Clark David: Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill — In CommitteeText is incorporated into the Bound VolumeClark David: Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill — In Committee[Sitting date: 02 July 2013. Volume:691;Page:11745. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North):It is a pleasure to rise to speak to this bill the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill. I think the honourable member David Cunliffe raised a very good point at the beginning of his speech. This bill is not so noteworthy for what is in it but for what is not in it. He raised immediately the issue of the car-park tax which has been ditchedsince the first reading as this Government fled for cover recognising the foolishness of imposing these petty taxes. It is a shame that the Government did not see this earlier that it did not look to avoid the paper girl and paper boy tax that it imposed in the previous Budget that it looked to not impose additional burdens on businesses that now have to collect child support and that it did not look to not impose further red tape on businesses to deal with those child support changes. This bill is full of these mild tinkering measures. It is typical of a tax bill put through under this Government. Some of them cannot be disputed as kind of sensible step-by-step little measures patching up tiny holes here and there rearranging the deckchairs on theTitanic perhaps and who can say that you would not get a little bit of sun if you put the deckchairs over here rather than here on theTitanic and make the most of the time you have available. But that is not a long-term strategy—that is not a long-term strategy.This is a Government with no plan. That is what it comes back to. This Government has been muddling along making tinkering little tax changes here and there taking the time of the House in order to rearrange the chairs on the “Tax-Titanic ”. What it ought to do—Hon Member: Worst economic performance in 50 years.Dr DAVID CLARK: The member over there quite rightly points out that this is the Government with the worst economic record of any Government in this country in the last 50 years.Andrew Williams: How long?Dr DAVID CLARK: In the last 50 years Mr Williams—quite right. It is shocking. But in some ways it is no surprise. If you do not have a plan to change things things will carry on as they are. Things will continue to get worse. The gap between rich and poor will continue to grow and the studies coming out say that it is. The gap between the rich and the poor in New Zealand has never been as great as it is now. This Government is shrinking median wages—they have gone down since it took over—and the people in the street know that. Ordinary Kiwis know when they go out to make their extraordinary contributions that they are less well off than they used to be because this Government is acting in the interests of the wealthiest.We as citizens know that something is not right when people in this country who have over $50 million are not on the top tax rate—when people earning over $50 million are not declaring income of $70000 or more. What we also know is that 75 percent of New Zealanders who fall into that category are not paying the top tax rate. That cannot be right. Are there any members opposite who think that is right?Hon Member: No not one.Dr DAVID CLARK: Not one. Not one member opposite thinks that those top tax earners should not be on the top tax rate and I am not surprised. But will they do anything about it? Will they do anything about it? They will not. Is there anything in this bill to do anything about it? No there is not. This is a bill that is all about the status quo that is all about ensuring that those wealthiest New Zealanders are protected and that those who cannot avoid paying tax are clamped down upon more and more and more.If this bill was accompanied by pro-growth tax reform we would be able to support it more enthusiastically. We will be supporting this bill because the measures in it are the little stitches that need to be made here and there to make things mildly better but making sure that the deckchair is placed in the sunny spot on theTitanic is not enough—it is not enough. We think that theTitanic should also be repaired. We think it should be done up and we think it should be sailing a course for a brighter future. There used to be another party that said that but it does not say that any more. It has given up that slogan because it knows it is not delivering on it. It has just shifted away from itsgoal of closing the wage gap with Australia. It has given it away. We know that 200000 Kiwis have moved permanently to Australia under this Government’s watch. This is a Government that is not improving the lot of New Zealanders.In this bill we also see nothing that reverses the tax changes made in 2010 that saw the wealthiest 10 percent of earners in New Zealand get 40 percent of the value and the bottom 20 percent of earners in New Zealand saw just 2 percent of the value of those tax cuts. That is why the gap between rich and poor is growing in this country. This bill does seek to make amendments to several Acts including the Income Tax Act 2007 the Tax Administration Act 1994 the Goods and Services Tax Act 1985 