Turei Metiria: Taxation (Budget Measures) Bill — In Committee 
Text is incorporated into the Bound Volume 
Turei Metiria: Taxation (Budget Measures) Bill — In Committee 
[Sitting date: 20 May 2010. Volume:663;Page:11155. Text is incorporated into the Bound Volume.] 
METIRIA TUREI (Co-Leader—Green) 
: 
 Before I discuss the issue of energy poverty in terms of the tax cuts in Part 2 of the Taxation (Budget Measures) Bill I will refer to a couple of statements made by the Minister of Revenue Peter Dunne. One was his criticism of a capital gains tax excluding the family home. He mentioned the compliance costs and how difficult it would be. There is a capital gains tax in practically every OECD country on the planet. It is an area of tax reform that is progressive and broad and New Zealand is seriously lagging behind. Not only do most of the other OECD countries have a capital gains tax of some form but also they include— 
The CHAIRPERSON (Lindsay Tisch) 
: I bring the member back to Part 2. Part 2 is not about capital gains tax so I ask the member to concentrate on Part 2. 
METIRIA TUREI 
: Part 2 is about the rates but it is also about personal tax cuts and decision by this Government that the best way to fund those personal tax cuts is by giving to the richest a tax cut that is funded by an increase in GST which affects the poorest. The alternative is a capital gains tax as the Minister was describing just a few moments ago. I remind Minister Dunne that the UK the US and Australia have a capital gains tax but New Zealand does not. On that basis alone we are obviously lagging behind. 
The other issue the Minister raised again in terms of the justification for cutting taxes for the richest in this country concerned the corporate tax rate. The fact is that those who are the richest and who were using dodgy means to avoid paying the top tax rate will now have to pay only 33 percent if they are being straight up. But now they can use business as a means to funnel their income to the tune of a 28 percent tax rate as opposed to a 38 percent tax rate. 
New Zealand is one of the easiest places in the world in which to do business and to establish a business. It is very common for New Zealanders to set up businesses for a variety of purposes. I am very concerned that the corporate tax rate dropping to 28 percent opens up another loophole for those who are very wealthy to avoid paying their fair share. There are other choices too. 
One of the issues with the personal tax cuts is that prices are increasing. We have seen energy prices increase by 40 percent in the last 9 years. People are having to pay more in all sorts of areas but they are not being compensated in these personal tax cuts. One of the areas where they are not being compensated is that of energy and electricity. We know that a pensioner who lives on his or her own in an old house has a 97 percent chance of living in energy poverty. There is nothing in this legislation or in the personal tax cuts this legislation deals with that will address the needs of that pensioner or of a solo parent in the same situation who is living in energy poverty. 
We need to have reform—and this is a choice John Key could have made—of the electricity system to provide for progressive pricing so that all families have access to a fixed cheaper rate of electricity to help alleviate energy poverty. Seventy thousand of our poorest families are suffering the most but 350000 would benefit from that change. These were the choices this Government could have made but it did not make them. Instead in this legislation it has chosen to give the biggest tax cuts to the wealthiest and to make the poorest people pay. 
It begs the question of why this Government would make those choices. Why would it place the burden on those who have the least? Why did it not look at alternatives—alternatives that would not cost the Government money except for set-up costs? Certainly that would be the case if we looked at progressive pricing. National did look at progressive pricing in the 1990s and considered it as a potential option as a means to reduce the costs on families. These are costs they cannot avoid and that they have to bear in order to keep their families safe and warm. 
We know that families in this country are not safe and warm in their homes. We have a terrible problem with cold damp housing and it is causing a billion dollars of costs to our economy in lost productivity in truancy and education costs and in health costs. There is no plan in this legislation which is so urgent we have to deal with it on a Friday to deal with any of the expected costs that our poorest families must deal with. The personal tax cuts will do nothing for those families who are living in energy poverty. We are coming up to winter. It is May and we need it now.