Parker David: Estimates Debate — In CommitteeText is incorporated into the Bound VolumeParker David: Estimates Debate — In Committee[Sitting date: 01 July 2014. Volume:700;Page:19047. Text is incorporated into the Bound Volume.]Hon DAVID PARKER (Deputy Leader—Labour):I rise to take a call to talk in the estimates debate on Vote Finance and related items. This was reviewed by the Finance and Expenditure Committee. One of the things that some members of the committee noted was that inequality in New Zealand is increasing and many New Zealanders are not benefiting from the growing economy. It was noted that some measures indicate that 46 percent of workers have had no pay rise in the past year. It is against that background that we need to judge whether the proposals that are brought forward through Vote Finance for the country are right. I would like to contrast them with some of the proposals that the Labour Opposition is making.Last week we proposed our alternative budget. That alternative budget has gone down pretty well. There are a few headline messages there. First of all everything is paid for and we are in surplus. So we can get down to a debate—Hon Clayton Cosgrove: 10th surplus.Hon DAVID PARKER: A 10th surplus; that is right. It would be the 10th surplus in a row for Labour Governments given that in the last Labour Government we ran nine surpluses in a row and reduced gross Government debt from 38 percent to 18 percent of GDP and net debt down to zero—net debt down to zero. It is clear that whether it is Labour in charge of the Treasury benches or National you are unlikely to have a fiscally irresponsible Government in New Zealand.Hon Dr Jonathan Coleman: I don’t know about that!Hon DAVID PARKER: The Minister in the chair says he does not know about that but the truth of it is that we actually have not had a fiscally irresponsible Government since Muldoon’s National Government in the 1980s left New Zealand with Government debt that was amongst the highest in the world which took subsequent Governments be they National or Labour a generation to pay off. So we know the ills of unbalanced Budgets. This Government has not yet run a surplus. It is true that some of those deficits were a consequence of a global recession that affected New Zealand and also the cost of the Canterbury rebuild. That is why we do not whack Government members around the ears too much about the deficits that they have run but we do know that it is time to get back to surplus and we would too.Our numbers show how it would be done. The commentators who have been through those numbers—produced not 3 weeks before an election but 3 months before an election—have given them the tick. They said: “Clean bill of health here. It is obviously clear that you’re not going to be fiscally irresponsible that you are going to run Budget surpluses and that you are going to pay down debt.” In a fair society everyone should get their fair share and everyone should pay their fair share. One of the provisions that we have got in this alternative budget is to shift the economy away from speculative activity towards the productive economy. There is no doubt that one of the reasons that we over-invest in property-based assets is that the tax system encourages it. Just about everyone now accepts that except for the Government. The OECD says it the IMF says it Treasury says it the Reserve Bank says it the Labour Party says it the Greens say it and just about every other developed country in the world says it. We need to have people investing in the productive parts of our economy not chasing tax advantages in the speculative economy.That is why if there is one policy that should be looked at really carefully this coming election—and I think the people of New Zealand are up for it—it is the question of whether we should change our tax system and tax capital gains excluding the family home.Hon Gerry Brownlee: How is this relevant?Hon DAVID PARKER: How is this relevant? You could take a call. You can see that one of the issues that was raised in the financial review by the Finance and Expenditure Committee was that the absence of a capital gains tax means that we have got an economy that is out of shape that invests too much in the speculative sector and not enough in the productive sector. We have got higher house prices as a consequence of the investors in rental housing piling in particularly in Auckland where homeownership rates are the lowest they have been in 50 years and still dropping.Our alternative budget makes it clear that we are fiscally responsible that we are not going to be writing cheques that we cannot cash and that we will be back into surplus. You know National has racked up $60 billion worth of debt just about—$60 billion worth of debt. It made it worse through tax cuts where 40 percent of its income tax cuts went to the top 10 percent. It quotes tax figures excluding the burden of GST.