Woods Megan: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
Text is incorporated into the Bound Volume 
Woods Megan: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
[Sitting date: 28 August 2012. Volume:683;Page:4834. Text is incorporated into the Bound Volume.] 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 There is no need to be so rude to my colleague as to refer to him as that. It is with great delight that I take a call on this Taxation (Annual Rates Returns Filing and Remedial Matters) Bill of 2011. When we look at the purpose of this bill when you are coming down to the House to speak on a bill such as this you do not actually realise that you are walking down to speak on a piece of legislation where nowhere is it clearer that this is a Government without a plan. This is a piece of legislation that in the part of the bill that we are currently debating sets the rates of taxation. As the Minister in the chair the Minister of Revenue has said it sets the rates of taxation and puts out what the Government’s plan for managing the economy is. 
This is as previous speakers have said tinkering around the edges. It is tinkering around the edges while the economy tanks. We are spending $10000 a minute here for members opposite to explain their plan. It is not a 104-point plan it is not a 110-point plan and it is not even a 10-point plan. It is the no-plan plan. There is simply no plan here. It is tax policies that can be used to address the inequalities that we are facing in New Zealand. These are inequalities that have never been higher. All we hear from members opposite is a chorus of “It’s the global financial crisis.” Well here is a message for members opposite: it is a choice you make with your policies that you make the poorest people suffer the most in times of economic crisis. That is a choice that you make and your tax switch of 2010 only exacerbated this situation. 
David Bennett 
: Rubbish! 
Dr MEGAN WOODS 
: We are told by members opposite that this is rubbish. Well this is not rubbish. Here is a fact that members opposite might like to consider: the tax switch that members opposite put into place widened the gap between someone earning $30000 and someone earning $150000 by $135 a week. I am not talking about that being the difference; that is how much the gap widened. We are told by members opposite that actually we have seen a rise in incomes since National has been in power. No we have not. What we have actually seen is a fall in real incomes. We have seen a fall in real incomes for the first time since the 1990s—the last time that National was in power. What we are seeing is that the poorest people are suffering. 
The day after the 2010 Budget John Key proclaimed that the tax reforms that his Government was introducing had been designed to be broadly fiscally neutral. We now have a definition of what “broadly fiscally neutral” means to members opposite—to Todd McClay the member for Rotorua. Apparently a billion dollars is “broadly fiscally neutral” to members opposite because that is the size of the whole of the tax switch that they put into place. I would like that member to take a call and tell us what is fiscally neutral about a one billion dollar hole of inequity. That is something that he is not even over the detail of as most of the members opposite are not. What happened with the tax switch is actually we had a set of policies that crashed the revenue side of the Budget. We have a dwindling Government revenue base and this has forced more borrowing. We have members opposite who have the audacity to call themselves good economic managers—good economic managers who think that a billion dollars is broadly fiscally neutral. They have the audacity to paint Labour which consistently kept the books in order and ran large surpluses as spendthrifts. They simply have no plan and they simply have no way of looking at it. 
Labour put up excellent alternatives to this approach at the last election and we have not heard one compelling argument from members opposite about how that would not have modified the economy. We are told there was no detail around Labour’s capital gains tax policy. This is just ridiculous. There were pages and pages of modelling. We also had a savings plan that gave some surety to people and ensured that they were going to stay in that scheme. What we did not have is the up and down and changing that erodes people’s confidence in KiwiSaver that we are seeing with this piece of legislation. Is it 2 percent? Is it 3 percent? Is it 4 percent? That level of uncertainty is no way to encourage Kiwis into the scheme and to keep them there. My colleague David Cunliffe has addressed that. 
We have been told many things tonight in the course of this debate. One of these that we were told was from the member rejected by Dunedin South. He has stood up and told us that at the last election every time he went on campus in Dunedin North he was told by students that only the very rich and the very poor students could get student allowances. Well he is a member of a Government that has certainly set about fixing that. If you are a postgraduate student in this country now no student will get a student allowance. The Government has certainly introduced equity into this area. It is one of the few places where it has actually introduced equity because no one no matter what their level of income can get a student allowance under this Government to do the very research that will benefit this country and will actually do something to address the levels of inequality that we are seeing in this country which members opposite are claiming are not a problem. 
We have growing inequality in this country. We have a Government that has no plan to address it and a Government that refuses to believe that it has a choice in the context of a global economic climate. It has made choices that have meant the poorest New Zealanders have borne the brunt of this recession. Their incomes are lower their taxes are higher as a result of their tax switch and they are worse off. Government members can bury their heads in the sand or they can read the international reports. Reports are coming out daily that are showing that their Government has failed when it comes to addressing inequality in this country and has failed to put in place any plans that will address inequality into the future. This piece of legislation that we are looking at here today does nothing but show that this is a Government without a plan. It is a tax system that is wedded to benefiting the highest-earning New Zealanders the most and doing nothing to address inequality in New Zealand.