Foss Craig: Debate on Prime Minister’s Statement 
Foss Craig: Debate on Prime Minister’s Statement 
[Volume:660;Page:8689] 
CRAIG FOSS (National—Tukituki) 
: 
 It is a pleasure to welcome colleagues. I hope everyone has had a good summer break. I thought most people were working very hard over the break on some matters and I was wondering what lines of attack the Opposition would bring into this new year in Parliament. I am relieved to see that there are actually no new lines of attack whatsoever. 
I note that Mr Goff has obviously been very busy working on his grand economic plan over the summer break. He took a month and a half or so to come up with a grand plan that would cap the salaries of 16 public servants. It is very interesting—when the Government has a budget of about $60 billion and people with families are unemployed as other speakers have noted—that the Leader of the Opposition can come up only with a plan for 16 public servants. In 2005 that same member signed off on a policy that would have increased year on year salaries of chief executive officers by 5 percent per year for 5 years. That is 25 percent—5 times 5—before compounding. He then has the audacity to come out with that unusual policy headline-grab or whatever it was. 
I unfortunately have to note my disappointment in the Hon Shane Jones and his earlier speech. I have good money on Mr Jones occupying one of the front benches in the foreseeable future but after that speech which would probably fail Economics 101 I might have to cut back on some of my investments. 
I congratulate our Prime Minister on today’s statement. It is a pleasure to speak to this full programme of reform—not only economic reform but also social reform—which is badly needed after 9 years of deterioration of the New Zealand social and economic scene. This is a template for a step-up for New Zealand society. That is why most of us are in this Parliament: to make fundamental material change and improvement not only for the current generations but for many generations to come and to put in place a step change. 
I quote from the conclusion of our Prime Minister’s statement—they are very very good words—“The policies we intend to introduce this year will be a big part of the country’s improvement this year next year and into the future. The Government’s overriding concern is to improve opportunity fairness and security for all New Zealanders. As this statement has shown we have an active and comprehensive programme ahead of us in 2010 in almost every economic and social area. As a result New Zealand will be a better place to live work invest grow up and retire. There can be no greater result than that.” They are very very good words. I proudly stand by those words and will work this year with the policy programme to put them all in place. The programme puts in place the beginnings of a very ambitious plan for New Zealand to start to get us back into the global economic game in which New Zealand’s position has been deteriorating for the last 9 years. It lays out what changes we must make to unleash the awesome potential of our awesome country. That is exactly what New Zealand voted for on 8 November 2008. We would have liked to put these policies in place last year but unfortunately we inherited a recession and an absolutely appalling state of Crown accounts. Labour put New Zealand into that recession in January 2008—1 year before the rest of the globe. The tradable sector in New Zealand had been in recession since 2005. 
There has been a lot of discussion about tax. Many facets and policies were announced in the Prime Minister’s statement but I will concentrate on some of those related to tax. I congratulate the Hon Peter Dunne on his earlier speech about tax and things that impact tax. I congratulate him again. The big wheel is moving into some alignment to bringing fairness back into our New Zealand tax system. I also reiterate our leader’s thanks and support for our support parties in Government: ACT the Maori Party and United Future. I thank those members and say that we are all on the same waka looking towards and working for a much better and brighter future. 
I congratulate the Tax Working Group for the way it laid out its options and alternatives; those things have provoked great discussion. I note and reiterate what is off the table. A capital gains tax is off the table. A land tax is off the table. A risk-free rate of return method is off the table. What is on the table? Lower income tax rates are on the table for discussion. Lower company tax rates are possibly on the table for discussion. Obviously alignment of trust rates is on the table for discussion. Changes to the tax treatment of some residential investment properties are on the table. Changes to GST are being considered—that is right. But any changes we make in any part will be fiscally neutral. The vast majority of New Zealanders will be better off and have a brighter future. It is about bringing back fairness and equity after 9 long years of unfairness jealousy and green-eyed tax policy from the previous administration whose first job when it became Government in 1999 was to hike rates to 39c—the highest marginal tax rate—as other members have spoken about which caused so many problems. 
Where does Labour stand from what we have heard today? I mention just a couple of things. Mr Cunliffe spoke earlier. Where does Mr Goff stand? What does Labour want? Another speaker seemed to talk about a larger State and a larger Crown account. That translates to a larger deficit and larger borrowings. I am glad that at least Mr Cunliffe has confirmed and I think Mr Jones confirmed that Labour wants to tax our homes. It wants to have a capital gains tax and tax our residential homes. On Labour’s blog Mr Mallard—a previous Associate Minister of Finance and I think Associate Minister of Commerce; Mr Mallard will excuse me if that is not correct—says Labour wants to hike rates to 36 percent. Labour wants to hike rates. Old habits die hard. Its mouthpiece its blog said it wanted tax rates to go to 36 percent. It wants company tax to go from 30 to 36 percent individual tax to go to 36 percent and trust tax to go from 33 to 36 percent. That is what the Labour front-bench member said and it has pretty much been confirmed today by Labour’s spokesman on finance Mr Cunliffe. He talked about the highest rate and nothing else. It is balanced; it is a balanced approach. 
I will talk about GST. Phil Goff says he is against it. In 1986 he voted—he had to; I think he was a Minister—to take it from 0 to 10 percent. When he was in power his Government introduced it. In 1989 when he had even more power his Government took GST from 10 to 12.5 percent. He said he was not for that increase way back then. What did he do when he was an Associate Minister of Finance for the last 9 years from 1999 to 2008? What did he do? Did he lower GST when the surpluses were in place? If we take his arguments against any increase in GST and turn them round we must ask whether when New Zealand had a surplus the previous Labour Government lowered personal tax rates. No—it hiked them. Did it lower GST to offset the pain those members have been talking about? No it did not. Where is Labour? It is all over the show. 
The Tax Working Group says the tax system is broken. We know that it is broken. It has been broken for quite some time. It started when Labour put its envy tax on in 1999 and drove Kiwis across the Ditch. Actually it hurt middle and lower-income earners in New Zealand more than any other group. I very much look forward to the next election when Labour campaigns on what its members have said today: an increase in income tax rates and company tax rates. Mr Mallard and the rest of the front bench have all argued against what we are proposing today in the Prime Minister’s statement. Therefore the only way they can go is to increase New Zealand’s taxes and quite probably put a capital gains tax on our homes. Well that is off the table as far as this National Government is concerned. Thank you.