Hughes Gareth: Taxation (Annual Rates and Budget Measures) Bill — In Committee Third Reading 
Hughes Gareth: Taxation (Annual Rates and Budget Measures) Bill — In Committee Third Reading 
[Volume:672;Page:19006] 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Assistant Speaker Roy. Na mihi nui ki a koutou. Kia ora. I feel somewhat that I should not be taking this call because I would like to hear National’s reply to the Hon Clayton Cosgrove who was building up quite a slanging match. But I want to take a call on this important bill the Taxation (Annual Rates and Budget Measures) Bill at an important time because we are at a turning point in our nation’s history. We are at a turning point where we are facing huge economic challenges as a nation. At the moment it is only those high international commodity prices that are keeping our heads above water as we continue our slide down the OECD rankings as we have for the last several decades. This has real impacts on Kiwi families and real impacts on Kiwi jobs. [ 
Interruption 
] 
The ASSISTANT SPEAKER (Eric Roy) 
: There are too many conversations going across the House. 
GARETH HUGHES 
: Essentially we are a nation addicted to growing grass. Most of our income is from tourists coming over here to look at our natural landscape and the other part of that is selling grass in the form of dehydrated milk powder. We are addicted to high commodity prices; we are not masters of our own fortunes in this nation. 
We are facing huge environmental challenges. Just this week at the time of the Budget we had esteemed National Aeronautics and Space Administration (NASA) astrophysicist Dr James Hansen in New Zealand saying that climate change and coal were the single greatest threat to our civilisation on this planet. It is also a week of immense personal challenges and worker challenges. Just before the Budget I was privileged to stand with a number of other MPs from the Labour and Green Parties at the Council of Trade Unions rally about how people were really feeling the pinch of these Government changes in the Budget and those it had made before. We are facing huge economic challenges huge environmental challenges and huge challenges to our workers and our whanau in New Zealand. But what did we see in the Budget? Quite frankly it was a damp squib—an absolute failure. We saw a bit of tinkering. We have seen some hilarious names issued for the Budget. Probably my favourite name was the one given by the member Stuart Nash in the Committee stage: the “Steal-the-Dream Budget”. We have heard the “Shaky Quaky Budget” and the “Zero Budget”. There has been a whole bunch of names. The journalists have been busy trying to come up with names because there is not a great deal of substance and definitely no positive substance in the Budget for the country. 
We are debating this now on a Friday afternoon under urgency. There is absolutely no reason for this to be the case. We have plenty of time for this to go through the proper process which involves the public having a say in select committee and it is a disappointment that we have to see this bill under urgency today. The Green Party will be voting against this bill which basically does only two things. Firstly it halves the Government rate of matching contributions to KiwiSaver and removes the tax exemption on the contribution by employers. It also makes some significant changes to Working for Families. Let us look at the balance of contributions to KiwiSaver. The Government says this is intended to move public funding towards private saving. It says this will generate fiscal savings by reducing the public cost of the Government’s contribution. Cutting both the Government’s and employers’ contributions to KiwiSaver and saying that that will increase the incentive for personal saving really borders on the disingenuous. Why would anyone be more encouraged to save when the matching contributions are cut? 
Let us look at the Working for Families changes. The bill amends Working for Families by reducing the fiscal costs of the scheme while protecting the tax credits for lower-income earners. The threshold is to reduce from $36827 down to $35000 and the abatement rate is also rising from 20c to 25c in the dollar. Tax credits for children aged 13 to 16 will be aligned and a two-child family on $61000 will now receive the same amount. Generally speaking those earning anything above this will receive less than that. Below it they will receive more though the extra amount is tiny. Our analysis suggests that this is less than altruistic despite what is claimed by the Government benches. Essentially 110000 Kiwi homes will be affected by these cuts to Working for Families. With more than 23000 families earning less than $60000 a year in combined annual income reducing the abatement threshold to $35000 means that the abatement now applies to two-parent families with one partner working at a minimum wage and the other partner working 12 hours at a minimum wage too. So raising that abatement rate to 25c in the dollar—and this is the rub of the changes—results in an effective marginal tax rate of 58 percent. This is put on the people of New Zealand who can least afford to be paying a marginal tax rate of 58 percent. 
