Norman Russel William: Taxation (Urgent Measures and Annual Rates) Bill — In Committee Third Reading 
Norman Russel William: Taxation (Urgent Measures and Annual Rates) Bill — In Committee Third Reading 
[Volume:651;Page:258] 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I stand to speak to the title clause of the Taxation (Urgent Measures and Annual Rates) Bill. Of course the use of the word “urgent” in the title is rather perplexing. It does not seem to me that there is anything so urgent that this bill has to be rammed through the House tonight or tomorrow. What is so urgent about this bill that it could not be considered by a select committee? What is so urgent that we could not have a proper public debate about the content of this bill? What is so urgent that we could not let civil society which is the foundation of our community have a look at the content of this bill? And what are the urgent things that are not in this bill? 
The UK Tory party the Conservative Party has become very interested in climate change because it thinks that is quite an urgent thing. It has started to embrace the idea of using the tax system in order to move our society towards a more sustainable direction. Its leader David Cameron has talked a great deal about it. It seems to me that climate change is an urgent issue and if we want to take urgency to deal with something urgent then why not deal with climate change? Surely that should be at the top of the agenda like green taxes are now at the top of the agenda for discussion by the Conservative Party in the UK. But there is nothing in this bill about climate change. There is no transition for the tax system—to shift taxes off income and on to resources and pollution. Instead the only discussion we are having about climate change is that maybe the taxpayer should pick up more of the costs because the Government is about to weaken the emissions trading scheme. Every time we weaken the emissions trading scheme the taxpayer is going to hand over more money to pay for the pollution of other people. It seems to me that if “urgency” is what this bill is meant to be about then we should be looking at climate change and what we are going to do about it. 
What about discussing something else that should be dealt with in this bill? I think the state of our rivers is quite an urgent issue and is something that our tax system should look at. There is nothing in this bill about making sure people pay in that respect. There is the issue of a tax on commercial water-use. This bill is a tax bill so it could have talked about a tax on commercial water-use. It could have something about that as an urgent issue. Then there might be a financial incentive to use water efficiently. Instead there is no financial incentive because this tax bill does not really deal with the urgent issues that are facing our country. 
What about another urgent issue that should be addressed by this bill—that is inequality and poverty in our country? We have a major problem with inequality and poverty and this tax bill will actually make it worse. Instead of the tax bill that we have already passed into law that would give tax breaks to lower and middle income earners particularly lower-income earners this bill reduces the tax breaks that we are going to give to those people. The tax cuts we were going to give to lower-income earners are being taken away. 
But it seems to me that what is really urgent in this bill and why it is so important that it is passed quickly is that next year people are going to get tax cuts of one sort or another. Now when they get those tax cuts most of them will say: “Oh look National gave us tax cuts just like they promised to do.” That is what most people will say. They will not realise they were already going to get bigger tax cuts particularly for lower-income workers. The reason this bill is so urgent is the politics of it. The Government needs to get it through quickly before people realise what is being done. That is what is urgent about this bill and that is why it is being pushed through. The reason we are having this debate at 10.30 at night and going through to midnight is the politics of it so that people do not realise. 
What about the savings problem? That is another urgent problem that I would like us to address. The fact is that we have a massive current account deficit most of which is an investment deficit because we are highly indebted. We borrow lots of money so we can trade each other’s houses. What about dealing with that problem? Instead this bill does not deal with that. It makes the problem worse. We have a bad savings culture. We are trying to do something about it. 
KiwiSaver was very very far from perfect but it was a step in the right direction. The Greens support the 2 percent but it should be “2 plus 4”. Why does the Government not do “2 plus 4”? Why does it have to be “2 plus 2”? Why not go to “2 plus 4” if the Government really cared about savings? We have a savings problem and we all agree about that. What about “4 plus 4”? Why do we not go that way? Let us give people the option of 2 percent but let us support it. It seems to me that an urgent problem that we have as a country is our savings culture. But this bill puts things backwards. 
We have another big problem an urgent problem—because it seems to me that the bill should be about our urgent problems. We have another urgent problem which is research and development. We do not do a lot of it in New Zealand. Most of it happens in universities and the public sector. Very little of it happens in the private sector. We had this idea of a research and development tax break in order to get more research and development in the private sector. It was not necessarily going to work and it was not perfect but it was trying to address one of the fundamental problems of our economy which is that we do not do enough research and development in the private sector. That is an urgent problem which we should be doing something about. Instead we are going in the opposite direction with this bill. 
It is urgent that the Government has another look at it and that the Minister of Finance thinks whether this is really what he would want to be responsible for or whether he really wants to put down as his first bill through the House something that does not deal with the urgent problems we face like climate change water quality inequality savings and research and development. In fact it starts to put some things backwards. In terms of the urgent problem of the economic stimulus package—which is an urgent problem I give you that—I ask whether we want to have a stimulus package that consists of tax cuts. A large part of those cuts will be spent mostly on imports although not entirely. Therefore we will be stimulating the Chinese economy with our tax cuts. Some of those tax cuts will be saved which is good. But if we really wanted a stimulus package to deal with the urgent problem which is the fact that people are losing their jobs why not build more State houses? Why not insulate cold damp houses which has long-term benefits and employ New Zealanders? It would stimulate economic activity because even though the Government does not think it is a problem we think it is a problem that people live in cold and damp houses. We think we need more houses. If we insulate houses it has benefits for the health system the education system and energy efficiency. That would be a good way to stimulate the economy. That would be a good kind of stimulus package instead of this package which is very very focused on tax cuts. It does not look at the big picture—what we need to do as a society and what we need to do as an economy to prepare for the future. That would be a much better way to have an economic stimulus package.