"\u003C!DOCTYPE html\u003E\u003Chtml xmlns:xlink=\u0022http://www.w3.org/1999/xlink\u0022 xmlns:xsi=\u0022http://www.w3.org/2007/XMLSchema-instance\u0022 xmlns:mml=\u0022http://www.w3.org/1998/Math/MathML\u0022\u003E\n  \u003Chead\u003E\n    \u003CMETA http-equiv=\u0022Content-Type\u0022 content=\u0022text/html; charset=utf-16\u0022\u003E\n    \u003Cmeta name=\u0022viewport\u0022 content=\u0022width=device-width, initial-scale=1\u0022\u003E\n  \u003C/head\u003E\n  \u003Cbody style=\u0022font-family:sans-serif; font-size:100%;\u0022\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000001\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022d9806ffc443e4ed0a4c5707459ffa0ab\u0022\u003EThursday, 20 May 2010\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000003\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00226050d806ced44d29b23e04fdfdae886b\u0022\u003EThursday, 20 May 2010\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000002\u0022\u003EMr Speaker took the Chair at 2 p.m.\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000004\u0022\u003EPrayers.\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000005\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u002294de2cb431e64fcea80f1ed2f8038cd9\u0022\u003EAppropriation (2009/10 Supplementary Estimates) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000006\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022daf073f45d2543da9b799620cdb93283\u0022\u003EProcedure\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022 data-id=\u0022f2d4c7047f1847aa9dc4ba6dba4c87c3\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000007\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f2d4c7047f1847aa9dc4ba6dba4c87c3\u0022\u003EHon BILL ENGLISH (Minister of Finance):\u003C/span\u003E I hereby present the Supplementary Estimates of Appropriations for the Government of New Zealand and supporting information for the year ending 30 June 2010 (B.7).\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000008\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c27f5bf3fb054890aef8fe0e10dcbc3a\u0022\u003EMr SPEAKER\u003C/span\u003E: That paper is published under the authority of the House.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000009\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00221a2c2ffd4b4e4f1a93e4314b625ec056\u0022\u003EAppropriation (2010/11 Estimates) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000010\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022ffdaf839e99647d2bb13457369301fc2\u0022\u003EProcedure\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022 data-id=\u0022f871a6e73b0343ea982b46fd7d10321d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000011\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f871a6e73b0343ea982b46fd7d10321d\u0022\u003EHon BILL ENGLISH (Minister of Finance):\u003C/span\u003E I hereby present the Budget 2010 Minister\u2019s Executive Summary, the speech, the Fiscal Strategy Report, the Economic and Fiscal Update (B.2 and B.3), the Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2011 (B.5), the information supporting the Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2011 (B.5A, Volumes 1-10), and the departmental statements of intent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000012\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fcda154b7b624f93994ad76303d779f8\u0022\u003EMr SPEAKER\u003C/span\u003E: Those papers are published under the authority of the House.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000013\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022eaa0ee5189dd46318f268bf77582c6eb\u0022\u003EPoints of Order\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000014\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022cbdf3a2b52214f5c9afe7b4324c46f6b\u0022\u003EChamber, Lobbies, and Galleries\u2014Audio System\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022 data-id=\u0022fc7b35597a874c329470dc164de32439\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000015\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022fc7b35597a874c329470dc164de32439\u0022\u003EHon TAU HENARE (National):\u003C/span\u003E I raise a point of order, Mr Speaker. Some of us at the back cannot hear.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000016\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a692f20701ad419b9432f83cbd4887aa\u0022\u003EMr SPEAKER\u003C/span\u003E: The sound technicians will be aware of the concerns of the member and will do their best to improve the situation. I apologise, but I expect improvements will be made before the Minister commences the second reading.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000017\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00220ab85a5db90c4e8aa9e72a1633e59a54\u0022\u003EAppropriation (2010/11 Estimates) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000018\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022b36bf62b878c4b0a8137a5682586858c\u0022\u003EFirst Reading\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022 data-id=\u00227a4c47b2b4514c75be56c49c120da381\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000019\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00227a4c47b2b4514c75be56c49c120da381\u0022\u003EHon BILL ENGLISH (Minister of Finance):\u003C/span\u003E I move, That the Appropriation (2010/11 Estimates) Bill be now read a first time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000020\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBill read a first time.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000021\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022e6ba0963cdef4f669c711796707bf6ed\u0022\u003EBudget Statement\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000022\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022f6851f5af3bd49ef8575a3541ad3ca9f\u0022\u003EBudget Debate\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000024\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022db7c94354e154772aca01181e3a2b5dd\u0022\u003EBudget Debate\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022 data-id=\u00222eda5d935d9645a48b22595503b083a4\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000023\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222eda5d935d9645a48b22595503b083a4\u0022\u003EHon BILL ENGLISH (Minister of Finance):\u003C/span\u003E I move, That the Appropriation (2010/11 Estimates) Bill be now read a second time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000025\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000026\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EI move that the Appropriation (2010/11 Estimates) Bill be now read a second time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000027\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOn election day 2008, New Zealanders voted for a more prosperous, ambitious New Zealand, where Kiwis have opportunities to get ahead.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000028\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe National-led Government came into office with the New Zealand economy well into recession and with the world\u2019s financial system experiencing its worst crisis since the Great Depression.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000029\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBy necessity, last year\u2019s Budget was focused on getting New Zealand through the global crisis. Budget 2009 maintained the nation\u2019s credit rating, preserved income support entitlements and fulfilled commitments from the 2008 election.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000030\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ETo help sustain economic activity and support jobs, the Government absorbed much of the shock of the recession on its own balance sheet, thereby significantly increasing its borrowing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000031\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe worst of the global crisis has for now passed and the economy has begun to grow again. In fact, New Zealand has weathered the economic storm better than many other developed economies.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000032\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EGovernment policy struck the right balance between blunting the sharp edges of recession and maintaining control of public finances.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000033\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBut we have work to do. That\u2019s why Budget 2010 is about building the recovery, creating jobs and helping Kiwi families get ahead.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000034\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ECreating and passing through this House a budget each year is at the heart of stable government. I want to especially thank the Government\u2019s support parties, ACT, the M\u0101ori Party and United Future, for their contributions.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000035\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EI am pleased to tell the House that this Budget will fund improved services to the public, will produce a lower track for future debt, and will deliver a tax package that will be good for the economy and good for families.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000036\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000037\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EI now turn to four main objectives of this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000038\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe first is lifting the long-term performance of the economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000039\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe second is reform of the tax system, to make it fairer, more sustainable and more supporting of economic growth.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000040\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe third is better delivery of public services, to make them better for users of those services and better for taxpayers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000041\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe fourth is to maintain firm control of the Government\u2019s finances, so we can return to budget surpluses and pull back our rising debt.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000042\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000043\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EGrowth matters. It is the only way that we can lift incomes, create permanent jobs and build the kind of country we aspire to be.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000044\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ELifting the long term performance of the economy will require considered and consistent change over the next decade because the challenges are significant.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000045\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt is convenient to blame sluggish growth on the global recession, but that is not the sole cause.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000046\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOur economy entered recession well before the financial crisis began in late 2008.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000047\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EGrowth in the three years prior was below one per cent per annum. This was less than half our trading partner average, and less than one-third of Australia\u2019s growth rate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000048\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EFrom mid-decade on, growth had been fuelled by a mix of rising household debt and ballooning Government expenditure, which grew 50 per cent in the five years to 2009.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000049\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBy contrast, output from exporters and import competing industries had been in decline since 2005.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000050\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThese include sectors such as agriculture, horticulture, mining and resources, forestry, fishing, food manufacturing and tourism, all areas where New Zealand should be benefiting from its natural advantages.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000051\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EToo many New Zealanders have discovered that growth driven by debt, Government spending and property speculation does not create permanent, worthwhile jobs.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000052\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe consequences of this decline in our earning capacity are now clear: too few jobs created, a balance of payments deficit over 8 per cent of GDP until its recent decline, and negative productivity growth between 2000 and 2009.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000053\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe economy has spent more than it earned and borrowed to make up the difference.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000054\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ENew Zealand\u2019s largest single vulnerability is now its large and growing net external liabilities. New Zealand owes the world $168 billion, or around 90 per cent of GDP.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000055\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EPrivate sector debt to foreign lenders has grown steadily over the last decade and our vulnerability will be increased by growth in government debt to foreign lenders over the next five years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000056\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe dangers of too much debt are well illustrated by a number of European nations who are currently undergoing painful changes, involving increasing taxes, cutting public services, or both.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000057\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government is committed to policies that will reduce our vulnerabilities by tilting our economy away from debt and consumption toward savings, investment and exports.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000058\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000059\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThese policies underpin the updated Treasury forecasts showing steady growth of around 3 per cent over each of the next four years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000060\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe forecasts also show that this growth will raise real incomes of the average household by about $7,000 over the next four years, and create 170,000 jobs.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000061\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EUnemployment has already fallen to 6 per cent. We share with both ACT and the M\u0101ori Party a common desire to help New Zealanders move off welfare and get ahead under their own steam.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000062\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EGlobal developments highlight the opportunity for New Zealand to stand out. We will emerge from recession with sound finances, quality public services and low and stable tax rates.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000063\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWe will naturally appeal as a place people want to live and do business.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000064\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000065\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government\u2019s growth strategy has identified six key drivers of stronger economic performance\u2014a better regulatory environment for business; skills and education; quality infrastructure; science, innovation and trade; improved public sector performance; and tax reform.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000066\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThese jointly form a programme to address economic imbalances and lift growth.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000067\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government is making progress in all six areas.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000068\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000069\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EI now turn to the Budget\u2019s second objective, that of improving the tax system.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000070\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ETax reform is a centrepiece of this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000071\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWe want a system that rewards effort and helps families get ahead.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000072\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOne that attracts and retain skilled people in New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000073\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOne that encourages savings and productive investment.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000074\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAnd we want to make the tax system fairer.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000075\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000076\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ETax has a powerful influence on savings and investment decisions. Uneven tax rates have been a major drag on growth. Sectors with low effective tax rates have expanded at the expense of the rest of the economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000077\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government is strongly of the view that investments should stand on their own merits, and not be unduly influenced by tax.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000078\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThere is also compelling evidence of widespread avoidance, mostly brought about by taxpayers exploiting differing effective tax rates. The system lacks integrity and fairness.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000079\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Tax Working Group of 2010 echoed the findings of the earlier McLeod Tax Review of 2001 on these matters.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000080\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWe also required any changes to be broadly fiscally neutral. Given the increase in public debt of recent years, it would be irresponsible to saddle the next generation to pay for tax cuts now.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000081\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOver four years the package delivers around $15 billion of tax cuts. This is matched by a similar level of revenue increases from less economically damaging sources.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000082\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe total package has a cost of $460 million in the first year due to some revenue initiatives which cannot be immediately implemented.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000083\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe main elements of the tax package are a shift towards lower and more uniform rates of income tax, more indirect taxation and broadening the existing tax bases.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000084\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt represents the most thorough and beneficial overhaul of the tax system in 25 years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000085\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EFrom 1 October 2010 we will lower personal income tax rates, and increase the rate of GST to 15 per cent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000086\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe increase in GST has been estimated by Statistics New Zealand to raise the level of prices by about 2 per cent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000087\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ETo put this in perspective, this is less than actual CPI inflation in each of the past six years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000088\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government is concerned to protect the vulnerable and those less well off from this one-off rise in the general level of prices.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000089\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis continues the approach taken in last year\u2019s Budget, which preserved income support and entitlements in the face of the global recession.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000090\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe tax package will protect the incomes of New Zealanders in two ways.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000091\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EFirst, for income earners at all taxable income levels, the reduction in personal income tax will be sufficient to match the increase in GST.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000092\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ESecond, the package will provide, from 1 October 2010, an immediate lift in the levels of New Zealand Superannuation, all main benefits, student allowances and Working for Families payments. This will be sufficient to offset the estimated impact on prices due to the rise in GST.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000093\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe payments will be adjusted to ensure the full CPI effect is captured, excluding the CPI impact of the tobacco excise increase.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000094\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ERevenue raised, from GST and other base broadening measures, will be used to fund an across the board reduction in all income tax rates.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000095\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe changes to personal income tax rates, to apply from 1 October 2010, will be as follows:\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000096\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe initial income tax rate applying up to income of $14,000 will reduce from 12.5 per cent to 10.5 per cent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000097\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe tax rate applying to income between $14,000 and $48,000 will reduce from 21 per cent to 17.5 per cent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000098\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe tax rate applying to income between $48,000 and $70,000 will reduce from 33 per cent to 30 per cent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000099\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe tax rate applying to income over $70,000 will reduce from 38 per cent to 33 per cent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000100\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThese are substantial and worthwhile tax reductions.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000101\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThey mean that, for example, a typical two earner family, with two children who earns the average household income, will, after allowing for the increase in GST, be better off by $25 per week, or $1,285 per year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000102\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWhen combined with the tax cuts already delivered from 1 April 2009, that family will be better off by over $43 per week or $2,245 per year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000103\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe changes also mean that since March 2009 the marginal rate of income tax faced by taxpayers earning between $40,000 and $48,000, just below the average wage, will have almost halved from 33 per cent to 17.5 per cent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000104\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ETaxpayers wanting to know how their own position is changed by today\u2019s tax package can consult our website, www.taxguide.govt.nz and make this calculation.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000105\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000106\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government believes that in a world of mobile capital, business income is particularly sensitive to tax rates.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000107\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWhen New Zealand\u2019s company tax rate was set at 33 per cent more than 20 years ago that rate was competitive by world standards.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000108\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ESince then company tax rates show strong downward momentum around the globe.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000109\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe tax rate applying to New Zealand companies will reduce from 30 per cent to 28 per cent. This will apply from the start of the 2011/12 income year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000110\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E28 per cent will also become the standard tax rate applying to most savings vehicles.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000111\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt will apply to vehicles taxed as companies, including Group Investment Funds, unit trusts, life insurance and superannuation funds. It will also be the maximum tax rate applicable to Portfolio Investment Entities, known as PIEs.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000112\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ELower income taxpayers will still have access to lower rates via imputation credits from companies and electing lower PIE rates.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000113\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe tax rate applying to trusts will remain at 33 per cent, the same as the new top personal rate of income tax.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000114\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe previous gap between the 33 per cent tax rate for trusts and the 38 per cent rate for higher income individuals has spawned widespread use of trusts as tax planning vehicles. Trusts have an important role in our economy, but this should not be driven by tax advantages.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000115\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EApplying a lower and more uniform tax rate to most forms of capital income will improve the durability and integrity of the tax system. It will encourage individuals to save and companies to invest.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000116\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000117\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Tax Working Group also reported that anomalies arise through the use of taxable income as a means of determining eligibility for certain Government assistance. Taxable income may not always be a good measure of true economic circumstances.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000118\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAs an initial step, from 1 April 2011 investment losses will be added back to taxable income for the purpose of determining a family\u2019s eligibility for Working for Families assistance.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000119\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EFurther changes of eligibility for Government assistance, including student allowances, covering areas such as distributions from trusts and income from cash PIEs, will follow after the Budget. Officials will release a paper setting out the issues and proposed solutions later this year for implementation from 1 April 2011.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000120\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000121\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Budget will also introduce a range of measures to broaden tax bases. These measures are being introduced to improve the fairness and efficiency of the tax system, and to improve the economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000122\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe existing 20 per cent loading on depreciation for new investments will be removed for assets acquired after today. Assets already purchased will continue to receive the loading.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000123\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis allowance explicitly departed from the principle of allowing deductions for true economic depreciation. It results in other taxpayers effectively supporting investments that might not stand up on their own merits.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000124\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIn addition, the Government is not convinced that all buildings actually depreciate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000125\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt is clear that some do. But many New Zealanders live happily in houses constructed over 100 years ago.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000126\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAllowing tax deductions for depreciation provides an unfair tax advantage for these assets.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000127\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAccordingly, the depreciation rate for most buildings with an expected life of 50 years or more will be set to zero from the start of the 2011/12 income year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000128\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThose buildings where the current depreciation schedule is consistent with a useful life of less than 50 years will be unaffected.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000129\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBuilding owners who believe that, under these rules, a class of buildings should qualify for depreciation, may seek a provisional rate from Inland Revenue as they do at present.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000130\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EFollowing the Budget, the treatment of commercial building fitout will be reviewed and if necessary amended prior to 1 April 2011 to clarify the law on the split between buildings which will not be depreciable and separate assets which will continue to be depreciable.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000131\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ETaxpayers will, of course, still be able to claim deductions for repairs and maintenance.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000132\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMany investors hold property through Loss Attributing Qualifying Companies, or LAQCs. After a short period of consultation, legislation will be proposed so that from 1 April 2011 all LAQCs will be taxed as limited partnerships.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000133\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe main impact of this change will be to ensure both profits and losses are assessed at the marginal tax rate of the investor.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000134\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government has also reviewed taxation of inward investment into New Zealand. International tax law generally provides that income should be taxed in the jurisdiction where it is earned.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000135\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EHowever, it is relatively easy to transfer income between jurisdictions by use of debt, often between related parties.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000136\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ENew Zealand, like most countries, operates \u201Cthin capitalisation\u201D rules to limit this practice. The current \u201Csafe harbour\u201D limit for gearing on foreign owned investments, will be reduced from 75 per cent to 60 per cent from the 2011/12 income year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000137\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000138\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis package of tax changes represents a major step forward. By improving incentives to save, and evening up effective tax rates across sectors and across vehicles, it directly addresses some of the problems that have beset the economy in recent years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000139\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe package improves fairness and the integrity of the tax system. It ensures that taxpayers with similar circumstances and true economic incomes will have similar tax positions.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000140\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe package is broadly neutral in terms of income distribution.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000141\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWhile higher income earners pay more tax and therefore receive larger personal income tax reductions, these groups also bear most of the impact of the tax base broadening measures.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000142\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIn addition, the compensation package is targeted to those on lower incomes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000143\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOn average most New Zealanders receive roughly a half to one per cent average increase in real disposable income.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000144\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe impact of the tax changes on economic growth will be positive, though only a small allowance has been made for this in the fiscal projections.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000145\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EFinally, I thank my colleague, the Hon Peter Dunne, who as Minister of Revenue has worked tirelessly to help deliver the tax package before the House today.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000146\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000147\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBudget 2010 also contains a range of other initiatives that will promote growth.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000148\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWe have focused funding on investing in innovation and encouraging growth in selected productive sectors.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000149\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Budget allocates $321 million over four years for a range of science and R\u0026amp;D incentives, lifting total spending to $750 million per annum.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000150\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis includes business R\u0026amp;D grants and assistance for firms to access new ideas, science and technology from Public Research Organisations, stronger commercialisation within CRIs and universities, and research infrastructure.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000151\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe global financial crisis was a setback for tourism. The Budget allocates $30 million of new spending in 2010/11, mostly to increase the marketing of New Zealand as a tourism destination internationally.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000152\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government will legislate this year to support the aquaculture sector\u2019s objective of becoming a billion dollar industry by 2025, working with industry and other stakeholders to lift regulatory barriers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000153\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ELate last year the Government agreed to most of the recommendations of the Capital Market Development Taskforce, and is in the process of implementing them.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000154\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government released a plan to unlock New Zealand\u2019s petroleum and mineral potential in November 2009 and has begun implementing it. This Budget funds implementation of that plan.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000155\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWater is also a key strategic resource. The Government is currently working on improving the regulatory regime, including those parts that impact storage and irrigation, as part of an efficient and sustainable water management programme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000156\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000157\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAnother important leg of our growth plan is to improve access for New Zealand exporters to world markets.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000158\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EChina has recently and rapidly become our second largest trading partner.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000159\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EGiven the increasing importance to New Zealand of trade with Asia and the Pacific Rim, we have also recently signed Free Trade Agreements with Hong Kong and Malaysia, and are negotiating with Korea and India.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000160\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOur Agreement with the 10 countries of ASEAN recently came into force.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000161\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWe are working with the Trans-Pacific Partnership regional grouping, including the United States, to open further markets and opportunities for New Zealand exporters.