Burns Brendon: Taxation (Tax Administration and Remedial Matters) Bill — In Committee Third Reading 
Burns Brendon: Taxation (Tax Administration and Remedial Matters) Bill — In Committee Third Reading 
[Volume:675;Page:20764] 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am very pleased to take a call on the clauses in Part 3 of the Taxation (Tax Administration and Remedial Matters) Bill that cover remedial matters and the abolition of gift duty. I turn to the issues around the abolition of gift duty. I do not think the Minister is giving the fullest picture on these issues. The fact that gift duty raises only about a million or a million and a half dollars a year is not the only point for consideration. Actually gift duty exists to prevent tax avoidance and structuring. By scrapping gift duty we are opening a way to more tax avoidance and structuring. We have to remember—and this is at the heart of why Labour is opposing this part of the bill—that we have seen two rounds of tax cuts for top income earners. I think a chorus of voices is starting to be heard on ongoing tax reductions for those at the top end of town. We need only to read today’s  
Press 
—I know it is in there and it is probably in the  
Dominion Post  
as well—to see the commentary from Warren Buffett the wealthiest man in the world who has commented that he wants to pay more tax should pay more tax and is paying half the tax rate of his secretary which he thinks is wrong wrong wrong. When we abolish gift duty taxes we are furthering the ends of people like that. 
If members think this relates only to Warren Buffett they should take another look. If we look at last Sunday’s  
Herald on Sunday 
 we see that a column by Bernard Hickey noted that we have a situation in this country where a change has happened over the last 20 years. The top 1 percent of income earners are now taking more than double what they were taking in the mid-1980s. They are now taking nearly 14 percent. Fourteen percent of the national income in the hands of the top 1 percent of income earners is a doubling since the 1980s in this country. In America it is 20 percent so Warren Buffett is doing particularly well. Many other people in this country are benefiting from tax breaks like these being passed by this Government under the changes in the Taxation (Tax Administration and Remedial Matters) Bill. But it is just not appropriate—at this point most particularly in our economic and financial cycles when we have this country doing it tough—to send a signal to people at the top end of town that not only will they get two rounds of income tax cuts but also the Government will pass a bill that will effectively allow them to continue structuring things in a way that will not be subject to the scrutiny of the Inland Revenue Department. That is why Labour is opposing this bill. It is wrong wrong wrong to continue piling money into the accounts of people who as Bernard Hickey has observed are already getting 14 percent of the national income—14 percent is in the hands of 1 percent of the population which is a doubling since the 1980s. 
I challenge any member opposite to stand up in this Chamber and say that that is fair and that that is the kind of New Zealand they truly want to live in. When we get extremes of wealth on one hand we will then get the resulting extremes of poverty on the other. I have seen that kind of split in society. I lived briefly in South Africa in the 1980s. That is the kind of split that sees people with barbed wire fences around their homes in the leafier suburbs of town and sees people rioting on the streets because they just do not think they are getting a fair shake. Maybe we have seen some portent of that in Britain in the last couple of weeks too. 
We need to have an equitable society and gift duty may not be an income earner of any real recourse to the Inland Revenue Department but it is there for another reason: it is there to try to ensure that people pay their fair share of tax and that people do not structure and avoid tax through estates. That is the reason for it. In fact the analysis shows why it is important. When $70 million is being spent to avoid $1 million of tax what does that say? It says that there must be some considerable benefit to people for that amount of money to be spent trying to protect them from tax of that level. I say to this Parliament that we have a situation. When we get observers like Bernard Hickey from interestrate.co.nz saying that we have a situation in this country— 
The CHAIRPERSON (Eric Roy) 
: I have rung the bell; the member should sit down. Mr Robertson were you seeking the call? 
Grant Robertson 
: I was seeking the call. 
The CHAIRPERSON (Eric Roy) 
: I call Grant Robertson— 
Hon Trevor Mallard 
: Mr Burns didn’t have more than one call. 
The CHAIRPERSON (Eric Roy) 
: He did not seek the call. Are you raising a point of order Mr Mallard? 
Hon Trevor Mallard 
: No I am just chairing from the seat as you did Mr Chair. 
The CHAIRPERSON (Eric Roy) 
: Ha ha!