and the Income Tax Act 2004 in order to improve fairness. That stuff we cannot disagree with. What we see there is an attempt to tighten up the rules for deducting expenditure on assets such as holiday homes boats and aircraft that the user uses both privately and to earn income. I would be interested to hear the Minister in the chair take a call to explain why the approach taken in this bill has been adopted rather than one similar to that used for company cars where a fringe benefit tax applies. It seems logical that the same could be done here. If it could be enforced properly—it works perfectly well for company cars—why was that approach not taken here? I see the Minister in the chair looking confused. He looks very confused and I am wondering whether he will take a call to explain—Hon Trevor Mallard: No no that’s not confused. That’s a normal state.Dr DAVID CLARK: The member in front of me Trevor Mallard assures me that that is what he normally looks like. I give the member more credit than that and I am sure he will take a call to explain why this present policy has been adopted this present approach rather than the one that is similar to that used for company cars which would be more straightforward. That would be less burdensome to administer and it would be potentially a better use of taxpayer resource—unless the Minister does not care. But I suspect he does so I will look forward to his contribution.This bill also changes the time periods for claiming refunds. It changes the GST rules for business-to-business cross-border transactions and there are several other GST-related amendments. Let us not forget that this is a party that likes to tinker with GST. It might not tell you that. It might go into an election saying “We won’t put up GST.” I think John Key said that did he not?Hon Damien O’Connor: It was a lie.Dr DAVID CLARK: Oh my colleague says it was a lie.The CHAIRPERSON (H V Ross Robertson): Order!Dr DAVID CLARK: I could not say that—The CHAIRPERSON (H V Ross Robertson): Order! And the member will not say that.Dr DAVID CLARK: I did not say that Mr Chairperson. Other members may have a view. But Mr Key in my view did say he would not put GST up and then he did—and then he did. We can call that what we will. He said one thing and then he did another thing. He said “We will not put up GST.” and then he put up GST. The members opposite might want to tell me what that is called over the other side of the Chamber. It might just be what happens. It might be that we live in a dynamic environment that things change with time and that we can change our principles when it suits. That might be the approach that Government takes but we on this side of the Chamber believe in higher principles. We believe everyone should pay their fair share when it comes to tax not just those who cannot get through the loopholes.Facebook in 2010 paid just $5000 in tax in New Zealand—$5000. It has 2.2 million users but it paid just $5000 of tax. The next year that went up to $15000 worth of tax with 2.2 million users. It says that it is doing nothing illegal and that is true but just because it is not doing anything illegal does not make it right. But this Governmentcontinues to allow multinationals to avoid paying their fair share. It is doing nothing to sort out that problem just as it is doing nothing to stop those wealthiest New Zealanders avoiding paying the top tax rates. This is a Government that is protecting the big interests those at the big end of town. This Government will bring in this kind of tax bill that will tinker that will try to “base broaden” and that will try to make sure that it tapes up little loopholes here and there that cannot be avoided by people from lower backgrounds and some middle-income earners. As long as it is fair we will support that aspect of it.But what we really want to see on this side of the Chamber is an overall fair tax policy that makes sure every New Zealander pays their fair share and that makes sure we can afford the schools and hospitals that our future generations will rely on in order to enjoy the prosperity that we are enjoying now. Those who are wealthy have benefited from those institutions in our society and they like everyone else ought to pay their fair share. Most New Zealanders do. Most New Zealanders do not quibble with that. But it is those who are the very wealthiest who are avoiding this and this Government is on their side and not on the side of ordinary New Zealanders who go about their day-to-day business working hard trying to save but experiencing a New Zealand where the Kiwi dream of owning your own house is getting further and further and further away.Labour policies will change that. We will bring in 10000 affordable homes every year for 10 years to make sure that there are affordable homes. We will introduce a power policy that will ensure that power prices drop for ordinary New Zealanders. We care about those ordinary New Zealanders who are struggling. Mr Key says that ordinary New Zealanders are paying about the right amount for electricity. We disagree. But I will come back to the tax issue and that is that this bill is a tinkering bill. We will support the tinkering for the meantime but we think rearranging the deckchairs on theTitanic is not enough.