Fenton Darien: Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill — Third ReadingText is incorporated into the Bound VolumeFenton Darien: Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill — Third Reading[Sitting date: 19 June 2014. Volume:699;Page:18735. Text is incorporated into the Bound Volume.]DARIEN FENTON (Labour):Tēnā koe Mr Assistant Speaker. I participated in the debate on the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill at the Committee stage and caught up with what it is about. I think that my colleagues David Parker and David Clark have outlined very clearly Labour’s view of this bill. Although we are supporting it we have legitimate concerns and questions that have been asked throughout the process and also concerns about what is essentially a missed opportunity and a bill that entrenches inequality and unfairness.I want to comment on a couple of things that have not been mentioned in the speeches. The first is the late amendment which was included during the Committee stage about the tax treatment of non-resident foreign fishing crew. I do not have any big problem with that but surely there are more pressing issues around foreign fishing crew than putting something like this in a tax bill not least of which is the damage to our international reputation. I would be really keen to know from the Government whether it intends to pass the legislation called the Fisheries (Foreign Charter Vessels and Other Matters) Amendment Bill which is on the Order Paper and is supposed to address this appalling abuse that we have seen in our waters.There is report that has just been published in the last couple of weeks by Stringer and Simmons around the Shin Ji scandal one of the fishing vessels in New Zealand where the crew walked off the boat after alleging a range of abuse: sexual and violent assault restriction of movement physical and sexual violence intimidation and threats retention of their identity documents—hanging on to their passports—withholding of wages debt bondage and abusive working and living conditions. That article was originally written as a confidential report for the Department of Labour for the Shin Ji investigation but the Government did nothing other than admit it had dropped the ball. I understand that the writers offered to take the investigators to Indonesia to facilitate the interviews and gather evidence from the crew but that was declined.I think that in this Taxation (Annual Rates Employee Allowances and Remedial Matters) Amendment Bill there is a tiny little change in respect of the tax treatment of foreign crews but what we are not dealing with is the unacceptable situation where we have impoverished and destitute workers who have now returned to Indonesia and who have still not been paid their wages. I hope that the Government can muster the numbers to get that bill through. Mind you we are running out of time but I would have thought it was a priority to get those people their pay.Dr David Clark: Let’s hear from the next speaker.DARIEN FENTON: Yes it would be interesting to hear from the next speaker whether that bill is going to be passed before the House rises. I have also expressed the Labour view during the Committee stage that the National Government is applying inconsistent rules in this legislation. This bill deals with the tax treatment of employee accommodation for workers who are required to work away from home. We support the clarification of these rules—we do not want to see workers disadvantaged—and of course we want to see that happen but there is inconsistency in that we have another bill which luckily will not be passed before the election where workers would lose their meals and rest breaks. It was John Banks who saved the cup of tea. Thank goodness for John Banks; he saved—Carol Beaumont: I bet he’s happy about that legacy.DARIEN FENTON: Yes. So that bill will not be passed but I am talking about the inconsistency between this bill and the other legislation. During the Committee stage of the bill the Minister of Revenue agreed that migrant workers who come to New Zealand and are provided with temporary accommodation in the Christchurch rebuild would be covered as well. That is good but the irony is that many of these workers cannot get paid what they are entitled to. They have been brought here by immigration advisers who charge them obscene amounts of money and have had their pay cut when they got here. There is case after case after case now of migrant workers who have come to Christchurch and cannot get paid properly. I think that getting tax relief on their accommodation might be a little bit low down on their list; they are struggling to feed themselves at the moment.The Minister also justified the Government’s changes to accommodation payments under the Recognised Seasonal Employer scheme where we bring in thousands of workers from the Pacific—mostly from poor villages—who come to New Zealand to harvest our fruit and vegetables. Jonathan Coleman the immigration Minister a few years ago actually cut the entitlement for those workers by making accommodation part of the calculation of the minimum wage instead of being additional to it as it was under Labour’s scheme. He cut—Carol Beaumont: They keep mucking around with the minimum wage.DARIEN FENTON: Yeah. He cut their pay. How mean can we be? We have an industry—an entire industry—in primary production that is reliant on poor workers from the Pacific to come and pick our fruit vegetables and grapes yet National thinks it is OK to cut their pay so they do not even receive the minimum wage. They receive minimum wage including accommodation.John Hayes: That’s not true.DARIEN FENTON: It is true. It is true absolutely. You go and ask Minister Coleman. Then as I have mentioned there is the Government’s determination to cut meals and rest breaks. John Key has said that he will go out there and campaign on those changes. Bring it on I say. Just how lucky can you be? I know that Labour will campaign on them as well and I know what working Kiwis are going to say about those changes.So we are still paying the price in this bill for this Government’s approach where it is one rule for the top earners and another one for everyone else. It entrenches the tax changes brought in in 2010. They were unfair then they are still unfair now and they have added to the growing inequality. The gap in take-home pay between someone on $30000 a year back in 2010 and someone on $150000 a year grew by $102 a week as a result of those income tax cuts compared with $16.15 for someone on a lower income if they were lucky.The cut for the higher incomes was not just greater but proportionately greater so we have actually broadened and strengthened the income inequality there. The after-tax income available to someone on $150000 a year increased by 5.9 percent—for people on $150000 a year—yet those who were on lower incomes got nothing like that of course.There were a whole lot of other things like the top 1 percent of incomes got 9 percent of all taxable income and 14 percent of the tax cuts. The top 10 percent got 34 percent of all taxable income and 42 percent of the tax cuts. Of course then we had the GST bomb. John Key went to the last election and promised people that he would not increase taxes. He increased GST and of course who were hit by that? Who were hit by that? The lowest-income earners who have to spend every penny they earn and do not have the luxury of shopping around and choosing. They spend every penny they earn and they are paying more tax than he promised they would have to pay.The bill does nothing to deal with tax fraud and we have canvassed that. I think it is very disappointing that we are not seeing action in this bill to really do something about inequality in this country—income inequality and tax inequality. As you have heard my colleague David Clark spell out Labour has a very positive programme for tax change—a fair tax system that includes a capital gains tax. We will stop the tax subsidies to speculators who are just making it impossible for young Kiwis to buy a house. We are going to reform taxation around trusts. We will ensure more fairness between those at the top middle and bottom of the income scale through tax reform. What is more we will substantially reform tax and simplify it for small business. I do not hear the National Party talking about that. This Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill is a missed opportunity. We could have done so much more.