Shearer David: Taxation (Budget Measures) Bill — In Committee 
Text is incorporated into the Bound Volume 
Shearer David: Taxation (Budget Measures) Bill — In Committee 
[Sitting date: 20 May 2010. Volume:663;Page:11153. Text is incorporated into the Bound Volume.] 
DAVID SHEARER (Labour—Mt Albert) 
: 
 I want to take another call in the debate on Part 1 of the Taxation (Budget Measures) Bill. Basically Tracy Watkins has it pretty much right: the Budget is an “Old-fashioned vote-winner”. It is not really about increasing our productive economy and it is not really about trying to grow our economy; it is really about the Government getting back into power in 2011. 
There is a lot of positive talk out there about the tax cuts and how much they will bring in. I believe that over the next few days as we start to unpick what the Budget really means we will get to the real core of what it means—that in effect the small amount of money that people on the average wage will get in their hands will be chipped away by GST by power prices by accident compensation by tobacco tax and by increased rates if one happens to live in Auckland to pay for the super-city structure. On top of that there have been the lowest wage increases in a decade. When the combination of those facts sinks in people will start to understand that the Budget as we have been saying today is an enormous swindle and it will leave a bitter taste in people’s mouths. 
What I want to talk about is what the tax cuts mean in terms of our productive economy. Let us take a look across the Tasman as this Government always wants to do and see what the Australians are doing. They will decrease their company tax rate down to 28 percent like New Zealand is doing. We have got the jump on them as the Government says. But companies in Australia pay superannuation contributions of 9 percent to 12 percent. Let us think about how much money in that economy—how much savings—is available for the productive sector to reinvest in the economy. What has been done here in New Zealand? The Government has dropped the employer superannuation contribution from 4 percent down to 2 percent. Our savings are woeful. In Australia people understand that increasing their savings increasing their capital to be able to invest into their productive economy is the way forward. 
Australia has given a 40 percent tax credit to its innovative companies—a 40 percent tax credit. So a company in Australia that invests in innovation gets 40 percent of its tax back for its efforts. We used to have a tax credit and it would have doubled our business research and development. Instead we have the State subsidising our companies. The State which cannot afford to do so at the moment is subsidising our companies. On top of that we have a farcical scheme called Primary Growth Partnership. Thirty million dollars was supposed to go into the Primary Growth Partnership in 2009-10. How much has gone out of the scheme? About $3 million went to greenhouse gas research. The rest of it has delivered nothing. So 18 months after the Government axed the Fast Forward Fund which transferred $700 million into productive research what do we have? We have nothing—zip zero—going out of the Primary Growth Partnership. For 18 months during which our scientists in combination with business could have been investing in our productive economy they have not received a thing. What has happened as a result? I will tell members. Thirty-six staff from AgResearch’s wool and meat sector have been laid off. That used to be a productive enterprise. Under this Government it will no longer be a productive enterprise. We have lost 12 to 15 people from the Institute of Environmental Science and Research. We have seen today that the Budget’s reprioritisations as the Government is calling them will move money out of environmental research and out of heath research and a bunch of good policies will be cut as a result.