Roy Heather: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
Roy Heather: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
[Volume:639;Page:9440] 
HEATHER ROY (Deputy Leader—ACT) 
: 
 I rise to speak to the second reading of this bill. Here we are yet again pushing through a hugely complex bill about matters that affect every person in the country—businesses and individuals. Here we are sitting under urgency on a Friday pushing through something that none of us on the Opposition side of the House have had a chance to have a proper look at. 
Bob Clarkson 
: More bureaucrats. 
HEATHER ROY 
: That is quite right. More bureaucrats will be needed as a result of this legislation. And here we are. Many of us have had to cancel appointments with constituents around the country so we can be here today to defend democracy. 
A quick look at the explanatory note shows me that the bill is about a huge number of things. Here we have enhancements to KiwiSaver and changes to the company tax rate—changes that I have to say are a bit of a backhander. On the one hand we are—properly—giving businesses a reduction in company tax rates; they should have been done well before Dr Cullen’s eighth Budget. On the other hand we are saying that employers now have a compulsory obligation to contribute so that the Government gets the honour and the glory for giving people a savings scheme. Where is the fairness in that? Many employers will be worse off as a result of this Budget. If they are supposed to be grateful then this is no sort of Government at all—as we know it is not. 
There are changes relating to research and development tax credits. Again there are more complications. This Government loves penalties and here we are putting in place penalties that we have not even had a chance to look at to consider whether they are fair and proper. This bill is not going to go to a select committee. No one will have the opportunity to look— 
Hon Peter Dunne 
: It’s the wrong bill. That’s the bill that’s going to the select committee. 
HEATHER ROY 
: Good—I am pleased it is going to a select committee because it jolly well should—[ 
Interruption 
] It is a bit confusing because we were given this bill last night to have a quick look at and now we are supposed to be experts on it so we can stand here and talk on it with some degree of authority. It is all very well for Mr Peter Dunne. He has had the chance for months to look at the legislation so that at election time he can say: “Look at the gains I’ve made from this Government.” 
Other policy includes tax exemptions implementation of fair dividend rates in life insurance—the list goes on and on. There is a huge degree of detail and complexity and we are supposed to be grateful that we are here on a Friday debating on behalf of the people of New Zealand who have great concerns; they are not going to get the chance to voice those concerns themselves. There are a great number of concerns and this is not democracy working as it should. 
Dr Cullen promised us that his policies would bring New Zealand 4 percent growth in GDP. He actually said at one point—many years ago—that that was how he would be measured. Well under National Certificate of Educational Achievement standards Dr Cullen has just scored Not Achieved. Or if we are talking about unit standards he has scored Fail. Actually he has not because one is not allowed to say “fail”. That is not allowed in this day and age. So on his score card there will be nothing. There will be just Not Achieved. 
What do we have today? Is it 4 percent growth in GDP? No. Today it is 2 percent growth in GDP. What is Dr Cullen’s forecast for the next 3 years? It is less than 2 percent. There is a bit of a gap is there not between 4 percent and less than 2 percent? He is not doing very well even by his own standards let alone by the standards of the rest of us on the Opposition side of the House. We have some ambition for this country but sadly Dr Cullen does not. What is Dr Cullen’s forecast for the next 5 years? It is an average of 2.3 percent. Already we are seeing a huge shortfall against his own self-imposed 4 percent yardstick. Dr Cullen’s yardstick—and perhaps this will be a message to him or enlighten him—will not get New Zealand’s GDP per capita into the top half of countries in the OECD. The country is being dragged—with kicking and screaming from members on the Opposition side of the House—right to the end of the bottom half of the OECD. Dr Cullen has certainly failed. 
We need a flat-tax rate of 20 percent. That would really kick-start the growth that New Zealand desperately needs if we want a First World health and a First World education system and if we want decent economic growth. The way to achieve more savings and more investment is to put more money in people’s pockets to achieve higher economic growth. That means across-the-board comprehensive tax cuts—not just to the company tax rate where it has been given with one hand and taken away with the other. It means bringing the top rate of personal taxation down to the same level as company taxation rates. That level too should be dropped to 30c in the dollar and other rates dropped significantly if we could not look realistically at a flat-tax rate of 20 percent. That would mean more savings more investment and a more prosperous future. 
