Clark David: Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill — Third ReadingText is incorporated into the Bound VolumeClark David: Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill — Third Reading[Sitting date: 19 June 2014. Volume:699;Page:18732. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North):I came into this Parliament motivated by a concern about the growing gap between rich and poor. This bill the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill confirms the 2010 tax changes made by the National Government. It confirms measures that have grown the gap between rich and poor in New Zealand. The 2010 tax package saw the top 10 percent of earners get over 40 percent of the value of the tax cuts. The bottom 20 percent got less than 2 percent of the value of those tax cuts and any benefit they got was swallowed up in a GST increase to 15 percent which went through at the very same time.This is the sobering reality. We have a Government opposite that is content to protect the interests of the wealthiest few New Zealanders—the top 1 percent of earners—while the rest of New Zealand is going backwards. Today in this bill we are being asked to support these changes that will drive the gap between the very wealthiest and the rest of New Zealand. Here we are in this Parliament passing those changes through again. This is the most uncomfortable bit about this bill.The bill will proceed anyway. The bill has the support of the National Government and its allies—those who have kowtowed the whole way through content to see that gap between the very wealthiest and the rest of New Zealand grow and grow and grow. We have to pass tax bills because they make sure that the laws line up that the taxes can be collected and that New Zealand can continue to support schools and hospitals. But we must note that that support is dwindling. In real terms support to health and education is dropping.If we look at the health sector we see year upon year upon year the real value of support to that sector dropping and we know it. All of us in our heart of hearts know it. We see people come into our constituency offices with children they cannot feed properly. This is an outrage. This is an absolute outrage.John Hayes: A good concession speech.Dr DAVID CLARK: Members opposite might find that amusing. They might find that a reason to make jokes—cheap shots. The people who are starving are not people who can defend themselves easily. But we on this side of the House have a view that New Zealand should have a much more positive future. We would like to see a New Zealand where everyone can get ahead; a tax system that is fair that rewards everyone for the effort that they put into our society; a New Zealand that makes sure that everyone pays their fair share and that everyone gets the benefits of that to get ahead.That is the New Zealand we would like to see on this side of the House. It will be a more positive New Zealand. It will be a New Zealand for everyone not just for the very wealthy few. These people on the opposite side of the House do not even interest themselves in tax avoidance. We do not see any real measures here that are going to crack into that. We know that the Government does not even have a measure for tax avoidance. It could be a billion dollars a year—quite likely. That would mean that in 5 years’ time if it caught all the tax avoidance that was going on it would not have needed to do its asset sales programme. But it is just not an issue for Government members. They are content to preserve the interests of that wealthiest few. That is why they do not want a capital gains tax.Labour will introduce research and development tax credits so those innovative firms that are making change that are innovating and that are creating export businesses can get ahead because we know that is real money coming into the economy which can support those public services that we all want. Nobody wants to see their neighbour’s kids not able to afford shoes to go to school. Nobody wants to see that. People care and Labour will support that kind of innovation that leads to that wealthier society.We want pro-growth tax reform. We want a capital gains tax that pushes money out of the speculative housing sector and toward the productive economy. We want to introduce monetary policy that actually puts more money into Kiwis’ pockets not into the banking sector. We want to introduce a universal KiwiSaver that facilitates that. We want to introduce a power policy that sees businesses paying more than $500 a year less on their power bills.We want to make sure that our housing sector is properly looked after that we actually have the houses necessary to house New Zealanders so they are not living in garages or in overcrowded housing conditions. We want a Government that puts people first. This Government is refusing to do that. It is putting through year after year after year the same taxes that confirm the growing gap between rich and poor and it does not care. Members opposite are gesturing; they do not care. For them it is not an issue as long as the wealthiest few continue to get ahead.In this legislation there are a couple of other anomalies I want to address. We have community housing entities that are in this legislation given a new framework. We have the Minister deciding who has charitable status and who does not. The Minister will have a wide-ranging discretionary power to approve or not approve charitable exemptions. The delegation to the Minister of the effective right to confer lower taxes on some and not others is bad law plain and simple. Some taxpayers get a tax cut and some do not and it is up to the Minister to decide. That is bad law. Geographic location will be taken into account and household composition and income.There is a bunch of criteria but it was too hard and part of the reason it was too hard was that this Government pushed the submission period for this bill through over the summer. New Zealanders were enjoying their well-deserved break at the end of the year when the bill was put through its consultation period. The Government did not want to hear the feedback. It did not want to hear why its bill was inadequate. The accountants and the tax firms told the Government “We’ll be back here sorting this law out later.”—and we will. We know that parts of this law will have to be amended and that is because of the process this Government has run. All it was concerned about was pushing through these changes to give the Minister extra powers and that is not good enough.On this side of the House we do not want this kind of New Zealand. We want a New Zealand that does give everyone the chance to get ahead and to get a job and we want tax policies that actually encourage employment growth. We want a monetary policy that gives the independent Reserve Bank the right to have other targets—not just interest rate targeting but actually employment targets. We want a Reserve Bank that has on its board representation from a variety of sectors. We want a Reserve Bank that makes sure that economic growth is in its sights not just interest rates. Plenty of other countries do that; why not New Zealand?We want tax policy that makes it easier for people to put money into productive investments rather than speculation in the housing sector. We want all of these other things looked at. We want to be a bit more hands-on not just take our hands off and say “The growing gap between rich and poor is inevitable. It’s something that will just happen. Let’s just pass another set of these tax settings. Let’s just wash them through for another year. Let’s just watch that gap between the very richest few and the rest of us grow bigger and bigger. Let’s watch the capital accumulate for that top 1 percent.” That is what this Government is doing.We used to be in the top third of the OECD in terms of equality. Now we are in the bottom 40 percent. It is very hard to get back from there but a capital gains tax will start to set us on that track. It will not only help us grow the economy which of course we want in order to afford those public services but actually help to reduce inequality. It will help to cut down on tax avoidance which we know is crippling New Zealand.Last year the Inland Revenue Department found that 107 out of 161 high-wealth individuals who control more than $50 million worth of assets in New Zealand declared that their personal income in the last financial year was less than $70000—Carol Beaumont: Unbelievable.Dr DAVID CLARK: —unbelievable—the starting point for the top tax bracket. So these people were saying they had net worth over $50 million but they did not have earnings that put them in the top tax bracket. That is completely implausible but for this Government that is no concern—it is no concern at all. It passes the rates on to another year—another year they go on. A Labour Government will bring about positive change. We will have tax policy that grows the economy that puts people first that grows employment that actually makes a difference for Kiwi families that makes housing affordable and that will be positive for New Zealand.