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000162\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000163\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ETo ensure that these and related initiatives continue to benefit the economy, we have established the Productivity Commission. This will be a standing body with high level expertise, operating independently with a wide brief to undertake inquiries into productivity-related matters. It will be in place by April 2011.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000164\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government also intends to release a discussion document on ways to ensure that all new and existing regulation is subject to proper scrutiny. This will help avoid proliferation of red tape.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000165\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EFor both of these initiatives the Government is grateful for the leadership shown by the Hon Rodney Hide and the ACT Party.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000166\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000167\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EI now turn to how the Government can ensure better delivery of services to the public.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000168\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EA more efficient public sector will deliver better quality services, while reducing fiscal and tax pressures on the rest of the economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000169\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government determined that rather than spread new spending resources thinly, it would focus on those few high priority areas that really mattered.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000170\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThree quarters of the new spending allowance has been allocated to improving health and education services, and to lifting science and innovation. Most of the other votes received either small or no increases. Many will see no additional funding for several years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000171\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government is working with public sector chief executives to deliver higher quality services more efficiently, as every other organisation in the community has had to do over the past two years, and I thank them for their efforts. We will continue to scrutinise every dollar of public spending.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000172\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAs we committed a year ago, Budget 2010 lives within a new operating spending allowance of $1.1 billion per year. In addition, a further $1.8 billion has been made available between now and 2014 by redirecting resources into higher priority areas, including within health and education spending.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000173\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ECore Crown expenditure also increases due to rising benefit and superannuation costs, increased finance costs and expenditure on the emissions trading scheme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000174\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIn total, core Crown expenditure is forecast to increase by $5.9 billion, to over $70 billion, in 2010/11.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000175\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000176\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe largest share of new spending has been dedicated to improving core Government services.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000177\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIn total, Health has been allocated an additional $2.1 billion over the next four years, including an extra $512 million in 2010/11 to cater for ongoing demographic and price pressures.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000178\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis includes $93 million for disability support and $60 million to boost elective surgery over the next four years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000179\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government\u2019s commitment to education remains strong. This Government wants all young New Zealanders to reach their potential and be given the opportunity to succeed.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000180\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Budget provides an extra $1.6 billion for education over four years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000181\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis will fund a 4 per cent increase in operating expenditure for schools. It also includes $349 million for school property, $92 million to raise participation in Early Childhood Education for families in areas currently under-represented, and $48 million to extend the Youth Guarantee.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000182\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ESocial services are also a priority. Building on the success of the Government\u2019s Community Response Fund, the Budget provides $91 million over the next four years for Non-Government Organisations to deliver extra services.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000183\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EJustice receives $147 million in new operating expenditure, as well as significant capital expenditure. This will fund a lift in prison capacity, legal aid restructuring and increase Family and Youth Court professional services.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000184\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOur commitment to Wh\u0101nau Ora is matched by funding of $134 million over four years. The first wave of 20 Wh\u0101nau Ora providers will be selected through an Expressions of Interest process that begins next month.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000185\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Budget provides almost $20 million for two new Whare Oranga Ake reintegration units.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000186\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EI particularly thank the Hon Dr Pita Sharples and the Hon Tariana Turia as the Ministers responsible, together with the rest of the M\u0101ori Party.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000187\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government retains an on-going commitment to growing the supply of affordable housing for New Zealanders and their families. $20 million has been provided to extend Housing New Zealand\u2019s Housing Innovation Fund for another year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000188\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000189\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government is determined to improve management of government owned assets. Too often Government assets have been poorly managed and liabilities poorly monitored.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000190\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAs at 30 June 2009, the Crown balance sheet showed $217 billion of assets and $118 billion of liabilities.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000191\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Crown has a wide range of holdings, and is by far the largest asset owner in the country.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000192\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt holds around $100 billion of what could be termed social assets, including roads, national parks, state housing, schools and hospitals.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000193\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt holds around $70 billion of financial assets, comprising a wide range of local and overseas investments, all of which produce commercial returns.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000194\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAnd it holds over $50 billion worth of commercial assets, comprising mainly SOEs and KiwiRail.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000195\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThese assets have been funded by New Zealanders paying taxes and fees over decades.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000196\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Budget forecasts show that over the next four years the value of Government owned assets is expected to increase by some $32 billion. This represents growth in taxpayer wealth.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000197\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis level of investment demands a high standard of stewardship by Government.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000198\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ESince taking office the Government has been working hard to understand the capital demands of its operations, and to allocate capital to where it can best be used.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000199\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWe have produced the first National Infrastructure Plan, tightened commercial disciplines on SOEs and started to introduce better disciplines on procurement processes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000200\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ENew capital spending decisions in this Budget reflect this increased emphasis on managing the public\u2019s resources to promote growth.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000201\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWe continue to invest in our $7.5 billion infrastructure programme over the next four years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000202\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Budget funds major investment in the rail network.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000203\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government has committed in principle to investing $750 million over the next three years, as its contribution to KiwiRail\u2019s $4.6 billion turnaround plan.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000204\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis is in addition to $500 million over four years to purchase electric commuter trains.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000205\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAnother major investment is the Government\u2019s ongoing investment in ultra-fast broadband infrastructure through Crown Fibre Holdings.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000206\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBudget 2010 allocates a further $200 million of capital funding, in addition to the $248 million allocated last year, as part of a total expected investment of $1.5 billion.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000207\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis funding will enable Crown Fibre Holdings to start making substantial contract commitments with the private sector to start rolling out the new fibre network.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000208\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EA further $48 million has been allocated for ultra-fast broadband in schools.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000209\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EFunding has been set aside for a new prison, potentially delivered via a Public Private Partnership.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000210\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000211\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EI now turn to the Government\u2019s fourth objective, that of maintaining firm control of the government\u2019s finances, so we can return the budget to surplus and reduce our rising debt.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000212\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe fiscal outlook has improved from last year, due to the economy returning to growth and the positive impact of Budget 2009 decisions.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000213\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe projected operating deficit for the next financial year is $8.6 billion or 4.2 per cent of GDP.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000214\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt is projected to improve steadily in each subsequent year, and to reach surplus in 2015/16, three years ahead of last year\u2019s projection.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000215\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAs a result of this improved outlook the debt projections have also become more favourable.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000216\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ENet core Crown debt is now projected to peak at 27 per cent of GDP in 2014/15 and then decline steadily. This is both a lower and earlier peak than was projected in last year\u2019s Budget. It contrasts strongly with the outlook of ever rising debt which the Government was presented with in late 2008.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000217\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBy 2024, net core Crown debt is projected to be back to 14 per cent of GDP, or about the level before the crisis struck.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000218\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EHowever, it will require at least a further decade of disciplined fiscal management to deal with the effects of the global financial crisis and the huge lift in Government spending during the boom years leading up to that crisis.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000219\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EFinancing new and maturing debt will require the Government to borrow around $240 million every week over the next three years. Debt is projected to reach $68 billion by 2014/15.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000220\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis substantial rise in debt will mean that interest costs more than double.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000221\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOur long term fiscal objective remains to ensure that net debt is brought back to no more than 20 per cent of GDP by the mid 2020s. The current projections show this being achieved by 2022.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000222\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIf possible it would be preferable to return to this low level of debt earlier.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000223\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000224\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe improvement in the debt outlook gives the Government some flexibility to absorb part of any future shocks, as it did in the last recession.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000225\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOur intention is that any favourable surprises will be used for deficit reduction and debt consolidation.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000226\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWhen the books are balanced and debt has stopped rising the Government will have more choices about where to invest, spend or reduce taxes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000227\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000228\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBudget 2010 is about building the recovery and helping New Zealanders prosper.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000229\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Prime Minister has made clear this Government\u2019s aspirations for an economy that values enterprise, rewards people for effort and encourages them to get ahead.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000230\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ENew Zealand has successfully navigated the worst global crisis in a generation. The challenge now is to build growth and create new jobs. Sustained growth provides opportunities for New Zealanders to achieve their aspirations.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000231\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBudget 2010 drives the New Zealand economy forward, moving away from debt and consumption while increasing investment and exports.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000232\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWe set a path for responsible Government spending last year, and we maintain that path in this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000233\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWe have changed the tax system to rebalance the economy, to put cash into people\u2019s hands and to encourage them to save more and consume less. This will have a long term benefit.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000234\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWe now have our debt under control and unemployment is beginning to fall. We will emerge as one of the countries that other nations aspire to be more like.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000235\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThere are risks to the recovery. A mountain of debt hangs over a number of our export destinations, and will also influence the markets that lend to New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000236\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWe cannot take for granted the contribution that the Australian and Chinese economies have made to our growth.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000237\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EHowever, we are on track to a position most developed economies will envy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000238\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis includes more new jobs, falling unemployment, rising family incomes, quality public services and sound public finances.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000239\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000240\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis Budget continues to build a platform for a much more ambitious New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000241\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000242\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EI commend this Budget to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022 data-id=\u0022a673a9efe86147b99cb684737eaa9de2\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000243\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a673a9efe86147b99cb684737eaa9de2\u0022\u003EHon PHIL GOFF (Leader of the Opposition):\u003C/span\u003E I move, That the words after \u201CThat\u201D be omitted and the following substituted: \u201Cthis House has no confidence in the National Government led by John Key which has blatantly broken its clear promise not to raise the Goods and Services Tax, has pushed up prices when working people have had their lowest wage rises in more than a decade, has failed to implement a plan for jobs, lacks any vision for a smart, high-skill, high-tech and high-wage economy, has cut services and assistance to the most needy in our community, and has rewarded the most wealthy at the expense of middle and low income New Zealanders.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000244\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EToday the National Government had the opportunity to deliver a Budget that was fair for all New Zealanders\u2014a Budget for the many, not the few. Today, the National Government had the chance to produce a Budget that invested in the future, a Budget that promoted a modern, smart economy with more and better jobs and higher wages. This National-led Government has failed absolutely in those objectives. There were no new ideas to create jobs and the future that they need. Instead, the Government has pushed up the price of just about every good or service that New Zealanders buy. It has borrowed extra to give a windfall to the most wealthy people in this country. It has broken its promises to senior citizens. It has created the highest level of inflation in decades\u2014nearly a 6 percent rate of inflation. In the time that we have had, our estimate is that average earners will be $30 a week worse off after inflation\u2014$30 a week worse off after inflation. Those on the average wage will get a $15 a week tax cut. Goods and services will go up by $45 a week. That leaves them $30 a week worse off, by Mr English\u2019s own figures. The top 1 percent of income earners will get 12 times the cut in their income tax of the average earner\u201412 times the cut of the average earner. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000245\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThis Budget is a short-term plan that will look after the interests of the highest-income earners, which this National Government represents, but it is a Budget that comes with a huge cost. It was ironic to listen to the National backbenchers cheering the figures on health. Why would they cheer the figures on health when those figures left a $300 million gap in maintaining health services even at the current level? That is a $300 million hole in the health budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000246\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EWhen we look at the education budget, we see that there is not the additional funding in education that will come even near to meeting the cost of extra inflation. If we take the critical area of education where the foundation is laid for our children to learn, early childhood education, we see a slashing of $400 million over 4 years\u2014$400 million over 4 years. My challenge to the Prime Minister is to ask how that cut will be met. Will it be met with additional fees on all of those who are trying to get a quality early childhood education for their families, or will it mean a cut to the quality of early childhood education? Either way, that is a disastrous failure to invest in the future of our country\u2014our children. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000247\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EBefore the election, Mr Key promised that the average wage earner would get a tax cut of $50 a week. That has not eventuated. There is no $50 a week tax cut for the average income earner. The Government promised tax cuts. Last year it cancelled the tax cuts and it talked about a tax switch. But this year they have actually delivered a tax swindle\u2014a tax swindle. There is no $50 a week tax cut for those on the average wage. National has done what it never told New Zealanders it would do. It promised income tax cuts, but it never told New Zealanders that they would be paying for those cuts themselves through the increase in GST. In fact, 2 weeks before the election Mr Key stood up, looked down the barrel of the camera, and said that National would not increase GST. Every time he denies or tries to qualify that, his credibility goes down. That is a broken promise by the National Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000248\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThis Budget will do nothing to create jobs or fix the problems that need to be fixed for New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000249\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226f9d1d5347214130a09a943687788474\u0022\u003EHon Bill English\u003C/span\u003E: Tell us your GST position.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000250\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c392a32537c440b5b1f3f29136c001a4\u0022\u003EHon PHIL GOFF\u003C/span\u003E: Bill English has given himself $240 extra a week, not to mention doubling his housing allowance until he was caught out. I say to Mr English that this not a Budget that looks after the middle and low income earners; this is a Budget that looks after him and his mates on his level of income, but it is unfair to ordinary New Zealanders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000251\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThe cuts in income tax were designed to compensate for GST going up by 2.5 percent, but they will not compensate for the rise in the cost of living. Bill English never told New Zealand that he would be pushing up inflation to 6 percent after his second Budget\u20146 percent. That is the highest rate of inflation that we have seen in decades in this country, and it will eat into the living standards and the wellbeing of our people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000252\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003ENational has increased consumption tax by 20 percent. I say to Mr Key that that consumption tax is regressive. Mr Key might have said that the wealthy will pay more GST in dollar terms, but a far higher percentage of the income of low-income earners will be consumed by the GST increase than that of high-income earners. Make no mistake\u2014that is a regressive tax and it is not being adequately compensated for by the cuts in income tax. The big cuts in income tax go to the wealthy; the big increases in income being spent on consumption taxes land on the lower and middle income earners. This country now has one of the highest rates of consumption tax in the world, because there are no exemptions to GST. We have the fourth or fifth highest consumption tax in the OECD. Consumers never voted for GST to go up, because John Key promised them that it would not go up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000253\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EBusinesses are not in favour of GST going up. In a recent survey of small businesses across New Zealand, 8 percent supported an increase in GST\u20148 percent, I say to Mr English. Businesses know that the increase will be bad for them and bad for New Zealand. In this Budget we were going to have a rebalancing of incentives to invest in the productive economy rather than the property speculation part of the economy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000254\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cfbf73c49fa04aae8869073263dca47a\u0022\u003EHon David Cunliffe\u003C/span\u003E: Wimped out!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000255\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ba9803285bbb44d4916055d5b3a9ba49\u0022\u003EHon PHIL GOFF\u003C/span\u003E: This Government wimped out because so many of its supporters are the very property investors that that rebalancing would have hurt.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000256\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002258689a498418440392fe1eeb659bf1e5\u0022\u003EHon Gerry Brownlee\u003C/span\u003E: Not correct.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000257\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002297fa35af5e7f4760a966cc64336a258b\u0022\u003EHon PHIL GOFF\u003C/span\u003E: That is correct, and I say to Mr Brownlee that it would have included a lot on that side of the House. The Minister should know that nothing in this Budget will be effective in rebalancing investment from the property investment sector to the productive economy. This Budget fails absolutely on that count. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000258\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThe income tax cuts, such as they were, were designed to compensate for GST, but I ask what the Minister of Finance has done for the lower and middle income earners of this country to compensate for all the other taxes that have been imposed. There is the tax on business and innovation, in Mr Brownlee\u2019s portfolio. They cut the 15 percent research and development credit, and a year later put 39 percent of that money back into research and development. It is too little, too late, and an embarrassing acknowledgment that they got it wrong in the first place. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000259\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThere is the $200 million windfall in tobacco tax. I would have thought that a Government introducing that for reasons other than simply gaining the windfall revenue might put some of that money back into tobacco-use prevention programmes or addiction treatment programmes. But no, that money is being taken as a windfall, the cost will fall disproportionately on some in the community, and there is nothing in a positive sense that will lead people to break that addiction with the assistance of at least some of that $200 million. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000260\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003ENational promised that it would cut taxes and not increase them. It has not delivered on that; the net position of average New Zealanders will be worse as a result of the costs imposed on New Zealanders, compared with the so-called cut-the-tax swindle. The costs facing New Zealanders will go up dramatically in the next year, and this Government has done nothing to protect middle and low income earners against that. Homeowners will face three or four hikes in the interest rate they pay as the official cash rate goes up in the next 18 months. Inflation at 6 percent is higher than even the banks estimated would be the result of the impact of National\u2019s actions. The only people who come out of this Budget better off in net terms are the wealthy. Mr Key, as Prime Minister, will get $350 a week, the average Cabinet Minister will get over $200 a week, and the average New Zealander will be struggling to get $13 a week\u2014and that will be totally consumed by the additional inflation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000261\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EWe heard a lot earlier in the week about closing the loopholes where the wealthy were escaping their obligations to pay even their share of the tax. I ask Mr English where the evidence is that that Minister has made any difference at all to those loopholes. Options were put up by the Tax Working Group, and that Government has lacked the courage of its convictions to implement the recommendations that were made. The wealthy will not be paying more tax as a result of this Budget but the 40 percent of New Zealanders at the bottom, who Mr Key said were not pulling their weight, will be paying more because they will be paying more GST on everything they buy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000262\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EMr Key said earlier in the week that New Zealanders should not be jealous of the fact that the wealthy were getting the biggest share. They are not jealous, I say to Mr Key, but they are angry that this Budget does not give ordinary New Zealanders on low and middle incomes a fair go. Some of those New Zealanders who will be angry are people like Henry Lindsay and Vicky Drew, and the thousands of other elderly, frail New Zealanders who have paid taxes all of their life, only to find that when they are elderly and in need and need some help\u2014a very small amount of help, $30 a week in home care\u2014that has been cut. Mr English should explain to those people why that small amount of assistance to enable them to maintain their independence is regarded as low-quality expenditure while $700 a week extra in tax cuts to chief executives is regarded as high-quality expenditure. The people who were given a wage rise or a salary rise last year of $1,000 a week, who were given the big tax cuts last year, have again benefited from the big tax cuts this year. I ask Mr English where the fairness is, where the equity is, in hammering people who are the most needy to reward those who are the most privileged. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000263\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThis Budget is not just a Budget of broken promises; it is a Budget of lost opportunities. We need an export-led recovery, but where is the evidence in this Budget of anything that will stop the continuation of the cycle of higher interest rates and inflated exchange rates that stop the export sector being able to do as well as it should? Where is the evidence of assistance to savings? The Government cut KiwiSaver contributions from 4 percent to 2 percent, while Australia increased its superannuation contributions from 9 percent to 12 percent. Then Mr English wonders why he does not have the investment capital to invest in growth so New Zealanders can have ownership of their own future. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000264\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThe Minister of Finance has not put back the additional payments into the superannuation fund. In the last year, since Mr English gave his last Budget, the superannuation fund increased in value by $3.5 billion. We are losing a million dollars a week in forgone interest alone because of the short-sightedness of that Minister. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000265\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EWhere is the evidence in this Budget of increasing skills? What is being done about the 70,000 young New Zealanders who are not in work, not in training, and not in education? That is a social and economic disaster for the future. Where are the additional apprenticeships when we know that once the economy recovers, there will be a major skills shortage this year? Where is the help for the thousands of young New Zealanders who are being turned away from polytechnics and universities because the Minister of Education has capped entry to those institutions? Where is the investment in research and development to get the smart economy so that New Zealand can be innovative and create jobs? This Government has cut research and development. It cut 2 billion from the Fast Forward fund, and the 15 percent research and development tax credit. This Government has failed to put in place a vision and a plan to build a stronger New Zealand for tomorrow. Where is the evidence that this Government has responded to the Top 100 business people in the country who have talked about a cleantech, added-value economy? Their pleas have been ignored. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000266\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThis is a Budget of missed opportunities. This is a Budget that promotes inequality in a way that no Budget has since 1991\u2014the \u201Cmother of all Budgets\u201D. This is a Budget of unfairness. This is a Budget of more new taxes. This is a Budget that will damage hard-pressed New Zealand families to reward the few instead of looking after the many. This Government has failed in its obligation to the people of this country. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022 data-id=\u0022fb7c1c915dc946f9b20a9b65f61be2d2\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000267\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022fb7c1c915dc946f9b20a9b65f61be2d2\u0022\u003EHon JOHN KEY (Prime Minister):\u003C/span\u003E Shane Jones was happy with that speech, I have to tell you. The one conclusion we can draw from Phil Goff\u2019s speech is that he has to stop reading those Greek economic textbooks, because that speech was about borrow and hope. It was Greek economics, Labour Party style. That is all Labour knows how to do.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000268\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWhen I went to bed last night at 12.30 I read the Dominion Post. In the Dominion Post Vernon Small listed 10 things that are highly predictable about today\u2019s Budget, and one was a vein-popping speech from Phil Goff. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000269\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022edd24a387b8041a7a793745807f939fc\u0022\u003EChris Tremain\u003C/span\u003E: He got that right.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000270\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cab05570c1db49a4b05320245bfced29\u0022\u003EHon JOHN KEY\u003C/span\u003E: No, actually he did not get it right. That was not a vein-popping speech from Phil Goff. Do members know why? Other than Labour wanting us to borrow, we did not hear one suggestion, one policy, or one good idea from Labour, because Phil Goff does not know what his policies are. He does not know whether GST is going up. He does not know whether GST is going down. He does not know whether GST is coming off a cooked chicken or an uncooked chicken. Neither does the rest of the Labour front bench, after that speech. Labour members do not have a clue.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000271\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EInterestingly enough, in Phil Goff\u2019s speech I did hear\u2014[Interruption] It is interesting that members opposite are paying more attention to my speech than they did to their own leader\u2019s speech. But I digress. There were crocodile tears in that speech from Phil Goff, but the question is this and it is a good one: did they ring true? That is an honest question that any New Zealander might ask. Let us wind the clock back to 1988, when Phil Goff was in Cabinet. The then Labour Government dropped the top personal tax rate to 33c\u2014exactly as it is in today\u2019s Budget. Did Phil Goff resign? No. Did he protest? No. He came down to the House and said that that reduction would allow Kiwis to keep more of their own money. I say: \u201CRight on, Phil!\u201D; I agree with him. In 1988 that Cabinet\u2014wait for this, and Roger Douglas knows exactly what I am talking about\u2014dropped the company tax rate to 28 percent\u2014exactly what it is today. Did Phil Goff resign? No. Did he quit? No. He came down to the House and said this: \u201CThat will create an environment in which enterprises can succeed\u2014both New Zealand enterprises and those attracted from overseas.\u201D [Interruption] Yes, it is a good Budget. But, wait, it gets better. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000272\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ce27382fdb854ae8ac7d5c1c246abbec\u0022\u003EMr SPEAKER\u003C/span\u003E: I hesitate to interrupt. The debate has been robust, and that is fine, but the noise has reached such a level that I am sure no one in the gallery can hear what on earth is going on, because I cannot either. I have no problem with it being a robust debate, and I do apologise for interrupting the Prime Minister, but we cannot let it just become bedlam. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000273\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b0380b28f15e4c09889676ba144a84b1\u0022\u003EHon JOHN KEY\u003C/span\u003E: The truth is I have never seen so much support from Labour for a National Budget! In 1989\u2014wait for this\u2014Phil Goff was in Cabinet. Guess what Labour did? It raised GST by 2.5 percent. Guess what? It was with no compensation\u2014nothing for those on benefits, nothing for those on pensions, nothing for anyone. Did Phil Goff resign?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000274\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ecd2e2bb6440420d8a1988df427e124c\u0022\u003EHon Members\u003C/span\u003E: No!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000275\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228ec45eea92084a418ca84997a7dbbc29\u0022\u003EHon JOHN KEY\u003C/span\u003E: Did he protest?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000276\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022deb7d28d90214d09b752f1c81be1e58c\u0022\u003EHon Members\u003C/span\u003E: No!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000277\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a16aadcd7dd44a3ea4f0b281e7b9abbe\u0022\u003EHon JOHN KEY\u003C/span\u003E: Did he get in a bus, paint \u201CAxe the Tax\u201D on it, and wander round New Zealand? No, he did not. He said the virtues of it were great.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000278\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003ELast week I read in the New Zealand Herald something very interesting. It was Phil Goff talking to Labour supporters. He said: \u201Cshould Labour regain the Treasury benches \u2026\u201D\u2014note to self: the operative word in that statement is \u201Cshould\u201D\u2014\u201Cwe are going to be doing a lot of reversing.\u201D That is what Phil Goff said\u2014\u201Cwe are going to be doing a lot of reversing.\u201D\u2014and we will hear about that in a moment. Well, ain\u2019t that the truth! Phil Goff has been doing a lot of reversing throughout his whole political career. But this is what he will be reversing. Today Bill English delivered control of Government spending. Well, under Labour\u2019s spending-type matters, that would be reversed under a Labour Government. Bill English today delivered Government debt under control and falling. That would be reversing under Labour\u2019s borrow and hope. Today Bill English carried on with orthodox monetary policy, which is something Labour has supported since 1989. According to Phil Goff, that would be reversing. Today Bill English delivered a comprehensive GST system, something Labour has supported since 1985. According to Phil Goff, that would be reversing. I give him one hint: he should have told Trevor Mallard before he wrote the blog in April of this year in which he had a go at the M\u0101ori Party. That is what he should have done. There has been a lot of reversing in that thing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000279\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EIt is as simple as this: if New Zealanders want to see debt go up and their country get into worse shape, they should vote Labour.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000280\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022095fca82525a48ed8e53b94f3396724e\u0022\u003EMr SPEAKER\u003C/span\u003E: I apologise to the Prime Minister again, but I cannot hear a thing. I think the Government benches need to be a little more reasonable. OK, the noise at the final point was from both sides, but the Opposition has actually not been as noisy as the Government benches in the last few minutes. We have to be able to hear. It is no use if we cannot hear what the Prime Minister is saying. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000281\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222848d962141e4f92b50e050625297eeb\u0022\u003EHon JOHN KEY\u003C/span\u003E: It is time to leave Labour behind, but I can only make this observation: if the only thing Labour has learnt in the last 18 months is to borrow more money, then those members need to go and have a good look at Greece. The only assumption I can draw is that the bus they have been on for the last 18 months has spent a lot more time on Mykonos than it has in Masterton! They need to get in the real world.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000282\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EThis is a great Budget. It will get our economy going. This Budget will create 170,000 jobs\u2014170,000 jobs. It is tackling the long-term issues that our economy and our country face. There will be some fairness in the New Zealand tax system. There are a lot of things in this Budget, and we have delivered on many, many important issues. Let us take just one of them: $1 billion for leaky homes. It is a problem we inherited from a Labour Government that spent 9 years ignoring the problem. We will see whether homeowners up and down the country who will have access to a solution to their leaky homes, who are currently living in rotting dwellings, and who now can see light at the end of the tunnel think this is a good Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000283\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWe are living in very difficult economic conditions, but today this Government delivered a record amount of expenditure on health care\u2014$2.1 billion more over 4 years. But I want to make a very important point: it is not just about more money; it is actually about how we spend that money. It is about value for money. It is about putting more money on the front line. It is about more money for nurses and doctors, and for retaining people in our system. It is about more money for subsidised drugs, not just more money for the sake of it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000284\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EThe same is true of education. There is a record spend-up on education. There is 4 percent extra for operations grants for schools up and down the country.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000285\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWe need to put science at the heart of our economy. This Budget makes a step in that direction. When Labour had billions and billions of dollars to spend, it did not spend it on science, research, and development. Labour members will want to talk about their rinky-dinky little fund, which never actually got off the ground. Not one dollar of that fund was spent, because it was 9 years too late. What have we done in science, research, and development? Well, we have given a huge amount of money to those companies that want to use that technology. We are linking the Crown research institutes, universities, and private institutes to our businesses, so that those businesses can be smarter.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000286\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWhen it comes to infrastructure, this Government is investing in the future of New Zealand though infrastructure, even if we are having to bail out KiwiRail, which Labour bought for far too much simply for political and ideological gain. We campaigned on ultra-fast broadband as a device to change New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000287\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022aa323b9031f04dc2acb0a1cd525c5127\u0022\u003EHon David Cunliffe\u003C/span\u003E: Where is it? Where is it?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000288\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221366836b1d7746fca1f6227f00d85525\u0022\u003EHon JOHN KEY\u003C/span\u003E: Well, actually, in the Budget\u2014hundreds of millions of dollars of expenditure. The Crown Fibre Holdings board is making tremendous progress. This is a country getting ready to be wired so that we can deliver to New Zealanders their opportunities to connect with the world through a low-cost, highly efficient, world-class leading technology; we are letting small businesses in New Zealand all of a sudden connect to the world.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000289\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EBut in the end this Budget, with not a lot of money to go around, has tackled one very core thing, which is the unfair and inappropriate way in which the tax system has evolved in this country. Today that is what we have done. Let us forget about the rhetoric from the Labour Party and go to what Treasury is telling us: there will be 170,000 new jobs and nearly 1 percent growth. Even at Treasury\u2019s most pessimistic view, this Budget will grow our economy by 1 percent extra. That is thousands of dollars to everyday Kiwis, in their pockets, in their households, and in job security. That is what a good tax system does.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000290\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003ELet us have a look at some of those taxpayers. Under the previous Labour Government someone earning $39,000 a year paid tax at the rate of 33c in the dollar. Has the National Government stood back and accepted that? No, it has not. It has effectively halved that rate to 17.5 percent. But that lower rate is not for just a few New Zealanders; three-quarters of all New Zealanders will face a top statutory rate in this country of 17.5 percent. Let us put that another way: three-quarters of New Zealanders will get to keep 82.5c in the dollar. That is about an incentive to get out there and train, work, and get ahead. That is two-thirds of the tax package. Let us understand the size and scale of this tax package. Four billion dollars of personal tax cuts are being delivered from a Government that is struggling with an economic environment that is difficult. That is commitment. Those cuts are worth $15 billion over a 4-year period. Where will that money go? Two-thirds of it will go to those on the bottom two personal tax rates. That is fairness.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000291\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWhat will this package do? Let us think about the young couple that have recently got married. They earn $50,000 each. As a result of this package they will have choices, because they will have thousands of extra dollars in their hands. Even if they decide to consume the lot, they will still be better off to the tune of thousands of dollars, and if they want to save, if they want to buy a house, they will now have the choice to do that. We in National are believers in a property-owning democracy; if people want to live in their own homes, if they aspire to own their own homes, National is the party that believes in that. Today, through this Budget, we have delivered the opportunity for New Zealanders to live up to that dream, to have that opportunity, and to get out there and build their own homes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000292\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EThere are many other component parts of this package, but one of them is about making sure there is fairness in the system, fairness to all New Zealanders. Labour members will spend a lot of time talking about tax cuts for the rich, but they have missed a simple point: the rich in New Zealand largely do not pay the top personal rate. The rich funnel their incomes through trusts, and today we have essentially aligned all of those incentives. We have made sure that when people who are well off go to their accountants, it is to talk about how to grow their businesses, it is to talk about how they can do better in their lives, not to work out ways in which to get round an \u201Cenvy tax\u201D that was put on by the Labour Government for no good reason.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000293\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003ENational has been fair across the board, which is unlike Labour when it increased GST with no compensation. We have recognised the cost on low-income and fixed-income New Zealanders, and have done something about it. Let us take the married superannuitant couple who have no other income\u2014no other income. As a result of this Budget, even if they consume every dollar they receive through superannuation, they will be over $500 a year better off.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000294\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EIn the months and years ahead, I guess that Labour members will have to consider what they would do. If they decide to put on a high personal tax rate\u2014for those on, let us say, more than $100,000\u2014will they be getting the rich to pay more tax? No, the rich will continue to funnel their incomes through trusts.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000295\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWhat we have delivered today is extreme efficiency in the tax system. We have lowered taxes on savings\u2014we have aligned them at 28 percent\u2014and we have done something very special: we have given New Zealand companies a head start over their Australian counterparts by cutting the company tax rate to 28 percent. A lot has been made of Australia, but here are the facts. Before this Budget, only those who earned more than $228,000 paid less tax here than they would have paid in Australia. Do members know what the result of this Budget is? It takes that amount from $228,000 to $55,000. That is about competitiveness with Australia!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000296\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EIn the end, this was a Budget about growth, a Budget about jobs, a Budget about the future of New Zealand, a Budget about getting on top of debt, a Budget about keeping our expenditure in order, and a Budget about fairness. When I look at the millions of New Zealand who will be better off after this Budget, I am left with only one conclusion: this was a Budget for the many, not the few.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022 data-id=\u002287930e9cc09c4efb85d877be3cea2078\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000297\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002287930e9cc09c4efb85d877be3cea2078\u0022\u003EDr RUSSEL NORMAN (Co-Leader\u2014Green):\u003C/span\u003E This Budget is a triple deficit Budget. It runs a fiscal deficit, it runs an environmental deficit, and it runs a social deficit. Perhaps most sadly, it portrays a deficit of vision for New Zealand. This Budget takes money from overseas creditors to fund its fiscal deficit.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000298\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022dc550e748264472986cfbef95a57343a\u0022\u003EMr SPEAKER\u003C/span\u003E: I apologise to Dr Russel Norman. I ask members leaving the House to please do so quietly, and I ask people in the galleries to please not talk, because the noise volume just escalates here in the House and it is so hard to hear. It is totally unfair to Dr Russel Norman. I apologise for that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000299\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220862c2a92d7e4fadbfaea7437a204e4e\u0022\u003EDr RUSSEL NORMAN\u003C/span\u003E: Shall I start again?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000300\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022184ba78b50844ceabddbc95a517c93f2\u0022\u003EMr SPEAKER\u003C/span\u003E: I think just carry on.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000301\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227341c5de2605448b853e124c11bf5dfc\u0022\u003EDr RUSSEL NORMAN\u003C/span\u003E: This Budget takes money from overseas creditors to fund its fiscal deficit. This Budget takes away the dreams of our young people with its social deficit. This Budget takes away the chance for our kids to love New Zealand as we do with its environmental deficit. This Budget adds to the deficit of vision that has so far marked this photo opportunity Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000302\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003ENew Zealanders believe in more than just money. New Zealanders want prosperity, which is enough money to live comfortably, but also warm homes; safe, healthy food for their kids; a transport system that works; and an Aotearoa that they can love for ever\u2014not mine for a quick buck. The Green Party supports this vision and therefore cannot vote for this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000303\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226530900d85d645dd8c07aa0ed625f3b8\u0022\u003EMr SPEAKER\u003C/span\u003E: I apologise to the honourable member speaking. No member in the gallery may take part in the debate in any shape or form. I make that very clear to members in the gallery. They will not interfere in the debate, or they will be removed from the gallery. I apologise to the member.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000304\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002258cf473e8349427aa86db72821e408be\u0022\u003EDr RUSSEL NORMAN\u003C/span\u003E: This Budget was an opportunity to take Aotearoa down a new, smarter economic path. This Budget could have provided the map and the funding to transform the New Zealand economy from one based on commodities and extractive industries towards one that rides the clean technology wave, and has a reputation for high-quality, sustainable commodities, and for knowledge-intensive, high-tech, cleantech industries. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000305\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003ENew Zealand could be a brand of integrity. Our country can be more than just extractive industries\u2014cow faeces in our water and national parks desecrated by mining. We can be more than a quick buck, more than what we can dig up, suck up, and sell off. Indeed, this Budget from National, ACT, and the M\u0101ori Party proposes to consume our capital\u2014our financial, natural, and social capital. We should pass on wisdom to the next generation, but we are passing on financial, environmental, and social debt. Most of all, this Budget makes manifest the contradiction at the heart of our age. We live in a society whose central rationale is maximum economic growth at any cost, yet we know that this growth threatens our well-being and even our long-term survival. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000306\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EI start by addressing the fiscal deficit. This Budget borrows to fund tax cuts, more motorways, and climate pollution subsidies. We are already borrowing $240 million every week for new and roll-over loans, yet this Government has introduced huge tax cuts that will cost $4.6 billion in the 2011-12 financial year. We are already borrowing, yet this Government is spending $9.5 billion on holiday highways and other pet motorway projects that even the Government\u2019s figures show will cost us more than they will deliver in benefits. We are already borrowing, yet this Government will spend $630 million in 2011 on subsidies to climate polluters. This is fiscally irresponsible. The impact of these measures will mean that Government debt balloons out to 26.5 percent of GDP, that annual finance costs will go up to nearly $6 billion in 7 years\u2019 time, and that we will not return to pre-crisis debt levels until 2024. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000307\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThis unnecessary public debt, when piled on top of the mass of private debt in our country, reduces our economic sovereignty. Future generations will bear the burden of this debt and will be beholden to the international lenders who own so much of our economy. This is not freedom, and this is not the sovereignty New Zealanders seek. The build-up of national debt will also provide an excuse to privatise public assets after the next election. John, Bill, and Gerry plan in 2012 to sell off what is left of New Zealand\u2019s public assets. The so-called mineral stocktake, which prepares the very best of our conservation estate for mining, is not the only stocktake in town. Mark my words: John Key will use Government debt to justify a \u201CFor Sale\u201D sign over our State-owned assets, such as Air New Zealand, Television New Zealand, Solid Energy, Meridian Energy, Genesis, New Zealand Post, and the Accident Compensation Corporation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000308\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EJohn Key blames tax loopholes for his decision to increase GST and cut tax rates. He could have closed the tax loopholes, but he has legalised them instead. He has rewarded tax avoidance with a tax cut. That is not smart and it is not fair. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000309\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EA capital gains tax is smart, and we can make it fair by excluding the family home. Sam Morgan does not think it is fair that he pays less tax than his secretary; nor do I. A capital gains tax is part of the solution to our property crisis. It can broaden our tax base and strengthen our economy. A capital gains tax is sharply progressive because income derived from capital gains is concentrated amongst the wealthiest. The United States uses a capital gains tax. It shows that those earning more than $1 million a year get around 40 percent of their income from capital gains. Meanwhile, those earning less than $75,000 per year get less than 2 percent of their income from capital gains. Capital gains taxes are sharply progressive because the tax falls on those who can afford it most, whereas GST is regressive because the tax falls on those who can afford it the least. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000310\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe Green Party stands for smart, fair taxes, and it has the courage to say what National and Labour both know\u2014that a comprehensive capital gains tax, excluding the family home, would help protect New Zealanders from property speculation. It would help make the dream of homeownership a reality for more Kiwis, and it would feed much-needed capital to the starved productive sector. We also know that there is a need to increase housing supply at the same time. Building more State housing can counter upward pressure on rents and boost the building sector of our economy, while helping our most needy families. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000311\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EJohn Key may talk about taking a balanced approach, but when it comes to rebalancing our economy, there is little action. Our tax system remains skewed. The tax treatment of property, changes to loss attributing qualifying companies, and depreciation measures are a step in the right direction, but it is a timid step. The time for a capital gains tax is right now\u2014this year, in this Budget\u2014and the Government has missed the moment to strengthen our economy, just as it has missed the chance to tighten foreign investment rules on property. To ignore those opportunities fails the fortitude test. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000312\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe tax cuts in this Budget from National, ACT, and the M\u0101ori Party will go mostly to the well-off, while raising GST hits those on low incomes disproportionately. This widens the gap between the haves and have-nots. It punishes those who already struggle to make ends meet, and the punishment falls most heavily on M\u0101ori and Pacific peoples. This Budget will increase inequality, the social deficit, and ultimately the fiscal deficit. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000313\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003ELooking after our most vulnerable children should be at the heart of any Budget, because one day those kids will fill either our workforce or our prisons. The Budget from National, ACT, and the M\u0101ori Party increases the money for prison beds, adding to the fiscal deficit and betting on which direction the social deficit is heading. New Zealand is one of the most unequal countries in the OECD, and that inequality drives crime, illness, violence, poor educational outcomes, and so much more. The cost of prisons, courts, and the police in this Budget alone has increased, to $3.7 billion from $1.7 billion just 10 years ago. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000314\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EInequality costs everyone. Because some New Zealand families cannot afford to heat their draughty homes, it costs taxpayers $54 million each year to treat respiratory illness. It costs businesses 180,000 sick days, and it costs $400 million in electricity that we do not need to use, doing untold, unnecessary environmental harm along the way. There are many more examples of how inequality hurts everybody. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000315\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EEarlier this week my colleague Metiria Turei launched a plan to reduce inequality and to help make New Zealand a place where everyone gets a fair go\u2014a plan called Mind the Gap. It includes a tax-free threshold of $10,000, which would benefit everyone, but it would give the most help to the New Zealanders who need it the most: the low-income earners. Mind the Gap also suggests giving every family a reasonable amount of electricity at a fixed low rate so that they can stay warm and healthy. Under a progressive pricing plan, additional power would be charged at a higher rate, so it would still pay to save power. Again, this measure helps all of us, but it has the biggest positive impact on our poorest families. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000316\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThose are just two of eight practical and fiscally responsible steps described in Mind the Gap. Measures such as those can address the social deficit that this Government has inherited. Instead, John Key chooses to concentrate on tax cuts that help the wealthiest ahead of the neediest. John Key\u2019s Government chooses to dishonour the Treaty of Waitangi by ensuring that M\u0101ori remain in poverty. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000317\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe eight-point plan in our Mind the Gap package is part of what we have called a Green New Deal for New Zealand. It sits alongside two economic stimulus packages that the Green Party released last year\u2014packages that offer practical solutions to our economic, environmental, and climate crises. Green New Deal solutions tackle all these pressing problems at the same time. Green New Deal solutions account for the fact that these challenges are global in nature. Green New Deal solutions see opportunity and lay out a practical path to prosperity. The most high-profile of our Green New Deal solutions is the $323 million home insulation fund, which has already made 40,000 New Zealand homes warmer and healthier. It is evidence that we offer practical answers to New Zealand\u2019s problems. Indeed, we have a surplus of solutions to offer to a Government in deficit. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000318\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EAs well as having a vision deficit, a fiscal deficit, and a social deficit, the Budget deepens our environmental deficit. We are currently clearing native vegetation at the fastest rate since European colonisation, which is an extraordinary fact. We are in the middle of a biodiversity crisis in this country, a crisis caused by us. The key reason for that loss of native vegetation is agricultural intensification, according to Landcare Research. We know that a key driver of agricultural intensification is the rapid increase in rural land values. Rural developers are seeking the tax-free capital gains that come with dairy conversions, and dairy corporations are pushing land harder in order to make the interest payments on the big loans. A capital gains tax would put downward pressure on rural land prices and it would take some of the pressure off our land and off our biodiversity. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000319\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EAgricultural intensification is also driving the desperate decline in water quality across our country. Drinking water for rural towns like Dunsandel is polluted by dairy corporations. Rivers are being dammed and drained for irrigation, and the water is being replaced with runoff thick with faeces and fertiliser. We have health warnings now that newborns are at risk of nitrate pollution.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000320\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022449855f4df104ae284641a7a82c101f3\u0022\u003EHon Maurice Williamson\u003C/span\u003E: This speech should have a health warning.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000321\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022973800b573054d78a4f3e8662adfdbea\u0022\u003EDr RUSSEL NORMAN\u003C/span\u003E: The Government members think it is funny that our infants are now at risk of nitrate pollution because the water has been so polluted by nitrate from dairy corporations. Well, the Green Party does not think it is funny. The Government might think it is funny that they are polluting our waterways to such an extent that it is dangerous for our children and infants to drink that water. The Green Party does not think it is funny; we think that we should do something about it. The Government does not care. The Government is giving funds to irrigation companies in order to expand irrigation in New Zealand so that we can pollute our groundwater even further. Well, the Green Party does not think that is funny; the Green Party thinks that is wrong. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000322\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThis Budget does nothing to address New Zealand\u2019s environmental deficit. There is no capital gains tax, there is no charge for using the public\u2019s water for private profit, and there is no charge for pollution. In fact, the Government grants for irrigation schemes subsidise the destruction of our rivers and aquifers. How about that? We are now passing a Budget where taxpayers\u2019 money will be used to subsidise the destruction of rivers and aquifers. This is environmentally tragic and it is economically stupid. Likewise, the Government\u2019s plan to subsidise greenhouse pollution to the tune of $100 billion over the next 40 years, according to Treasury estimates, is also environmentally tragic and economically stupid. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000323\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe Greens have shown how we can make a 30 percent reduction in our greenhouse emissions, put our economy on a competitive footing to trade in a global economy where carbon matters, and do our bit to secure a safe future for our children. Instead, John Key\u2019s Government has locked New Zealanders into subsidising our biggest polluters. The more they pollute, the more we pay. We teach our children that if they make a mess, they should clean it up. But John Key\u2019s lesson to industrial polluters is that there is no accountability for them. Their mess is our problem. They have little incentive to cut emissions through smarter technology. National will keep hidden how much taxpayer money subsidises each individual polluting company. National will publish the welfare details of a couple of mums on the domestic purposes benefit who upset Paula Bennett, but it will not publish the details of billions of dollars worth of corporate welfare handed out to greenhouse polluters. John Key\u2019s Government will no doubt also remain silent on the 27 percent cut to environmental research in this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000324\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe Green Party will not vote for this Budget, but we respect the Minister of Finance and acknowledge his hard work. As a Minister who takes his responsibilities very seriously, he no doubt argued for a capital gains tax. We extend our sympathies that he lost out to his Cabinet\u2019s more conservative instincts. The result is a Budget that takes our country in the wrong direction. It adds to the nation\u2019s fiscal, environmental, and social deficit, and has a terrible deficit of vision at its heart. It adds to the fiscal deficit and takes away the sovereignty of future generations by borrowing to pay for tax cuts that heavily favour the wealthy, borrowing for Steven Joyce\u2019s pet holiday highway projects, and borrowing to subsidise polluters. It adds to the social deficit by entrenching inequality and locking our society into a further cycle of poverty, crime, and illness. It adds to the environmental deficit and takes away the chance to enjoy the wilderness of Aotearoa New Zealand. The Green Party will not vote for this deficit Budget.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022 data-id=\u0022cff9b5474a7540d280dec21d30ce288f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000325\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022cff9b5474a7540d280dec21d30ce288f\u0022\u003EHon RODNEY HIDE (Leader\u2014ACT):\u003C/span\u003E The ACT Party is proud to be part of this Government. We are proud to support it on confidence and supply, and we are pleased to vote for this Budget. Along with the majority of all Kiwis, we are pleased that we have a Government that is addressing the scandalous abuse of taxpayers that we saw over the past decade. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000326\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EWe are pleased that we finally have a Government that understands that every dollar that it spends either comes from some hard-working taxpayer or is an attempt to put the tab on our children and grandchildren. We are staggered that after 9 years of grotesque, wasteful spending, Labour members Phil Goff and Darren Hughes have the cheek to stand in this House and urge yet more spending and more borrowing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000327\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220854aec12327424f96f7859e78b7a770\u0022\u003EHon Darren Hughes\u003C/span\u003E: A picture of restraint!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000328\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229bcf0547e8ff41668ff73ba5fdeb420e\u0022\u003EHon RODNEY HIDE\u003C/span\u003E: The answer to the debt problem, I say to Mr Hughes, is not more debt, yet that is Labour\u2019s only solution. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000329\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EWe are pleased that we are seeing action across a wide range of portfolios. The previous Government did nothing about leaky homes, even when the global boom blessed us with fiscal surpluses, but the current Government is addressing this problem. We are fixing the financial crisis in accident compensation, we are getting better value for money in health, and we are addressing our poor infrastructure, building the roads that are essential to moving our people and our products around. We are looking at common-sense options to utilise our mineral resources better, to give jobs and wealth to New Zealanders, and to help fund essential social services, and we are cutting red tape. We are getting more transparency and more accountability in local government, and the Government is addressing longstanding problems in Auckland\u2014issues that the previous Government ducked. We are creating one strong voice for Auckland. Because of ACT\u2019s \u201Cthree strikes\u201D legislation, we are sending a message as a Government that repeat violent crime will not be tolerated. This Government will work to keep our communities safe from the violent predators. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000330\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EThis Budget is a welcome attempt to get New Zealand\u2019s fiscal problems under control. The Minister of Finance is to be commended for his attempts to restrain Government spending. In just one term of Government, he will leave New Zealand in much better shape. We should contrast that with the previous Minister of Finance\u2019s legacy, which turned out to be a tsunami of debt. As the cyclical economic decline came, Labour increased spending at an even more frantic rate to forestall its political decline. It was irresponsible, foolish, reckless, and entirely typical of Labour. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000331\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EI commend the moves to structure the tax system to encourage work and savings, but I have to say that the ACT Party would prefer to do more. We would prefer to attack wasteful spending more vigorously, because there is still plenty of it. If we did so, we would not have to match income tax cuts with tax increases elsewhere, and all New Zealand households would be better off. We need more competition and choice within the vast, creaking, and crumbling State monopolies that dominate our health and education sectors. We could look to the new British Government, which is about to introduce ACT\u2019s education policies. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000332\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EAlthough there is much to commend in this Budget, and much more yet to do, there is one gross and glaring failure. There is one elephant in the room, which threatens to undo all the good work that is being done by Government Ministers. We are tuning up the car for peak performance\u2014putting on new tyres, getting a tank full of gas, and removing any aerodynamic impediments\u2014but someone has locked the handbrake in place. That handbrake is the emissions trading scheme. The rest of the world\u2014every one of our trading partners\u2014has that handbrake off, but we have it locked firmly on. We are the only country with an \u201Call gases, all sectors\u201D emissions trading scheme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000333\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b41dadb40cfe429fac5b8d3f3f0443af\u0022\u003EHon Dr Nick Smith\u003C/span\u003E: What about the European Union?