Clark David: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
Text is incorporated into the Bound Volume 
Clark David: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
[Sitting date: 18 September 2012. Volume:684;Page:5336. Text is incorporated into the Bound Volume.] 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 Part 4 concerns the amendments to the Goods and Services Tax Act 1985. Fresh in our minds of course for those of us on this side of the Chamber who have constituents struggling at this stage in their lives with the rising costs of living are the changes that this Government made in 2010 in the so-called tax switch where 44 percent of the value of the tax cuts went to the top 10 percent of earners and the bottom 20 percent of earners got just 2 percent of the value of the tax cuts. That was some switch. Any benefit that those who were on low and middle incomes got was very quickly swallowed up in GST and then in subsequent rises in the cost of living. 
This change in GST has really affected us as a society. Recently there was a report that made it clear that we are becoming more and more unequal. In fact New Zealand is now more unequal than it has ever been in its history and that is not something to be proud of. When we have an unequal society we have wasted potential. We have people right now in poverty falling between the cracks. We have got to ask: was that tax reform the sensible tax reform that should have happened? Is there any better tax reform proposed in this bill the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill that would sort out that problem of widening disparities and the poverty that is eventuating? There is wasted talent amongst our poor people who are not able to put nutritious food on their table in some cases and who are not able to afford the school books school shoes and raincoats that they need for their kids. They have kids getting preventable illnesses because they are living in cold damp and overcrowded homes. Those preventable costs are borne by all taxpayers. They are borne by high-earning taxpayers and by low-earning taxpayers. 
 Really there is a huge social shame associated with being poor—unnecessarily and because of this Government—and also with those health effects that go with being poor. Those people who are missing out as a consequence of not having the resources they should have will also not become the taxpayers of the future in the way that they could. I put it that if those people were given the full resources to develop as young children—and we know that early intervention has high rewards—then those children would grow up to be high-contributing taxpayers. That is why we need a tax system that is fair where everyone pays their fair share and where those at the top pay their fair share. We know that only 50 percent of the highest earners in New Zealand are on the top tax rate. We know that there is something not fair there and that is part of the reason we need tax reform. We also know that sometimes people do not meet their tax requirements for a variety of reasons and we deplore on this side of the Chamber those who do not fill out correct returns. That has been the topic of much debate this evening. 
I want to address a couple of specific clauses in Part 4. One clause is clause 151B the keeping of records and if we take the first section there in section 75(3D) the words “name address and registration number” are replaced by “name and address and registration number or tax file number as applicable.” This is the kind of change we see in this bill. We see— 
Hon Clayton Cosgrove 
: Radical! 
Dr DAVID CLARK 
: —radical reform—adding the words “and” and “or tax file number as applicable”. This kind of tax reform is you know hard to oppose—it is hard to oppose. I see that. Politically that might be a strategy from the Government of the day to put up tax reform where the words “and” and the words “or tax file number as applicable” are added in to the legislation because Oppositions cannot get up much steam against that stuff. But what it also reveals is a Government that is bereft of ideas and a Government that is not able to implement the real change that is needed to get New Zealand’s economy back on a track that would grow the pie for all New Zealanders. That is what we on this side of the House believe should be happening. We know that our trading partners over recent years China and Australia have been going gangbusters and we know that during that time real wages in New Zealand have dropped. That is almost unbelievable. What is going to happen when those economies falter? New Zealand is going backwards already. Will we go back further? So we see this tinkering in the legislation where we should see more adventurous change. 
Another clause that leapt out at me when I was reading through was the retrospective GST exemption in clause 135 of the bill for “the Auckland Council Independent Maori Statutory [written Statu-tory] Board established by section 81 of the Local Government (Auckland Council) Act 2009”. It was with some relief that I saw that hyphen in there. If it had been an “E” there the clause may have been restricted—perhaps some might jest—to members of the Maori Party to the “Maori Statue Tories” as we have perhaps seen them acting in the recent debates on assets sales. I am sure my colleague Rino Tirikatene might have something further to say on that as the debate proceeds. 
This kind of change—again a small change—is something that is difficult to oppose because in and of itself it is worthy but it really is tinkering and we are tinkering here with little bits of GST here and there. We are not expecting to see a step change in the economy as a result of these changes to the GST treatment. It would be great if we had a Government that did have a vision and that did really want to make change that would benefit our economy and that would really get our economy moving with pro-growth tax reform and policy that promoted savings perhaps through a universal KiwiSaver. We know that this Government has had more positions on KiwiSaver than the Kama Sutra. We wish that this Government would adopt a position that actually was beneficial for all New Zealanders not just a position that was all over the place—all over the place. It would be a pleasure I am sure if we saw a positive position adopted. Variety is not always the spice of life as we know in the area of savings policy. 
This Government is bereft of these changes and of direction in terms of GST and in terms of what kinds of changes could be made more broadly and that is why it is the Government that has the worst growth record of any Government in the last 50 years in New Zealand. That is why 50000 Australians are leaving annually to make their permanent home in Australia. 
Hon Clayton Cosgrove 
: New Zealanders. 
Dr DAVID CLARK 
: Sorry—New Zealanders are leaving. I was saying Australians are leaving! It has not quite got to that. They are leaving New Zealand too because this Government is bereft of ideas. One thousand people we know left Dunedin my hometown last year. They permanently left Dunedin for Australia because they saw greater opportunities there. I am assured it had nothing to do with the local National member of Parliament. It is because the opportunities were better abroad in general under the National Government’s term in office. 
It is also true that this Government is failing because perhaps it has not addressed the Inland Revenue Department system which is failing. John Key has pointed out that it is not working and that it needs to be upgraded because the Government is being held to ransom effectively through having a computing system that is out of date and not able to adopt the big changes that would be needed to get our economy back on track. It is perhaps symptomatic of a Government that really is giving up it appears and that is not good enough. We think this Government is letting people down and that is what we are hearing out on the street. People are telling me those people who did support John Key—and I find that a little challenging—that they supported John Key because they were promised a brighter future but now they are disappointed because it is not being delivered. In Dunedin we are seeing jobs being cut left right and centre. We are seeing our economy slow down and these people are disappointed. That is the word on their lips. They are disappointed with what this Government has not offered them—has not offered them. And that is why they are leaving New Zealand at a rate of 1000 people a week for Australia. 
We will come I am sure to more about the software development. It is not touched on in this part of the bill so I will leave that conversation for the next part of the bill but suffice to say that the kind of change that we see in section 151B around the keeping of records is symptomatic of a Government bereft of ideas and bereft of direction. It is now reduced to adding the words “and” and “or tax file number as applicable”. That is not real change. That is not going to improve our economy.