Cunliffe David: Taxation (Budget Tax Measures) Bill — First Reading Second Reading In Committee 
Cunliffe David: Taxation (Budget Tax Measures) Bill — First Reading Second Reading In Committee 
[Volume:654;Page:3981] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Before the election the only thing National was going to cut was taxes. After the election that is about the only thing it is not going to cut. Today is Budget day. The kimono has been opened and we find that there is not a lot there. This bill makes a liar of the Prime Minister. The man who signed the personal guarantee to say that there would be tax cuts— 
Chris Tremain 
: I raise a point of order Mr Speaker. 
The ASSISTANT SPEAKER (Eric Roy) 
: I do not think you need to explain what your point of order is. All members are honourable members. I think the way in which the member phrased that was beyond—I will ask him to withdraw the comment. 
Hon DAVID CUNLIFFE 
: Speaking to the point of order— 
The ASSISTANT SPEAKER (Eric Roy) 
: No I have ruled that the member will withdraw the comment. That is all I require. 
Hon DAVID CUNLIFFE 
: I withdraw the comment. 
I raise a point of order Mr Speaker. Respecting your wisdom in this matter it none the less leaves me on the horns of a rather uncomfortable dilemma. As you will see from the speech that follows I can find no other explanation for the course of events than that the leader of the National Party knew before the 2008 general election—or should have known—that these tax cuts could never be affordable. 
The ASSISTANT SPEAKER (Eric Roy) 
: I have the gist of what the member is saying and that argument has been tried many times in the House. There is no way that the member can imply that about a member or use the word that he did. All members are honourable members. The member has to exercise his brain to express himself in another way. The member will continue. 
Hon DAVID CUNLIFFE 
: The key point here is that the Hon John Key knew before the election that these tax cuts could never be afforded. There are only two logical possibilities: either he knew or he should have known. 
As a matter of evidence let us look at the historical record. The International Monetary Fund issued a warning in October 2008 in its  
World Economic Outlook 
. It said: “The financial turmoil that began in the summer of 2007 has mutated into a full-blown crisis”. 
Craig Foss 
: What did you do at that time when you knew that? 
Hon DAVID CUNLIFFE 
: I am coming to that if the member will just wait patiently. On 14 September 2008 Mr Key’s old firm Merrill Lynch was gobbled up by the Bank of America. On the next day Lehman Brothers went bankrupt—nearly 8 weeks before the election. Mr Key likes to remind us that he was a member of the foreign exchange committee of the Federal Reserve Board of New York—a very august body. He would have been patently unqualified for that role if he had been unable to take the hint that two major investment banks on Wall Street had bitten the dust and there was a tad of trouble. One cannot have it both ways. One cannot be qualified to serve on the Federal Reserve Board of New York yet miss the hint—Lehman Brothers hitting the wall is a bit of a giveaway right? If he knew yet promised to continue with tax cuts the Assistant Speaker has better wisdom than me of how one might describe that. The word I wanted to use I cannot use but I cannot think of another. There was a deception an untruth a very long stretch of the imagination. But either way the public of New Zealand were conned. They were conned that they could have everything that they had liked under Labour—they could have Working for Families smaller class sizes and cheaper doctors’ visits—and they could have 3 years of tax cuts as well. 
You know the tax cuts were always economic lunacy. The first one took three-quarters of a billion dollars from people below the average wage who really needed the help and would have spent it straight away and by the Minister’s own admission transferred it to upper income earners. But worse than that it gave 30 percent of it— 
Hon Simon Power 
: Just keep walking. 
Hon DAVID CUNLIFFE 
: Mr Power may laugh but Mr Power unfortunately will not be in the top group that got one-third of the money. Three percent of income earners got 30 percent of those tax cuts—3 percent of income earners. I do not know who would call that fair but certainly not the taxi drivers I have been using. They are gobsmacked by that; they talk to everybody. So let us assume that ordinary New Zealanders think that was a rort. It was a political payback to the people who bankrolled the National Party to deliver for them—and it did. That was the 1 April tax cut. We are all good-humoured in this House but sometimes one just has to call it like one sees it. It seemed to me to be political payback. 
