Clark David: International Finance Agreements Amendment Bill — In Committee 
Text is incorporated into the Bound Volume 
Clark David: International Finance Agreements Amendment Bill — In Committee 
[Sitting date: 19 February 2013. Volume:687;Page:7963. Text is incorporated into the Bound Volume.] 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I want to build on what my colleague Mr Parker was saying because I think he makes the valid point that the IMF advice is generally pretty good. What we have here is a Government that picks and chooses which advice it chooses to implement and which it does not. A good example is a capital gains tax. This Government has I am sure heard or read from the IMF that it suggests that a capital gains tax is a sensible way forward. 
John Hayes 
: No it’s not. 
Dr DAVID CLARK 
: New Zealand is one of only three OECD countries that do not currently have a capital gains tax—Mr Hayes knows that—and we know that one of those three Switzerland is a tax haven in effect. Another is Turkey and then there is little old New Zealand. Those are the three countries in the Western World that do not have a capital gains tax. The unfortunate thing with the absence of a capital gains tax in New Zealand at the moment is that it distorts investment decisions. It is part of the picture as to why our manufacturing sector is losing jobs. The primary sector is fine because indeed the investment bias is towards land and capital assets. We have farmers who are farming for capital gain which unfortunately they can realise only at the end of their careers and that is an unfortunate incentive. 
John Hayes 
: It’s not a bad time to realise it. 
Dr DAVID CLARK 
: There are lot of farmers whom I have spoken to who say it would be better—it would be better—to be farming on the basis of a competitive environment where the farmers who farmed best made the best profits not those who amassed the most capital gain over their lifetimes; rather those who adopted the farm practices here and now that generated returns and that participated in international strategies that saw New Zealand’s product rise up the value chain. But instead we have a lot of farmers who are resigned to the fact that this Government is condemning them to farming for capital gains that they will not realise until they retire or if they are old and tired and they die on the job that they will never see. Their families might get some benefit through the capital gains. So there are a lot of farmers who see that the current situation is not ideal and who would actually welcome a capital gains tax because they understand the importance of growing our economy and having an economy that rewards those who engage in effective business practices here and now. 
Of course with a more neutral investment signal we will also see people weighing up decisions as to whether they take what is effectively a tax break in investing in residential property or whether they choose instead to use their expertise in the business sector to invest in good manufacturing industries and in other good innovative business ideas. We in the Labour Party want more export jobs. 
This National Government seems to have its hands off the wheel when it comes to the economy and we see the results of that: the worst economic growth record of any Government in the last 50 years. This Government has a shocking—a shocking—record on economic growth and I contend in the context of this debate that that is precisely because it chooses what advice from the IMF it will put into practice what it will sign up to and what it will not sign up to. By cherry-picking according to immediate political considerations it misses the wider objective of economic growth for the benefit of all of New Zealand’s citizens. A capital gains tax is illustrative of this approach by the Government and the costs on New Zealand. We see real wages dropping in New Zealand. We see manufacturing jobs going. We see unemployment as high as it was in the 1990s when we last had a National Government and we see a shocking balance of trade that is projected to be the worst in the developed world next year all because of decisions— 
Hon David Parker 
: Balance of payments. 
Dr DAVID CLARK 
: Balance of payments Mr Parker corrects me and he is right. It is projected to be the worst balance of payments in the Western World. And it is because Mr Hayes and others like him are not comfortable with entertaining the solutions from the IMF that do not suit their current political narrative. At least I have got to assume that. I have got to assume there is good intention in there somewhere but it is not immediately obvious why the National Party seems to be against business seems to be against manufacturing and seems to be against growing the economy. This Government talks about business but it seems to do nothing that supports New Zealand businesses and New Zealand businesses as we know are crying out.