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000334\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022083367d328914ef5910400113f8a953e\u0022\u003EHon RODNEY HIDE\u003C/span\u003E: Dr Smith calls out: \u201CWhat about the European Union?\u201D. Well, he knows that that applies only to carbon dioxide. He knows that it does not apply to agriculture. He knows that it does not apply to households. He knows that it does not apply to small business. He knows that it is riven with so many exceptions and so many outs that it is hardly an emissions trading scheme at all in practical effect.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000335\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220bd5aa67-2f2b-4a13-a2b4-21a392396f11\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022dfb30d4d869b4e8d965a7a9730328682\u0022\u003EHon Georgina te Heuheu\u003C/span\u003E: Why are you worried about it?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000336\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227329fefccfa04287a325f5c2e1f6aca1\u0022\u003EHon RODNEY HIDE\u003C/span\u003E: Well, I am not worried about the European emissions trading scheme; it is the one here that worries me. Our emissions trading scheme worries me. Georgina te Heuheu is absolutely right. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000337\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EThe only thing that we can say about the National Government\u2019s emissions trading scheme is that it is not as stupid as the one that Labour had, but it is still a damaging and incomprehensibly foolish imposition on our fragile economy and our hard-working export sector. It is stifling our ability to create jobs and to generate higher incomes for working people. Having an emissions trading scheme here but not in Australia will stop our ability to catch Australia, and will see more of our young people depart across the Tasman. The emissions trading scheme is a folly on the scale of past National-inspired disasters. This is up there with Rob Muldoon\u2019s attempts at central planning, and it matches and surpasses Bill Birch\u2019s disastrous Think Big. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000338\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EThe emission trading scheme is an act of total financial, economic, and environmental folly. It will take over $1 billion from struggling households and businesses and bestow that wealth on forest owners whose forests were planted long before the emissions trading scheme was ever contemplated. Have the foresters had too much of an influence? Absolutely. Has the fox been in the hen house? Yes, and we know for sure that farmers and other hard-working Kiwis have been in the outhouse. The costs are about to hit on 1 July this year. The emissions trading scheme is an assault on the agricultural sector. We will have higher energy costs, and it will bite into the profitability of all our processing industries. It is a bigger hit than the increase in GST. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000339\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EThe ACT Party opposes the emissions trading scheme and will continue to oppose the emissions trading scheme. I am pleased to say that the membership of the National Party, from one end of the country to the other, opposes it. Two Saturdays ago the central North Island National Party conference was attended by 300 delegates. They passed a remit to defer the emissions trading scheme. The Manurewa and T\u0101maki electorates are proposing a joint remit for the northern regional conference of the National Party to defer the emissions trading scheme, and I say to those National Party members: \u201CGood on you! Keep at it!\u201D. They should make their employees, particularly Dr Nick Smith, listen. They pay his wages; they support him in this Parliament. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000340\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EWe can stop this madness, we can stop this self-inflicted wound, and we can stop the handbrake on growth, jobs, and incomes. I say to the brave, decent, and honest National supporters who are simply urging their party to do in Government what it promised in Opposition\u2014to align with Australia\u2019s policy on climate change, but not get ahead of it\u2014that we in the ACT Party are for them. In fact, if those members gave their support to the ACT Party, they would get the National Party that they thought they voted for.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022 data-id=\u0022d258436ff47e4f26bfeaff10d1d6d791\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000341\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d258436ff47e4f26bfeaff10d1d6d791\u0022\u003EHon TARIANA TURIA (Co-Leader\u2014M\u0101ori Party):\u003C/span\u003E If ever a political speech was made to get the votes away from National, I would have to say that was one of them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000342\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThe M\u0101ori Party joins with the Government today to congratulate the Minister of Finance on his leadership in trying to chart a pathway forward in this 2010 Budget statement. A challenge that we in the M\u0101ori Party face every day in this House is to lay the w\u2019\u0101riki for the long term, and to create the foundation for the generations to come. We have every reason to believe with this Budget and the emphasis accorded to Wh\u0101nau Ora that this Government is prepared to invest in that foundation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000343\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EWh\u0101nau Ora is evidence of a Government prepared to back w\u2019\u0101nau, families, and prepared to let the people determine their own solutions. This Budget has given a clear direction to providers and agencies alike that we want to see outcomes that derive from families having real ownership of their solutions. The transformation that we seek through this approach is that in building w\u2019\u0101nau capability and nurturing resilience we are restoring to families that sense of collective responsibility to take care of their own. From the Government\u2019s perspective, $134 million is an investment in outcomes achieved for w\u2019\u0101nau, for providers, and, we believe, for the nation as a whole. But most of all this is an investment in how they do it\u2014how we make the difference by placing trust in people. The Minister of Finance has laid out the challenge for Aotearoa, which is emerging from the sharper edges of a global recession. We have an opportunity as a Parliament either to sink further into a cycle of ever-spiralling debt or to take some initiatives to back ourselves. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000344\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThe changes that the Budget brings with it\u2014and I am thinking particularly of the tax impact\u2014will not be universally popular, despite the acknowledgment from Mr English that at all taxable income levels tax cuts will more than offset the GST rise. We know that the biggest challenge will be encouraging our constituency to look more broadly at the whole picture of the Budget rather than focusing on one measure in isolation. I am reminded of the wisdom of our rangatira from Whanganui, Dr Whakaari Rangitakuku Metekingi, who told us \u201CKo te pae tawhiti wh\u0101ia kia tata, ko te pae tata whakamaua kia t\u012Bna\u201D. It means \u201CSeek out the distant horizons; cherish those that you attain\u201D. The grim reality is that we are in a situation in which we have been spending more than we earn. If the horizons we seek are a stronger economic outlook\u2014a future in which our tamariki and our mokopuna will achieve the jobs, the incomes, and the living standards that they aspire to\u2014then we must be prepared to take bold action now. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000345\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003ELifting long-term economic performance will require a careful balancing of measures of restraint and of support. But it is not as if w\u2019\u0101nau M\u0101ori are not used to the concept of making the most of meagre resources. The mastery of M\u0101ori in managing massive crowds through tangi, w\u2019\u0101nau reunions, or events such as the koroneihana, poukai, iwi festivals, and the R\u0101tana Church celebrations, is legendary. Our M\u0101ori incorporations have acquired a distinctive reputation for being conservative by nature, and at a w\u2019\u0101nau level making do with what we have is part of our history. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000346\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EBut we do not resile from a major issue that neither National nor Labour have ever responded to well, which is the challenge to close the gaps. We have constantly argued for a more equitable society where social and economic justice count for something. In our coalition agreement we made the call to eliminate poverty, and we will not resile from that challenge either. So we have advocated ferociously for this Budget to protect the most vulnerable and for an immediate lift in benefits, superannuation, student allowances, and Working for Families to offset the GST increase. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000347\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003ESome aspects of this Budget will help to focus on growth to help our families to get ahead. There is allocation of new funding to grow M\u0101ori productivity and export growth, and support M\u0101ori innovation. The $4.5 million allocated for skills and training for M\u0101ori in the primary sector and M\u0101ori innovation, and the $4.5 million to support initiatives to strengthen and promote M\u0101ori tourism are key achievements for the Minister of M\u0101ori Affairs and will help to build the recovery that we need. There is $20 million over 4 years for the M\u0101ori Innovations Fund in Vote Health, which will support M\u0101ori service providers with funding and resources that they need to build and implement innovative Wh\u0101nau Ora services. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000348\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThe Housing Innovation Fund has been lifted with another boost of $20 million to extend the fund for another year, thereby growing the supply of affordable housing for w\u2019\u0101nau. The emphasis on the building blocks for families is also evident with an additional $16 million for grants and loans to support social and affordable housing. The additional $24 million to grow the Warm Up New Zealand: Heat Smart home insulation programme is immensely important to our families. The M\u0101ori Party is very proud that we were able to increase the number of low-income households that will benefit from this scheme by at least 8,500 families. That is about making a lifetime difference to every aspect of w\u2019\u0101nau well-being, including health, education, and employment participation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000349\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EIn the disability sector, the lifetime difference has been supported through the $1.5 million invested in promoting accessible housing for disabled people through the Lifetime Design Standard. It will also be supported through the $3 million that has been allocated to improving attitudes towards disabled persons and the $2.34 million invested in promoting, protecting, and monitoring the rights of disabled persons. A key priority for me and this Government is to ensure that the voice of disabled persons is heard, and this Budget does that. Although there is $93 million more for disability support, I particularly draw attention to the very substantial injection of an additional $20 million over the next 2 years for home modifications and equipment. This funding will have a considerable impact on the waiting lists and will mean that people can access equipment and home modifications much sooner than they can now. Although this is fantastic, there is so much more that we need to do, and it will remain a key priority for me to continue this work. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000350\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EWe welcome the injection of $90 million into community-led participation in early childhood education. We believe that this will have particular relevance for M\u0101ori and Pasifika families. The increase of $48 million for the Youth Guarantee scheme will help our rangatahi to go forward on a more secure footing. I know that Dr Sharples is particularly pleased about the $12.6 million that will enable kura to benefit from specific and specialised M\u0101ori medium assessment tools, which will tell us whether any difference has been made. I am particularly pleased with an initiative within the community and voluntary sector to support w\u2019\u0101nau to access the information highway through $7.9 million to increase the Computers in Homes and the Computer Clubhouse initiatives. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000351\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EFinally, Budget 2010 is about putting the support where it is most needed, and so I also acknowledge the initiative pioneered by Dr Sharples, with close to $20 million set aside for Whare Oranga Ake\u2014rehabilitation centres that have been founded on kaupapa M\u0101ori, which are available to everybody to help pre-release prisoners with their re-entry into their communities. The Minister of Finance has talked about the goals of economic transformation. For the M\u0101ori Party, we see this Budget as about a transformation of another kind: the transformation of attitudes. It is about an attitude that backs ourselves, an attitude that supports potential, an attitude that is about being self-sustaining and in charge of our own destiny, and a Government attitude that trusts family and community to know best what their needs are. We are in this for the long haul. It is in that context that we, the M\u0101ori Party, support Budget 2010 for investing in the future for the next generation, ng\u0101 taonga tukunga iho.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022 data-id=\u0022aafbd6637c54438fae6231f2bd2f9e1d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000352\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022aafbd6637c54438fae6231f2bd2f9e1d\u0022\u003EHon JIM ANDERTON (Leader\u2014Progressive):\u003C/span\u003E What is the Government saying with today\u2019s Budget to families on low incomes? Let them eat cake\u2014that is what it is saying. It says not to worry about an increase in GST and rising food prices, because the rich eat more than the poor, so they will pay more in GST. Is that meant to make low-income families feel better? They might not be able to afford to buy food, but just think of the GST they are saving by not eating! The rich have a choice if they want to spend more money and pay more GST; they can choose whether to upgrade the Mercedes or to buy another boat. Those on lower incomes cannot choose whether to eat. What is John Key saying to New Zealand families struggling to pay the bills and to make ends meet on low incomes? He tells them to stop being envious. Well, I say to Mr Key that they will not be envious; they will be angry, like I am. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000353\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EAre New Zealand families more or less equal after this Budget? They are less equal, and shame on the Prime Minister and the Minister of Finance, and on all those who support those Ministers. After today\u2019s Budget, the wealthiest New Zealanders will take home thousands of extra dollars a week compared with those on average incomes. People like Telecom\u2019s chief executive officer, who earned $7 million last year, will get a tax cut of $6,608 per week. State sector chief executive officers, who earn more than $600,000 in some cases, will get a tax cut of nearly $500 a week. However, if one earns $50,000, after one pays more in GST at the supermarket alone one will take home about $5 a week. The chances are that that $5 will be wiped out by inflation any time soon. Is a chief executive officer who got a $1000 a week pay rise last year really the highest priority for a $700-a-week tax cut this year? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000354\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003ENew Zealand is now on a par with the United Kingdom, which has one of the most entrenched income gaps between rich and poor in the world. Our ancestors came to this country to get away from that kind of inequality. John Key is determined to bring it back from his speculating years overseas. Others might be taken in by the Prime Minister\u2019s rags-to-riches story, but not me. I remember that he helped to make a pot of money speculating against the New Zealand dollar in the 1980s, at a cost to New Zealand of $700 million. Guess what! At the same time, New Zealand\u2019s increasing rate of income inequality became one of the worst in the OECD. Over the same period, Australia closed the income gap between rich and poor. Mr Key wants us to emulate Australia, but he goes in exactly the opposite direction. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000355\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EIncome inequality widened again under National Governments in the 1990s\u2014I will not mention the Governments in the 1980s\u2014and it started to get better during the period of the Labour-led Governments in the 1999-2008 period. Mr Key misled the House yesterday when he said that income gaps between rich and poor \u201Cbecame worse under the previous Labour Government,\u201D. I say to Mr Key that they actually became better and they are set to become worse under this National Government. I will table the facts after this speech to prove just that. Here they are: under a Labour-Progressive Government between 2001 and 2008 everyone became richer, even Mr Key, but those on low and middle incomes increased their wealth the most, thanks to the Working for Families tax break. We closed the gap; National will again widen it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000356\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EThe Prime Minister also said yesterday that it was a terrible injustice that 10 percent of the wealthiest New Zealanders pay 44 percent of the tax. He used to invite New Zealanders to go to Australia to pay less. But what is the truth of that? In Australia, the top 10 percent do not pay 44 percent of the tax; they pay 46 percent of the tax. Should we all go to Australia and pay some more tax? Where does Mr Key come from? Does he read anything? It turns out that most countries do exactly that: those who earn more pay more tax, because they earn a higher share of income. That is what is called a progressive, fair tax system. I do not think that Mr Key has ever heard of it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000357\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EJohn Key is no Robin Hood. I saw Robin Hood the other night; John Key looks more like the Sheriff of Nottingham to me, and this is the Sheriff of Nottingham\u2019s Budget. Will the average New Zealander be better off after this Budget from the \u201CSheriff\u201D? No, because they will not be getting the lion\u2019s share of the tax cut; the top 10 percent of income earners will. Can members guess who got the lion\u2019s share from the last round of tax cuts by the National Government? The same top tax earners. Has the penny dropped yet? If people are not on a high income, this Government is not interested and will not help. Some might have voted for them in 2008, but in 2011 they can make this National-led Government a one-term Government\u2014the first one since 1975\u2014and I say good riddance to them. If New Zealanders are on an average income and have aspirations to do better, they can forget it. This Budget puts reinforced glass into the glass ceiling. This Government is showing its true colours today. It does not want our people to prosper; it wants them to know their place. It does not want them to be envious; it does not want them to worry about buying any food, because they will be saving some GST, for goodness\u2019 sake! This Government is out of touch with the way in which poorer and low-income people live in this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000358\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EWill more children be lifted out of poverty after today\u2019s Budget? The answer is no. A recent Unicef survey of the well-being of children put New Zealand almost last\u201424th out of 25 countries. It measured immunisation levels, infant deaths, and early death from injury and illness. The Ministers have laughed at Greece over recent times. It is collapsing, the streets are on fire, and the people protest. But do members know what? It is way ahead of New Zealand when it comes to looking after its kids\u2014way ahead. A respected professor of epidemiology in New Zealand said recently that \u201C \u2026 in New Zealand social injustice\u201D, which means income inequality, \u201Cis killing and maiming our kids on a grand scale.\u201D What do we mean by that? We top the scales for OECD rates of whooping cough, rheumatic fever, pneumonia, and other diseases in children. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000359\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EI ask whether these tax cuts to the richest New Zealanders help any of that. The answer is that they do not; they make it worse, because the Government denudes itself of income to do it. We spend less than the OECD average on child health, and the only thing that will change as a result of this Budget is that this appalling situation will get worse. Twenty-eight percent of our children still live in poverty. The Government that I was proud to be associated with lifted 100,000 kids out of poverty, and we were heading in the right direction. This Budget goes in exactly the opposite direction. I was disgusted to hear the backbenchers in National clap for the Budget. They do not understand what they are doing. It is absolutely disgraceful. This rate started to decline under the last Labour-Progressive Government for the first time in decades. As I said, Working for Families lifted 100,000 children out of poverty. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000360\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003ESenior people in the medical profession know what the problem is. Two professors of child health wrote to me yesterday\u2014and I think they wrote to all other parliamentarians\u2014saying that they were absolutely embarrassed by the fact that things have got worse for kids on their watch. They were begging the Government not to make them worse this time, but they will be deeply disappointed. I was touched by that letter. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000361\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EHow do we get rid of poverty? We increase people\u2019s incomes. We give people decent wages and jobs. Will there be more jobs after today? Will there what! There is nothing in this Budget to create new jobs. Where on earth does the Minister of Finance gets his figures from? How many jobs were created by the Prime Minister\u2019s great cycleway from the north to Bluff? The answer is none\u2014not one single job. How many jobs have been created by the amount of money invested in research, science, and technology, which we provided $2 billion for through Fast Forward? The answer is not one cent in the 18 months since this Government was elected. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000362\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EThis country does not have a tax problem, as we have one of the most modest income rates for low to middle-income earners in the world; it has a wage problem. There is nothing in this Budget to fix that, at all. If John Key thinks that cutting the top tax rate will stop young doctors and entrepreneurs from going overseas, he is dreaming. Australia\u2019s top tax rate in 45c in the dollar, and we have already discovered that the top 10 percent pay more tax there than they do here. Yet is that a disincentive? John Key should ask himself why he left the country to go into the world of international speculation. Did he leave to avoid our high taxes? I do not think so. I think he left to get more money. He succeeded, and I say: \u201CGood on him.\u201D But tax cuts for the wealthy will not increase the wage or incomes of ordinary New Zealanders. Will the economy grow as a result of this Budget from the \u201CSheriff\u201D today? No. There is nothing in this Budget for increased exports. The Government is dreaming if it thinks otherwise. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000363\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EI will wind up. This Budget has not turned out to be a smiley Robin Hood Budget; it has turned out to be a nasty Sheriff of Nottingham Budget. This Parliament should be ashamed to have received it today.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u00224de1b72b91a64d99bab8504c03bf912c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000364\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00224de1b72b91a64d99bab8504c03bf912c\u0022\u003EHon PETER DUNNE (Leader\u2014United Future):\u003C/span\u003E The best way to create a sustainable economy that deals with poverty, that deals with disadvantage, and that gives all the things that the previous speaker, Jim Anderton, and others have said we ought to be providing to people is to have one that is funded on a sound basis. The reality is that until this Budget there were real questions raised first by the Tax Working Group and second by some of the actions taken in years gone by that put the long-term viability of our tax base at risk.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000365\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ELet me give the House an example. With the benefit of hindsight, what some of us suspected at the time to be true has been proven to be correct. The most disastrous tax decision in the last decade was the previous Government\u2019s decision to hike the top tax rate in December 1999. The consequence of that has been as follows. We have seen a huge explosion in the use of trusts for income-sheltering purposes. The calculation has been that that move alone, driven by that differential in the tax rate, has cost the revenue around $300 million a year. That is $2.7 billion lost over the last decade as a consequence of that policy shift. But it gets worse. A lot has been said about loss attributing qualifying companies and how they have become another diversionary tactic along the way. The growth in loss attributing qualifying companies in the same period has been over 240 percent. We now have in the order of 130,000 loss attributing qualifying companies in New Zealand. The value of their tax losses is now $2.3 billion, which is 400 percent higher than it was at the start of the decade. If we put those two figures together, we can draw the reasonable conclusion that the net consequence of Labour\u2019s hiking of the top tax rate in 1999 has been a $5 billion revenue hole for the New Zealand taxpayer.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000366\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe speaker who preceded me, Jim Anderton, asked why we were not doing more to alleviate poverty. I would love to do more to alleviate poverty. I would love to give a bigger boost to child health. But when we have a $5 billion hole to fill, it becomes a little difficult. And it gets worse. If members listened to the Leader of the Opposition this afternoon, they would have heard that he proposes to restore the hole. He is opposed to the cut in the top tax rate. He would restore it to what it was and set the whole process off again. We heard him and also Russel Norman, the co-leader of the Greens, say that coming in alongside that would be a capital gains tax. We have a situation where members on that side of the House say that this Budget is all doom and gloom, it is terrible, people will be punished, etc., and to vote for them to have the top tax rate go up, a $5 billion hole in our revenue, and a capital gains tax, as well. That is what does not add up; that is what does not make sense.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000367\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI say to those who advocate a capital gains tax because it is efficient that it is efficient in the sense that it captures just about everything, but it is not efficient in terms of producing revenue. I heard the Greens say the other day that with the $4.5 billion we would gain from a capital gains tax we could do all sorts of marvellous things. I have a couple of points about that. That would probably be over a 10-year period, because it assumes that assets are moving all at the same time, and, actually, at a maximum of about $450 million a year it is not the huge windfall that people make it out to be.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000368\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EAs a result of the tax package in this Budget, we have a dramatic change in the arrangements that will affect the average New Zealand family. For nearly three-quarters of taxpayers in New Zealand, as a result of this Budget\u2019s changes their maximum tax rate will be 17.5 percent. That compares more than favourably with the situation in any other jurisdiction we like to compare ourselves with. We also see a package that supposedly gives more to the rich, but actually two-thirds of the cost of the package is dedicated to lowering the bottom two rates of tax. Those rates of decrease are greater than the rates of decrease for the higher rates of tax. So we are seeing a significant shift.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000369\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ELet us talk about the GST increase. Yes, it goes up to 15 percent from 1 October. Let us contrast that with what happened the last time GST was raised. I was part of the Government that did that, too. Unlike now, at that time GST was raised with 6 weeks\u2019 notice.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000370\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ac114666353a47a7b4f7b2354c6bf686\u0022\u003EChris Tremain\u003C/span\u003E: 6 weeks?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000371\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022751a591b9cfd4f7b9863ed728f30a713\u0022\u003EHon PETER DUNNE\u003C/span\u003E: Six weeks\u2019 notice, with no compensation. Members can talk about people being adversely affected by a change that is 3\u00BD months away, with compensation and tax cuts on the day it comes into force, but compare that with 6 weeks\u2019 notice, with no compensation, I think it is reasonable to draw a conclusion about who is better off as a consequence.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000372\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI am particularly pleased that the changes that will take effect from 1 October include full compensation for contributors to the Government Superannuation Fund and to the National Provident Fund as well, because they are a group that has often missed out in the past when tax changes have occurred. I am pleased they will be addressed in the context of this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000373\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ESo there we have it. We have a Budget that makes some significant changes in the disposition of taxes, and that gives people more ability to make some choices for themselves about how they spend their income. Surely that is a reasonable proposition. Some may well spend more on food than others; that is a matter of choice. Some may well choose to do other things; again, it is a matter of choice as to how one spends one\u2019s income.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000374\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EWe have heard the suggestion from those opposite that one way of compensating people for an increase in GST is to take fresh fruit and vegetables out of the mix. Let us have a look at that. It is a very arbitrary consideration. It probably would cost about $150 million to do, but there are practical problems about how it would apply. Most retailers operate their GST return off their cash register returns. For a start, every cash register in New Zealand would have to be recalibrated to take out a fresh fruit or vegetable item. There would be a growing industry in that respect. Also, no account is taken of the cost of claiming a GST refund to produce those tax-free items. And it is so arbitrary that other unprocessed items like meat, poultry, fish, and eggs would somehow be in the tax net, but not fresh fruit and vegetables. One has only to look at what happened in Australia when this was tried. The great example was that of John Hewson, Paul Keating, and the ham sandwich. The ham by itself was exempt of GST and the bread by itself was exempt from GST, but the sandwich was subject to GST. That is what the Labour Party is proposing to give us as an alternative to a very clear and straightforward system where everyone ends up better off as a result of these changes than they were beforehand. That is the line that cannot be surpassed.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000375\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EIt is interesting to assess what the public reaction to this has been. At the lock-up this morning, and in the various media commentaries subsequent to the presentation of the Budget, there has been a generally favourable reaction, and it comes around two key points. Firstly, there has been surprise at the extent of the movement on the lower two tax rates; people did not expect as big a reduction, and they certainly did not expect the move to reduce the company tax rate. Both of those things are positive for New Zealand: they certainly boost our competitiveness; they certainly make it easier for those New Zealanders contemplating a shift offshore to make the choice to stay here; they position our economy well for the future in terms of the uptake that will come from the international recovery; they position our economy well in respect of our traditional major partner and competitor, Australia; they send a very clear signal to New Zealanders that what we are about is a better, fairer tax system that removes the distortions that have nobbled it for a long time; and they get away from the envy politics that have actually made it more difficult to deliver quality policies in terms of the areas of traditional concern of members opposite.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000376\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ESo this is a good Budget. It does not do all the dastardly things that were predicted for it; it does a lot of good for New Zealand families, and I suspect that it will be well welcomed and positively accepted.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022 data-id=\u002257692d76034c4661af0f1c7ed3135ed7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000377\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002257692d76034c4661af0f1c7ed3135ed7\u0022\u003EHon GERRY BROWNLEE (Leader of the House):\u003C/span\u003E I move, That this debate be now adjourned. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000378\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003EMotion agreed to.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000379\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u00229a94244b2aeb4e4b87135862483c4bdc\u0022\u003EUrgency\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000381\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022ddba4c660204414a97a0302bc3c7d04a\u0022\u003EUrgency\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022 data-id=\u002248de342739434c9bb83467c51d96022f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000380\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002248de342739434c9bb83467c51d96022f\u0022\u003EHon GERRY BROWNLEE (Leader of the House):\u003C/span\u003E I move, That urgency be accorded the introduction and passing of the Taxation (Budget Measures) Bill. The simple reason is that this bill gives life to the announcements in today\u2019s Budget speech around personal tax cuts, company tax cuts, and a range of provisions that relate to the taxation of New Zealand business activities. As the previous speaker, the Hon Peter Dunne, mentioned, these provisions have been very well received by the commentariat so far. It is also important to have them locked into place so that there can be sufficient planning in order for there to be a smooth transition to those new arrangements by the date prescribed in the bill.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022 data-id=\u0022af60aee4f035433fb01ae140725c9a76\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000382\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022af60aee4f035433fb01ae140725c9a76\u0022\u003EHon DARREN HUGHES (Senior Whip\u2014Labour):\u003C/span\u003E I raise a point of order, Mr Speaker. As the Leader of the House has moved that the bill be introduced under an urgency motion, which is the impact of the vote we are about to have, Opposition members have not had a chance to see the legislation. I wonder whether the Leader of the House could indicate to us the implementation date for the tax changes in the legislation so we can get a sense of how urgent it is that we pass the legislation over the next 2 days.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000383\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002264b7c1454fb24ad19a8c074f8c5f80e7\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: He is not required to do that under Standing Orders. It is a reasonable request but one he does not have to respond to. It looks like he has chosen not to, so I will put the motion, and the member can vote accordingly.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022 data-id=\u0022fa21ab2ac79e49a791c5e3ee8945904e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000384\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022fa21ab2ac79e49a791c5e3ee8945904e\u0022\u003EHon GERRY BROWNLEE (Leader of the House):\u003C/span\u003E Perhaps it would help\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000385\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022abaf989fef8248059b7dddaaf5569091\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: It looks like Mr Brownlee now will respond.