Cunliffe David: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — Third Reading 
Text is incorporated into the Bound Volume 
Cunliffe David: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — Third Reading 
[Sitting date: 25 October 2012. Volume:685;Page:6248. Text is incorporated into the Bound Volume.] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 The answer to that question is that more and more New Zealanders are disappointed with the performance of this Government. It was in the last 2 weeks that something historic in the life of every Government happened. The right track wrong track polling crossed over. More New Zealanders now believe New Zealand is on the wrong track than think it is on the right track and that was confirmed in a TV3 poll this week which showed that 49 percent think the Government does not have a plan for jobs or growth and only 46 percent think it does. Fifty-eight percent think the Government is ruining education and 40-odd percent think it is doing OK. That is a very important sea change in New Zealand’s politics. 
For the first time since 2008 New Zealanders are saying that they are losing confidence in this Government. The reason is very obvious: the economy is going backwards. It is going backwards in any number of dimensions and I am going to mention a few of them. Firstly unemployment is back up to 6.8 percent and 162000 New Zealanders are currently employed. Over 40000 jobs have been lost in manufacturing since 2008. If someone does not have a job not only do they not have an income that they can be proud of but they do not have dignity. It is very very difficult for New Zealanders who have lost their jobs to maintain hope. That is why they are amongst the many New Zealanders who are saying to the National Government: “You have disappointed us. You have not lived up to expectations.” 
This bill the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill—and Mr Deputy Speaker I appreciate your allowing a pretty broad remit in the way we approach it—is an enormous non-entity. The only thing Dr Nick Smith could say about it was that it tweaked the KiwiSaver contribution rate. It tweaked the rate down from 4 percent to 2 percent and tweaked it back up again to 3 percent. How visionary is that? 
Hon Clayton Cosgrove 
: Inflation hadn’t kicked in though. 
Hon DAVID CUNLIFFE 
: Maybe it was that Mr Cosgrove. Compare that with Labour’s KiwiSaver plan which would have made KiwiSaver universal by now. It would have increased the savings rate four times faster than National’s plan. Under Labour the burden of KiwiSaver contributions would shift to a more employer-based scheme the rate would increase gradually over time at a rate that businesses and workers could afford and we would have an enormous pool of capital available for investment in New Zealand businesses. That is one of the reasons the Australian economy is doing better than New Zealand’s. 
When John Key was running for office he told New Zealanders: “Kiss goodbye to higher taxes not your loved ones.” What happened? They got higher GST the richest 10 percent got 40 percent of the tax remission the gap between rich and poor went up and we added $1.1 billion to the fiscal deficit because National was spending more than it was taking. 
In answer to Dr Smith’s last question about fiscal management National has nothing to be proud of. When National took office expenditure as a share of GDP was around 30 percent. By last year it had grown to 34 percent partly because the economy was stagnant while revenue had declined from 30 percent to 26 percent and it is forecasting raising it to only 28 percent. Why is it that revenue went down so fast? Well partly because the economy tanked and partly because those who could afford to pay more got a one-off Christmas gift from their mates in the National Party. Jobs are down inequality has grown the fiscal position has worsened and so many of our regions are doing worse—East Coast Northland. The Deputy Speaker is nodding at me to get back to tax matters and I will. But can I just add into this that you can tax what people are getting only by way of income and the median income in New Zealand for all New Zealanders has fallen by $18 a week. That is down 3.7 percent over the last 3 years. So New Zealanders are in real terms poorer now than they were 3 years ago. It is no wonder they are feeling disappointed—no wonder they are feeling disappointed—and it is no wonder it is harder to make ends meet. It is no wonder they are getting sick and tired of smug MPs like those opposite who say: “Hey tough it out. She’s OK. It’s worse in countries overseas.” Well where is it worse? New Zealand has the second-highest current account deficit in the entire OECD predicted by the IMF to be the single worst current account deficit in the OECD by next year. What does that mean? It means we are not paying our way in the world. We are building up foreign debt every year at a rate faster than any other country including Greece Spain Portugal and the so-called southern European basket cases by next year. What a record of shame. 
So what role does tax policy play? The first issue is courage. The Labour Party has shown time and time again that when New Zealand is in need of change we can deliver it. We did it in the 1930s we did it in the war years we did it in the Kirk Government of 1972-75 we did it in the Lange Government of 1984-90—we might not agree with everything today but that was still a Government of change—and we did it under the Clark-Cullen Government as well. The country is going to call upon the Labour-led Opposition once more to offer progressive and pragmatic change for a better future. What will that mean in terms of tax? It will mean pro-growth tax reform. It will mean a capital gains tax system that rewards investment work and productive business not capital gains or farming for capital gains. It is not right that the only way you can get wealthy in New Zealand is just to invest in property because it does not make anything. It does not export anything. It does not enrich our country. It is just a Ponzi scheme where one person is betting off another. The tax system needs to change. 
We need to reward innovation and investment in innovation. That is why we are looking at accelerated depreciation for short-life investments. That is why we are looking at research and development tax incentives—very popular with the private sector which is resentful and disappointed that it has been replaced by National putting them through the bureaucratic hoops of a grant-based scheme. National cannot understand it. When we go around the private sector and we are talking to it about innovation people are saying: “Well goodness me why was it that National was the one that made the bureaucrats the masters of our investment decisions? Why couldn’t we just have an R and D tax credit so that we could make the business decisions about what is best for the growth of our companies and we could get a little bit of help a little bit of remission from the taxpayer in terms of recognising the risks of R and D?”. That is fair enough. 
We need pro-growth tax reform capital gains tax research and development tax incentive and short-life depreciations. KiwiSaver needs to go on steroids. Labour’s scheme would have four times the rate of savings growth as the one under National’s KiwiSaver amendments. And it is disappointing that the only practical measure in this bill that Dr Smith could refer to was the tweaking of National’s KiwiSaver incentive from 4 percent to 2 percent and back up to 3 percent. 
At least Rob Muldoon said: “Think big.” This lot say: “Think small.”—when they think at all. Actually what New Zealand needs right now is a few big ideas. We need a bit of guts. We need a bit of courage. We need to be unafraid to say this is not good enough. Why is it that our colleagues on this side of the House get up every morning and come to work? You know why it is? It is because we refuse to accept decline. We refuse to accept that our best days are over. We refuse to accept that New Zealand will be managed into statehood of Australia. We refuse to accept that the best thing you can do in a tax bill is to tweak some minute KiwiSaver incentive rather than showing a visionary path to pro-growth tax reform. 
There are 160000 people out of work and Mr Bennett thinks it is a joke. Mr Bennett thinks it is a joke and Mr Bridges spent most of question time today insulting the Green Party to boost his run for Cabinet. How shallow was that? How shallow was that? So where is National’s economic dream team in this debate? Is Mr English taking a call? Hark—not so. Is Mr Joyce taking a call? “Mr Mobie”—is he here? I could not possibly comment on that but I have not heard him take a call and I can comment on that. Where is National’s commerce dream team? You know the redoubtable Craig Foss—has he taken a call? No no National members have left it to the brilliance of Nick Smith the man they themselves sacked from Cabinet to lead their debate. They do not even trust Simon Bridges with a call. I think it is a bit harsh. He may be a little smarmy but I actually think he would be worth a shot. He has got to be better than the other lot. But no they are not trusting even him with a call. What about some of their thrusting young blood like Jonathan Young— 
Mr DEPUTY SPEAKER 
: Order! The member’s time has expired.