good on your rulings to make sure the Committee is in order—is that the member made reference to a member for such-and-such. I thought that was a disrespectful reference to members on this side of the Chamber. Members are either members for an electorate or they are list members but to call the member the “member for misleading information” was I thought disrespectful to a member in this Chamber. 
The CHAIRPERSON (Lindsay Tisch) 
: The intent of that was not directed particularly to a member. These are debating points and I am sure they will be taken in that light. 
JOHN HAYES 
: The point of the issue is that we have had two members speak in this Committee who are both list members of Parliament—unlike myself who deals with a provincial area of New Zealand the Wairarapa. I have a great connection with dairy farmers sheep farmers and beef farmers. I can tell members that there has been a very important rain event in the northern part of my electorate which if members will bear with me bears on this argument. The reason is that some of the farms in my electorate have lost more than 60 percent of their land area between Porangahau and Cape Kidnappers. For that reason we have tax rules as I am sure the Minister in the chair Peter Dunne understands that allow farmers to remove their capital stock from their land sell it and raise capital from it. That money is treated as capital not as income because when the pasture is restored and the grass starts growing in the spring those farmers will want to bring back capital stock on to their pastures. So it is fundamentally important that we have flexible arrangements as we have in the legislation for allowing this sort of transaction. 
I have to say to the member Stuart Nash that he is quite wrong and I do not believe he understands the difference between a person who draws wages or a salary and a person who pays an employee. All of those people take money from the business entity for which they work and they pay full tax on that at whatever is the relevant rate. That does not mean that the business and all dairy farmers pay no tax. That is absolutely outrageous to suggest— 
Stuart Nash 
: I’ll send you the figures. 
JOHN HAYES 
: I think the member needs to look at the issues he was talking about and it is how he was talking about it. I have to assert again that this is voodoo economics and the member is just taking headline figures and wrongly interpreting them for the benefit of his argument. 
I return to clause 3 of Part 1. I need to say that when the Government took the reins of office in the financial crisis the economy had gone into recession and had shrunk 3 percent a year topping off 5 years of historically low growth. Then what happened was that exports flattened out completely Government spending—which the member David Parker who spoke earlier was responsible for—was out of control and Treasury books showed never-ending budget deficits spiralling out to 60 percent of GDP and beyond. Despite the surprises of the two earthquakes and the global recession our economy now under John Key’s leadership is far stronger than it was 3 years ago. We have improved the tax system so that we are setting up signals for people in my electorate and elsewhere in New Zealand who want to improve their lot by working hard by saving hard and by paying tax through GST rather than on income tax. We have done that to improve the efficiency of the economy and to set up signals so that people will respond better. They will put money in their pockets and spend it as they wish. 
If we did not do that what would the list member across the Chamber do? He would be involved in a Government that would tax businesses on revenue not on profit. David Cunliffe has already explained that Labour plans to spend $5 billion a year but it will not tell anyone where the money is coming from. The member opposite has a really good opportunity to do that. It may be a turnover tax. I expect that Labour is going to give people a discount on GST; it has already said that in the House. That discount would cost about $250 million. It would benefit 10 percent of households by a magnificent amount: $1.50 a week. The Labour Party is talking about having a $5000 tax-free threshold but David Cunliffe said that the tax-free regime will not happen for 5 years and even then it would be worth about $10 per week. A month ago Labour had fully costed policies according to Mr Cunliffe—fully costed policies on a spreadsheet.