Dr Cullen and the Labour Party do not seem interested in those things for New Zealand but that is why I came to this House. I want to see decent economic growth in this country. I want to see a decent health system where everybody gets the treatment they need. I want to see a decent education system. Our Minister of Finance should be aiming at much more than a Not Achieved he should be aiming at an Excellence but he has no idea how to go about doing that. 
Once again this is a Budget for tax accountants to get fat on. The Inland Revenue Department must be sitting today wondering how it is supposed to introduce the detail and deal with the complexity of it. No doubt as Mr Clarkson points out there will be more employment. There will be more bureaucrats and more people trying to deal with the complexity of a system that did not need to be that way. The tax package is incoherent. It is cutting company tax independently of personal rates and that makes absolutely no sense at all. The complicated tax credits for investing in Government schemes just add to the complexity of our tax system. 
People out there are focusing on KiwiSaver in the Budget and that is exactly what Dr Cullen intended. I was in a taxi this morning and the taxi driver said that it was all people in his office have been talking about this morning. But guess what those people cannot afford 4 percent of their income to go into savings. They need that to pay their mortgage and to feed their families; they certainly cannot entertain the idea of 8 percent. It might sound all very attractive on paper but where are they supposed to get that money from? Dr Cullen has not addressed that. He should be here in this House telling us how that is going to happen. 
Bob Clarkson 
: They’re not a people party. 
HEATHER ROY 
: They are not a people party at all; they are here for themselves. The Christchurch  
Press 
 “Perspectives” column is very interesting this morning. It contains a very interesting article written by Michael Littlewood who is the co-director of the retirement policy and research centre at Auckland University. He made some very interesting comments and I am going to read a few of those out. Firstly he said: “Until recently New Zealand had a simple transparent”—[ 
Interruption 
] Perhaps the Minister Mark Burton would like to stand and take a call because I cannot hear myself over here. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I remind members on my right to look at Speakers’ ruling 57/3. Interjections are to be “rare and reasonable” and as a former colleague once said here if at all possible witty. At the moment we are having conversations. 
HEATHER ROY 
: I want to read out some of the comments that Michael Littlewood a very well-respected gentleman has made on the KiwiSaver tax breaks and the Budget. He said: “Until recently New Zealand had a simple transparent tax and retirement income structure that has served us well. In fact it was a world leader in simplicity in transparency and equity but not a lot of New Zealanders understood that.” He went on to say: “The Government and other commentators have created a straw man.” He said that the Government is telling New Zealanders this: “you’re hopeless savers; you can’t be trusted with your own money; you own too much property; you’re drowning in debt; we here in Wellington”—“we” meaning the Government—“know much better what to do with your money and here’s how it’s all going to happen.” Those comments are exactly right. This is a “we know best Budget”. The Government is saying poor people out there know nothing and need to come and listen carefully to what the Government has to say because it knows best how people should spend their money. 
The article continues: “In the United States tax breaks for retirement saving are expensive favour the rich are complex and don’t seem to increase saving.” We never look around the world to see how other countries are getting on; we just rush forward and do these things ourselves. Michael Littlewood says that in Australia compulsory tax-favoured savings seem only now after 15 years to be having a little impact and it is only very little. He continues: “In Britain tax breaks for saving favour the rich at the expense of the poor.” That is where the taxi driver was absolutely right this morning. Half the value of tax incentives goes to the top 10 percent of taxpayers who do not need any incentive to save; that makes absolutely no sense. 
This Budget is a Fail. Mr Littlewood’s final comment could not have summed it up any better. He says: “So we seem not to have a retirement saving problem; retirees seem to be in good shape;”—and they are—“tax incentives are costly complex regressive inequitable and ineffective; governments seem to affect citizens’ total behaviour only a little but most important of all what we already had actually seemed to be working.” So here we are putting in place something we know is not going to work and that people will have no control over.