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000386\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229c9712cf95894a2ab64d209b606b6bed\u0022\u003EHon GERRY BROWNLEE\u003C/span\u003E: I just want to keep good order in the House. I suggest the member takes the rather large blue book that was handed to him this afternoon, sets aside his colouring pencils, and reads some of the text, which will give him all the answers he requires.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022 data-id=\u0022ea8beeed623446e5903c2f303971d905\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000387\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ea8beeed623446e5903c2f303971d905\u0022\u003EHon DARREN HUGHES (Senior Whip\u2014Labour):\u003C/span\u003E I raise a point of order, Mr Speaker. That simple explanation would have been helpful without all the extra bits that caused the member trouble down the track. The case is that the legislation comes into effect on 1 October and it is only May now, so it is not an urgent matter that the House has to deal with straight away under Standing Order 54(3).\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022 data-id=\u0022c6e4a6e95e7546f8985ba2b97ef7211b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000388\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c6e4a6e95e7546f8985ba2b97ef7211b\u0022\u003EHon GERRY BROWNLEE (Leader of the House):\u003C/span\u003E Speaking to the point of order\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000389\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cebf95ea605344699b48d7eab8ff7ca8\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: I am quite happy to respond. The Government has the right to determine whether a motion should be accorded urgency. Under Standing Orders, it has to give reasons. It has done that. There is no debate about that. I will now put the motion. [Interruption] I must remind the House that there is to be no comment during voting, for two reasons. One is that we need some accuracy about recording the vote. The second is that no member of this House will vote under duress of comment. In the past people have been ejected for such behaviour. I remind the House\u2014it is just a cautionary note\u2014that votes will be taken in silence.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u0022d2093c123f3e4c948b22d3dcd84521c3\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That urgency be accorded.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 69\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 58; ACT New Zealand 5; M\u0101ori Party 5; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 53\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 43; Green Party 9; Progressive 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EMotion agreed to.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000390\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00225db6e1ec9ace41718ae64fa851972cb6\u0022\u003ETaxation (Budget Measures) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000391\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022525ea371722249cbb2d38c45c24ed2c7\u0022\u003EFirst Reading\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u00225a8329350280421ab189a3449b91a02d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000392\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225a8329350280421ab189a3449b91a02d\u0022\u003EHon PETER DUNNE (Minister of Revenue) \u003C/span\u003Eon behalf of the Minister of Finance: I move, That the Taxation (Budget Measures) Bill be now read a first time. The measures contained in this bill represent the most significant package of tax reforms for New Zealand in over two decades. Although the measures themselves are wide ranging, their underlying purpose is straightforward. That purpose is to lift the long-term performance of the economy by giving people greater incentives to work, to save, and to invest, by improving the fairness, coherence, and integrity of the tax system so that people pay their fair share of tax, and by encouraging productive investment in New Zealand, thereby increasing productivity and raising wages. The effect of the reforms will be to rebalance the tax mix so that it better supports the economic growth, saving, and investment that New Zealand needs right now, rather than the excessive consumption, borrowing, and overinvestment in housing that we have had in the past.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000393\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ETo encourage people to work and contribute to a better-performing economy, personal income tax rates will be reduced across the board from 1 October this year. The new rates will be 10.5 percent for people earning up to $14,000 a year, a 16 percent reduction in that rate; 17.5 percent for those who earn between $14,100 and $48,000, a 17 percent reduction in the rate; 30 percent for people who earn between $48,100 and $70,000, a 9 percent reduction in the rate; and 33 percent for those earning income over $70,000 a year, a 13 percent reduction in that rate. Similarly, the company tax rate will be lowered from 30 percent to 28 percent from the beginning of the 2011-12 income year, which will encourage productive investment in New Zealand. Tax rates and savings are being reduced so that they are in line with the new personal income tax rates, thus giving people more income to reinvest towards their retirement.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000394\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe main balancing feature of the changes is a lift in the GST rate from the current\u2014[Interruption] \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000395\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d64e67a301d54d298057c70b33c8b403\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: I am sorry to interrupt the member. Interjections are acceptable as long as they are rare and reasonable; discussions across the House while a member is introducing a bill or at any other time is inappropriate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000396\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221ce8181748734d7f94be8f553af35108\u0022\u003EHon PETER DUNNE\u003C/span\u003E: I was saying that the main balancing feature of the changes in this bill is a lift in the GST rate from the current 12.5 percent to 15 percent. That is in keeping with the intention of the tax reforms to shift the current economic balance away from consumption and spending, and towards greater productivity and investment in the economy. The Government does, however, recognise that the increase in GST will impose increased costs, and for certain groups such as superannuitants, beneficiaries, and others receiving Government assistance, relief will be necessary. This compensation will be provided in the form of immediate compensation from 1 October. For those receiving Working for Families assistance, the bill contains measures that raise the level of support that families will receive as tax credits from 1 October. Those on New Zealand Superannuation or the veterans pension, or recipients of Consumer Price Index adjusted Government Superannuation Fund or National Provident Fund payments will also receive an increase in their payments from 1 October. This one-off compensation will be in place until the normal annual inflation adjustment occurs on 1 April next year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000397\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EIn weighing up the changes needed to rebalance the tax system, the bill also introduces a number of changes to strengthen the tax rules and ensure that everyone pays his or her fair share of tax. With that purpose in mind, measures are being introduced to tighten the income tax test for Working for Families entitlements so that investment losses such as those from rental properties cannot be used to inflate a family\u2019s entitlement to Working for Families tax credits. The rules around property investment are also being tightened so that no depreciation deductions will be allowed for buildings with an estimated useful life of 50 years or more, from the 2011-12 income year. That change more accurately reflects the way that New Zealand buildings actually change in value over time, which, on average, means that buildings increase rather than decrease in value. Removing this unnecessary tax advantage will reduce the incentives for people to invest in property for tax reasons, and will encourage wider investment in more productive parts of the economy. The 20 percent depreciation loading on new plant and equipment has been removed for assets purchased after today. Finally, stricter rules will also be applied to foreign-owned companies to reduce the interest deductions they can claim against debt allocated to their New Zealand subsidiaries.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000398\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ETogether, the changes contained in this bill form a balanced package of measures that will reward people for the work they do, encourage broader and deeper economic growth, and make New Zealand\u2019s tax system stronger and more equitable for all. I therefore commend the bill to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022 data-id=\u0022e36636600db24c709059e3f5a0016109\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000399\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e36636600db24c709059e3f5a0016109\u0022\u003EHon DAVID CUNLIFFE (Labour\u2014New Lynn):\u003C/span\u003E 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.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000400\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c3a88c42-f60b-4cf9-8065-8bfb80a020eb\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022677900b62eeb4331bd346cd29ef1e7c8\u0022\u003ECarmel Sepuloni\u003C/span\u003E: Shame on them.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000401\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022986cee10c1124cea9af915c18020b8e1\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: 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\u2019s 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 $70,000 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. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000402\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EIt 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 $1,000 a week better off. What is that? Someone who is already earning $1 million a year will be $1,000 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\u2019s election. This Government will be a one-term Government and that will be a record for the National Party. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000403\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThe 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\u2019s 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. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000404\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThe 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\u2014wait for this\u2014the 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. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000405\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EWhat 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. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000406\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EWhat 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. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000407\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThis 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\u2019s 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. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000408\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EWhat 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\u2019s money in the hands of phoney companies being written off against people\u2019s personal income, when it should not be. Labour would fix that\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000409\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a244152-977c-48d2-bf53-4f3a369a27a9\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002296954112048a406f9e1ada99824e6c95\u0022\u003EHon Steven Joyce\u003C/span\u003E: Labour set it up.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000410\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fa1234096584456dbb712f6cdb7d30d6\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: 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.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000411\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThis 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 1,000 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.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000412\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003ETo 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. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000413\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a244152-977c-48d2-bf53-4f3a369a27a9\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227535e31d96ff44c7b189df9f1d7e4602\u0022\u003EHon Steven Joyce\u003C/span\u003E: No, it\u2019s not. You\u2019re making it up.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000414\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f7f5d5ea29c6428382aae88dd3d0ae23\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: 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 T\u016Bhoe 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 T\u016Bhoe. That was a bad Sunday afternoon phone call, I say to Mr Joyce. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022 data-id=\u0022134809c875f14e18ac302b9a8cd9d6b5\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000415\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022134809c875f14e18ac302b9a8cd9d6b5\u0022\u003EHon DARREN HUGHES (Labour):\u003C/span\u003E I raise a point of order, Mr Speaker. It is a technical point about the bill. The regulatory impact statement that is referred to in the explanatory note of the bill contains a reference to a website, and I am advised that the website address that is in the explanatory note does not actually connect to the regulatory impact statement. It can probably be fixed very quickly, from an information technology perspective, but it is the Minister for Regulatory Reform\u2019s\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000416\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220ff4530e8e7246c58ccbe0212c52b96c\u0022\u003EHon Member\u003C/span\u003E: Is this a point of order?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000417\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002233552d08326b480fa3e72cfbf4a54895\u0022\u003EHon DARREN HUGHES\u003C/span\u003E: It is a point of order about the bill. We need to have the information. If the Minister in charge of the bill could see to that, it would be great. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000418\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e9714ca5db3445ad80f0a0fb647408f2\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: It is not a point of order in relation to the order of the House. I think that, the member having raised the point, someone will now address it. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022 data-id=\u002249ad69e17c0f48ce867c2135ed47848c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000419\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002249ad69e17c0f48ce867c2135ed47848c\u0022\u003ECRAIG FOSS (National\u2014Tukituki):\u003C/span\u003E First, before I comment on the Taxation (Budget Measures) Bill, I acknowledge and thank the Minister of Finance, Bill English, and our Prime Minister, Mr John Key, for a step change Budget, which this bill starts to bring alive and put into effect. The Budget is a step change. It gets rid of some of the imbalances in our economy, it addresses so much of what has been talked about by so many over so many years, and this bill puts the Budget into action. As I acknowledged yesterday, the previous Labour Government talked about some of those issues, but it never did anything about them. In fact, it perpetuated them and made them worse. I also acknowledge our coalition partners, and particularly the Hon Peter Dunne for the work he has done on the taxation changes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000420\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI was quite intrigued that the previous speaker, the Hon David Cunliffe, had a new-found interest in inflation. Under his regime\u2014when he was in Cabinet, in fact\u2014non-tradable inflation was running at about 4 percent, and the rest of the economy was in recession. The reason I raise that is the member made inflation a key point of his speech. Labour is focusing on inflation, yet it is also trying to rewrite the monetary policy framework\u2014it is doing some task groups on it, or something. Members on the other side of the House need to get their story straight. Either they are rigid about inflation or they are not. David Cunliffe missed some other points. Labour assumes life is static. If inflation is going up, one assumes that wages are going up, because wages tend to track inflation; real wages actually increase as our economy gets better.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000421\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EFairness and equity are back. This bill brings fairness and equity back. Interestingly, as the Prime Minister noted in his Budget speech, many of the tax rate numbers have been brought back to exactly where they were in 1988 and 1989, from memory, when Mr Goff was in Cabinet. It also puts some of the balance back. There is encouragement for financial assets. We heard time and time again the previous member wrongly, I suggest, talk about nothing being done about the housing bubble and the creation of housing assets or investment property assets. Actually, if we look at the change in the taxation of financial assets\u2014down to 28c in the dollar, matching the awesome corporate tax changes\u2014therein lies the incentive in action. Members should watch those macros change as investment moves to financial assets in New Zealand, and hand in hand with some of the changes the Hon Simon Power is bringing in.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000422\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI just say one other thing. There are a few commentaries in already. Regardless of what the previous member said, I will quote from Mr Bernard Hickey\u2019s commentary on the Budget, which is only about 2 hours or 3 hours old. I could not put it better myself, I do not think\u2014apart from the last sentence, perhaps. But I will read it: \u201CThis is the most comprehensive and coherent reform of New Zealand\u2019s taxation system in more than 25 years. It goes a long way to tilting the economy back towards productive investment and away from property investment.\u201D That sums up the Budget, which is only 3 hours old. Feeding from that Budget is the bill that is before us tonight. I will not read it right through to page 61. I suggest members read the explanatory note. There are some interesting highlights on page 2, which has the new schedule of taxation rates, particularly the changes\u2014the current rates versus the rates from 1 October 2010.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000423\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EFairness, equity, and sustainable growth are back. New Zealand is about to step up and take charge of its destiny again. With the current financial stresses around the globe, this is a Budget for our time and for future generations. Fairness and equity are back. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000424\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EDebate interrupted.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000425\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022f85e67b4b8f54374b1937415dcc88a9e\u0022\u003ETabling of Documents\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000426\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022b36625a187644539bf80e10f73e207a7\u0022\u003EIncome Distribution\u20141998-2008\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022 data-id=\u0022ba95a3e1a7bb46a1bce5221e40d8f6f9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000427\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ba95a3e1a7bb46a1bce5221e40d8f6f9\u0022\u003EHon JIM ANDERTON (Leader\u2014Progressive):\u003C/span\u003E I gave notice in my Budget speech that I would seek leave, and I do now, to table three graphs from the Ministry of Social Development that demonstrate that the gap between rich and poor in New Zealand narrowed, not widened, under the last Government, contrary to what was stated in the House yesterday by the Prime Minister, Mr Key.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000428\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224ae8a405d23a43509d714cc739d33865\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: Leave is sought to table those papers. Is there anyone opposed to that course of action?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000429\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022aab3b128209a4dc18fac7d1104f1048f\u0022\u003ECraig Foss\u003C/span\u003E: Are they Ministry of Social Development reports that have been tabled in the House in some form, or are they from a select committee?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000430\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a7c69e5d13e94620b3cfe0ceaff7187b\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: We have gotten into the habit of finding out precisely the nature and the origin of documents. Have they already been tabled? Are they public documents?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000431\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225cbc6aa0fbce4a0e932c70c22157411e\u0022\u003EHon JIM ANDERTON\u003C/span\u003E: I cannot ascertain that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000432\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bb7fa23c0a4044609f857320ced5424f\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: I will put the leave anyway. Leave is sought for that purpose. Is there anyone opposed to that course of action? It appears not.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000433\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ac497b8c548a48678177f9082181dd3a\u0022\u003EJo Goodhew\u003C/span\u003E: Yes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000434\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225855b3097d434ae1ba9dfc30d6849283\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: It is too late.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000435\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003EDocument, by leave, laid on the Table of the House.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000436\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00221684efb978f148eb9d3397228db44748\u0022\u003ETaxation (Budget Measures) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000437\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00226dd173c4008e4f5c919f96631f8c6089\u0022\u003EFirst Reading\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000438\u0022\u003EDebate resumed.\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022 data-id=\u00228030902134e74f9cb672038c7023b794\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000439\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00228030902134e74f9cb672038c7023b794\u0022\u003EHon CLAYTON COSGROVE (Labour\u2014Waimakariri):\u003C/span\u003E That speech by the chair of the Finance and Expenditure Committee, Mr Foss, was\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000440\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fd3fa48c1eb1423aa8c3efb9463736e2\u0022\u003ENicky Wagner\u003C/span\u003E: It was fantastic.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000441\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002225e7659477c543b1923703bcf78e4f61\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: No, it was not fantastic; it was insightful because of what it said and what it did not say. That member started his speech by talking about this Budget and the Taxation (Budget Measures) Bill being fair and equitable. Let us examine what this bill does. My colleague David Cunliffe said a person on the average wage, after we factor in the increased GST and inflation at 5.9 percent, will be $30 a week worse off than at present. A millionaire earning $1 million a year will be $1,000 a week better off. Now, I do not know how Mr Foss, in his little world, explains and defines fairness and equity, but in my world that is not fair, is not equitable, and is not right. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000442\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EA person on the average wage apparently\u2014Mr Key said this to every New Zealander, and there are many people who are worse off today\u2014should not be jealous of the guys on the top of the heap, the super-wealthy. They should not look up at the super-wealthy and be jealous. Well, Kiwis, in my view, are not generally jealous creatures. They will not be jealous; they will feel let down, angry, and disappointed. I wonder what people on the average wage will think tonight about being $30 a week worse off because, at the hands of that crew and its mismanagement of the economy, we are about to see some of the worst inflation that we have experienced and the increase in GST. Will people hang on the words of Mr Foss, who says this is fair and equitable, when they realise that if they were earning a million bucks a year they would get $1,000 a week back? I wonder what Mr Foss, on the campaign stump, will say to those people in his constituency, or where he resides, who are on the average wage. They will come to his office and say to him that they do not think it is fair or equitable that they are 30 bucks a week worse off because of his mismanagement of inflation and his GST hike. What will he say to them? Silence\u2014silence is deafening. What will he say to them? He will not have an answer, because he knows\u2014and if he does not know, there is a word that I will not use, but it is the word for what he is\u2014that this is not fair and is not equitable. He knows that this is not fair and is not equitable. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000443\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EWhen we look at this Budget, we can see what we get. We get inflation going up by 5.9 percent. We get debt skyrocketing. If we look at page\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000444\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f467770b672f4f868a7236f33a04a2a1\u0022\u003EAmy Adams\u003C/span\u003E: What? Skyrocketing\u2014unbelievable!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000445\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fdd678f8ef7848fc826aa30e563f150e\u0022\u003ENicky Wagner\u003C/span\u003E: That\u2019s amazing. How does he get away with it?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000446\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a50acdf8f0884c6a8b157a0f1da01b28\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Oh, hang on; the squawk-boxes are going over there. Well, I invite those members to look at page 30 of volume B.2 and B.3 of the Budget documents. The report states: \u201CFinancing new and maturing debt will require the Government to borrow around $240 million every week over the next three years.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000447\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002220d6e5889fa44ce5949d630e8e26238d\u0022\u003EAmy Adams\u003C/span\u003E: It\u2019s your mismanagement.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000448\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d000e185c61c4057a974e206c46f4fc9\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Hang on; is there a squawk over there? I say to Amy Adams that she should look at page 30. Then the report states: \u201CDebt is projected to reach $68 billion\u201D\u2014that is, billion with a \u201Cb\u201D, for the benefit of the uninformed over there\u2014\u201Cby 2014/15.\u201D If we look at the next sentence, we see that it is a cracker: \u201CThis substantial rise in debt will mean that interest costs more than double.\u201D So inflation is going up, debt is going up, and interest is going up. What effect will that have on the average Kiwi? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000449\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EIf we turn over to page 40 of the same document, and look at \u201CFigure 2\u2014Finance costs\u201D, we see that the financing costs, the interest on that massive debt, will not even start to decline until about 2021. So we know\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000450\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002231b59256e79344cb94020e0bac19f179\u0022\u003EAmy Adams\u003C/span\u003E: That\u2019s from the party that wants us to borrow more.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000451\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223494def0321b445fb9fa89a2af06908f\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: I invite the member to read her own Budget documents, because that is what they say. Debt will be going up, inflation will be going up, and interest costs will be massively exploding, which will effectively mortgage our kids\u2019 future. What is fair and equitable about that, of course, is that the person on the average wage will be 30 bucks a week worse off, but a millionaire, someone who earns a million bucks a year, will get back a thousand bucks a week. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000452\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003ESo I ask the members opposite to explain their definition of fairness and equity today. I ask them to tell us in the coming days, and in the coming hours of this debate, how it is possible for people on the average wage to feel that they have been treated fairly or equitably, when they are 30 bucks a week worse off, which is what the documents show. I would like Government members to explain how they will justify that to average New Zealanders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000453\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EIt was said\u2014I think in Muldoon\u2019s time, when we had an explosion in inflation \u2014that the biggest thief taking money from our wage pocket was inflation. The biggest thief taking money from the pockets of working men and women was, at that time, said to be the spectre of inflation. Now inflation is projected to go to 6 percent. So interest is going up, debt is going up, inflation is going up, and the average Joe in the street will be worse off. I would like those members\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000454\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022173bb78306444e2f8864637b314b2c68\u0022\u003ENicky Wagner\u003C/span\u003E: Not true.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000455\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f47580430143475c82d6d8d0f5d3a0d4\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Nicky Wagner says no, and shakes her head. I doubt whether she has got past the contents page of most of the Budget documents, but I give her an invitation. I know that members on this side of the House are quite happy to go out to their constituencies, have a group of average New Zealanders on the average wage come in, and debate the Budget with the National crew. Let us have a meeting about it. Let us get the responses of people who are on the average wage to the Budget, in a hall anywhere in this country\u2014in \u014Ctaki, in Dunedin, in Rimutaka, or in Auckland. Let us get a group of them together in a room, and ask them whether they feel they have been dealt to fairly and equitably by that crew over there. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000456\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cbc37df2-57ae-4536-94ed-a2e39eecd585\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d3cab1416bb647a3ae2a4882656bd61e\u0022\u003EPhil Twyford\u003C/span\u003E: They\u2019ve been dealt to, all right.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000457\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ff2a0b607a22471b93ca7090c021ade1\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: They have been dealt to, my colleague said\u2014absolutely; they have been dealt to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000458\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E The only rooms that the members opposite, the National crew, will be happy and comfortable in are the cabins of the yachts parked in the Viaduct Basin harbour, which belong to the people who will be a thousand bucks a week better off. I can see Gerry Brownlee in the galley, with his mates who are on a million bucks a year. They will be congratulating Mr Brownlee and saying how wonderful it is that he is giving a thousand dollars a week back to them. But we will not see Gerry Brownlee at the food bank\u2014well, we might, but for different reasons\u2014talking with ordinary New Zealanders. The food banks in my electorate and around this country are chocker, but we will not see Gerry Brownlee and Bill English at the Salvation Army, at Presbyterian Support, or at the Methodist Central Mission, as people rock up day after day, trying to make\u2014[Interruption] \u201CEvidence\u201D, Mr Bennett says. He wants to be given evidence. Well, I invite him to come to Kaiapoi and visit Kaiapoi Community Services\u2014old \u201CCue-ball\u201D in the back row over there\u2014where I will introduce him to some of the lost and lonely people in my electorate. I will introduce him to them, and they will be very happy to sit down with that member, Mr Bennett, and explain to him how life goes for people who are on the bottom of the heap. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000459\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EIt might be instructive for Mr Bennett to actually meet somebody who is scratching for it. It might be instructive for Mr Bennett to meet a couple of constituents in my electorate, one of whom is a builder who lost his job. His wife is in two part-time jobs. They have a vegetable garden and grow produce that is better than that of Turners and Growers. They preserve that produce, freeze it, and do everything else that they can to make ends meet. They have a couple of kids. But that family cannot make it, and their mortgage may well be foreclosed. I can tell members that after the Budget today, that family of four will not be any better off. They will not feel that they have been treated fairly. They will not feel that the veil has been lifted from politics in New Zealand, that there has suddenly been a redistribution of wealth, and that they will be looked after. Oh, no! \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000460\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022eddb9ca541db43b49373178a2e58cee1\u0022\u003ENicky Wagner\u003C/span\u003E: They are.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000461\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bbe745a2d0694540b756795994343ade\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: So if Mr Bennett and the other member over there whose name I cannot remember want to come to my electorate and meet some of the lost and lonely people\u2014those who live on income that is below the average wage\u2014let alone the people on the average wage, who will be $30 a week worse off, then I am quite happy to take them around. But they just squawk over there. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000462\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI am sure that Kate Wilkinson, a Cabinet Minister who resides in my electorate, would not know a poor person if she fell over one. I wonder whether she is prepared to have a public meeting with a group of people on the average wage, and to front up and explain to them that she is a Cabinet Minister, and that she sat in Cabinet and voted for this package. I wonder whether she is prepared to say that she sold out Waimakariri and the rest of New Zealand, and that she did not oppose a thing. I wonder whether she will tell that to the people on the average wage, or whether she will swan around the various public houses and clubs in New Zealand where those members over there enjoy the finer things of life. She will feel very comfortable in those places, I am sure, because she will not be challenged there; she will be congratulated. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000463\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI say to Government members that they should have a good look in the dictionary and see what \u201Cfairness\u201D and \u201Cequity\u201D mean. They should go and talk to a few ordinary people who are scratching for that now. They should not go and talk in the fashion-ways of Christchurch\u2014no, no\u2014but should go and talk to some ordinary people, and ask them whether they feel equitably and fairly treated today. Those members should ask ordinary people whether they feel ambitious for New Zealand or inspired by this Budget. Oh, no! They feel let down, angry, and disappointed. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022 data-id=\u0022d484cd18bbf340918bbf72bbde77f042\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000464\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d484cd18bbf340918bbf72bbde77f042\u0022\u003EDr RUSSEL NORMAN (Co-Leader\u2014Green):\u003C/span\u003E I stand to speak on the first reading of the Taxation (Budget Measures) Bill. This bill is part of the Government\u2019s overall Budget package, and part of the Government\u2019s overall fiscal strategy. I said earlier today, in reference to the Budget, that in many ways this Budget is a triple-deficit Budget. It runs a fiscal deficit, it adds to the social deficit, and it adds to the environmental deficit. I appreciate that the Government inherited some deficits; there is no question about it. It inherited a fiscal deficit, and with this Budget it is making it worse. It inherited a social deficit, and with this Budget it is making it worse; and it inherited an environmental deficit, and with this Budget and this bill, the Government is making it worse. But it is worth examining some of the particular measures that are being proposed in this combination of tax changes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000465\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EI think that when the Minister of Finance said we should look at the tax changes as a whole, he has a point. We should look at the tax changes as a whole. When we look at the impact of the income tax changes, which lower the tax rates very significantly, and combine that impact with the impact of a GST change, we see that the two tax changes together are doubly regressive. When the two elements of them are incorporated\u2014one of which lowers the top tax rates and the other of which increases GST\u2014we get a doubly regressive tax policy, and the tax changes announced in this bill will be doubly regressive for that reason. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000466\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EWe know that GST is a regressive tax, because those on the bottom decile spend about 14 percent of their incomes on GST, whereas those at the top spend about 4 percent. So GST acts as a regressive tax because it punishes the poor more than the rich. At the same time we know that the changes to income tax will make the tax scale flatter and not as progressive as it currently is. So when we combine the two elements together\u2014the changes to GST and the changes to income tax\u2014we end up with a more regressive tax system. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000467\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThat might not be the worst thing in the world, if New Zealand did not already start from a position of being one of the most unequal countries in the whole OECD. If we started from a position of massive equity, from a very flat income scale, then it would not necessarily be a big deal that we flatten the progressivity of the tax system, and that we increase GST. It would be a problem, but it would not be a big deal. But when our starting point is that New Zealand is one of the most grossly unequal countries within all of the advanced industrialised countries on the planet, it does not make any sense to introduce a combined tax package that, put together, is highly regressive. It is hard to fathom why a Government that is governing a country that is already grossly unequal would introduce a package that increases inequality. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000468\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EIt is important to understand just how grossly unequal our country is. For example, we know that the top 50 percent of income earners earn 84 percent of all the income, and the bottom half of income earners earn 16 percent of all the income. Eighty-four percent of all income goes to the top half, and 16 percent of all income goes to the bottom half. When we look at those numbers, we get a sense of how out of touch the people in this Chamber are. Almost all the people in this Chamber are paid well above the average wage. They have no idea that half of the country earns 16 percent of the income. How else could we pass a tax package that adds to inequality? How could we possibly pass that tax package, which National, ACT, and the M\u0101ori Party are proposing to do today? How could those three parties support a tax package that will increase inequality in New Zealand, when we already start from a position of being one of the most grossly unequal countries in the OECD? Why would we add to that inequality? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000469\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EOne of the justifications the Government gives is that it will increase GDP growth. The Green Party is a bit sceptical about GDP growth. We recognise that we live on a finite planet, and we cannot continue to grow the use of resources and the use of pollution when we live on a finite planet. There is that small issue that there is only one planet, which pretty much every other party in the House struggles to come to terms with. Let us put that to one side, in order to just indulge the Government\u2019s argument that it will grow GDP. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000470\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EWe know that in 1986, the last time there were very significant tax cuts, the New Zealand economy, in terms of GDP per capita, absolutely flat-lined. It flat-lined straight after the biggest tax cut package this country has ever seen. It was a huge cut. We cut it from I think 66 percent down to 33 percent, or something like that. We went from a very high percentage, down to 33 percent. That was during Labour\u2019s term, when Roger Douglas introduced the package. I know that colleagues in the Labour Party do not agree with that any more, and recognise the wrongs of their ways back then when Roger Douglas was in charge. What happened after Labour cut the taxes so significantly? GDP flat-lined; it absolutely flat-lined. That was the impact. I am not saying there is cause and effect, because there are so many more complicated factors\u2014the relationship between GDP change and income tax rates is very complicated\u2014but we certainly cannot walk away from that and say that if we cut personal income tax rates, it results in an increase in GDP, because the exact opposite happened. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000471\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EOf course the other thing that happened in 2000 was that we increased tax rates. The top tax rate went from 33 percent to 39 percent, and what happened? Did the economy, in terms of GDP, flat-line? No, it grew. We had the situation that after the increase in income tax rates the economy grew, and after the drop in income tax rates, overseen by Roger Douglas, who is sitting to my left, the economy flat-lined. The evidence is compellingly against the argument that the Government is putting forward. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000472\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe second argument that is put forward is the one around tax avoidance. That is a really interesting argument. The tax avoidance argument says that there are all these people who are using the loopholes in the tax system to avoid tax. Did it never occur to the Government that maybe it should close the loopholes? If there are loopholes in the tax system, maybe the Government should close the loopholes. Let us take the example of people avoiding other laws, such as the laws around shoplifting. If a whole bunch of people are coming into a shop and shoplifting all the time, does the proprietor say: \u201CWell, that\u2019s a bit of problem. What we need to do is to drop all the prices and put a fixed charge on everyone who comes into the shop, in order to cover the difference.\u201D? Instead of saying we will enforce the rules against shoplifting, the opposite is that we say no, obviously our prices are too high so we will cut the top prices, and because there will be less income, every person now coming into the shop will have to pay a little fee at the door. That is effectively what the Government is doing. That is the Government\u2019s argument around tax avoidance. The Government\u2019s argument is that there are people avoiding the tax, so what it needs to do is to cut the top tax rate, rather than enforce the rules. There was another option here. The Government\u2014the National Party, the ACT Party, and the M\u0101ori Party\u2014had an option other than making our tax system more regressive. The option was to enforce the tax rules as they currently exist. That is an option the Government has chosen not to take. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000473\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EI would like to talk briefly about the property tax changes. The Green Party obviously has been a supporter of trying to direct a lot of our savings away from investment property, because we have had a speculative boom in investment property. The obvious solution to it is a capital gains tax, excluding the family home\u2014we all know that\u2014even though the Government does not have the political courage to do what it knows should be done. There are two parts to the problem with the way the Government has addressed investment property. It is far too weak and will not have the effect we are talking about. David Cunliffe said earlier that loss attributing qualifying companies will be only marginally affected. The other part is that to the extent it puts an impact on rent\u2014and to the extent that it is effective, it will have some upward pressure on rent prices\u2014what we have to do is make sure there is a supply of affordable rental properties to account for that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000474\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe Green Party has a programme, for example, of massively increasing the number of affordable State houses so that we can deal with the fact that the Government is putting upward pressure on rents, which is what this package will do, and make sure that there is more affordable housing available through State housing, through non-governmental organisation housing, and through council housing. Unfortunately, in this Budget the Government has slashed to almost zero the amount of money that is going towards new State housing. At the time that the Government is proposing to put upward pressure on rents, it has cut all new building of, or acquiring of, affordable State rental housing. That is just damn wrong. The Government cannot do that. At the one time that upward pressure is going to be put on people\u2019s rental prices, to the extent that the Government\u2019s changes in property will do that, we should make sure that affordable rental properties are available. This Budget is inequitable. It leaves a social deficit, an environmental deficit, and a fiscal deficit, and this bill is part of the problem.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022 data-id=\u00227d473333541d4fb8813c33b69b757fa9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000475\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00227d473333541d4fb8813c33b69b757fa9\u0022\u003EHon Sir ROGER DOUGLAS (ACT):\u003C/span\u003E I have recently been reported in the newspapers as giving National three out of 10 for this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000476\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c80e74d5005d499a9867e41084561341\u0022\u003EAmy Adams\u003C/span\u003E: A bit tough, Roger\u2014a bit miserly.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000477\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ca287309332640e7b24d7c88dd484164\u0022\u003EHon Sir ROGER DOUGLAS\u003C/span\u003E: Well, it is slightly tough, I think, but in fact it was not quite what I said. I said that this Budget was being prepared against three trends. The first trend was the fact that New Zealand, relative to other countries, had been in decline for 40 years, and I gave the Government three out of 10 in terms of whether I felt it would make the changes that were necessary. The changes that I felt were necessary were very low taxes\u2014and the Government has gone some way towards that\u2014and the need to introduce competition and private enterprise into the areas of health, welfare, and education. I knew that would not happen, so I gave the Government three out of 10.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000478\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EI said, on the expenditure front, that, frankly, for 13 years successive Governments have spent way above the rate of inflation. I thought that probably the Government would get a score of six or maybe even seven. I have had to revise that score down to five, I am afraid. But on the other hand, in terms of the Government\u2019s tax proposals, I said that I thought the Government would get maybe four or five, and I would certainly revise that up to six or seven. Just what it is overall, whether it is 3\u00BD or four, I am not sure. Maybe on Tuesday, when I speak in the Budget debate, I will make that decision. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000479\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EIf I look at this particular tax bill, and at what is in it, I would say that there are some good measures. But I think it could have been improved considerably from where it is. I will touch on where I believe it could have been improved. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000480\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EThe first point I will make is that I do not believe there was any necessity whatsoever to increase GST. I believe that it was possible to have reduced Government expenditure by at least the net amount of revenue that GST will bring after compensating superannuitants and welfare beneficiaries. I say that for a number of reasons, and I will give some examples. First of all, in a paper that I put out the other day, I identified about $3 billion worth of possible expenditure savings, which is double what GST net will bring in. If I look at this particular Budget and at items of what I would call corporate welfare\u2014handouts to various businesses, organisations, and the like\u2014I can see that that comes to about $2.6 billion, and I am sure that over the weekend I will find other costs that will take it to over $3 billion. So handouts to corporates, subsidies for this and that, the emissions trading scheme, etc., come to over $3 billion. Again, that is double what will come in, in terms of the net return from GST.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000481\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EThe next point I will make is that if I look at page 15 of the Minister\u2019s executive summary in the Budget documents\u2014and this is why I marked the Government down from seven to five\u2014I see that Government expenditure this year, rather than flat-lining as I thought it would, has actually increased by 9 percent. It has gone up from $64.79 billion to over $70 billion. It has increased by just over 9 percent. I accept, and I think it is being fair to the Government to say, that almost 2 percent of that 9 percent increase is compensation for the GST increase, but even allowing for that the increase in Government expenditure in this Budget is 3\u00BD times the current rate of inflation. I have to say that this country cannot continue to increase Government expenditure at 3\u00BD times the rate of inflation. At some point in time, that has to stop. It has been going on for 13 years. We had a Labour Government that simply did not care and got us in a hell of a mess, and we need to stop that. That is the first point I would make. I do not believe that GST needed to go up from 12.5 percent to 15 percent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000482\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EWhat were the other parts of the tax package that I personally do not really agree with? I would not have reduced the 12.5 percent rate down to 10.5 percent on the first $14,000 of income. The thing that impacts on people\u2019s behaviour is the rate they pay at the margins\u2014what they earn on their extra few hours of overtime. The rate that is paid is what determines whether a person will do overtime; that final rate is what determines whether people will invest, etc. We know that those people who earn under $14,000 actually come from the wealthy families of this country, so when we reduce the tax rate from 12.5 percent to 10.5 percent we are not in fact helping the low-income earner; we are helping the more affluent\u2014the person who is able to income split, etc. I remember that vividly from the time I tried to put in a flat tax rate of 23c, and we were concerned about lifting everyone from 15c to 23c. The fact was that 90 percent of the people who were paying simply the 15 percent came from wealthy families. They were the wives, husbands, or children of people who were earning high incomes. Their families had high incomes. So I would not have done that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000483\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EThe other thing that I would have tried to do\u2014and I really do not understand why the Government did not do it\u2014was to align tax rates. I believe that the Government should have aligned the various rates, whether of personal income tax, corporate tax, or tax on trusts, at a rate of 30c, and then, maybe next year, it should move the rate down to 29c, and move it in the following year to 28c. But at some point in time it is important that the corporate and the top personal income tax rates are aligned, otherwise we are simply encouraging people to try to dodge tax payments.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022 data-id=\u0022f407ed85bf8747f9b760270ab2903776\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000484\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f407ed85bf8747f9b760270ab2903776\u0022\u003EAMY ADAMS (National\u2014Selwyn):\u003C/span\u003E I am delighted to have the chance to stand here on Budget day and speak to the Taxation (Budget Measures) Bill. Today Bill English delivered a Budget that will move our economy from the sluggish, underperforming, unbalanced, debt-driven, and consumption-focused economy that the previous Government encouraged and presided over. It sat by with its head in the sand for 9 years while our productive sector went down the toilet. This Budget will move us from that position, where we were consistently living beyond our means, and put us back on the track to becoming an economy focused on growth. That is what this Budget is about. It is about having an economy focused on growth. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000485\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003EWhy is growth so important? Well, for the benefit of members in the House who do not seem to grasp it, I say that growth is important because through growth we will see jobs. Growth will create real jobs in this country. Members should not tell me that there is nothing in this Budget about jobs. Growth is what will gives us jobs, and this whole Budget is about delivering growth to the New Zealand economy. It will give us not only jobs\u2014and not just jobs in the public sector, but real jobs in the productive economy\u2014but better incomes and a higher standard of living. That is what we in the National-led Government want for this country, and that is what this Budget is moving us towards achieving. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000486\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003ELet us look at some of the projections that we have heard today. They are stunning\u2014they are stunning. We have 3 percent projected growth every year for the next 4 years. That is a staggering turn-round for this economy, and it is a mark of the success of John Key and this National-led Government. Growth of 3 percent every year for the next 4 years will mean 170,000 new jobs\u2014170,000 new jobs. That is what Treasury is telling us. That is Treasury\u2019s conservative estimate of what that sort of growth means to this economy. Not only that, it also means an average of $7,000 a year of extra income for New Zealand families. That is what I came into Parliament to help deliver, and I am incredibly proud to be part of a Government that has delivered a Budget like the one we have seen today, which will give that sort of growth, that number of new jobs, and that level of lift in income to all New Zealand families. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000487\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003EThat growth comes about from a couple of very important aspects of this Budget. It comes about through controlling our national debt. Debt is a massive issue, as Greece and the UK know. It is their No. 1 issue. Let us just remember that without the changes that this Government made in last year\u2019s Budget and in this Budget, by 2020 we would have been looking at net Crown debt of 60 percent of GDP. Now it is projected at that stage to be 20 percent. From 60 percent under Labour\u2019s policies to 20 percent under National\u2019s policies\u2014that is the sort of control that will make a difference in this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000488\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003EThat growth comes from supporting business. All we have heard today, particularly from the Green Party, is how those members would shut down and kill the productive sector. They do not like farming, they do not like the productive sector; all they want to do is to shut it down. We are about supporting our industry and supporting growth, because that is where jobs will come from. Importantly, in respect of this bill, growth is about getting the incentives right. It is about ensuring that, through our tax system, we say to New Zealanders that we will get behind them if they are going out there to work hard and get ahead. We will not be getting behind the consumptive, debt-driven economy; we will support Kiwis who are trying to work hard and get ahead.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000489\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003ELabour spent most of the afternoon trying to tell us that this Budget is about favouring the rich\u2014talk about last resort of the desperate! Let us look at what is really happening. Two-thirds of all the tax cuts delivered in today\u2019s Budget will go to reducing the bottom two income tax brackets. Two-thirds of everything will go to the bottom two income tax brackets. After the passage of this bill, 73 percent of New Zealanders will face a top tax rate of no more than 17.5 percent. Nearly three-quarters of all New Zealanders will face a tax rate of 17.5 percent or less. Labour is trying to tell us that it is about a few rich pricks at the top; well, it is not. This is about fairness. It is about equity. The only reason that Labour is so angry is that this Budget has left it with nowhere to go. National is delivering to all New Zealanders. We are delivering to low and middle income New Zealanders, and Labour knows it. Labour knows it, the public knows it, and the commentators know it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000490\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003ELet us took at what the commentators say. Bernard Hickey today reported that \u201CLabour cannot accuse the Government of delivering a budget for the rich because rich property investors and foreign investors will be hit most by this Budget.\u201D He is right. Tracy Watkins commented: \u201CIf the holy grail of budgets is that they under promise and over deliver, Finance Minister Bill English can score Budget 2010 as a win. \u2026 everyone will be better off.\u201D I encourage anyone listening to this debate not to buy into the histrionics and crocodile tears from across the House, because those who know economics know that this Budget today is delivering a fairer, more equitable tax system and a stronger, growing economy for all New Zealanders, and I am very proud to commend it.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022 data-id=\u00229a074bbaf7b94c419ee3520744bd8a54\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000491\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229a074bbaf7b94c419ee3520744bd8a54\u0022\u003EHon DAVID PARKER (Labour):\u003C/span\u003E How one values this Budget depends on how much one values one\u2019s word. On this side of the House, members value their word, but this Budget has been built on three broken promises, which the National Party cannot deny. The first promise was that National would not increase GST. John Key was on camera immediately before the election promising that there would be no increase in GST. That is the first broken promise of this Budget. How does one value that? Well, National does not put much value on its word. It lacks integrity. It lacks integrity\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000492\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d3071167b3fa4c83b85fb89e50df056b\u0022\u003ECraig Foss\u003C/span\u003E: I raise a point of order, Mr Speaker. I believe that under the Standing Orders, a member cannot question the integrity of other members in the House. As well as that, I take offence at the accusation made by the member opposite.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000493\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a5048794fd90400281d99b27bc928c11\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: The Speakers\u2019 rulings are quite clear that one cannot challenge members\u2019 integrity. I am sure that the member will be able to use some other phrase, and I ask him to continue.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000494\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220589a69387a249eab8ed625d8a3d0caa\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: I raise a point of order, Mr Speaker. This is not to challenge your ruling, but as I understand it, Mr Parker was talking about the National Party\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000495\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fd4f4764bbe24c62838f1a7c88d2a54c\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: I have already ruled, and I invite the member to continue.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000496\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ff3a1932346f4350b196a4f45376f205\u0022\u003EHon DAVID PARKER\u003C/span\u003E: How does one value one\u2019s word? I value my word highly. National obviously does not value its word. It promised before the election that it would not increase GST, but this Budget increases GST. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000497\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003ENational\u2019s second promise was that it would not increase borrowing for tax cuts. That promise has been broken. The Government\u2019s borrowing has increased as a consequence of the tax cuts in this Budget. That is the second broken promise. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000498\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EThe third broken promise is that National would not cut public services. In particular, it promised explicitly that it would not cut early childhood education\u2014in fact, it would have made it free. What did National do in this Budget? Audrey Young picked up on this issue in her column today. She stated that it will \u201Csave about $400 million over four years in abolishing the top two funding rates for early childhood centres\u201D. That means in those cases a decrease in the subsidy that parents get for their children of about $25 per child per week\u2014$25 per child per week. That is the third broken promise.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000499\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a990e776a8c6459682413be589aa6b6a\u0022\u003EAmy Adams\u003C/span\u003E: No, it\u2019s not.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000500\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221d0dccc5b6e34ae3b5ed041c31de7528\u0022\u003EHon DAVID PARKER\u003C/span\u003E: Amy Adams says that that is not a broken promise. She does not know what a promise is. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000501\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EThe other thing that needs to be said in respect of the changes to income tax is that we know the projection of the rate of inflation as a consequence of these changes is that, next year, inflation will be 5.9 percent. As for the income tax cuts that people will get to compensate them for the increase in GST, all but the most wealthy people will have them eaten up as a consequence of the increase in the prices they will pay when they go to the supermarket. Rather than being some great boon to people, the money will be gobbled up by an increase in their cost of living. Their rents will go up, their supermarket costs will go up, all of their costs will go up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000502\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EWe heard Amy Adams say that the income tax cuts are being fairly distributed, but 41 percent of the income tax benefits will go to the top 10 percent of income earners\u201441 percent goes to the people who already earn the most. New Zealand already has low income tax rates for high earners. That is set out in the Tax Working Group paper that was produced on behalf of the Government. It stated: \u201CThe current New Zealand top personal tax rate at 38% is not especially high by OECD standards,\u201D. It was already low by OECD standards, and this Government is cutting it further for the top 10 percent of income earners. The top 10 percent of income earners will pick up 41 percent of the decrease in income tax. That is just not fair. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000503\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EI will say something about the rebalancing of the economy. The Government said that this Budget is all about rebalancing the economy. The Tax Working Group stated that we needed to rebalance the economy away from speculative investment in housing towards the productive sector. Labour agrees with that as an ambition. Until today, we were all expecting that there would be ring-fencing of losses, so that people would not be able to buy some residential property and offset the interest costs on the loss they make on that rental property in order to decrease their personal income overall. What has the Government done? It has backed away from that. One of the disappointments that Bernard Hickey has with this Budget\u2014and he is right\u2014is it does not properly rebalance the economy away from speculative investment in the housing sector. People can still make those investments in the residential property sector, incur a big mortgage cost and offset that against their personal income tax. Rather than closing that loophole, the Government has gone a little bit of the way and said that people cannot deduct depreciation costs on buildings that will last for more than 50 years. That is a fair enough step and I do not criticise that, but the Government has not taken the more important step of ring-fencing those losses. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000504\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EWhat has the Government done about catching up with Australia? Well, the answer is nothing. The growth rates in New Zealand projected for the years out are lower than the growth rates predicted in Australia, so the gap continues to grow between New Zealand and Australia. The wage gap between New Zealand and Australia will continue to grow ever bigger, and this Budget does absolutely nothing to reverse that trend. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000505\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EWhat has the Government done in terms of encouraging smart business? It has cut the depreciation rates that businesses can claim for investments in high-tech plant and equipment. It has cut depreciation rates, so it is going in exactly the opposite way there. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000506\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EFran O\u2019Sullivan wrote a very good column in the New Zealand Herald a couple of weeks ago, I thought, or it might be about a month ago now. She stated that given the high rates of youth unemployment in New Zealand and given our experience last time we had high rates of youth unemployment, particularly M\u0101ori and Pacific Island unemployment\u2014and the last time we had that in New Zealand was in the 1990s, under the Bolger Government and then the Shipley Government\u2014a big mistake made then was that we did not spend enough on training, and the people who were on the dole queue ended that period of unemployment without further skills and had got into the habit of sitting on their bums at home. They did not have a work habit. She said that this Budget needed to be judged in terms of what it would do for the training of the large cohort of young people in New Zealand who are currently unemployed. What this Budget does about that is just about nothing. Rather than increasing the amount of funding that is going into training, the Government is setting quotas on the number of people who can go to university. People are being excluded from university, and we do not have an increase in funding for training for those people who, because of the state of the economy and through no fault of their own, are stuck on the dole.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000507\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EWhat does this Budget do in terms of debt? It stated that the amount that will be spent on the interest on Government debt goes from $2.5 billion per annum to $5.5 billion per annum. That is a big increase in the amount of our taxes that is being spent on interest. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000508\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EWhat it does in terms of the current account deficit is woeful. We heard the Government say that it will rebalance the economy towards exports. What does this Budget show? It shows the current account deficit going up every year from now on\u2014the current account deficit goes up to 7 percent of GDP. How is that proof of rebalancing the economy? It is not. It is proof of a return to a deficit-based economy, so much weighted towards the property sector with not enough exporting. This Budget does not solve that problem. The effect is that by 2014, New Zealand\u2019s total net assets as a country, including both Government and private debt, will rise to negative 100 percent of GDP\u2014100 percent of GDP. Rather than going in the right direction, the deficits from the Government and the lack of movement of the economy towards the productive sector and exports will mean that total net assets will go to negative 100 percent of GDP. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000509\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003ELastly, I will mention the fact that the position of the Government and the country would have been even worse were it not for the fact that the previous Government reduced debt. Bill English and John Key, every time, said the previous Government should have had tax cuts, not surpluses, but that would have led to more inflation. It would have to led to higher interest rates and to a higher level of debt than the current Government has inherited. New Zealand would have been closer to the position that Greece and Great Britain are in and closer to the position that the National Government under Muldoon left the country in, with debt at 80 percent of GDP. Instead, we reduced gross debt to 17 percent of GDP and reduced net debt to 0 percent of GDP. This Government has got it going in the other direction. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000510\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EThe Government has not rebalanced the economy. The tax cuts will be eaten up, for all but the most wealthy people, in the extra costs that people face in rent and in inflation on their food costs. But overall, the worst thing about this Budget is that it breaks three promises.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022 data-id=\u0022daa627c48a42439aaab8b982dec62b5e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000511\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022daa627c48a42439aaab8b982dec62b5e\u0022\u003EHon TARIANA TURIA (Co-Leader\u2014M\u0101ori Party):\u003C/span\u003E In M\u0101oridom we say \u201CTe p\u014D uriuri me te ao m\u0101rama\u201D, which basically means \u201CIn the darkest of dark and the lightest of light\u201D. The general concept is like the Chinese version of the yin and the yang\u2014the need to balance and achieve a sense of equilibrium as we take a steady foot forward. It is with this sense of balance that I stand to speak to the Taxation (Budget Measures) Bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000512\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThe previous speaker, David Parker, talked about the high unemployment rate amongst M\u0101ori and Pasifika and the need for more training. Some in the room will remember that in the 1980s, when we had really high unemployment, our people knew what it was like to be on the \u201Ctraining-go-round\u201D through access training, steps programmes, you name it. Did any of those young people get trained in real job skills? No, they did not. Why did they not? The union movement would not allow the kind of skills training that needed to take place for those young people\u2014training that would have given them really employable skills in the workforce\u2014because it was afraid that by training these young people in those skills they would take jobs away from those who were working. It is one thing to get into the whole notion of M\u0101ori unemployment and talk about skills training and development, but our young people want training that will get them into the workforce. They want training and education that will give them the opportunity to improve their life chances and their educational opportunities, so that they will not end up always being the last on and the first off in the job market. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000513\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EI think it is really important that we had 9 years of plenty, yet M\u0101ori youth unemployment rates and Pasifika youth unemployment rates were still incredibly high during those years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000514\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002211023343342149109b937c32a2bd55ef\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: What a load of rubbish.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000515\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d3ed13f5a0fe4927a08cdc35ce984d74\u0022\u003EHon TARIANA TURIA\u003C/span\u003E: It is not a load of rubbish. I think it is probably a really good opportunity for those who are shouting at me in the House to go back and look at those figures. M\u0101ori youth under 24 years of age had a high unemployment rate in a time of plenty. It is manifestly evident that something is wrong with the state of the nation when we can sit back and think that really a high unemployment rate amongst young M\u0101ori people is OK. It is not OK. If we do not have those young people contributing to the economy in the way that they should be, in productive work, we will be in serious trouble with this ageing population, so that needs to happen as quickly as possible. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000516\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EI will move off that take. Something is wrong when New Zealanders are crowding the property market and feeding their own wealth, yet no new jobs are resulting from it. Something is wrong when our economy is trapped in excessive debt and cycles of long-term borrowing, and business and investment confidence is declining with it. We do not want to pass on this history of unmitigated spending and debt to our young. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000517\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EWe will be supporting this bill in its entirety, as is the expectation of our coalition agreement with National, and in doing so we will seek to promote two particular priorities throughout the passage of the debate. The first is that we want to be sure that new tax rates for companies and savings, the depreciation in capital contributions, the personal tax cuts, and the other tax changes proposed in this bill give confidence to people to invest in businesses, which can then grow and strengthen the economy and give confidence to employers to employ more people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000518\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022328a107270594f6580c9223fd57252cf\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: You sold out your electorate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000519\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a64901a18cc44786a47a68bea7e31ba6\u0022\u003EHon TARIANA TURIA\u003C/span\u003E: Mr Deputy Speaker, I object to the person across the House making the comment that the M\u0101ori Party has sold out. I object in the strongest terms possible.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000520\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002282a1ba958bd04c8d8788520eb8f3c22f\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: Is the member bringing a point of order?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000521\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002232f08ea2acd54ab1a04630263fd5edfb\u0022\u003EHon TARIANA TURIA\u003C/span\u003E: Absolutely. I want an apology.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000522\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002236371d4ce6c44f30b8540cab598fe7a6\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: The member has taken offence under Standing Order 116; it is a personal reflection on the member. I ask the member to withdraw that comment and apologise.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000523\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002266191339448c48e7901df0aba6ec4a4e\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: I withdraw. I raise a point of order, Mr Deputy Speaker. I think other speakers have ruled on these sorts\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000524\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022178cb146e6994244b50a459ccf27340c\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: I have ruled. The member took offence, and we take her word for that. She was offended by the comment. I have ruled, and that is the end of the matter.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000525\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002239416c19f5fb458899cd4c825058bcf3\u0022\u003EHon TARIANA TURIA\u003C/span\u003E: The second priority is the vital need to guarantee that poverty will be addressed and that household income, standards of living, and economic performance will indeed be lifted. It is vitally important to us that we do what we can to build our economic recovery and to provide more opportunities for New Zealanders to back themselves. We need incentives in place to strengthen the economy and make a brighter future. But this is not just about the Government tipping the scales to create the balance that we need. This is also about us\u2014about our people and our nation preparing for our future. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000526\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EIf my colleague Rahui Katene were here, she would talk to the House about Whai Rawa. Whai Rawa is designed to provide a base level of savings for all registered Ng\u0101i Tahu to support a culture of savings and asset building to encourage and assist Ng\u0101i Tahu w\u2019\u0101nui to improve their financial situation and knowledge. Whai Rawa is about empowerment and giving Ng\u0101i Tahu the ability to create a better tomorrow for themselves and for their children. It is about rebuilding the savings culture that we once believed in. M\u0101ori are phenomenally thrifty people who can make a meal spread to feed a crowd. They know how to make the best of what they have in front of them. But also we are a people who focus on the future for the generations to come. In this sense, although our people did not like the proposal to increase GST, they are also not happy with the concept of leaving our grandchildren burdened by the heavy price of debt.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000527\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThe M\u0101ori Party entered into coalition with National with the explicit focus that we seek significant outcomes in Wh\u0101nau Ora through eliminating poverty, advocating for social justice, and advancing M\u0101ori social, cultural, economic, and community development in the best interests of this nation. These are ideals that we hold true to as much today as we did when we signed up to that agreement. Unlike the two major parties of this Parliament, we are not afraid to say the word \u201Cpoverty\u201D. Indeed, in our policy manifesto we made the explicit commitment to set a deadline to eliminate child poverty by 2020 and to designate an official poverty line. We will not resile from the challenge of preventing poverty. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000528\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EIn today\u2019s Budget an additional $1 million is being invested in Maara Kai, recognising that community gardens are a key means of encouraging us to live more collectively and to live alongside one another, restoring our families to being the gardeners, the hunters, and the gatherers that they once were. In today\u2019s Budget we also have seen honoured one of our policy goals to raise core benefit levels. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000529\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EOver the past few months as the policy thinking around this Budget has evolved, all of our MPs have hit the road, taking the challenge of the tax question to our constituency. I have to say that no one in our electorates was pleased about the proposed rise, but there was a general acceptance of the rationale for why we needed to support the tax changes. Primarily this issue is a condition of our coalition agreement, and, to that extent, our constituency told us clearly that they want us to continue to have the influence that we do. But other members can understand the precarious financial position that we are in: the situation that, on average, New Zealanders are spending more than they earn\u2014some 22c more than every dollar we make. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000530\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EI come back to the notion of \u201CTe p\u014D uriuri me te ao m\u0101rama\u201D. We believe in balancing up the scales and making things spread. It is in this light that we support this bill.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022 data-id=\u00220a32096c59884e2eae45043ee5103c51\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000531\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00220a32096c59884e2eae45043ee5103c51\u0022\u003EDAVID BENNETT (National\u2014Hamilton East):\u003C/span\u003E I congratulate the Minister of Finance and the Prime Minister today on an excellent Budget. It has been well received by the public and the commentators of New Zealand. It is a Budget that shows leadership in the economic and the political fields that this country has lacked for many years. I bet members that the headlines in the Sydney Morning Herald will read \u201CWhy haven\u2019t we got a John Key and a Bill English to take our country forward?\u201D like this country has been taken forward today. People around the world will be looking at New Zealand as an example of how to build a stronger country, of how to create economic management, and of how to have reform in our tax system, which has been long overdue. It seems crazy that in this place Labour, with its position of looking after the downtrodden and those on low incomes, did nothing about property investors for 9 years. They did nothing about that and it came only to us. We had to make that change to taxation, which delivered the right incentives for New Zealanders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000532\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EI look forward to the young people of New Zealand knowing that they need to get an education, that they need to work hard, and that the opportunities are there. We will give them the rewards. We will make it worth their while to do the right things in life. That is the signal and the incentive this Budget sets. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000533\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EI thank our coalition partners, because they see the big picture. They do not see the small petty-mindedness of what one needs to do to win elections; they see that we need to build a stronger people so that we can have a stronger country and that their success will be our success in building that country in the future. We look forward to that. This is a tremendous day for New Zealand. It shows that we can get out of recession quicker than we thought, that we can create tax change that is meaningful and that delivers the future, and that we can look after our public services, and health and education, which need investment. This is a great day for New Zealand, a great day for National, and something that all New Zealanders can be very proud of. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u002259eeced56e8a4cb2a009c6bb4e380e4d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000534\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002259eeced56e8a4cb2a009c6bb4e380e4d\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E I want to deal with some facts. The M\u0101ori Party member Tariana Turia has sold M\u0101ori out. Seventy-three percent of the people in that member\u2019s electorate earn under $40,000 a year. If her support for the Budget is not regarded as selling M\u0101ori out, then I do not know what would be. That party is about to vote in a Budget that will increase GST from 12.5 percent to 15 percent whilst it has a member\u2019s bill, which was just pulled out of the ballot, that proposes removing GST from healthy food. Now that is hypocrisy, if I have ever heard it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000535\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d5aab715e3f34dbb9cacf33500128417\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: The member cannot use that word. I ask him to withdraw it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000536\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002245672e48cdb945c490ae7fc59e78f388\u0022\u003ESTUART NASH\u003C/span\u003E: I withdraw. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000537\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ETariana Turia talked about high M\u0101ori unemployment. Well, let me tell her about high M\u0101ori unemployment. When Labour took over in 1999, the M\u0101ori unemployment rate sat at just about 30 percent. The previous Labour Government took it down to a 32-year low of 12 percent. Does the member know what the M\u0101ori unemployment is at the moment? It sits at 20 percent\u2014it sits at 20 percent. The previous Labour Government was the first Government to bring down the M\u0101ori unemployment rate to a level that was even close to becoming acceptable\u2014in fact, it was not acceptable, at all. Does that member know what this Budget will do? This Budget will be the worst Budget for M\u0101ori since the \u201Cmother of all Budgets\u201D in 1991. This Budget is a travesty, and for that member to stand up and say it is a wonderful Budget is a complete sell-out of M\u0101ori. Seventy-three percent of the people in her electorate earn under $40,000 a year. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000538\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EMr Bennett over there talked about the downtrodden corporate property investor. The downtrodden corporate property investor\u2014now that is a strange one. I do not know what sort of electorate he lives in or where his downtrodden people are, but I can tell members that the really downtrodden people in this country will be sitting back and asking how this Budget will help them, when all it delivers is an extra $16 a week, or a mere $5 a week extra to those on the median wage, after the GST hike has been taken into account. I ask members to remember that 50 percent of Kiwis still earn under the median wage. Those people will receive less than an extra $5 a week in the hand, when the Prime Minister will receive $350 a week more in the hand. The chief executive officer of Telecom will receive $1,600 a week more in the hand. That is 100 times more\u2014100 times more\u2014than the increase for a person on the median wage. That does not take into account the inflation rate of nearly 6 percent that this Budget creates. This is not a Labour Party figure; this is not scaremongering. This figure is in the Budget documents. It is the Minister of Finance\u2019s figure, this 6 percent inflation. That is the bogeyman that Mr English does not want to talk about, because he knows that it not only erodes but eradicates the effect of the tax cuts. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000539\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EPhil Goff, the next Labour Prime Minister and the next Prime Minister of this country, has pointed that out. Mr English informed a horrified National caucus\u2014[Interruption] We can see them. He talked about inflation. The National members had their statements. The National members were ready to go out and tell people how much better off they were going to be, but then Phil Goff told them what inflation would do to the tax cuts. I saw the reaction of the National members in the back row. Those members over there were saying \u201COh, goodness me. How will I counter this?\u201D. I ask those members whether Mr English told them about the rise in inflation. No, he did not tell them about it at all, because those members were sitting back saying \u201COh, goodness me.\u201D As Mr Cosgrove said, those members should go to halls full of their constituents, and tell them that their Prime Minister will be about $350 a week better off and that they will be worse off, but that that is OK. I ask those members how they will sell that. How will they sell that? I would like to see them do that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000540\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI think the theme song for this Budget should be \u201C(I Can\u2019t Get No) Satisfaction\u201D. That song was about a young man who, no matter what he did, could not get ahead. People kept telling him that everything was better; there were mixed messages, but still there was no joy. That is what this Budget is about: mixed messages from Mr English and Mr Key. They told Kiwis that they would all be better off under this Budget\u2014that this would be a Budget for all Kiwis. It does not matter to Mr English and Mr Key that there is to be $11 billion\u2014$11 billion\u2014in extra revenue from GST over 4 years. They are giving the lion\u2019s share of the tax cuts to the very wealthy, to the likes of Mr Key and the chief executive officer of Telecom, who will receive $1,600 in the hand every week. That money is coming from the 50 percent of Kiwis who earn under $30,000 a year or the 75 percent of Kiwis who earn the average wage. But those members say that is OK, because Mr Key will receive $350 a week in the hand! \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000541\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI do not think there will be feelings of envy from Kiwis about that, as Mr Key suggested there would be. I think there will be feelings of anger. They will be thinking \u201COh my God, we\u2019re being let down again\u201D. Mr Key promised\u2014he looked into the camera and promised\u2014prior to the election that he would not raise GST, but he has done that. He said he would not do that, but he has done so. That is not nice. It is not fair, and it certainly is not what people voted for. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000542\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe first principle of tax legislation is that there should be equity. This is about who carries the burden of tax. I argue that those who are less well off will carry the significant burden of tax through the increase in GST. That is a regressive tax, because it is a tax on petrol, food, electricity, and all the items that people need in order to lead a decent life\u2014a life with dignity. GST is increasing, at a time when most people are struggling with rising costs and falling real wages. What we have not heard is that Mr English has said to Mr Brownlee that he wants to have increased dividends from the State-owned enterprises. Do members know what that means?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000543\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b0e21a9ab48e48cf8208edda2a5929f2\u0022\u003EBrendon Burns\u003C/span\u003E: Power prices.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000544\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228adce924f8d8430d8cb64187cd2a8a9f\u0022\u003ESTUART NASH\u003C/span\u003E: Mr Burns is right. This will be a real winter of discontent. People will look at the Budget tomorrow and think that they have a bit of extra money, but they will realise that their power bill will go up by 10 percent. Inflation will erode their tax cuts, and their real wages will be eroded. This is not a Budget for the many, at all; it is a Budget for the very, very few. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000545\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe Reserve Bank Governor, Alan Bollard, wrote a paper in 1992 entitled New Zealand\u2019s Experience with Consumption Tax. It dealt with the implementation of GST in New Zealand. He wrote: \u201Cin 1989 when GST was increased to 12\u00BD% the effect on retail sales and subsequently on growth was marked; after experiencing signs of a pick-up the economy dropped back to recession the following year.\u201D Let us remember that when GST was increased by 2.5 percent in 1998, Kiwis at the top end had received massive tax cuts in 1988. Less than 12 months beforehand, the top marginal tax rate had dropped from 48 percent to 33 percent. I wonder whether anyone has asked Dr Bollard what he thinks about the idea of increasing GST. Just as he is managing the economy out of recession, this increase comes along. He probably read through the history books and reread his paper with a sense of impending dread. We are borrowing $1.1 billion over 4 years in order to fund tax cuts for the very wealthy at the expense of the many, and, in all probability, at the expense of the economy. It is a dreadful legacy for those who are at school at the moment. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000546\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI would like to point out that last year\u2019s Budget focused on three objectives. The first was to help Kiwis through the recession and support jobs. The Government had a Job Summit, and what did that throw up? The cycleway. How many jobs came from that cycleway? Six. Let us forget about that objective, because the jobs thing seems to have petered out with a whimper. The second objective was to lift productivity. I understand that a report released today says we have dropped five places in productivity down to 20 percent, while Australia has increased its ranking. That one is a failure. The third objective was to keep future Government debt under control. I can tell members that Labour got rid of debt through 9 years of prudent fiscal management. Even Dr Bollard said in his latest statement that the reason that this recession was not as bad in New Zealand as it was overseas was due to the prudent management of the previous Government and the way that Labour left the finances. Dr Cullen\u2019s legacy was set, but it has been destroyed in 18 months by this Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000547\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI will make one final point, in which I will give the perspective of an entrepreneur. This is a case study\u2014a real-world example. I spoke to a very good friend of mine who is one of New Zealand\u2019s most successful entrepreneurs. He is worth $100 million, give or take a little. He does not like those guys over there in National, by the way. His comment was that the tax rates do not even come into the equation when he is considering a business venture. So Mr Key and Mr English should not tell me that the National Government is cutting taxes in order to stimulate economic growth, because that is just not the case. This is a Budget for the very few, not the many, at all. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022 data-id=\u0022850215aaa4d84e97b75e84defae62397\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000548\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022850215aaa4d84e97b75e84defae62397\u0022\u003EPESETA SAM LOTU-IIGA (National\u2014Maungakiekie):\u003C/span\u003E I rise to support the Taxation (Budget Measures) Bill for 2010. The previous speaker, Stuart Nash, asked about facts. I tell that member that the one fact he has not got quite clear in his head is that his tie is an ugly, detestable tie, and he should not wear it 2 days in a row in this House. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000549\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EThe member talked about electricity prices going up.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000550\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d8260e623d7e4cedb5153a206b09a1e8\u0022\u003EHon Trevor Mallard\u003C/span\u003E: I raise a point of order, Mr Speaker. I was waiting for you to intervene on the personal nature of the comments just made by that member about the dress of a member on this side. If we started criticising members opposite for their dress sense, you would intervene pretty quickly.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000551\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ddb68d7f4a9b4345a9b740e673fcb4e2\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: I am actually quite fashion conscious on some of these matters, so I did not take offence. I did not take offence myself, but if the member took offence I apologise for not interrupting earlier. Possibly, if someone has taken offence, our clothing might be something to be mindful of.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000552\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022503fe51c73004084a8b50561203f1d1d\u0022\u003EPESETA SAM LOTU-IIGA\u003C/span\u003E: I apologise to the member. I described his tie in such a way only because he\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000553\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b6d2e12f55534901883418956bd63426\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: No, I have already ruled on this. It has been very clear that exception was taken and I ruled on it. Do not mention it again.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000554\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221cd0a79b249148cb87e254823eb9522b\u0022\u003EPESETA SAM LOTU-IIGA\u003C/span\u003E: This tax bill is about compensating ordinary Kiwis for a rise in GST by cutting personal income tax rates, increasing superannuation payments, and increasing Working for Families payments and benefits\u2014something Labour did not do last time it increased GST. Labour says that this bill compensates only the rich. The previous speaker wanted facts; I will give him facts. Seventy-three percent of income earners will have a top tax rate of 17.5 percent or less. Two-thirds of the tax cuts will apply to people on an income below $48,000\u2014two-thirds. They are low to middle income earners. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000555\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EThis is a Budget that has delivered for New Zealanders. It builds on the good work that has been done in the past 18 months of this Government. It will secure prosperity for New Zealanders. It lowers tax rates. It allows exporters to get on with producing and selling goods and services overseas. The company tax rate is being decreased from 30 percent to 28 percent. We are encouraging savings through various changes in portfolio investment entity rates and personal income tax rates. This Budget will deliver surpluses sooner rather than later. We inherited a bad economy and a bad recession from the previous Government. This Government is about taking action, about investing in New Zealanders\u2019 future, and about the prosperity of our people. I support this bill and I look forward to the second and third readings. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u00220ce80ae0f36c4d76877772f03d514365\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the Taxation (Budget Measures) Bill be now read a first time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 69\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 58; ACT New Zealand 5; M\u0101ori Party 5; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 53\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 43; Green Party 9; Progressive 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EBill read a first time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000556\u0022\u003ESitting suspended from 6 p.m. to 7.30 p.m.\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000557\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00226638aef5be854fda9de3043a033313b6\u0022\u003ESecond Reading\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u0022a50393f53a7045338fe185b2264adbc0\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000558\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a50393f53a7045338fe185b2264adbc0\u0022\u003EHon PETER DUNNE (Minister of Revenue)\u003C/span\u003E on behalf of the Minister of Finance: I move, That the Taxation (Budget Measures) Bill be now read a second time. I will not traverse the ground that I covered in my first reading speech; I simply make the observation that over the last year there has been a great deal of public debate about our tax system. The Government has responded to that debate with the measures announced in the Budget this afternoon. It is now time to put the results of that into action, so that we have a tax system that supports growth, encourages productivity, and moves us away from the consumption and distorted investment decisions of the past.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000559\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EIn order to achieve those purposes, this bill introduces what we describe as a balanced packet of changes. Lower income tax rates not only will provide greater incentives for people to work and save but also will help to attract skilled people to our workforce and encourage New Zealanders to stay and contribute to our economy. In this regard, it is interesting to note that outside Ireland and Luxembourg, we, among OECD countries, have the highest rate of skilled citizenry living overseas\u2014about one in five New Zealanders.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000560\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022445f12bc13fa45b7b6fa7e5dd6f04b50\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Why? Why!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000561\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002213a58ca1b6e44056bfe69ea8bf4dd6b5\u0022\u003EHon PETER DUNNE\u003C/span\u003E: There are a number of reasons for that, but the fact is that if we want to attract those citizens back, we have to have a competitive tax environment in this country, and that is what this bill is seeking to establish. The lower company tax rate that it ushers in will encourage productive investment throughout New Zealand, thereby increasing productivity and contributing to raising wage levels. Lifting the amount of GST will help shift the current economic balance away from consumption and spending, and will channel efforts towards saving and investment. As part of the rebalancing of the tax system, certain rules will be tightened and strengthened to make the system more equitable, so that everyone pays his or her fair share of tax. In making these substantial changes to our tax system, the Government has been mindful of those New Zealanders who will need support as a result of the rise in the GST rate. As has been indicated, compensation will be an immediate and permanent part of these changes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000562\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EIn summary, these are the main features of the tax reforms proposed in the bill. They were well aired in the earlier debate and in the Budget presentation this afternoon. Taken together, they offer a fairer, more balanced system, which will better support the efforts of New Zealanders to get ahead, and for that reason I am very happy to commend this bill to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022 data-id=\u002205f49d3f8f474604b05604f854790af8\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000563\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002205f49d3f8f474604b05604f854790af8\u0022\u003EHon TREVOR MALLARD (Labour\u2014Hutt South):\u003C/span\u003E I think we can tell when there is real enthusiasm behind the speeches made by the Hon Peter Dunne. He is not one to sit down early, especially a third of the way into his speech, if he is truly enthusiastic about legislation he is promoting. He knows that the good people of \u014Chariu will not be happy about the Taxation (Budget Measures) Bill. He knows that the good people of \u014Chariu know the effect of inflation on their assets. They know that 5.9 percent inflation will not be covered by the extra that they will get as part of this package of measures. The people of \u014Chariu know that the person who gets $1 million a year and a $985 a week tax cut will be much better off than they are, as a result of that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000564\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EThe Hon Peter Dunne is sitting next to the co-leader of the M\u0101ori Party. I say to Tariana Turia that I have some sympathy with her and the position her caucus is in with regard to this Budget, especially the increases in GST. Because those increases are so regressive, they will proportionately hit M\u0101ori much harder than the P\u0101keh\u0101 population generally. There is no doubt that what Mr Harawira was reported in the newspaper this morning as saying was right. I disagree with the fact that he did not front and that his vote did not follow his voice. I had always thought of him as a warrior who would be here, who would be around, and who would not scuttle off after making comments like that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000565\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EBut, going back to the legislation, I can see the hand of Peter Dunne in it. I think it is fair to say that there is a change to do with middle incomes that he would have had much more responsibility for than John Key or people such as that. I am sure there will be people who appreciate that part of the changes. But what people will see in the end is something that benefits rich people and high-income people much more than those who are on middle incomes. It will be especially bad once Dr Bollard has a look at the inflation. Having myself been involved in a few meetings on this subject with the good doctor over the years, I can accept that he will almost certainly accept the 2.02 percent increase in inflation arising from the increase in GST, but the other 3 percent or 4 percent is something that he will look at, and it will be well outside the requirements for tightening. I have not had a look at iPredict this afternoon, but I would be pretty sure that betting on interest rate increases in the middle of this year, later this year, and early next year has gone up substantially as Dr Bollard has a look at the inflationary effects of this Budget and what it will do to the economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000566\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EWhat do we need now? What we do not need now is the choking off of business even more through the increased interest rates that will flow from this taxation bill. The Labour Party\u2019s view on the GST increases has been made very, very clear. GST is a regressive tax. It is a tax that disproportionately hurts poorer people. Increasing it hurts them more than it hurts anyone else, and these increases will therefore hurt lower-income and middle-income people much more than they do people on higher incomes and people who have a higher proportion of discretionary income. It is sad because I thought there was general consensus across the House that the current GST was a good, comprehensive tax. At 12.5 percent it is relatively high by OECD standards. I think we have the sixth-highest level of consumption tax in the OECD. If there was a debate, it would have been that at 12.5 percent it is higher than most countries would think reasonable. But I think its comprehensive nature is something that has got support because it is seen to be relatively low and fair. What the Minister of Revenue has done in the legislation he has promoted is start to unravel that. As people see GST going up, as they see us heading right to the very top of the developed world for the level of this type of tax, we will see the support for it beginning to unravel.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000567\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EClearly, the M\u0101ori Party led the way on that. I have made my views clear on the M\u0101ori Party\u2019s approach. The idea that we exempt all poultry and all vegetables would mean that Kentucky Fried Chicken and chips would become GST-free as healthy food\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000568\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222e7e02b5e60e429dbefdfc13c5f0a955\u0022\u003EHon Tariana Turia\u003C/span\u003E: No.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000569\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228c6aa00c9dc04202bd3b7abebf2066b5\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: It would, under the definition in the M\u0101ori Party bill that is on the Table of the House. Kentucky Fried Chicken and chips would be healthy food under its definition. I say to Peter Dunne that the problem is that as he puts up the rate he opens it up to that sort of approach, which I think undermines the tax. I accept what the member says\u2014that as he puts up the tax level he opens it up to a number of other suggestions that would not have arisen if he had not taken the leadership in the way in which he has done in promoting this bill. I think it would be better to stay with the 12.5 percent GST rate and to stay comprehensive, but the member knows my views on that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000570\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EI think we have three things happening here\u2014and I would be interested in the Minister\u2019s views when he makes his reply. We have some loopholes being closed. I say to the Minister that no one can argue against closing the depreciation loophole; we all know that it is a rort. The changes made to thin capitalisation are, again, a good thing. I am not there yet on the company tax changes; my view is that the major beneficiaries of those are the Australian banks, because for New Zealand companies, of course, company taxation is effectively a withholding tax, and with the imputation credits it is a matter of timing rather than absolute amounts\u2014and I am glad Mr Woodhouse is agreeing with me. So there is not a lot of benefit to New Zealand companies from these changes. The end benefit of the taxation changes is to overseas owners of New Zealand companies.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000571\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E In my view, the closing of those rorts has effectively given some money to lower-income and middle-income earners in order to offset the increase in GST for them. But the revenue from the GST is what is effectively paying for the massive tax reductions for high-income earners. People on incomes similar to the Prime Minister\u2019s full income will get about $1,000 a week. People like the Prime Minister will get about $1,000 a week in the hand as a result of these changes. I ask whether we, as Kiwis, think that is fair. I say to Paul Hutchison that most of his voters would have been happy if the Government had raised the threshold for the 38c rate to, say, $150,000, or $120,000. I think his voters would have said that, yes, they liked that, and thought it was fair. When people such as the Prime Minister and a number of his mates are earning\u2014or receiving; I do not want to say that the Prime Minister is earning it\u2014$1 million of taxable income a year, do most Kiwis really think that those people should have an extra $1,000 a week? No, we do not; we think it is fair for them to make a contribution to our system. This is a tax switch bill; it is a switch from the poor to the rich.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022 data-id=\u002207d8ea0796644508b3be205b99878c2a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000572\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002207d8ea0796644508b3be205b99878c2a\u0022\u003EDr PAUL HUTCHISON (National\u2014Hunua):\u003C/span\u003E The Hon Trevor Mallard really does display the huge muddle that Labour members are in. After all, what did their leader say about vegetables and GST? Well, this is what Trevor Mallard said in April. He said that it was a very silly idea to take GST off healthy food. He said on his blog: \u201CJust imagine trying to define that. And how much of each we are allowed each hour/day/week before GST kicks in. And the army of inspectors to check the food. And increase the GST or other tax to cover the diff.