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:15997. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): I had a little more to say about pro-growth tax reform the opportunity for which has been missed in the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. I was disappointed that Mr Goldsmith as Finance and Expenditure Committee chair did not have a little more substance to add to the debate. He may be very dry as an economist and he may have written some historically worthy tax books but unfortunately today he was merely spouting the Government line and not really showing the underlying flint and intellect that we have come to expect of him as a promising—one day to be—Minister in a National Government probably decades away after a very long fair and opportune Labour-led Government.That sentiment aside the 2010 tax swindle to which my colleague Megan Woods has referred is really the thing that we are affirming today. I think we need to put it in terms that simple. It is the National Government’s policy to drive a wedge between the very wealthiest New Zealanders and the rest of New Zealand. And it has done it quite successfully. In 2010 the Government put through tax law that drove that wedge hard and here we are today in this bill reaffirming that policy as a Parliament effectively. This Government has not been bold enough to chop down those changes and to say that actually it thinks we need a fairer system and to make sure that we have some way of driving growth in the economy.Let us not forget that we have had a dream run in terms of dairy commodity prices internationally. New Zealand has benefited from the high primary produce prices. We have had trading partners our biggest trading partners which have avoided recession in the likes of China and Australia. New Zealand should be booming. New Zealand should have been booming for the last X number of years. But this Government has squandered that opportunity. It has been so focused on shovelling money towards the wealthiest New Zealanders that middle New Zealand and those who are struggling most have been squashed and pressed and are not able to get ahead. And here it is trying to do it again. Well it is important that we speak out against this and that we speak in favour of fairness and opportunity and in favour of pro-growth tax reform that will actually grow the economy and that can then be shared for the benefit of all New Zealanders.We are also missing in this bill the opportunity for research and development tax credits the likes of which Labour has put forward—the opportunity for businesses to access tax credits for developing ideas that will create a new and innovative economy in this country. That Government opposite seems to have given it all away.One reason we know that this Government has struggled to implement or even propose these changes of course is that the Inland Revenue Department computersystem is simply not up to the task. This Government was told when it came to office 5 years ago that the first computer system the legacy computer system was on its last legs. It was built in 1992. The internet was still in nappies. Google did not exist in 1992 members of the House will know and Facebook was more than a decade away. That is when New Zealand’s tax system was invented and was implemented. The one that we are using today the computer system that is in use in the Inland Revenue Department was put in place in 1992. It has been on its last legs for quite some time and this Government has done very very little about it.Two years ago John Key the Prime Minister said that tax policy was being held back because the computer systems “can’t actually support radical changes from Government.” He said that on Valentine’s Day 2 years ago. The Prime Minister said: “You don’t want to be in a position where Parliament is held hostage to a lack of technology.” He was giving a nod in the direction of sorting this problem out. Two years on two Valentine’s Days have passed and the Prime Minister’s Valentine’s Day promise appears to have been broken. He showered bouquets here and there in an effort to try to remedy this problem with our tax system and $50 million has been spent on international consultants to look at the tax problem. Do you know what conclusion those people have come to? After 2 years and $50 million they have come to the conclusion in principle that the tax system needs fixing. The Government was told 5 years ago by the Inland Revenue Department that the tax system the computer system needed upgrading. It was built in 1992 and 5 years ago this Government was told it needed upgrading and $50 million later and 2 years after the Prime Minister said that you do not want to be held hostage to it—the Government has spent $50 million on consultants—it has agreed in principle that it needs to be fixed. This is a flagrant waste of taxpayer money—a flagrant waste.The Government has gone one step further than agreeing in principle that it should be fixed. It is also now saying that it will build some more business cases—some more business cases. The Government will spend more millions building business cases. This Government is sitting on its hands not repairing the Inland Revenue Department’s broken computer system and therefore it cannot implement the kind of pro-growth tax reform that is necessary to take New Zealand ahead to grow the economy and to share those proceeds fairly. This Government has been sitting on its hands and not doing anything about it. That is a sad indictment on this Government.It is a Government that is so tied up in scandals in dealing with corporate bailouts like that for Skycity for its casino deal the $30 million for Rio Tinto with Chorus looking at deals there and so on that it is not focused on fixing the basics—the tax system that implements the decisions of this Parliament. So we will see when we get to later parts of the bill that other deadlines are being pushed out because this tax computer system is in disrepair. It is long past its due-by date and this Government has done nothing about it—to its shame.That is part of the reason why even if it wanted to make a fairer tax system it cannot. It is clearly not a priority for this Government. It needs a wake-up call. It needs to understand that ordinary New Zealanders do want tax policy that grows the economy and that gives people a chance to get ahead that is fair so that everybody pays their fair share of tax as indeed most countries in the OECD have in place already. New Zealand is a real outlier in not having a comprehensive tax system and by having this loophole for property speculators we sit outside the OECD norm. The OECD tells us this Treasury tells us this and every respectable economist tells us this. But this Government knows better. It is protecting vested interests and that is to its shame. Ordinary New Zealanders middle New Zealand are struggling to get ahead. They are working hard they are doing the right things but they do not feel like they can getahead. This Government is out of touch if it thinks that the current settings we are affirming here today should not be challenged. They certainly should because New Zealanders deserve a fairer deal. Every New Zealander deserves the opportunity to get ahead and that goes for the people down in Dunedin in the wonderful electorate of Dunedin North as I am sure it goes for the people right up in Kaitāia.We are not the only country in the Western World with a tax system. Those people in the Government across the Chamber need to accord fixing it the highest priority and they need to stop spending tens of millions of dollars on international consultants who simply tell them that in principle things need fixing. They have had that message before and they have had that message again now. I look forward to seeing progress on that issue so that we can have tax policy that is fair and that allows all New Zealanders the opportunity to get ahead.I also look forward later in this bill to discussing the delays in child support legislation because it is true that that is an embarrassment for the Government and it is inconveniencing New Zealanders. I look forward to hearing more from the Government as to why it needs to make these delays. It must have excuses but I can assure you they will only be excuses. They will not be things that New Zealanders want to hear. New Zealanders are sick and tired of hearing that they are a low priority for this Government that only the wealthiest have their interests protected and that ordinary New Zealanders should not be afforded the opportunity that everyone else at the very top of the heap is afforded when it comes to getting ahead for themselves for their families and for their communities.When Labour is in Government we will implement a capital gains tax that drives this economy forward that moves money from the speculative sector into the real productive economy that creates jobs that makes sure that economic growth is shared fairly and that reduces the gap between rich and poor which has grown and grown under this Government. We will have an economy that grows and shares the benefits fairly with all New Zealanders so that all New Zealanders have the opportunity to work hard and to get ahead. Thank you.