Cunliffe David: Taxation (Urgent Measures and Annual Rates) Bill — In Committee Third Reading 
Cunliffe David: Taxation (Urgent Measures and Annual Rates) Bill — In Committee Third Reading 
[Volume:651;Page:245] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 This has been an extremely insightful discussion—insightful because of the complete claptrap that the Government is reciting having dredged the barrel for anything resembling an economic argument. David “Cliché” Bennett fell back on the last press release that he read which must have been a pre-election one and then his lookalike twin brother the Parnell yuppy rehearsed his Crosby/Textor lines. This apparently is the man who is the king of listening: whatever the punters want give it to them. What they did not want was their superannuation contributions their savings future capped at 2 percent. Nobody asked the National Government to cap employer contributions nobody asked it to take away the $40 overhead subsidy nobody asked it to take away the superannuation tax credit and nobody asked it to take $3.5 billion out of the best savings scheme New Zealand has ever had. The ghost of Muldoon is stalking the Government benches: “Find a good savings scheme and scrap it—heh heh heh!”. 
To get back to economics for a moment we have witnessed tonight David Bennett saying that the whole reason he is in this House is to care for low-income New Zealanders. 
Hon Darren Hughes 
: And a brighter future. 
Hon DAVID CUNLIFFE 
: And a brighter future. It almost brought tears to my eyes but my enthusiasm for his religious conversion was tempered by the fact that the Minister of Finance not an hour ago had to withdraw through embarrassment—his butt having been saved by Hone Harawira—a financial veto relating to a $750 million kick in the guts for low-income Kiwis just before Christmas. So when David Bennett goes home and rereads his clichés he should think about how what Mr English has done affects the people he purports to serve. 
But getting back to economics for just a second I wonder whether anyone on the Government benches understands the savings gap. I hate to do Economics 101 on my first week in this job but it seemed to me that the fact that Kiwis were spending $1.20 for every $1 they earned because they thought they were becoming wealthy because their house values were going up—that is called dissaving—was offset by the surpluses that our Government was running. If members opposite do not run Government surpluses and are now spending us into debt they are borrowing to pay for these tax cuts. If Kiwis are not saving do members know what happens? Our current account blows out even further. Our current account deficit is the difference between what Kiwis are borrowing overseas and what we are earning through exports and what the Government is saving on Kiwis’ behalf. So the consequences of this ill-fated move go beyond taking away ordinary Kiwis’ nest eggs. They gut the Government saving on Kiwis’ behalf and KiwiSaver was the one tool that was fixing that long-run problem. And now by National members’ own admission they have killed it because their own books make no provision for new enrolments and they are too scared—where is the point of order for my saying they lack bottle—to put the future debt track out there so that all New Zealanders know how far in the shtook this is going to get us. 
Hon Steven Joyce 
: The debt track’s yours. 
Hon DAVID CUNLIFFE 
: Oh no sir! When we were elected we inherited a gross debt to GDP ratio of—wait for it—35 percent. We got it down by half. Can Mr Bakshi do those sums while he is still here? That is half. My great fear for New Zealanders is that through the ill-fated efforts of the new Government the debt track will go back to the 35 percent that we inherited in 1999. 
Craig Foss 
: Decade of deficits. 
Hon DAVID CUNLIFFE 
: It was not a decade of missed opportunities because we did a hell of a lot to cut the ratio in half but members opposite have squandered in a week what it took New Zealanders 10 years to build up. And why? The media the press gallery and the public know that the real reasons for this bill are not economic and they have nothing to do I say to Mr Bennett with helping low-income New Zealanders because those members have just kicked them in the guts by three-quarters of a billion dollars at Christmas. This bill has everything to do with rewarding constituencies. That is why the lion’s share of the tax cuts go to the best-off—they happen to be the voters who are the most faithful to the National Party—and that is why those members have penalised real businesses and rewarded the financial sector’s soft-shoe guys. The games that have been played to cover this up the half-truths that have been told and the rubbish economics that have been paraded would make one wince. 
