Foss Craig: Taxation (Urgent Measures and Annual Rates) Bill — First Reading Second ReadingText is incorporated into the Bound VolumeFoss Craig: Taxation (Urgent Measures and Annual Rates) Bill — First Reading Second Reading[Sitting date: 09 December 2008. Volume:651;Page:96. Text is incorporated into the Bound Volume.]CRAIG FOSS (National—Tukituki): First let me acknowledge the election of the Speaker the Deputy Speaker and the Assistant Speakers—including you Mr Assistant Speaker. I also acknowledge my returning colleagues and new members. I look forward to hearing maiden statements from new members on all sides of the House and if what we heard today from the two members who made maiden statements is anything to go by then I say we are in for a great period. I look forward to hearing those statements. I also thank and acknowledge the 20103 people of Tukituki who re-elected me to represent them in Parliament the 17904 people who voted with their party vote for National in Tukituki in Hawke’s Bay and the more than 1 million New Zealand voters who voted for National’s 100-day plan. It is a plan of tax cuts—simple tax cuts. It is a 100-day plan of commitments—an economic plan for New Zealand.One of the first things the previous Labour Government did when it came into office was to raise taxes. One of the first things the Labour members did was to take the top personal tax rate from 33c in the dollar to 39c in the dollar. It was 3231 days later when they decided to cut taxes in the face of lower poll ratings and to try to rescue themselves from absolute oblivion. The first measure of this incoming National Government 21 days after being elected is to introduce on the Table in front of members now the Taxation (Urgent Measures and Annual Rates) Bill. It is an absolute pleasure to be speaking and voting for this bill and to be part of the finance team of this National-led Government which is committed to putting on the Table an ongoingprogramme of personal tax cuts. We have waited for 9 long wasted years to get an ongoing programme a committed programme of personal tax cuts back into New Zealand so as to back New Zealanders. We will not really take as much in personal taxes in the first place; we will leave the money there with people. After 9 long wasted years we finally have some certainty with regard to personal incomes. After-tax incomes are going up; personal tax cuts are coming in. National members are committed to National’s core policy and it is an absolute pleasure to be committed to it.The members opposite who spoke earlier seem to have forgotten what happened a few weeks ago and why this programme of tax cuts was core open public policy. Over 1 million New Zealanders voted for this policy. It is very tempting to repeat the words of the previous finance Minister after the 1999 election. It is very tempting to do so but I will not. The anger will dissipate after a while—perhaps after the next 2 weeks. I did note the applause the new finance spokesperson for the Labour Party got; I think one person was clapping. The previous finance Minister had rousing applause from his colleagues on that side. I thought that was quite interesting even though it was a somewhat angry speech.It is such a pleasure to speak to this bill. After 9 years this bill shows a massive investment in the best part of the infrastructure of New Zealand which is the people of New Zealand. We want to reward them. We want them to stay here and have a viable future in New Zealand and we want the young people at varsity who are coming out with student loans to have the ability to pay for those loans. This measure makes it very much easier to give them a chance and an opportunity to choose a viable future in New Zealand. The members on the other side of the House seem to have forgotten—I did not hear this in any of their speeches—that over the past 9 years 70000 to 80000 Kiwis have been leaving per annum to go to other countries. Of those 40000 have been leaving for Australia because quite simply they could enjoy higher personal after-tax incomes there.Households are suffering and under stress. Household balance sheets are suffering; they are under stress and strain. Many people are suffering from the effects of the higher fixed mortgages that rolled over in the past 18 months to a year when interest rates effectively doubled under the previous regime. People are struggling and that is why we need them to enjoy a higher after-tax income. Then at least when they are negotiating with their bank as they are suffering from the effects of the higher fixed mortgages costs they have had for the last few years the bank will see that they have a forward track and an ability to fund their mortgage through this tough recession time.I did note that at the last Budget the previous finance Minister said I think “We’ve spent the lot. It’s out. The cupboard’s bare.” or something like that. What he failed to mention is that not only did he think he had spent the lot but also he had dug a few holes and put a few ticking time bombs in the back of the closet. One of the terms he used which may have been in the media was about some kind of “hospital pass” to the incoming National Government. It was actually a hospital pass to Labour’s new finance spokesperson. After his speech—written by whom I do not know—half his colleagues were nodding off to sleep. We are in for a fun time with that new spokesperson.We talk about Australia and its 7-year programme I think of ongoing personal tax cuts. After-tax incomes in Australia are one-third higher than those in New Zealand. There are 500000-odd Kiwis now living in Australia and enjoying that and we wonder why they left New Zealand. We have speeches from members on the other side of the House that are static boring and stuck in the past. To use the previous speaker’s term those members are dumb. They lack the vision we are trying to show them here: a commitment by an incoming Government. Twenty-one days after being elected the firstlegislation on our timetable is right here. We are rewarding New Zealanders and we are trying to offer them a better viable future.Hon Lianne Dalziel: So why are you cutting KiwiSaver?CRAIG FOSS: I will just touch on KiwiSaver for a minute. The previous speaker from the Greens mentioned it. This legislation brings in “2 plus 2”. I was on the Finance and Expenditure Committee when Business New Zealand and the combined trade unions both argued for “2 plus 2”. Both argued for “2 plus 2”. The Labour members on that committee also asked for and agreed with most of what they were saying. The Green member as was previously acknowledged said that the Greens also wanted “2 plus 2”. Yet the word came down from Dr Cullen’s office upstairs that there was no way it was going to happen. The unions wanted it business wanted it and the Green Party wanted it. The Minister drove the present scheme through for whatever reason we do not know. The change is right here and this bill will make KiwiSaver more affordable and more robust. It will make it last for longer and will give people certainty. As we know many New Zealanders cannot afford to save. When we are No. 22 in the OECD our ability to afford our expectations of 2008 is very very limited. This only starts to go some way towards moving us back up the OECD by trying to recover some of the opportunities that were lost over the last 9 years.This bill also deals with the research and development tax credits that previous members have spoken about as well as KiwiSaver—which we will be talking about in the coming hours—and of course the changes in the personal tax rates which we will get into more detail on. One thing I will mention because it seems to be forgotten is that we hear the term “borrowing from overseas” from members over there on the other side of the House. Over 70 percent of Government debt is owned by overseas-registered institutions. The previous Government borrowed an awful lot from overseas. In the last Budget $6.7 billion of extra borrowing was announced by the previous finance Minister. When that party over there was in Government $6.7 billion of sales of financial assets were also announced in the same Budget. Those members cannot come into this House and rave on about overseas borrowing and debt blowing out because the people responsible for that are right there on the other side of the House. In the June 2008 Budget there was extra borrowing. In October 2008 a decade of deficits was announced in the Pre-election Economic and Fiscal Update. In November 2008 the Accident Compensation Corporation’s blowout was revealed; it is about $2.3 billion at the moment and rising. In terms of the Government Shared Network the Labour members say it is only $25 million but it is $25 million of money that is not theirs to be wasted.I look forward to speaking further on this bill as we go through it and I say it is about time after 9 years of waiting for us to finally have a constant consistent ongoing programme of personal tax cuts for New Zealanders.