Katene Rahui: Taxation (Budget Measures) Bill — First Reading Second Reading In Committee 
Katene Rahui: Taxation (Budget Measures) Bill — First Reading Second Reading In Committee 
[Volume:663;Page:11098] 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 There is a story to be told as one browses the Net to ascertain how the market and the press gallery are responding to Budget 2010. I want to share with the House an absolutely random selection of headlines gathered from cyberspace: “Budget woes for property investors” “Biggest tax reform in 25 years” “Major incentives for investment” “Headaches for retailers over GST rise” “Income tax slashed GST to 15 percent” “Tax changes will keep Kiwis home” “Dollar responds positively to Budget” “More in most pay packets” “Budget politically safe but economically timid” “Tax package will bump up deficit” “Higher economic activity picked” “Experts praise tax cuts for all” and so it goes on. This is just a random selection of headlines. 
Nowhere in that list of analyses did I read that this is a Budget that reflects the melodramatic hype we have heard in the House today. Sure we read the words “safe” and “timid” but we do not read that this Budget is a tax swindle or a lost opportunity as members on the Opposition benches might mutter. In actual fact we read the exact opposite—that this is a Budget that will crack down on property investors and tax evasion. We read that this is a Budget that will benefit all workers. So much for this being a Budget that privileges the rich and leaves all other New Zealanders out in the cold. The worst that could be levelled at the changes to the tax system would be that they are by and large fiscally neutral. In effect this means that the increase in GST is offset by cuts to all personal tax rates and the immediate rise of 2 percent in benefit payments. 
All payments including New Zealand Superannuation and Working for Families will increase by 2.02 percent to compensate for the increase in GST. Two percent might not sound a lot but it is 2 percent more than the previous Government ever put out there. This is something we argued for right throughout the lead-up to Budget day—that no one should be any worse off as a result of the Budget tabled today. It has been a hard slog to bring the need to protect our most vulnerable to the forefront of this debate. To be frank it has not been the easiest Budget to promote amongst our electorate. I have just come from a Maori Party film evening fund-raiser and there were about 120 people present who are really supportive of this Budget. I spoke to a couple who are superannuitants and they are just so pleased that they will be getting $10 a week extra in their superannuation payment. An amount of $10 may not sound a lot but to them it is mana from heaven and they are rapt; and so are the others. It is all about perspective about restoring balance and about taking a long cool look at what will make the difference in order to create the promising financial outlook we all seek. 
The Maori Party has spent many hours debating and debunking myths about the facts about tax. We know that in many respects this issue has much to do with perception—the perception of punters about whether a tax cut or a rise in GST will directly impact on their lives. We have been told by National that once all the measures are accounted for the Budget has almost exactly the same impact on the average incomes of low medium and high income households. When we looked at a range of different scenarios and all scenarios the GST increase was offset by the income tax decrease. In simple terms there was no loss of money. What might be the breaking news of the day is that the biggest losers in terms of this tax package are foreigners who lose through a combination of the tightening of tax on foreign investment and also because they own a lot of property. 
This is a policy goal that we in the Maori Party campaigned on to protect and preserve our land to keep it from falling into foreign ownership which is something the previous Government did nothing about. The Budget will tighten investment property tax rules. One of the immediate impacts that will be achieved is that wealthy families will not now be able to use losses from rental properties to become eligible for Working for Families. Some might call this practice morally bankrupt—a claim we could also throw at those rental property investors who manipulate the system to dodge tax. In that light another feature of this tax legislation is that it puts a stop to those who try to rort the system for their own benefit. It seems a pretty hefty amount of money $26.6 million for the next 4 years allocated to the Inland Revenue Department but if it can put a stop to what surely amounts to theft and deception then that has to be positive. In fact it is almost incredible to believe that these measures according to Minister of Revenue Peter Dunne are expected to generate an extra $2.48 billion in the next 4 years. 
I want to return to the concept around the redistribution of wealth to invest in well-being—the “pay it forward” mentality. Paying it forward is a concept of doing good for others to repay the good that has been done to oneself. In effect reforming the tax system can make our economy fairer more sustainable and able to provide a better support for economic growth. I think therefore that those who are hardest hit by this tax legislation are the commercial and industrial property owners. They are hurt the hardest by the new depreciation rules. 
I want to return to the discussion around Maori and Pasifika unemployment generated just before the dinner break. We know that in the population aged 18 to 25 years the number of Maori and Pasifika young people receiving the unemployment benefit demands that we take action. The figures are startling. Out of 19000 youth receiving the unemployment benefit 34.8 percent are Maori—that is 6500 of our rangatahi—and 13.4 percent are Pasifika which is another 2500 young people. We must do something to ensure that they have a future to look forward to. We need to be able to support those young people with skills work experience and the confidence to invest in our future. Paying it forward is all about helping us to regain our footing and in particular to help Maori and Pasifika youth to find employment as the economy continues to recover. We need the putea in the national accounts to help make that happen. I hope that part of the $2.48 billion that Mr Dunne promised can be set aside for just that. 
The Maori Party is supporting this bill in the interests of our young people in the interests of our economy and most of all in the interests of setting a strong pathway forward into our future.