The key point—and it is a Key point—is that the Prime Minister then the Leader of the Opposition must have known before the election that this tax cut could not be afforded. Before Christmas this House was thrown into urgency to pass the tax bills in the dead of the weekend to get them through. And here we are in the dead of the night un-passing them because the penny has finally dropped in the National Party that they were ridiculous. I ask colleagues to contrast that with the responsible actions of the New Zealand Labour Party which canned a whole lot of election campaign promises—I did in health and there were whole portfolio manifestos we did not even release—because we did not want to promise more than we could afford. We did not want to promise more than we could afford because the public of New Zealand have had a gutsful of being conned. 
Today is Budget day. Today is the day National cannot hide any more. It has to open the books and the public has to see. It is no surprise therefore that on Budget day the charade was finally dropped. The argument in this House is not whether the tax cuts were a good idea—finally National has come round to our way of thinking which is that they were always bollocks. Now that National is voting them down we are happy to support that. There is no confusion in the Labour position because it has not changed. The senior whip on the Government side should be reminded that it is his party that has done the U-turn. It passed the tax cuts and it is repealing them and good on them for having finally mustered the courage and the wisdom to do so. 
Nathan Guy 
: You’re voting for it. 
Hon DAVID CUNLIFFE 
: We are for it—that is what I am saying. You did not used to be; you have changed your mind—not you Mr Assistant Speaker Roy. He changed his mind. You Mr Assistant Speaker are known for your consistency and wisdom. 
Hon Members 
: Oh! 
Hon DAVID CUNLIFFE 
: Look a man has to take his chances when he can get them. He is such a good Assistant Speaker is he not? Labour today stands alongside the hundreds probably thousands of decent hard-working New Zealanders who will be joining the unemployment lines. We are disappointed and we are angry that certain decisions have been taken that mean that some of them actually need not be there. 
On Budget day we are faced with a Budget that is remarkable for what it does not do. As I think Vernon Small from the  
Dominion Post 
 said it does nothing for the short term. There is no new stimulus. There is some reprioritisation of old money and dressing up of old programmes. There is no new stimulus and these tax cuts remove part of the stimulus that was there—it was not a very good stimulus. Those unemployment lines will grow. And it does nothing for the long term. There is no plan. There is no growth strategy. Heck there is not even an Economic Development vote of much meaning left. There is no research and development to give tax cuts for. There is no Foundation for Research Science and Technology to speak of; there is no Fast Forward. There is no Skills Strategy. There is a doughnut with a gaping great hole in the middle that is New Zealanders’ future. 
The punchline of this Budget has been the decade of deficits in superannuation. It is one thing to suspend contributions for a year; it is another thing to suspend them for 10 years. Our children will have to pay $30 billion out of their taxes because this Government did not have the fortitude to buy assets when assets where cheap and maintain the consistency of that purchasing fund. Not only that but if that Government really had to take a holiday what would have been wrong with doing that for a year or two and then telling the people of New Zealand how it was going to catch up again? But no those members could not do that; they had to have a 10-year holiday. It is like people not going to the gym for a decade and then thinking they will still be fit. 
Maybe Mr Key does not mind his second great con—the con that he would personally guarantee to maintain superannuation—because he knows that he will not be the Prime Minister when those chickens come home to roost. So his personal guarantee is as useful on superannuation as it was on tax cuts: “I personally guarantee 3 years of tax cuts—this year next year the year after—oh sorry is that what Lehman Brothers going bankrupt really means? You mean there is no growth? There is a deficit? We can’t afford them after all? Sorry we put you into urgency before Christmas. Sorry I told you in the House that these could be afforded. I guess I was wrong. Gee whizz how silly of me; I’ve been saying that for 6 months. I know I was a merchant banker I know I should have known I guess I just got it wrong.” Nobody believes that. The taxi driver does not believe it ordinary New Zealanders do not believe it and they will have their returns in 2011 when we win the next general election and restore integrity in New Zealand politics.