Some of those members cannot tell the difference but I fear for New Zealand because I know that the Minister of Finance is better than that. He can tell the difference but he did it anyway. He knew all along that there was a billion-dollar kick in the guts in this bill but he did not tell us until Dr Michael Cullen forced him to by putting an amendment that asked him to insure low-income New Zealanders against the effects of his policy. And then he said: “Oh you got me. OK I will veto it. Here is the financial veto.” Stupidly he made it public; stupidly he signed it; and stupidly he gave us the number. It is now on the Internet—$750 million with the Minister’s signature beside it. You are too late—sorry not you Mr Chairman. The Minister of Finance then withdrew it throwing National’s new coalition partner deeper into mana-depressing territory because its mana was used to bail out your lack of honour. You did not tell New Zealanders what was coming. You surprised them— 
Hon Bill English 
: I raise a point of order Mr Chairperson. The Chair is obliged to enforce the conventions of the House. This member has been using the term “you” incorrectly as have other members of the Opposition yesterday and today. I suggest that you let the Opposition members know that they are not to bring you regularly and generally in a derogatory way into the debate. 
The CHAIRPERSON (Lindsay Tisch) 
: I thank the member. 
Hon DAVID CUNLIFFE 
: Mr Chairman I certainly withdraw and apologise for drawing you into the debate. There was no intention to do that and it was quite inadvertent. 
The Minister of Finance is the one who has trashed the mana of the Maori Party. Our team has tonight provided to New Zealanders the fact that something like 71 percent of all Maori earn incomes of less than $40000. That means some 71 percent of Maori people if they have children are in the category of people who are net losers from this bill. They are part of the crew that is paying the $750 million bill. 
Chris Tremain 
: I raise a point of order Mr Chairperson. The member is an experienced former senior Minister. We are talking to Part 4 of this bill and he has gone back to Part 3. I ask you to ask him to talk to Part 4 which has the provisions relating to KiwiSaver. 
Hon DAVID CUNLIFFE 
: Speaking to the point of order Mr Chairperson I respectfully submit that earlier there was a very similar point of order from Mr Foss on exactly the same point. Because of the interdependencies between the spending provisions of this bill and the funding provisions your alternate Chairman ruled that it was in order to draw those links. 
The CHAIRPERSON (Lindsay Tisch) 
: Continue. 
Hon DAVID CUNLIFFE 
: Thank you Mr Chairman. New Zealand has a historical problem of a savings gap. It was held off by the fact that the Government was saving on New Zealanders’ behalf. The structural solution to that problem was KiwiSaver. It has worked a dream. It has exceeded all expectations. There is no justification for the Minister of Finance to even raise the suggestion that it has not increased net saving because 827000 New Zealanders who were not saving are now saving massively through this scheme. OK there may be some diversion but the chances of it being 100 percent are nil—absolutely nil. That is a red herring one of many floated by the Government tonight because it knows that it is on very shaky ground here. It knows there is no economic justification. There is no logical linkage between undermining one’s savings programme and one’s incentives for innovation in order to fund a short-run consumption increase. 
Hon Ruth Dyson 
: So why would they do it? 
Hon DAVID CUNLIFFE 
: Well the politics are plain. National does it because it rewards constituencies that have been faithful to it. Upper-income earners and the financial sector are the beneficiaries and they just happen to be the main donors to the National Party. Do we see any potential connection here? After years of trying to get National elected they have finally got that and on National’s first business day it has put the interests of its core constituencies ahead of the interests of the many New Zealanders who are going to pay the bill. 
The strategic mistake that National has made is that it is just a bit too obvious. If National members had waited until some time next year to introduce this measure perhaps they would have snuck it through with less public concern—but actually I think we would have called them on it. The fact that they are trying to ram it through without select committee consideration with an enormous lack of mana—in fact lowering the mana of this whole House and of every Minister of Finance who has gone before Mr English—is what is truly sad about this legislation. It is bad economics; it is bad I say to Mr Bennett for many low-income New Zealanders because many of them will lose; and it is bad for Maori.