Cunliffe David: General Debate 
Cunliffe David: General Debate 
[Volume:674;Page:20261] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 It is not often that I have the opportunity to agree with the honourable member John Boscawen who has just his resumed his seat but I do on this point: New Zealand’s debt is too high and borrowing an extra $380 million a week is irresponsible when the opportunity is here to consistently reduce that with sound tax reform that is backed by the authorities of the world economic system. A capital gains tax will fill in the largest tax loophole that is dragging this economy further into debt. The honourable member Dr Nick Smith sounded like a Tea Party Republican in his refusal to state the obvious: that the Government cannot get its way out of the mess that it has got the country into without addressing sensible tax reform. He also got our price of carbon wrong but I will not go into that; it is a story for another day. 
Yesterday Statistics New Zealand reaffirmed that New Zealanders earned on average only another 1.9 percent in their wages in the year to June except for those on the rich list who made a 20 percent gain—probably none of it taxed because much of that was capital gain. Yesterday the truth stared us in the face. What is the National Government’s solution to that inequality and to the debt mountain? It is to sell off New Zealand’s precious public assets sell our power companies raise GST on everything give the richest few a whopping tax cut attack workers’ rights with the 90-day fire-at-will law and drive down wage rates. Bill English thinks that is a great idea. Well thank goodness there is now a clear alternative: a strategy based on sound tax policy and a fiscal balance that gets to surplus the same year as the Government’s Budget and pays net debt to zero faster than the current Government does. 
The Government is trying to brand Labour as tax and spend while we are projecting zero net debt faster than the current Government’s own books. 
Hon David Parker 
: As we previously did. 
Hon DAVID CUNLIFFE 
: That is why nobody is taking the National Government seriously. My colleague has said the truth: we did it previously in 2007-08. Net debt was zero under Labour; net debt was zero. The Government hates it. Net debt is now about 20 percent. The Government cannot get away from the truth: net debt was zero under Labour. Net debt will be zero again under Labour with the tax plan we have unveiled. 
Let me just restate some of the important features of Labour’s proposed capital gains tax. It is a flat rate of 15 percent. It excludes the primary residence. Is that not interesting? The Prime Minister says this will have the country screaming backwards and that it is a dagger through the heart of capitalism but on the other hand he says we already have a capital gains tax. Bill English says the capital gains tax is the right thing to do but it is just not comprehensive enough. But 31 out of 34 OECD countries have one and only Japan puts the family home in. Labour will not put the family home in. Bill English wants to put the family home in. What side of the argument is the Government on? 
Under Labour’s design the capital gains tax will be a flat 15 percent. It will cover only future gains; it will not be retrospective. It will not cover unrealised gains. It will be broad-based and fair to all but it will not be intrusive and will not include personal property. It will not be an inheritance tax. It will not touch the Canterbury Earthquake Recovery Authority area for at least 5 years. The Kiwi CGT—capital gains tax—will be carefully designed by an expert tax panel like the tax panel the Government set up and then ignored. That tax panel all but recommended the capital gains tax that the Labour Opposition has had the courage and foresight to stand up and say this country needs. 
There is another working group that the Government set up and then ignored: the Savings Working Group. Is it not interesting that the Prime Minister this week frightened by the reception of Labour’s capital gains tax has moved to cover his backside on savings and say we will have to do a green paper to try to resuscitate the Savings Working Group? It is too late. New Zealanders know that National has no credibility on savings. It cut superannuation and KiwiSaver incentives. It has no credibility.