Clark David: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — Third ReadingText is incorporated into the Bound VolumeClark David: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — Third Reading[Sitting date: 16 February 2016. Volume:711;Page:9050. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): This bill is one we have indicated we will support on the basis that it makes our tax system more robust. That is its most basic and important function as a bill in my view. So that becomes the overriding reason that we support the bill. In this bill we are of course confirming the annual rates of taxation which are the same taxation rates that were confirmed in the Government’s 2010 tax package where 40 percent of the value of those tax changes went to the top 10 percent of earners and the bottom 20 percent got just 2 percent of the value of those tax cuts as they were called—and of course it got swallowed up in GST at the time as John Key broke his promise not to increase GST.So this is what we do in this bill. We confirm that 2010 tax package. Let us not forget that in doing that we seem to be under this Government’s stewardship committing this country to further borrowing. This Government sitting opposite us is a Government that has borrowed more money than the Muldoon Government borrowed.Hon Ruth Dyson: What?Dr DAVID CLARK: This is the Government that has created more debt for New Zealand than any other Government in New Zealand’s history. Part of the borrowing has been to fund these tax cuts.Chris Bishop: We blame you.Dr DAVID CLARK: And they do blame us—the member is quite right. Although there is absolutely no evidence to support the claim they blame us for the fact that they have borrowed and borrowed and borrowed to fund the tax cuts they put through in the 2010 tax package where all of value went to the very top earners and the middle class missed out again. They are working with this tax package to ensure that their mates in the in-club—a very small club I might add—are looked after into the future and to make sure that middle New Zealand sees none of the benefits of their economic gains.Of course today we also heard more evidence coming out in recent days that shows that New Zealand’s GDP is not growing per person. The only thing that has grown our GDP in the last year basically is immigration. So individuals are not better off. In fact in many regions of New Zealand real household incomes are still lower than when National took office all those years ago. New Zealanders know this to be true. They experience it in their everyday lives. They know that the Kiwi Dream is leaching away from them. They know that these tax changes that we are again confirming this year in this bill before us are responsible for them being worse off over time as the borrowing and these tax changes go to fund the very wealthiest 1 percent of New Zealanders to live the lifestyle that many people could only imagine in their wildest dreams.Most of New Zealand is missing out under this Government. It has a terrible record. It actually has the worst economic record of any Government in the last 50 years. We know for certain that no one has borrowed more. We know that no one has driven inequalities in quite the way they are being driven now as we have the lowest homeownership rate in 60 years.The OECD put out a report about a year ago saying the inequalities in New Zealand had acted as a major handbrake—a major handbrake—on our economy. It is about 15 percent smaller as a result of inequalities than it would have been otherwise. The tax rates in this bill which we are affirming this evening are a part of that picture. This is a Government that just does not seem to care for the middle class. It is concerned only with that very tight in-club that very tight Cabinet club and their well-being and that is coming at the expense of ordinary New Zealanders who once used to dream of owning their own home. It was not such an unreasonable thing to dream of.When I was a kid growing up I think most people imagined that they would own their own home. Now I see a large number of my peers—people in my age group—saying it will never happen for them because housing has got so out of control particularly in Auckland. The average house price there is now around $930000 and it will soon hit a million dollars—for the average house. It is one of the most expensive housing markets in the world. Something is out of whack.James Shaw: The most.Dr DAVID CLARK: It is the most my colleague in the Green Party says—the most expensive. This is where we are heading to as a country. This is not the New Zealand that we should have. This is not the New Zealand that we should have and yet in this bill we are once again affirming those tax rates.We know why inequality is bad for us. We know that when kids go to school hungry they do not learn as well. It is not rocket science. We know that if they go to school without shoes on without raincoats they get illnesses that are preventable. They probably feel the world is against them and it probably is actually. They are more likely to end up in the prison system. They are more likely to be unable to make the contribution they otherwise could make as a result of inequalities.We know that inequalities are bad for us when people are so desperate to earn money because they have grown up in poverty that they throw every other care aside—other societal cares. Think of the person who goes out to become a wealthy stockbroker exploiting loopholes in financial systems in order to make sure that they can provide for the next generation because they grew up in poverty. That person might well have been better as a neurosurgeon. They are choosing to use their talents out of desperation when they live in an unequal society.We know that less equal societies do not invest in infrastructure in the same way that more equal societies do. We see that in the United States. The state of many major highways is woeful compared with the major investment in places that are committed to public infrastructurelike China. We see China in recent decades is on the way up as it has invested in public infrastructure and the United States is struggling.These are meta-trends. We know we all need hospitals and schools and we need a taxation system that supports them but the more our taxation system drives inequality the greater the burden on those particular systems and the greater the cost of running them effectively. We need a more equal society and this Government just does not care. It seems determined to focus on making sure that the 1 percent the very wealthiest of the wealthy are looked after at the expense of those in the middle—at the expense of those in the middle.We know that when we have a fairer society everyone feels like they are included. Everyone feels like they have a role to play. Everyone feels like they can give of their best and that it will be valued. That makes for a wealthier more prosperous and happy society.But this Government opposite seems determined to focus only on making sure the 1 percent are better off. It is focused only on some superficial targets around surplus. We have seen the Minister of Finance deliver his first surplus after 7 years of Government. He had been promising it for two elections has finally delivered one and now he is saying he cannot do it again. The last Labour Government delivered nine surpluses in a row. There was zero net debt at the end of the day. The last Labour Government had a very responsible fiscal position. This one has borrowed more than any other Government in New Zealand’s history.Chris Bishop: Absolute rubbish—left us with a structural deficit.Dr DAVID CLARK: It has borrowed more than any other Government in New Zealand’s history and that member knows it. He is embarrassed and well he might be because this Government has a shameful economic record—a shameful economic record. It has failed to recover after the financial crisis. It was gifted zero net debt. Bill English said: “That’s the day the rainy day we’ve been saving for.” that the Labour Party had saved for. They have spent that money through the global financial crisis.Nobody would say that was wrong initially but since then they could have got New Zealand back on track. They could have had a plan. Instead of going from one dairy price bubble to the next—blaming the farmers when things went wrong like that Government does—they could have set about diversifying the economy creating a plan and creating a tax structure that incentivised research and development properly rather than tinkering around the edges to protect entrenched interests which is their way of doing things. They could have created an economy that was humming that was really in New Zealand’s interests.We could have been debating a tax bill that had much more proactive measures in it—to create a better society to create a better country and a wealthier more prosperous New Zealand where people actually could afford to own their own homes where they were not worried about non-resident foreign buyers bidding up the market so that the whole market was unaffordable in Auckland for the average Kiwi to buy a home in.This is not the New Zealand we all dream of. This is not the Kiwi Dream. This Government has lost touch with the aspirations of New Zealand. They were there they spoke to those aspirations when they came in but now they look jaded. Now they look tired. They have given up on ordinary middle New Zealand and they are now only looking to the aspirations of the 1 percent in the hope that they can fund another campaign cling to power for another term and ram through more bills that preserve the status quo and protect the interests that they have and not the interests of ordinary middle New Zealand.