The KiwiSaver changes come at a terrible time in New Zealand’s history. We have very low rates of household savings compared with other OECD countries. I have to admit that I have been wrong on one thing. We have heard over the years that this Government has a vision of taking us back to the 1990s. That is definitely the case when it comes to industrial relations legislation. For some environmental legislation the vision is to go back to the 1990s. When it comes to household saving the vision is for us to go back to the 1970s—back to the days of Muldoon and scrapping national superannuation. Apparently the Government has dusted off the old play books on how to reduce our nation’s savings. 
Two things this bill deals with are the KiwiSaver changes and the Working for Families changes. The third big element of this bill is the student loan changes and I am surprised we do not see the changes in legislation in this Chamber today for the entitlement to student loan access for students aged over 55. Clearly that is discriminatory. At 54 one can get a student loan; at 55 one is not allowed to under this Government’s change. It is clear blatant ageism. It is distinctly unfair and I believe unlawful. The Human Rights Act says it is illegal to discriminate based on age when providing services. Obviously the Government can get around this by legislating it but the Government has not legislated this. The student loan scheme was established in 1992 under a Cabinet minute. One cannot break the law in a Cabinet minute. Cleary this change is discriminatory and I believe it is unlawful if the Government intends to continue this crazy policy. It is crazy when we consider that Kiwis are working longer—many past 65. It is crazy when many of us have a number of careers in our lifetime. It is crazy because in a recessionary environment people who have lost their jobs want to get trained up and they want to get skilled. That is a good thing for the economy but this Government is saying no. I am surprised we do not have legislation in front of us to deal with that. 
Lastly I want to touch on the context of this bill which is the Budget. The Budget lays out National’s grand plan which is essentially that it will sell State assets. It is like an analogy of ordinary Kiwi cafe owners selling their espresso machines to get a little bit of upfront cash. It is like shearers selling their clippers to pay off the monthly bills. It is like hairdressers selling their scissors to pay off some bills. Ultimately we will see bad long-term effects. I have just discovered in the Budget that it allows the Government to set up a new account of $750 million to help borrow for its roads of significance to National. This is in the context of the nation borrowing more than $300 million a week and of the biggest Budget deficit in our country’s history. Yet somehow Steven Joyce has managed to ring-fence his $11 billion for just seven roads of significance to National. And now because we are seeing declining road usage across our country as a result of those high oil prices that the Government refuses to prepare us for and plan for it has to set up a whole separate budget line of $750 million to fund the roads of significance to National. 
We are seeing in this Budget subsidises to polluters of between $800 million and $1 billion. At a time when our country can least afford it we are subsidising polluters. For me that sums up the Budget but it also sums up the failure of imagination from both the two big parties in our Parliament. There is still no vision. From the National benches we hear that we will have severe cuts possibly leading to another recession and from the Labour benches we hear that it would borrow more potentially risking a credit downgrade. No other party in this Parliament has the courage to look at the revenue side of the ledger. For any household budget if the household is facing a pinch then it has to look at revenue. The Green Party has put serious credible well-costed proposals on the table that would not impact the economic growth currently projected but would make a serious difference to the Government’s books. 
Lastly I say that there is no vision from either party of how we transform in order to deal with these significant economic environmental and social challenges facing the nation. We have such advantages and such strategic assets in this country. We have this “clean green” brand that will be called into doubt as seen in the BBC  
HARDtalk 
interview. We will have 80000 people coming to New Zealand to watch the Rugby World Cup and maybe a billion people watching it on television and when they are not watching the rugby they will be asking the question: what is the deal with New Zealand? What is the country’s story? They will find we are on the world stage selling ourselves as being clean and green yet it is simply a marketing slogan and a marketing line. Instead we need to be cutting those subsidies to polluters rebalancing some of that transport budget to sustainable options and leveraging that “clean green” brand into a prosperous future for all of our kids. Kia ora.