Cunliffe David: Taxation (Budget Measures) Bill — First Reading 
Cunliffe David: Taxation (Budget Measures) Bill — First Reading 
[Volume:663;Page:11069] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Budget 2010 is a tax swindle. It is a lost opportunity and it is a Budget of broken promises. It rewards the wealthiest and it swindles the middle class by gobbling up their small change with the highest rampant inflation in 20 years. It took the previous Labour Government a decade to get inflation down yet this Government has blown it out to 6 percent next year. With that the hopes of middle New Zealand are washed away. 
Carmel Sepuloni 
: Shame on them. 
Hon DAVID CUNLIFFE 
: Shame! Most Kiwi tax cuts which the Minister of Finance vaunts in the House are worse than gone. How bad is it? People on the average wage will be $30 a week worse off on Treasury’s own numbers after the effect of inflation and GST. Every working family on the average wage will be $30 a week worse off. When they get to the supermarket counter they will be 30 bucks a week short. People on $70000 a year will be $45 a week worse off after GST inflation and their tax cut. They will be worse off; those New Zealanders will be going backwards. 
It gets worse. These tax cuts are unfair. There is a group who will be better off: the upper income earners. People on the same salary as the Prime Minister will be $350 a week better off as promised. People on $1 million a year will be $1000 a week better off. What is that? Someone who is already earning $1 million a year will be $1000 a week better off but someone on the average wage will be $30 a week worse off. What is fair about that? New Zealanders will vote against that package in next year’s election. This Government will be a one-term Government and that will be a record for the National Party. 
The Government has broken its promise to be revenue-neutral. There will be a $450 million fiscal hole in the Budget next year as a result of this tax bill. The Government is borrowing nearly half a billion dollars extra to fund the tax cuts for the millionaires who back the National Party. The Government is borrowing the public’s money to fund its mates. It gets worse. The Government will be $1 billion extra in the red over 4 years to fund those tax cuts. 
The Government promised that it would return to pre-funding superannuation when the economy got back into surplus. Do colleagues remember John Key saying that he would resign rather than break the promise to elderly New Zealanders? Has National kept its promise? No it has not. The economy is getting back into surplus. Actually—wait for this—the economy would have been back in surplus by 2012 if it were not for those upper income tax cuts. But the Government is borrowing to sort its mates out. The economy should be going back to surplus in 2016 but when is its pre-funding of superannuation coming back? That will not be until 2019. That is a decade of deferrals. It will wreck the chances of New Zealanders to feel secure in their retirement. 
What about the health budget? The Government promised that health would be paid for but what has happened? There is a $300 million hole in the budget that health needs just to stand still. The Government will be $300 million short next year alone because of the inflation impact on health. So even if there are no new services and even if there is no innovation in health the Government will be $300 million short. 
What about early childhood education? It has been put at risk by this tax bill. It will take $25 a week per child out of the pockets of ordinary New Zealand families. That $25 a week per child is a $100 million-a-year swindle out of New Zealand families. The Government says that this is a Budget for all New Zealanders; we say this is a Budget of broken promises. This is not a tax switch; it is a tax swindle. 
This Budget does not rebalance the economy. Let us look at that part of it. The Minister said that he would address the bias towards property investment. What has he actually managed to do? The chief Government whip has 15 rental properties and I guess he probably had a quiet word with him in the corridor. The Government took only half the depreciation write-down on rental properties. But it did take away the short-life depreciation allowance on high technology. That will cut innovation. The Government failed to ring-fence property losses. People who have a portfolio like Mr Tremain’s can write off their costs against their personal income and make a whopping great tax loss. That is wrong. The Government should have at least touched ring-fencing. It did not. It did not have the bottle it did not have the nerve. It rolled over in front of the Property Council and it will get back only $600 million a year. 
What about loss attributing qualifying companies? The Government had the nerve to state in the Budget that it was fixing the rorts around loss attributing qualifying companies. How much has it actually fixed? In 2008 alone loss attributing qualifying companies cost the Crown $2.3 billion in tax losses. It has mushroomed in the last couple of years. Do members know that the Government is getting back a measly $70 million? That leaves over $2.2 billion a year of the public’s money in the hands of phoney companies being written off against people’s personal income when it should not be. Labour would fix that— 
Hon Steven Joyce 
: Labour set it up. 
Hon DAVID CUNLIFFE 
: Yes Labour set it up and Labour has seen it being used for purposes that were never intended. We have the guts to admit that it should be changed and we will change it. We will change it because National does not have the nerve to do what is right. I say to National that we cannot make an omelette without breaking eggs and we cannot fix the property imbalance without putting a few property speculators on the wrong side of the ballot box. So it should have the nerve to front up and do the job. 
This was supposed to be a Budget for the many. It is quite obviously a Budget for the few. It was supposed to be a Budget for middle New Zealand. Those people will find that their incomes go down when rampant mega-inflation from the Minister of Finance hits them in the wallet. It was not supposed to be a Budget that made our elderly our sick our frail and our children worse off in order to pay for the tax cuts for the rich. But that is what the Budget has done. This Opposition will fight this Budget all the way to the ballot box because we know that New Zealanders can tell the difference. We know that New Zealanders have a sense of fairness and a sense of decency. They know that when an average earner is 30 bucks a week worse off and a millionaire is 1000 bucks a week better off something is wrong. Something is not right in the state of New Zealand. Do members know what it is? It is the current Government. Fortunately for New Zealanders that problem can be fixed relatively easily. 
To sum up this Budget is not a tax switch; it is a tax swindle. Headline numbers pretend people are better off but the Treasury documents calculated those numbers with a 2 percent inflation rate while the actual inflation rate that is in the rest of the Budget is 5.9 percent. That is why average income earners are worse off. 
Hon Steven Joyce 
: No it’s not. You’re making it up. 
Hon DAVID CUNLIFFE 
: That is in the Budget documents I say to Mr Joyce. I thought he was inside the loop. Obviously he has been left out. That is a bad sign. He has been consigned to the focus group routine. He has been consigned to reading the focus groups. John Key rings him only after a Tuhoe moment but not to prepare for the Budget. Now he probably will not ring him at all after the trouble that Mr Joyce caused over Tuhoe. That was a bad Sunday afternoon phone call I say to Mr Joyce.