Lees-Galloway Iain: Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill — Third ReadingText is incorporated into the Bound VolumeLees-Galloway Iain: Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill — Third Reading[Sitting date: 20 February 2014. Volume:696;Page:16210. Text is incorporated into the Bound Volume.]IAIN LEES-GALLOWAY (Labour—Palmerston North): David Bennett is not often right but he is wrong again. He has completely got the wrong end of the stick. He does not understand Labour policy he probably does not understand National policy and he certainly does not understand tax policy by any stretch of the imagination. So let us talk about a capital gains tax and let us talk about why National hates the idea of a capital gains tax. First of all David Bennett says that this is a capital gains tax on the productive sector. It is a pity that David Bennett is not paying close attention to what I have to say. It is a pity that David Bennett gets up in the House makes inaccurate accusations shows his lack of intelligence shows his lack of understanding shows his absolute ignorance and then cannot pay attention to the speaker who responds to what he has to say.This is what a capital gains tax would do. It would encourage investment in the productive sector the job-creating sector and discourage investment in speculation in property. That is one of New Zealand’s biggest problems and it is something that this National Government has failed to address—the fact that far too much capital in New Zealand is tied up in unproductive speculation in residential property. It is true that Labour does not want to apply a capital gains tax to the family home. That is not speculation in the property market; that is putting a roof over your family’s head. The vast majority of nations in the OECD have a capital gains tax and most of those do not apply it to the family home. This is an absolutely normal run of the mill international best practice approach to taxation.But that party over there the National Party hates the idea of a capital gains tax. I wonder why that is—I wonder why that is. The first reason is that so many of them and the people who keep them in Government the people who ensure National has the resources to run campaigns rely on capital gain for tax-free income. They rely on investment and speculation in the non-productive residential property sector to make their money. They do not like the idea that a Government will come along and say to them: “Hey the way you make your money ought to be taxed just in the same way that everybody else makes their money.” Why is it that a person can go to work for 40 hours a week maybe 50 hours a week maybe 60 hours a week and earn wages to put food on the table to put a roof over their children’s heads and pay tax on every cent they earn yet National’s property speculators do not pay tax on their capital gains?That might be one reason why National does not like a capital gains tax. But I think there is another reason—speculators are the people who do best out of capital gains and the tax-free income it generates. And who are the lackeys of the speculators? It is the traders. It is the share traders and the money traders. Speculators are short-term investors. They put their money here. They wait for the price to go up. They pull their money out. They put their money somewhere else. They wait for the price to go up. They pull their money out. Every time they put their money in and they take their money out is a transaction. That is a transaction that a trader carries out and the trader clips the ticket along the way. Who is the biggest trader in New Zealand? Why is it our Prime Minister John Key. So this is just a classic case of John Key looking after his old buddies his mates in the trading sector—the money traders the used-money salesmen—who want to clip the ticket every time a speculator makes a transaction. Those are the people who are opposed to a capital gains tax.The real investors the value investors put their money into businesses for the long term. They want to see those business grow create jobs and contribute to our nation’sGDP. They are not funding the traders. They are not worried about the capital gains tax. They are worried about building a good business that is going to pay them a dividend—a dividend that they already pay tax on. No—a capital gains tax is opposed only by those who have no interest in building our nation. It is opposed by those with vested interests those who support the speculators and those who want to put their private wealth their private benefit ahead of the interests of the nation.Tax tends to be something on which the left and the right do disagree. There are good reasons for that. Over here on the left we want a fair tax system where everybody gets to pay their fair share. Over there they want to make sure that the people reliant on salaries and wages particularly the people who are on modest incomes pay more than their fair share and that the people at the top get a sweet deal. We saw it of course back in 2010 when National cut tax rates for the top 10 percent whilst at the same time putting up GST—that regressive tax—which meant that people buying food buying clothes for the kids and paying school fees had to pay more tax to make up for the shortfall from decreasing the tax on the people at the top.Bill English late last year tried to defend these changes by saying that the tax system is more progressive now since those 2010 changes. He said that households earning less than $60000 a year which total around half of all households are generally expected to pay less in percentage terms than they were in 2008 and 2009. Conversely those at the top are expected to pay more. That tells me just one thing—inequality is growing in New Zealand. Those at the top are earning more and mercifully are it would seem paying a little bit more tax and those at the bottom are earning less and therefore paying less of the overall taxation. But is it fair—is it fair? That is the question we have to ask.A measure of whether or not taxation is fair is simply this. If the top 10 percent say control 50 percent of the wealth they should be paying 50 percent of the tax. Those who control say 5 percent of the wealth should be paying about 5 percent of the tax. Here is what Bill English said. Here is what Bill English said—the words of the Minister of Finance himself. He said the top 12 percent—not just the top 10 percent but the top 12 percent—pay around 46 percent of taxation. So they are paying less than their fair share under National. Meanwhile those earning less than $60000 a year who make up around half of New Zealanders i.e. those who control about 5 percent of the wealth in New Zealand are paying 11 percent of income tax. So those earning the least who have the least wealth are paying about twice as much tax as is fair whilst those at the top get the sweetheart deals from this Government not only in income tax but also through the benefit of the tax-free capital gains that that party over there refuses to budge on.It is clear it is plain and it is in the words of the Minister of Finance himself that our tax system is unfair and New Zealand is growing more unequal and has become more unequal over the last 5 years. You do not have to listen to me. You do not have to listen to my colleagues in the Labour Party or our friends on the left of politics. You just have to listen to the Minister of Finance Bill English. His own words say it for themselves. New Zealand is more unequal and New Zealanders on moderate and low incomes have a higher tax burden than what is fair. In fact they are paying twice as much tax as they ought to.Labour members think we can do it differently. We think this bill should have been used to implement a progressive growth-focused taxation system but that is not here. That is not here because that party over there is not interested in growth. Its members are not interested in supportive innovative businesses that create jobs and contribute to our nation’s GDP. National members are interested in doing deals that support their mates. They are interested in maintaining the status quo because that is in the best interests of their mates. They are not interested in growing our economy they are notinterested in creating jobs and that is why they will be out on their ears by the end of this year.