Clark David: Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill — In CommitteeText is incorporated into the Bound VolumeClark David: Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill — In Committee[Sitting date: 18 February 2014. Volume:696;Page:15992. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): I follow my learned colleague the Hon Shane Jones in supporting this bill the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. However there are some things that ought to be covered in this debate including the introduction of Supplementary Order Paper 413 by the Minister of Revenue which must be regarded as one of the more embarrassing things that we will see in this Parliament this year.The CHAIRPERSON (H V Ross Robertson): Order! Sorry to interrupt the honourable member. I just want to remind members that this debate on Part 1 is about the annual rates of income tax for 2013-14. That is just a general reminder for all members.Dr DAVID CLARK: I am quite happy to come back to that issue in further parts of the debate. I appreciate that there will be opportunities in different parts to raise those issues which are particularly embarrassing for the Government. But there is plenty more to cover in Part 1 that is embarrassing for the Government so I shall concentrate on that as we start off.I guess the embarrassing thing about Part 1 which covers most of the substance of the bill is indeed the fact that it does not cover off those things that would really grow our economy. We see here where the annual rates are set for the taxes and so on and the way in which we agree as a Parliament to continue certain parts of Government business that they are something that can and ought to and should be debated time and again. The Government here has failed to really grasp the nettle. So we fail to see here the Government grasping pro-growth tax reform. Once again the opportunity is slipping by in a tax bill before this Parliament to discuss the opportunities that the OECD would recommend to us that Treasury would recommend to us and in fact that any credible economist around the Western World would recommend to us. In fact mostWestern countries have already adopted instituting pro-growth tax reform in the form of a capital gains tax.A Labour-led Government aims to introduce a capital gains tax to ensure that businesses in New Zealand are assisted in having money that is currently involved in the speculative property sector transferred across into the productive sector. Right now unfortunately there is something of a loophole in our tax system. It does protect the rights of invested capital but what it does not do is use that capital most efficiently in our economy. That loophole very rare in the Western World favours investors in property over investors in the productive sector. Labour regards this as wrong.Of course as I have said the OECD Treasury and other credible Western economists regard this as wrong but this Government has taken no steps to change it. It likes the way it is now. It likes the fact that the very wealthiest New Zealanders do not pay tax. Many of the wealthiest New Zealanders do not pay tax like the rest of us do because they are not on the top tax rate. The Government is not seizing the issue here. It is not addressing the fact that those New Zealanders are not paying tax on every dollar they earn. They treat their income in a different way so that it is not taxed.New Zealanders know that that is not fair. They are seeing fairness and opportunity slip away under this Government as we see in New Zealand inequalities at the widest they have ever been in recorded history in New Zealand. We see in the Gini coefficients and the other measures that economists follow that inequalities in New Zealand are the greatest they have ever been. Here where we set the rates of taxation we are reminded that these were changed—and they are not changed again here. The Government again did not seize the opportunity in the 2010 tax package where against its promise it put up GST taking money off New Zealanders—ordinary New Zealanders going about their business. John Key said he would not put up GST and again almost immediately after the election up it went. We begin to distrust a Government like that say the ordinary citizens of New Zealand.At the same time as that consumption tax was raised the Government sought to give some very big tax cuts to the wealthiest New Zealanders. The top 10 percent of New Zealand earners got 44 percent of the value of those 2010 tax cuts. The bottom 20 percent got just 2 percent of the value of those tax cuts. That was a very unfair tax change as we have seen it from this side of the Chamber. We have seen since then as we start to see here and there signs that the economy is growing that that growth is not being shared fairly amongst New Zealanders. There is no sign of it being shared fairly. Those at the top—the very few at the very top—have been given a big tax cut by this Government and the rest of New Zealand middle New Zealand is struggling. People are not able to get ahead even though they work day in day out. Even though they do those things that are good for our country and good for our future or ought to be they are not able to get ahead for themselves or for their families or for their communities because this Government has set the system through the way it sets up the tax rates in such a fashion that the wealthiest New Zealanders get this big tax break while the rest of New Zealand pays and pays and pays for the services and pays for that tax cut for the wealthiest New Zealanders.This Government is not about fairness and opportunity—those are Labour values the Labour values of fairness and opportunity. This Government is about preserving the interests of the wealthiest. That is why it has not gone near the capital gains tax in this particular bill. That is why it has not helped out New Zealand businesses that are struggling by introducing pro-growth tax reform that would support emerging businesses and that would see money directed towards the productive sector. Instead it is preserving the interests of capital that is already there. It is preserving the big money and big end of town’s interests. That is what we are seeing from this Government timeand time again. We see the echoes of it in the Skycity deal. We see the echoes of it in the handout to Rio Tinto which made record profits. The Government did not ask for any job guarantee and the next day Rio Tinto was cutting jobs. It took the $30 million from the Prime Minister but it carried on with cutting jobs anyway. That is the kind of corporate welfare and the kind of attitude that underpins these tax rates we see here that we reaffirm again today in this Parliament unfortunately. They drive this wedge between rich and poor and undermine the fairness and opportunity that New Zealanders value which are actually what New Zealand values as a culture. This Government is anti - New Zealand with its policy of driving a wedge between those at the very top and the rest of us New Zealanders who are struggling to get ahead despite working hard.It is a great disappointment that that is not being addressed properly in this bill because I think this Government is out of touch in not addressing it. It will in time see the consequences of not addressing it. Ordinary New Zealanders are sick and tired of being neglected and of seeing their hard-earned dollars being transferred to the tax cuts for the wealthiest New Zealanders. So this Government will face a day of reckoning come the next election. We heard from across the House during question time the Prime Minister offering to have the election in a month’s time. It had those echoes ofNineteen Eighty-Four as the Prime Minister off the top of his head said “Well let’s have it next month Sunshine.” I bet he scuttles away from that before too long. He is out of touch but he is probably not out of touch enough to not recognise that that would not go well for him because ordinary New Zealanders are becoming more and more and more concerned about the lack of opportunity and the lack of fairness in our society that is happening under this Government’s watch. They are concerned that the opportunities they had through the schooling system and so on have disappeared. It is now the case that more and more New Zealanders are living in poverty and cannot afford to buy raincoats or shoes for their kids or to feed them so that they can learn in the schooling system.David Bennett: Prove it.Dr DAVID CLARK: They mock across the Chamber. They think that it is a laughing matter that one in four New Zealand kids goes to school hungry. But we on this side of the Chamber think that every New Zealander should have the opportunity to get ahead. We think we should have a fairer tax system where everybody pays their fair share. That includes multinationals and that includes the wealthiest New Zealanders who currently structure their affairs to avoid paying tax. On this side of the Chamber we stand for fairness and opportunity and we think it is a great shame that the Government is not taking the opportunity in this bill to rectify the tax system to make it fairer for all New Zealanders so that they can all reach their aspirations and stay in New Zealand achieve their dreams and educate their children instead of having to take flight to Australia in order to get opportunities.This bill is largely uncontroversial aside from the lack of opportunity it represents and the foreign superannuation changes that colleagues have spoken to.