Cunliffe David: Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill — Third ReadingText is incorporated into the Bound VolumeCunliffe David: Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill — Third Reading[Sitting date: 10 July 2013. Volume:692;Page:11947. Text is incorporated into the Bound Volume.]Hon DAVID CUNLIFFE (Labour—New Lynn):The Minister of Revenue talked about the Government steadily reducing inconsistencies and anomalies. The only anomaly that it is reducing in this Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill is the car-park tax which it stripped out of it. Talking about inconsistencies under that Minister’s plan if a car-park was in the central business district of Auckland or Wellington and you used it you paid fringe benefit tax on it outside work hours. If it happened to be two blocks over in the central business district fringe it did not apply. If you were in the central business district of Christchurch or Dunedin it did not apply—well it would not apply in Christchurch because there is no central business district. If you were in Tauranga or Hamilton it would not apply. But if you were in Auckland or Wellington it would. This Government is busy creating inconsistencies.So under pressure from a very interesting coalition of unions business groups and MatthewHooton the Government rolled over and stripped—not before time—the ridiculous car-park tax out of this bill. It was ridiculous because it was going to cost more in compliance costs than it raised in revenue—by some independent accounting estimates more than twice as much in compliance costs. So it is typical. National says that it is the party of low compliance costs but it is busy introducing ridiculous taxes that raise costs for ordinary New Zealand businesses and workers. It says that it is the party of prudent fiscal management but actually it has the worst economic record in how many years Dr Clark?Dr David Clark: 50 years.Hon DAVID CUNLIFFE: 50 years. This Government has never run a fiscal surplus since taking office—the last Labour Government never ran a fiscal deficit—but it would have the country believe that it somehow has had a change of heart and it is now managing the economy.In this bill we no longer have a car-park tax. We need the Government to wake up and smell the coffee on several other ridiculous petty taxes such as theiPad tax—the idea that people the public of New Zealand would be charged for the personal use of their cellphonesiPads and other devices. Imagine having to go through your phone bill and work out which were the private calls and which were the work calls apportion them for tax purposes and then somehow if you mention both in the same call share the cost. What would be the compliance costs of that?That the Government is happy to tax the public on their private use of cellphones is kind of ironic is it not because now the Government wants the Government Communications Security Bureau to listen in as well on every cellphone call you make. I wonder whether the Government is going to tax us for that privilege as well. The Government has not however got the foresight or the ingenuity to ensure that the people who make cellphones andiPads are paying their fair share of tax. The base erosion problem looms large and the Minister of Revenue is too busy chit-chatting in the House to do anything about it.Another example of this Government’s ridiculous petty tax drive is the bizarre proposal to tax clergy housing. We all know that clergy do not earn much money. They do not get full salaries; they just get stipends. Part of the way that is offset is that manyclergy get a free house to live in—a vicarage or a manse or some such. The Government thinks that should be taxed at an imputed full cost and the poor clergy or the poor church is going to have to find cash that they do not have to pay the grossed-up cost of this clergy tax. I want the Minister to stand up and tell the House he is going to fix that anomaly and that inconsistency because it is not before time.An accommodation fringe benefit tax is another thing the Government is pushing. The idea is that if you are in temporary accommodation for more than a year—and that includes in Christchurch—then that would be classed as a personal benefit and you would pay fringe benefit tax on it. Is that not ridiculous? The Government is going to be charging workers who move to Christchurch and have to stay in temporary lodgings for the rebuild a fringe benefit tax on their lodgings as if it were a private benefit. What a misbegotten ridiculous impediment to the rebuild of Christchurch. I sincerely hope that the next Mayor of Christchurch the Hon Lianne Dalziel works with the Government to remove that ridiculous petty tax.This bill does a couple of useful things. We agree with the Government on the fact that we should be charging people’s private use of baches boats and cars appropriately and if it is a business expense for a certain part of the year the tax implications ought to be proportionate. There is no argument about that. We also agree that the livestock taxation rules the valuation rules should be adjusted to prevent people turning what should be profit-earning farming businesses simply into capital gains plays because of the absence of a proper capital gains tax. This bill does not go that far but it at least tightens some of the egregious loopholes around livestock valuation.I do want to acknowledge David Bennett MP who brought some of his former professional training to bear on the drafting of that part of the bill. It is good to see the poacher becoming a gamekeeper—I wish that applied to all his colleagues. In the background of this bill is the issue that the public of New Zealand is sick and tired of waiting for this Government to show some leadership and a real economic plan. The public is tired of hearing excuses for why the New Zealand economy cannot get out of the rut and why we have to put up with some of the highest unemployment in the developed world. Previously under the Labour-led Government we had the absolute lowest unemployment in the developed world.Whether it is the global financial crisis or the Christchurch earthquakes this Government is fast running out of excuses. At a time when decisive leadership decisive action and real vision are required this Government is tooling around with petty ridiculous taxes on car-parks oniPads on clergy housing and on Christchurch accommodation and the like. It is putting up compliance costs putting up costs on ordinary New Zealanders and making it more difficult—not easier—for people to get ahead.An aspect that this bill starts to touch on is the erosion of the tax base and it makes small but useful progress on closing down a couple of loopholes. But in the meantime in the background there is massive avoidance going on through the use of company structures and the use of trusts. The sad fact is that more than half of the hundred wealthiest New Zealanders are not even declaring tax at the top tax rate. Let us say that again: half of the hundred wealthiest New Zealanders—these are multimillionaires if not billionaires—are declaring that they are not even on the top tax rate. They are declaring incomes therefore that are less than—and the Minister of Revenue is so ashamed that he has crossed the floor and will now be sitting on the Labour benches helping to bring down this Government. He is helping to bring down this Government. [Interruption ] He wants to take the next call. I yield my time to the new member of the Labour Party—well I suppose we have got certain constitutional process Todd so you can lodge your nomination at www.labour.org.nz and say: “I want to be a candidatebecause I’m jumping off the sinking rat-infested ship called National and I’m coming to work with the Labour Party to make New Zealand a better and brighter place.”We recognise that member’s foresight. It is really a death wish to stay on that side of the House because here is the most important economic legislation of the day which the Government has put right up on the flagpole: a very very limited tightening of loopholes around baches and boats. That is good as far as it goes. We will be supporting that. In the background are these two 800-pound gorillas: the fact that the bill is full of petty taxes and puts up compliance costs on New Zealand and the fact that the Government does not have a vision for getting our economy out of the rut.You can tell a lot in Parliament by the way members are sitting. Colleagues when you look across the floor and you see those members looking at their feet shuffling their papers out of embarrassment that this is the best that their ministry can do in trying to modernise the tax system you know that that is a Government that is not long for this world. Thank you.