Mackey Moana: Taxation (Urgent Measures and Annual Rates) Bill — Second Reading In Committee 
Mackey Moana: Taxation (Urgent Measures and Annual Rates) Bill — Second Reading In Committee 
[Volume:651;Page:131] 
MOANA MACKEY (Labour) 
: 
 The one thing clear from that speech from David Bennett is that he has not read the legislation before him because it does none of the things he says it does. It does not deliver for all hard-working New Zealanders. In fact it penalises some of the poorest families in this country and it comes off the back of a campaign during which National members went around the electorates smiling at everyone saying: “It’s OK. We’ve changed. We’re different. We know that people don’t want cuts. We know that people want support for their families. We know that people don’t want the same old tired policies and failed arguments of the 1990s all over again.” And what do we see? On this first day of business in this new Parliament with this new National - ACT - Maori Party Government what do we see? We see the putting up of taxes on the poorest New Zealand families compared with the tax cuts they would have got—and were already legislated for—under the previous Labour-led Government’s tax policy. I say to the National Government “Shame!”. 
If the Government thinks for a second that this Labour Opposition will roll over and let it destroy the economy and destroy the finances of some of our poorest families then it has another think coming. Its members think that we do not know we have lost the election. We know it when we stand here and see legislation that once again attacks some of our most vulnerable families. The difference is that—unlike that party—it will not take us 6 years in Opposition to get stuck in. We are getting stuck in from day one. We will be here today tomorrow and—as Mr Mallard said—for the next 3 years holding this Government to account on every promise to the electorate that it breaks. 
Hon Dr Wayne Mapp 
: This is actually delivering the promise. 
MOANA MACKEY 
: Mr Mapp need not worry; I will get to him soon. 
Let us remember the context in which this bill comes to the House. The outgoing Labour Government left the economy in a very good position for the incoming Government. We had halved debt from 35 percent to 17 percent of GDP. We left this National Government with a very good position in which to move. The previous National Party leader Don Brash agrees. He said New Zealand is in a very good position to weather this storm. We have seen international credit agencies agree. New Zealand is in a very good position to weather this storm because of the fiscal prudence shown by the previous Minister of Finance the Hon Dr Michael Cullen. And what is the first thing we see on day one of this Government? We see legislation—if those members opposite will ever show it to us—that puts us on a track back to the 35 percent debt we inherited when we became Government in 1999. 
I refer to the Speech from the Throne in relation to this bill. There were lots of nice words in that speech. We heard that the Government is going to look after people we heard about turbocharging about protecting about enforcing about innovation about aspiration and about individual responsibility but nothing in this bill will assist vulnerable New Zealand families through the recession nothing in this bill will help our most innovative businesses bring us through the recession and nothing in this bill will help bring liquidity into our capital markets through our savings in this country. In fact not only does this bill not do those things; it destroys them. It undermines the gains we have made as a country over the last 9 years. 
I want to talk a little about the research and development tax credit. I am very glad that the Minister of Research Science and Technology the Hon Dr Wayne Mapp is in the House now because he has made a big deal about how great he will be for research and development. I wonder whether Mr Mapp is aware that with this bill New Zealand will go straight to the bottom of the OECD when it comes to research and development. In one go this legislation puts New Zealand straight to the bottom of the OECD when it comes to research and development and this is at a time when one would think it would be sensible prudent and common sense to provide incentives for our most innovative companies—those that are most likely to bring New Zealand through the recession faster those that are most likely to be exporters and those that are most likely to employ people on higher salaries and therefore provide higher take-home incomes for families. One would think that a Government would want to provide incentives for those companies to invest in more research and development. [ 
Interruption 
] 
Dr Mapp says it is a tax rort. The Australian Government thought that. A year later it had to bring the research and development tax credit back because it realised that getting rid of it did much more damage than these kinds of tax rorts that people talk about and never prove. Of course Australia is meant to be the nirvana that we are following so why with one stroke of a pen in this legislation are we putting ourselves at a competitive disadvantage to Australia? 
