Cosgrove Clayton: Taxation (Budget Tax Measures) Bill — First Reading Second Reading In Committee 
Cosgrove Clayton: Taxation (Budget Tax Measures) Bill — First Reading Second Reading In Committee 
[Volume:654;Page:3960] 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I say from the outset that Labour will be supporting the passage of the Taxation (Budget Tax Measures) Bill to cancel the tax cuts and we do so for a number of reasons. Firstly we have been consistent in our view that these tax cuts were unaffordable inequitable and wrong. That is why we will be voting to cancel them. But the great crime in this House today is not actually the fact that these tax cuts are going to be cancelled; it is the great deception created by a Government that before the election bribed the people of this country by saying over and over and over again that they would get their full tranche of tax cuts. 
I point to an article by Brian Rudman. The great alibi that Mr Dunne and the National Party have put forward is that times have changed and the economic environment has changed. They say that when they walked through the door of the Cabinet room for the first time the veil fell from their eyes and they realised that the world was in a global economic meltdown. They said they knew about that effectively only when they got into Government. Mr Rudman made some very interesting points in his article in the  
New Zealand Herald  
on 27 May. He said: “It seems we’re drifting back to those bad old days. Earlier this month Prime Minister John Key signalled to an audience of his friends at a Business New Zealand meeting the promised tax cuts would be delayed to some unspecific time in the future. He said New Zealand could not afford ‘a runaway balance sheet’.” Yet Mr Rudman goes on to say that on 30 September last year Bill English criticised Michael Cullen saying: “Dr Cullen cannot be trusted to deliver on any future tax promises.” and that he criticised Dr Cullen for being cautious. 
The alibi that National put up was a bribe. It won an election largely based on a bribe that said that everybody would get tax cuts. 
Hon Member 
: Except the poor! 
Hon CLAYTON COSGROVE 
: Except the poor. It put the first tranche of the tax cuts through. We know now that National’s version of economic stimulus was to give the top 3 percent of income earners in this country one-third of the tax cut package. Families earning $40000 or less a year—I know this will not affect Mr Boscawen of course—got absolutely nothing. That was National’s version of stimulating the economy. Who did President Obama pitch his tax cuts to? He pitched them at low-income earners. Who did Prime Minister Rudd pitch his tax cuts and his stimulus package to? He pitched them to low and middle income earners. Why? Because low and middle income earners will spend the money. Those at the top who have discretionary income will either retire debt or save and that is not stimulatory. 
Iain Lees-Galloway 
: Or take an overseas trip. 
Hon CLAYTON COSGROVE 
: My colleague is probably referring to somebody on the opposite side of the House. 
Then National tried to do what it has always done throughout its history. It came into Government and said it had not known about the economic conditions. It said that the rules had changed and the environment had changed and it said to the New Zealand people that it must pass this legislation to be responsible. I tell members that if the National members did not know back in October and September that the world was in an international and economic meltdown then they must have been the only people on the globe who did not know that. The Nats knew all right—I ask members to listen to more of Brian Rudman’s article: “The International Monetary Fund’s October 8 2008 World Economic Outlook … said the world economy is ‘entering a major downturn’ in the face of ‘the most dangerous shock’ to rich-country financial markets since the 1930s.” That is what the IMF said in October last year. Mr Rudman goes on to say: “That was about the time Mr Key was unveiling his ‘responsible’ and ‘appropriate for the current conditions’ catalogue of tax-cut bribes.” 
It is not good enough for Mr English and Mr Dunne who walks with National now to say that the world has changed and that that is why National must go back on its word. It is ironic that Mr Dunne got up to quote from Part 2 because as he said himself part of this bill expunges a part of United Future policy. How embarrassing is that? It is not good enough for National members to come down to this House and say in the traditional Tory slap-happy way that they are sorry but they have to go back on their word. Those members could not read what the rest of the world read in  
The Economist 
 in  
Time 
 and in material from the International Monetary Fund. The OECD said in October and September last year—well before the election—that we as a globe were heading into an economic hole. Yet what did National members do? They announced to use the same words a “responsible” “appropriate for the current conditions” tax package. They knew all along that these tax cuts were unaffordable. They knew all along that these tax cuts were inequitable but they announced them anyway. 
