Cunliffe David: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
Text is incorporated into the Bound Volume 
Cunliffe David: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
[Sitting date: 16 October 2012. Volume:684;Page:5856. Text is incorporated into the Bound Volume.] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Thank you Mr Chair. That is incredibly generous of you to remember back that far and I am delighted to take up the other 3 minutes and 20 seconds. I had actually temporarily forgotten that my last soliloquy was so rudely interrupted by the clock. So let us pick it up from where we left off which of course is that the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill—which Labour supports the Chairman will be pleased to know—is part of a much broader plan that the Labour Opposition has for creating jobs by supporting our exporters to expand and to earn more and to help Kiwis get the education and skills they need to seize the job opportunities of tomorrow. It sounds pretty good does it not? But none of that is going to happen unless we have a tax system that works for our businesses and for our people. 
It is important that we grow our jobs and businesses by investing in science and innovation so that we can own the intellectual property rights that will help us command a premium in overseas markets and we also want to be able to help Kiwis save for a first home. This is a long-held and long-cherished part of the Kiwi dream that you can own your own patch of dirt but in order to achieve that we need to have a reasonable tax system that encourages homeownership. 
So how does this bill fit in? Well in general the picture that New Zealanders are seeing is that under National things are slipping backwards— 
Todd McClay 
: Oh such a good speech until now. 
Hon DAVID CUNLIFFE 
: —the member for Rotorua—that sadly National does not have a plan for taking us forward that it is increasingly out of touch with ordinary Kiwis and that it is spending its time debating things like its defence of Dotcom actions and so forth whereas what ordinary Kiwis are saying to us is “Actually we care more about paying the bills you know? Yes Labour you’ve caught them out but it is time you came back Government to what matters to us: paying the bills putting the roof over our head getting the kids through school and making sure that the hospitals are there when they need them.” and that is what we are determined to do. 
This bill makes a very small contribution to a few good things. I am going to run through just a couple of them. It raises the employee contribution rate for KiwiSaver from 2 percent to 3 percent. The irony of that is of course that only 2 years ago National cut the KiwiSaver rate from 4 percent to 2 percent. But we are broad-minded. We are pleased to see that the Government has now admitted that it has got it wrong and it is doing a U-turn which we are now pleased to support. It is a small U-turn. The Government went from 4 percent to 2 percent and now it has gone from 2 percent to 3 percent and for National that is a revolution. It is a very small revolution. It is a step in the right direction. 
It is worth noting that Labour’s KiwiSaver plan which was taken to the last election would have increased the savings rate by four times over National’s plan—four times—and that would have been of huge benefit to savers to the banking system and to our businesses that wanted to access investment capital. Labour’s KiwiSaver Plus plan would have really guaranteed a good savings future. 
What the chopping and changing on KiwiSaver does though is it undermines New Zealanders’ confidence and it does nothing to improve our dire savings situation. So what we would recommend to the Government is that we are supporting this increase from 2 percent to 3 percent so why do you not get with the programme and increase it to 12 percent or 19 percent which is what the Australians are doing through their employer contribution? That would be real change. This is just tinkering. We are supporting it just because it is going in the right direction. It is a small step. 
The bill also confirms that GST applies to late payments. The Minister of Revenue claims that he is merely trying to clarify the law around GST on late payments but tax experts say that late payment fees neither were particularly good nor were they a service and therefore they were not supported by the first-principles approach to GST. That is complicated tax language for the fact that this confusion should never have occurred in the first place. We support the tidy-up but it really should not have been there. 
The National Government of course has bad form on GST. I am sorry to have to remind the House of this but of course we all have emblazoned in our minds the indelible picture of John Key facing the camera and recalling that he would never raise GST. And then in a sudden stroke of amnesia he forgot and he raised it and then said that he never promised he would not. It is extraordinary that bloke’s amnesia is it not? You know one minute he is running a spy agency; the next minute he cannot remember where he had lunch. It is extraordinary. One minute he is promising he will never raise GST; the next minute he is raising it and then forgetting that he had promised not to. Anyway let us let bygones be bygones. We are bigger than that. That was last election. We are preparing for the next one. We are supporting the bill. We are supporting the tidy-ups on GST but that brings me to the next issue. 
Members will recall the tax switch. That was the much-heralded idea and one of really only two ideas that the Government has had in the economic area since coming into office that it would swap increasing GST on everybody for cutting the top tax rate for rich people—very rich people—and that that would cause the economy to bloom and it would not lose money because it would be fiscally neutral. Bad idea for everybody except the top few percent because the economy did not grow and it was not tax-neutral. The taxpayer was out of pocket to the tune of $1.1 billion over 4 years. That was one of two bright ideas National brought to the table as a new Government. The other one was selling State-owned assets. Neither has made a blind bit of difference to an economy struggling to get out of the mire. 
National’s tax switch was therefore really a tax swindle. Hard-working Kiwi families ended up paying more than they needed to and they saw little in the way of tax cuts. The current Government has got more problems because as we have long suggested the Inland Revenue Department’s computer system is on the brink of falling over. What that— 
The CHAIRPERSON (Eric Roy) 
: Order! Part 5—I am just struggling to find the part of Part 5 that the member is referring to. 
Hon DAVID CUNLIFFE 
: It applies to KiwiSaver and this tax system is required to implement KiwiSaver. 
Maggie Barry 
: Drawing a long bow. 
Hon DAVID CUNLIFFE 
: We specialise in long bows. I will come back to Part 5. We have been on a little what we might call derivative tour through macroeconomics. We went from KiwiSaver to the savings rate. We went then to the tax system and the fiscal balance which of course is impacted by the savings and so back to KiwiSaver of course which is referred to in Part 5. 
Michael Woodhouse 
: That is a long bow. 
Hon DAVID CUNLIFFE 
: It is a long bow but it is relevant because what we are doing is actually cutting through the fine print to what is really important to New Zealand households and that is being able to pay the bills put a few cents away for the rainy day and make sure that they have left something for their own retirement and something for their kids. 
New Zealand needs KiwiSaver and it needs it to be bigger it needs it to be better and it needs it to be stronger and National’s record in this regard is not flash. It cut the contribution rate from 4 percent to 2 percent. In this bill it is lifting it from 2 percent to 3 percent. We think it is a good idea. We are prepared to support the bill but do not let anybody out there in listener land get the wrong impression that it is a full solution.