I want a guarantee from Dr Wayne Mapp. He promised that a third of the money that would have gone towards this research and development tax credit would go to our Crown research institutes. He promised. Will that continue? 
Hon Dr Wayne Mapp 
: It’s broader than that. 
MOANA MACKEY 
: Oh it is broader than that. No Dr Mapp promised in the election campaign as did Dr Hutchison that a third of the money saved by scrapping the research and development tax credit would go straight to funding science directly. I think that is what he called it; he said it would be a third. Will they get that money? Will the Crown research institutes get that money? 
Hon Dr Wayne Mapp 
: You haven’t read the policy. 
MOANA MACKEY 
: Well I say to Dr Mapp that we will be getting out the policy; he need not worry. The policy was very clearly that the Crown research institutes would be directly funded with a third of this money. 
Hon Dr Wayne Mapp 
: I didn’t say that at all. 
MOANA MACKEY 
: Oh no what a great day for science! Not only are we scrapping the research and development tax credit but we have just heard here on the floor of the House that the $330 million promised to the Crown research institutes by Dr Paul Hutchison and by the new Minister Wayne Mapp will not be given to them—they will not get it. What is it going towards? It is going towards paying for tax cuts that disadvantage some of our most vulnerable families and do nothing for our economy. 
Research and development tax credits are a common tool around the world for lifting rates of private sector research and development investment. Just about every country has them. All the countries the National Party compares us with have them yet we are getting rid of them at the one time in history when we need them more than anything else. Well I am sure the scientists and the manufacturers around New Zealand are saying: “Thank you for a very merry Christmas the National - ACT - Maori Party Government. Thank you for a very merry Christmas Dr Wayne Mapp our new Minister.” 
We know that the research and development tax credit was supported by all of National’s mates. Business New Zealand’s Phil O’Reilly pointed out that many companies had made long-term investment plans based on that research and development tax credit and they will be out of pocket now that the National - ACT - Maori Party Government is getting rid of it. They are going to be out of pocket. We know that when National announced its tax policy different groups such as manufacturers’ organisations flew all over the country to meet with Bill English to try to convince him to back down on the research and development tax credit abolition because they knew how important that single policy was for our economy especially going into a recession. 
So I say to Mr David Bennett who said before that the National Party does not want to lead on anything in the world—he does not think it is important to be a world leader on anything—that his mission is accomplished. We are now with one stroke of the pen on this legislation last in the OECD on research and development. The member might not think that that is particularly important. He thought it was important during the election campaign when he was in his own home area because of course there are lots of manufacturers in the Waikato. There are Crown research institutes and lots of scientists. It is a fabulous area for science innovation—it is a hub. He got up during the election campaign and said that he did not agree with abolishing the research and development tax credit. He has obviously realised that that has got him seated somewhere further back in the Chamber than he was during the last term so he has come down here with a mea culpa road to Damascus speech. He has suddenly realised the error of his ways and that getting rid of the tax credits is a really fabulous idea. 
We have just heard from Wayne Mapp that the money he was promising the Crown research institutes was kind of so that they would not feel so bad about his getting rid of the research and development tax credit—which they may have got money from through contracts they have in the private sector—because he will give them $330 million to tide them over. Of course they were very happy with that. Well that has gone. That has gone out the window as well and what for? To pay for cuts to KiwiSaver that will limit the level of liquidity we have in our venture capital markets which is important for our research and development. National will cut KiwiSaver. It will cut taxes for the people who need it the least. It will raise taxes on some of our most vulnerable families. 
I genuinely want the Maori Party to think very seriously about its support for that legislation which raises taxes on some of our most vulnerable families. Thirty-five percent of families in the East Coast electorate earn under $40000 and they will get nothing—they will get absolutely nothing. In fact for some of them their taxes will go up. Well I say merry merry Christmas from a National Government which from day one is showing its true colours—a National Government that campaigned on being softer campaigned on being friendlier and campaigned on being smiley—their smiley selves. Well once again we are seeing the cold face of reality behind the friendly mask of John Key and this National - ACT - Maori Party Government.