I like this part of the article. Mr Rudman referred to the Budget and Mr English 
. 
 He said: “Tomorrow the albatross comes home to roost on Mr English’s shoulder. We can’t sue our politicians for breaking their word. But we can at least enjoy seeing them squirm.” I tell members that the people who are squirming out there are the poor battling New Zealanders for whom this Budget did nothing and whom my leader Phil Goff talked about. Mr English squirms in this House because he broke his word. Mr Joyce broke his word. In fact all those members over there broke their word. 
Hon Trevor Mallard 
: Mr Joyce likes seeing Mr English squirm though. 
Hon CLAYTON COSGROVE 
: Well that may be so. But the truth is—and history will show it—that those members told the country that it would get tax cuts. They accused Labour of being mean. They criticised us for being cautious. They told us not to worry as it was a cast-iron guarantee. It was one of the guarantees that John Key signed. It was another case of “no ifs no buts no maybes”. I can hear the ghost of Christmas Past; I can hear Jim Bolger’s words emanating into the Chamber. National members did the old Tory trick. The lied to the people of New Zealand. They lied to them before an election. They said they would give people tax cuts come hell or high water. They read the IMF report and they still went on promising tax cuts even though the IMF said this is the worst shock we have had in a generation and possibly in our history economically. 
Hone Harawira 
: Hold it up again! 
Hon CLAYTON COSGROVE 
: Do you want to make a speech or do you want to sit down? The Maori Party might like to consider that because of course it voted for the first tranche of tax cuts— 
David Garrett 
: I raise a point of order Mr Speaker. It is about the use of the word “you” again. 
Hon CLAYTON COSGROVE 
: Speaking to the point of order— 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: No we do not need to debate this. The member makes a point. Technically the member was using the word “you”. The word “you” is not ruled out on every occasion. I think that on occasion members just hear the word “you” and automatically think there has been an infraction of the rules. There has not. For the rules to be broken the member must be directing the comments at the Speaker; I did not take the member’s comments to be directed at me. 
Hon CLAYTON COSGROVE 
: Is that is the best he can do over there as he shrivels up behind his desk? I say to that member of the ACT Party and that member of the Maori Party that every one of their constituents who earn under $40000 a year got nothing out of the first tranche of tax cuts. Yet those members line up in the stalls—like a bunch of sheep led by the nose—to vote for the National Party every time. I invite Mr Harawira—there is no point in talking to Mr Garrett because we know what his constituency is like—to stand up and finally explain to us why his party voted for a tax package in which 70 80 or 90 percent of their constituency get nothing. 
Hon Steven Joyce 
: Mr Assistant Speaker Barker— 
Hon CLAYTON COSGROVE 
: No it was a false start so the member should sit down. He will get his chance because in the words of the famous Paul Keating “I want to do you slowly.”—I do not mean you Mr Assistant Speaker Barker; I mean that member. I say to the Maori Party that maybe the Maori Party members can get up instead of being lambs led by the nose lining up in the stalls to vote for that lot and tell us why they sold out—and they did sell out—every member of their constituency. 
We will vote to get rid of these tax cuts. Our position has been vindicated; our position has been consistent. We knew they were unaffordable the IMF knew they were unaffordable and the OECD knew they were unaffordable yet Mr Key tried to treat people like idiots and said that the first he knew that there was an economic crisis and that his package of tax cuts would be unaffordable was when he whipped up to the tea-making machine in the Cabinet room and realised that there was an economic crisis and a meltdown. 
I say to Mr Joyce who will get up next—with all the spin of his radio network background and with his hair parted in the middle—that he will have to put his best spin on this situation for New Zealanders. I say to Mr Joyce that New Zealanders are not silly: they know a bribe when they see it they know dishonesty when they hear it and they knew there was a recession. But they got sucked in. They got bribed sadly because on and on Mr Joyce and his ilk promised the unpromisable promised the inequitable and promised the biggest tranche of tax cuts we have seen for many years knowing of course that they would have to pull the pin and knowing they would try to win an election and then go back on their word a couple of months after.