\u201D It is quite obvious that Labour will be in Opposition for a long, long time; its members have very, very muddled thinking.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000573\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EIt is a huge pleasure to speak on this Taxation (Budget Measures) Bill, because the purpose of this bill is to implement the extremely well-researched, well-reasoned, and well-received Budget decisions announced today. I say \u201Cwell-received\u201D, because within about 30 minutes employers and manufacturers had said that it was the fairest Budget for many years, and that it contained the biggest tax reforms in many years. Just listening to the news tonight, I heard that five out of five commentators gave it seven points or higher. Even Guyon Espiner gave seven points for this Budget; that has to be pretty good. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000574\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bacd9fc533074e28b8d641ac1a992389\u0022\u003EHon Member\u003C/span\u003E: 7.5.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000575\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222125440f5690412298f5a722c347db25\u0022\u003EDr PAUL HUTCHISON\u003C/span\u003E: That is even better. But it is important to put this Budget in context, because if one thinks back to 2001\u2014if Labour members can think back that far\u2014one can ask what the Labour Government did after organising a highly respected report, the McLeod Tax Review. That Government totally ignored it. If it had actually implemented some of the report\u2019s recommendations, we would not have been in the pickle we now are. In contrast, after this National Government had organised in 2009-10 a highly respected report known as A Tax System for New Zealand\u2019s Future, tonight the National Government is implementing its measures, or the thrust of most of those measures. It is salutary to record in the House what the Tax Working Group report said. It said: \u201CThe current system\u201D\u2014this was after 9 years of Labour\u2014\u201Cis incoherent, unfair, lacks integrity, unduly discourages work participation and biases investment decisions.\u201D Those are the things that have been corrected, and are being corrected, in this Taxation (Budget Measures) Bill tonight. The working group explained that due to New Zealand\u2019s current financial circumstances, it accepted the constraint to consider tax reform on a neutrally fiscal basis. That is absolutely correct.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000576\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003ESo what does this bill do? Firstly, it rewards effort and helps families to get ahead. Just in case Labour members do not know, let me tell them that people respond to incentives. People think that it is fair and equitable that if they work hard, they are rewarded. The great thing about this Taxation (Budget Measures) Bill is that it decreases taxes right across the board. These measures certainly make the system fairer. At all taxable income levels, tax cuts more than affect the GST rise; furthermore, two-thirds of the cost of the income tax cuts goes to reducing the bottom two rates. Two-thirds of these reductions go to addressing the bottom two rates. They are Labour\u2019s people that this Government is looking after.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000577\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EThe third thing this Taxation (Budget Measures) Bill does is help attract and retain skilled people. I was over in Australia a few weeks ago with the Health Committee, and we were deeply concerned by the number of research institutes that had skilled New Zealanders in them. But those New Zealanders wanted to be here, and the measures in the Budget are the very sorts of things that will attract and retain skilled New Zealanders here.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000578\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EThe other important thing is that this Budget encourages savings and productive investment, instead of the Labour Government\u2019s 9 years of vacuuming up hard-working Kiwis\u2019 important earnings, and redistributing them in a nanny State manner. Kiwis had got so used to that that they had forgotten about it. But, as Peter Dunne said earlier this afternoon, when Labour put up the tax rate in 1999 it was a disaster. There are now 130,000 loss attributing qualifying companies in New Zealand, which is four times as many as there were in 1999. Gross distortion has occurred over the last 9 years. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000579\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EThis bill is an extraordinarily great suite of measures to correct the disasters of the past. It will cement in a bright future for New Zealand, and economic growth to ensure that New Zealanders get sustainable, world-class health, education, and welfare. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022 data-id=\u0022433f623981494908a19ce8aad68b2737\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000580\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022433f623981494908a19ce8aad68b2737\u0022\u003EHon RUTH DYSON (Labour\u2014Port Hills):\u003C/span\u003E For members and those of the public who may have been listening to the contribution from the member who has just resumed his seat, that was Dr Paul Hutchison\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000581\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a535d023d35b475396edadf1b2b06dff\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Who?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000582\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e22df2bd021c4978aa143eea77385026\u0022\u003EHon RUTH DYSON\u003C/span\u003E: Dr Paul Hutchison, who is a National member of Parliament. Dr Paul Hutchison is from somewhere just out of Auckland and is also the chair of the Health Committee. I find it extraordinary that in a 10-minute contribution on a tax bill he did not mention the Taxation Budget Measures Bill. I am not all that surprised; I would be ashamed too, if I were the member. Also, despite being a doctor and the chair of the Health Committee, he did not mention the $300 million hole that today\u2019s Budget has left in our health budget. Any basic calculation will show that with inflation at the level it is and with the 2.5 percent increase in GST, which came in with the Budget, there is now a $300 million hole in the health budget. I could say that this makes the job of an Opposition health spokesperson a dream come true in many ways, because all we have seen over the last few months is health cuts. That may make an Opposition health spokesperson\u2019s job easier but they do not make the lives of good, hard-working, ordinary New Zealanders any easier. It has not made the lives of people in Otago and Southland who have had their home support cut very easy. It has not made life any easier for the people in Palmerston North who are terminally ill and who will have 8 hours a day cut from the district nursing services they were receiving. It does not make their lives any easier, either. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000583\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003ESo I am not surprised that Dr Paul Hutchison is so embarrassed that during a 10-minute speech he not once mentioned the tax cuts or the $300 million gaping hole in the health budget that was announced today. Nor did he did not mention that the Budget was a Budget of broken promises. The first broken promise was a promise made by John Key before the last election that GST would not be increased; today we saw it increased to 15 percent. Before the election John Key categorically denied that there would be an increase in GST, but today in the House we saw him as Prime Minister break that personal promise. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000584\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EThe second broken promise from the Prime Minister, Bill English, and National was an earlier promise that they would not increase borrowing for tax cuts. What did we see in the Budget today? We saw exactly that; there is increased borrowing for tax cuts, and not even fair tax cuts. [Interruption] The woman from Christchurch who has taught Aaron Gilmore everything he knows about economics says that that cannot be right. But one just has to read the Budget to see that we now have increased borrowing in order to deliver tax cuts. That is another broken promise from John Key, Bill English, and National. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000585\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EThe third broken promise was that there would be no cuts to public services, and I am sure my friend and colleague the member of Parliament for Wellington Central will have further contributions on this later. What are the services that are delivered through our education system and our health system? Are they front-line services, are they public services, and are they being cut now? They certainly are. That was the third broken promise. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000586\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003ENew Zealanders are pretty tolerant; they understand when we are going through hard times. They understand when we all need to work together\u2014central government, local government, and members of our community. They understand the need for people to tighten their belts and do a little bit more in hard times so that our country can get ahead. However, what they will not and do not understand, and what is making them very angry, is that this Budget and this legislation that we are debating had an opportunity to lift New Zealand out of the recession, to give people an opportunity for jobs, and to create a fairer tax system in any changes that were being introduced. But that is not what happened, at all. We see that the people who are doing OK still, despite everything\u2014the people who are in the very, very top income bracket in New Zealand\u2014are doing the best out of tax cuts while people who are on the average wage or below doing very, very badly. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000587\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EYesterday in the House I heard the Prime Minister announce\u2014it certainly was an announcement and news to everyone, including Treasury\u2014that Treasury had told him that GST was a progressive tax. Well, it is not. It is a regressive tax. It means that people who have less income spend a higher proportion of that income on items that have GST attached to them. Those people do not have a lot of spare money, so a higher percentage of their income goes on items that attract GST, so when GST goes up it is harsher on people who are low and middle income earners. On the Government\u2019s own figures now, we know that most people will not be compensated for the GST increase. Many people will be worse off. People on $70,000 a year, and that is well above the average, will be $45 a week worse off with the tax cuts and GST increases. That does not factor in some other situations\u2014for example, people in an income-related rental house whose income goes up, as it will for many people who are beneficiaries or on superannuation. Their rent will go up as well. So as their income goes up, their rent goes up. That means they will not be better off, but when they go into the supermarket they will not get a discount; they will pay an increased level of GST. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000588\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EWe see that 41 percent of the tax cuts go to the top 10 percent of income earners, and 15 percent of Bill English\u2019s tax cuts go to the top 1 percent of income earners. How can that be fair on people who are just getting through a recession, many of whom have lost their jobs, and have had to get another job at a lower income. They work as hard as people on the top income bracket. I was appalled when John Key said to them to wait for the Budget and the Government would give the biggest tax cuts to the highest income earners but not to get jealous, because those very, very wealthy people are the backbone of the country; they are the people who are important to New Zealand! \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000589\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EI think those people are important to New Zealand, but I think the cleaners who work in this building are important to New Zealand, and as much of importance to our country as the people who are on the highest income. The average-income earner, and people earning right up to $70,000 a year, will be worse off under this legislation. Today the National-led Government squandered an opportunity to put a fairer tax system in place, and create a more modern economy where people would have open opportunities. When we look into the other budgets\u2014like the education budget and the health budget\u2014we see more cuts to adult and community education, introducing costs on people with children in early childhood education, reducing the number of qualified teachers in early childhood centres, and leaving a $300 million gaping hole in the health budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000590\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EThe Government has not introduced a fair tax system, as National promised. It is not the $50 a week tax cut that National promised before the election. This Government has introduced a tax swindle. It has broken three promises. It has increased GST when John Key promised personally to this nation that National would not increase the level of GST. It has cut public services, and certainly it has not introduced a fair tax system. This legislation will be a huge disappointment. It will cause more unfairness in our community and a lot of anger. Labour will oppose this legislation.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022 data-id=\u00224f3d61d00c874e6e9833f6f777956ca6\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000591\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00224f3d61d00c874e6e9833f6f777956ca6\u0022\u003EMETIRIA TUREI (Co-Leader\u2014Green):\u003C/span\u003E I enjoyed the contribution from my Labour colleague Ruth Dyson. She is quite right about the productivity of low-paid workers. I just inform the House that ACT disagrees completely. If members look at ACT\u2019s alternative budget, they will see that Roger Douglas has said very clearly that high-income earners are the most productive members of our society\u2014not the nurses, not the police, not the people who clean Roger Douglas\u2019 office so that it is nice and tidy for him in the morning, and not the parents of this country. No, the excessively and ridiculously wealthy are, he says, by virtue of their wealth alone, obviously much more productive. That is the kind of extremist position that we see from ACT, and that informs National policy. That is the attitude of John Key when he tells the country that low-income earners, pensioners, and solo parents struggling to make their way with kids and take good care of their kids should not be jealous that they will get virtually nothing out of this Budget, while the very wealthy get the most. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000592\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EThe Greens have a vision for a smart economy and a better society\u2014a smart economy that will deliver real prosperity for our people, for everyone, and for our environment. A smart economy protects our environment. In Aotearoa, particularly, if we have no environment, we have no economy. Upon our environment rests all of our security and our wealth. Whether it is our fresh water, our oceans, our forests, our natural healthy soils, or our most treasured places, we are 100 percent dependent on our environment. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000593\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EA smart economy will sustain our natural capital rather than squander it, as this Government intends to do. A smart economy includes smart taxes that fairly share the tax obligation and the tax burden across our community. A smart economy delivers real and new jobs and sustainable industries that will enhance rather than degrade our environment and our communities. The Taxation (Budget Measures) Bill and the Budget on which it is premised fail to meet all those criteria for a smart economy, and it is a great shame for those families and their children who will bear the cost of that failure. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000594\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EOn Monday the Green Party launched our Mind the Gap proposal, a Green New Deal package of solutions that would create jobs, generate Government income, and combat the growing inequality that is a blight on our communities. We focused on inequality and its effects on children because income inequality has been shown to be the single most important cause of a wide range of social and economic problems. We chose to focus on children and the effects of inequality on children because they are the future of our planet and our society. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000595\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221fb8d8db-3e96-49c7-ab1c-b7916a50e30e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b91514e28d794dad89ee5bdbe0d7b872\u0022\u003EHon Steve Chadwick\u003C/span\u003E: Hear, hear!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000596\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d608df5958fe4fb9a903e91e259d5a4c\u0022\u003EMETIRIA TUREI\u003C/span\u003E: I thank the member. All children are entitled to live in a safe, sustainable society that protects their right to warm housing, safe, affordable food, and quality public education and health care\u2014all within a loving and supportive wh\u0101nau. We know that inequality hurts every child and every family, not just those people who are at the bottom. We know that New Zealand is one of the most unequal countries in the developed world: we are 23rd out of 30 in the recent OECD report. We were the sixth most unequal country among highly developed countries in last year\u2019s United Nations Human Development Report. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000597\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022badb0a39-849c-462a-b32f-77fc017c9fc2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022df7ef953a7e1479897bbc9de7d387fa2\u0022\u003ESimon Bridges\u003C/span\u003E: Shame on Labour!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000598\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bdffe789058246aba9208c4650ac55a7\u0022\u003EMETIRIA TUREI\u003C/span\u003E: Shame on the Government. Shame on the Government for failing to do anything about it. Shame on John Key\u2019s Government for making it worse, which is exactly what its tax cuts and its GST increase do\u2014they make inequality worse. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000599\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003ENew Zealanders like to think of ourselves as an egalitarian society where everyone gets a fair go, but the truth is that we are not\u2014the facts tell a very different story. The Green Party has the vision that we can be a more equal and more sustainable Aotearoa. It is within the choices that we make. But this Budget and this bill produced by the John Key Government choose not to pursue that vision. John Key\u2019s Government has already initiated some very big spending: about $10 billion on new motorways, an estimated $500 million from cutting the top tax rate, and potentially hundreds of millions of dollars in taxpayer subsidies to polluters through the emissions trading scheme. Again, it is always a question of priorities, and the Green Party would prioritise our people and our environment. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000600\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EI will talk about the area of housing. There are some provisions in this bill for changes in property taxes and speculation. The Mind the Gap package produced by the Green Party recommended the introduction of a comprehensive capital gains tax, excluding the family home. My fellow co-leader, Russel Norman, has talked about that tax in some detail today. We know that, in the longer term, a capital gains tax will provide a serious and significant part of the solution to New Zealand\u2019s property crisis by broadening the tax base and protecting housing from what currently seems to be irrational property speculation intensity. A capital gains tax is necessary to strengthen our economy in the short and the long term. This bill makes some minor changes around property speculation and property taxes. They are a small step towards the changes we need to make, but we also know that any changes in property taxes could lead to increases in rental prices, particularly in the short term, and particularly for those at the very bottom. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000601\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EIn order to make sure that the spread is fair around the tax obligation and the tax benefit, we need to make sure that for any changes in property tax there is also a comprehensive building programme of new State housing to help provide affordable housing for those who need it the most. That is absolutely an urgent priority in this country. We have severe homelessness in this country, in different ways: primary, secondary, and tertiary levels of homelessness. It is incredibly important that families who live in overcrowded, cold, expensive housing have affordable alternatives, but this Government will not be doing that, because it has cut the budget for the building of new State homes. This Government has cut the budget for the building of new State houses by more than $100 million. So no State houses will be built under this Government. That is clear from the Budget cuts. In fact, the Government\u2019s only proposal is to sell off more State housing. It congratulates itself on having sold off 17 houses last year. There is no plan by this Government to increase the supply of affordable housing for those families who need it the most. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000602\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EThe fact is that we must make that change, because safe, secure, and sustainable housing is fundamental to the health and well-being of everyone, and everyone should have access to housing that is suitable for their needs. It is a basic necessity, and we know that being homeless or in overcrowded housing affects income, employment, attendance and truancy at schools, and health. The Human Rights Commission has identified that crowding, dampness, and coldness are key issues for the New Zealand community. There is a State housing crisis, with 10,000 families on the waiting list. Many people are living in rental accommodation where they have to move regularly, which has a huge impact on their education and employment. We know that about 30 percent of at-risk and vulnerable young people are in unsafe and insecure housing. It is a serious crisis. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000603\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EThe cost of cold housing on families in the community cannot be allowed to continue. We know that we are losing about $1 billion per year in costs from cold housing, whether it is in relation to hospitalisation, the cost of respiratory illnesses, or the cost of lost working hours. We have a package that would deal with that cost. The building of 6,000 new State houses over 3 years at the cost of $2 billion would provide 28,000 jobs. Housing is part of the bill. That is a way of providing access to affordable housing and creating 28,000 new jobs, so that people have employment as well. There is no employment strategy in this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000604\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EWe would also introduce progressive pricing into the electricity market. That is a way of making sure that we can bring 70,000 households that are currently living in energy poverty out of energy poverty by providing a fixed rate of electricity provision at a low cost; anything that is used above that fixed level of provision comes at a higher cost. It is an effective way of providing support to those who are in the worst energy poverty. For example, pensioners who live on their own in old homes have a 97 percent chance of living in energy poverty. We can provide for them and support them out of that energy poverty if we simply choose to do so. The Green Party chooses to do so. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022 data-id=\u0022740dbede30bc456aa1728f009c81ea9b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000605\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022740dbede30bc456aa1728f009c81ea9b\u0022\u003EJOHN BOSCAWEN (ACT):\u003C/span\u003E There is much to commend in the Budget. In particular, the tax changes that are incorporated into the Taxation (Budget Measures) Bill, which we are discussing this evening, are to be commended. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000606\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003ELet us start with the reduction in the marginal tax rates. There is a significant reduction in marginal tax rates. Those whose annual income is $14,000 or less will see their marginal tax rate drop from 12.5c in the dollar to 10.5c in the dollar, those earning from $14,000 to $48,000 will see a reduction from 21c to 17.5c, those earning from $48,000 to $70,000 will see a reduction from 33c to 30c, and, finally, those on incomes above $70,000 will see their marginal tax rate go down to 33c. Much more was possible in terms of reduction in marginal tax rates, but at least that is a good first start by the Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000607\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EThe Government has also moved to close loopholes\u2014in particular, loopholes in relation to qualifying companies, and the tax advantages available through investment in residential and commercial property. The restriction on depreciation claims on properties is a move to see a rebalancing of the economy, and that has to be commended. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000608\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EWe also have a reduction in company tax rates, from 30 percent to 28 percent, from the beginning of the 2011 tax year. Finally, there are moves to incentivise savings with the setting of a new maximum tax rate of 28c in the dollar for portfolio investment entities, or PIEs. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000609\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EOne can look at the impact of the tax changes contained in this bill on page 9 of the Minister\u2019s executive summary in the Budget documents. Those members who have that document might be interested to look at page 9. It shows the effect of the various changes, whether they be the reductions in personal income tax, the increases in GST, or the changes to benefits, for people on various incomes. In particular, it shows that those households earning an annual income of $40,000 or less will have a net impact from these tax changes of 0.7 percent\u20140.7 of 1 percent. Those earning between $40,000 and $85,000 will have a net benefit of 0.4 percent. I suspect that this bracket includes the great bulk of working households in New Zealand. Those earning in excess of $85,000 will have a net impact of 0.7 percent. The Minister of Finance\u2014I guess\u2014summarises that very nicely when he states at the bottom of page 25 of the Budget speech: \u201COn average most New Zealanders receive roughly a half to one per cent average increase in real disposable income.\u201D That is not much, but one could say that it is better than nothing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000610\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI wish that were the full story, but it is not. What both the Government and the Labour Opposition are ignoring is that, starting on 1 July, we will have an emissions trading scheme tax. We will have a tax on energy, a tax on electricity\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000611\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227ca5809d48da4e5b99d261aca9209f77\u0022\u003EHon Members\u003C/span\u003E: Oh!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000612\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022359aae44d61c43d1a44f0e049b020e69\u0022\u003EJOHN BOSCAWEN\u003C/span\u003E: I am interested in the barracking from the Government members, because they should be ashamed. The reason they should be ashamed is that New Zealand\u2019s Treasury estimates that the impact of the emissions trading scheme will be to add 5 percent to the price of electricity and 4c per litre to the price of petrol from 1 July. Those costs will flow throughout the whole economy. They will flow into food prices and into everything that New Zealanders purchase. The Reserve Bank has calculated that the annual effect in the first year of the emissions trading scheme will be to add 0.4 percent to the CPI. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000613\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EWhere does that leave this Budget? Where does that leave the Budget that Mr English and Mr Key are so very proud of\u2014the Budget that says that, on average, most New Zealanders will receive roughly \u201Ca half to one per cent\u201D? Well, the people on incomes from $40,000 to $85,000, which the Budget document \u201CB2 and B3\u201D shows on page 9 will get a benefit of 0.4 percent, will be left with absolutely nothing\u2014zero. National members\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000614\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ee74357f7dd0491ca564fdac900d8d6c\u0022\u003ENicky Wagner\u003C/span\u003E: Whose side are you on?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000615\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022595fd1f51e344765909c9cbc01e5efbf\u0022\u003EJOHN BOSCAWEN\u003C/span\u003E: Do I hear a comment asking whose side I am on?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000616\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002229a2215f07bc4369b2d8f7aa86b66915\u0022\u003ENicky Wagner\u003C/span\u003E: Yes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000617\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f46e06f77f864ff28d083cdacb78ecc7\u0022\u003EJOHN BOSCAWEN\u003C/span\u003E: That is interesting. I am very pleased that the member has asked that question, because I find myself, more and more, having to stand up and represent her constituents. Overwhelmingly, National Party members are opposed to the emissions trading scheme. They tell me that at the meetings I have conducted up and down the country. I read with a great deal of interest that at the National Party\u2019s central North Island regional conference in the weekend, a subset of National Party members moved a resolution, unanimously, that the National Government should be delaying the introduction of the emissions trading scheme. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000618\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EHow interesting it is, also, to hear Labour members talk about the impact of this Budget on working people\u2019s incomes and their expenditure. I have heard Mr Goff and Mr Cunliffe talk about the increase in GST, and of how inflation is going up. Well, National members can be proud of one thing. They can be proud of the fact that they are putting electricity up by only 5 percent, because the previous Labour Government would have put it up by 10 percent. That is right; that is the one thing, and the only thing, that the emissions trading scheme has to commend it. If there had not been a change of Government, then, from 1 January, we would have had an emissions trading scheme that Treasury has said would have increased electricity prices by 10 percent. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000619\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EThe National Government is confident and relaxed about the fact that it is increasing electricity and petrol prices, and increasing the flow-on effect of those things, by 5 percent from 1 July. The impact of that is there for all New Zealanders to see, on page 9 of the Budget document. Households earning between $40,000 and $85,000 will get a net impact of 0.4 percent, and the Reserve Bank tells us that the impact of the emissions trading scheme will be 0.4 percent. So everything that this Budget purports to give to those people will be taken away from 1 July, which is 3 months before the tax changes we are debating in this bill will come into effect. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000620\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EIt is actually worse than that. We can look at the position of superannuitants. The Minister of Finance goes on to state, very generously, on page 22: \u201Cthe package will provide, from 1 October 2010, an immediate lift in the levels of New Zealand Superannuation, all main benefits, student allowances and Working for Families payments. This will be sufficient to offset the estimated impact on prices due to the rise in GST.\u201D Well, is that not generous of the Minister of Finance and the National Government to be making adjustments to superannuation that will be sufficient to compensate for the increase in GST? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000621\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI ask about the increase in the price of electricity. What about the 5 percent increase in electricity? I ask about the flow-on effects throughout the whole New Zealand economy. I ask about the 0.4 percent increase in costs that the Reserve Bank of New Zealand said the emissions trading scheme will cause. What about that? There is no reference to compensation in the Budget speech. One thing I will say is that beneficiaries, and those who have their benefits adjusted in line with the CPI, will receive an adjustment, which will be carried forward because those benefits are adjusted in line with the CPI. But superannuitants, those people over 65 who rely substantially on New Zealand Superannuation\u2014and who may be listening to this debate tonight\u2014will receive no permanent compensation for those increases in electricity and petrol prices. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000622\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003ELet us turn to page 15 of the Minister\u2019s executive summary. We see that in 2011, the cost of the emissions trading scheme will be about $907 million. In the following year, it will cost $275 million. I have heard the Minister for Climate Change Issues tell this Parliament that we have to proceed with those electricity increases because we have the massive cost of the emissions trading scheme. We heard Metiria Turei, the co-leader of the Green Party, talking tonight about subsidies for polluters. But this is not a subsidy for polluters. That $1.3 billion over 2011-12 is not a payment to polluters. I am sure that she is referring to the emitters of carbon dioxide, and carbon dioxide is not a pollutant. But that is a totally separate argument. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000623\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EWhat is this sum? It is $1.3 billion that will be paid to the people who planted trees in the 1980s and 1990s. That is right. There were 70,000, 60,000, 70,000, and 80,000 hectares planted in trees every year through the 1990s. The people who planted those trees had no expectation of receiving a subsidy, but that is what they are getting. They are getting it courtesy of the taxpayer, so every single New Zealander will have to pay for that. It is a disgrace. If National\u2019s politicians will not represent their members, then the ACT Party certainly will. Thank you. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022 data-id=\u002267cea95ce32c4cf78abf1f2678cd46f2\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000624\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002267cea95ce32c4cf78abf1f2678cd46f2\u0022\u003ERAHUI KATENE (M\u0101ori Party\u2014Te Tai Tonga):\u003C/span\u003E There is a story to be told as one browses the Net to ascertain how the market and the press gallery are responding to Budget 2010. I want to share with the House an absolutely random selection of headlines gathered from cyberspace: \u201CBudget woes for property investors\u201D, \u201CBiggest tax reform in 25 years\u201D, \u201CMajor incentives for investment\u201D, \u201CHeadaches for retailers over GST rise\u201D, \u201CIncome tax slashed, GST to 15 percent\u201D, \u201CTax changes will keep Kiwis home\u201D, \u201CDollar responds positively to Budget\u201D, \u201CMore in most pay packets\u201D, \u201CBudget politically safe but economically timid\u201D, \u201CTax package will bump up deficit\u201D, \u201CHigher economic activity picked\u201D, \u201CExperts praise tax cuts for all\u201D, and so it goes on. This is just a random selection of headlines. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000625\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003ENowhere in that list of analyses did I read that this is a Budget that reflects the melodramatic hype we have heard in the House today. Sure, we read the words \u201Csafe\u201D and \u201Ctimid\u201D, but we do not read that this Budget is a tax swindle or a lost opportunity, as members on the Opposition benches might mutter. In actual fact, we read the exact opposite\u2014that this is a Budget that will crack down on property investors and tax evasion. We read that this is a Budget that will benefit all workers. So much for this being a Budget that privileges the rich and leaves all other New Zealanders out in the cold. The worst that could be levelled at the changes to the tax system would be that they are by and large fiscally neutral. In effect, this means that the increase in GST is offset by cuts to all personal tax rates and the immediate rise of 2 percent in benefit payments. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000626\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EAll payments, including New Zealand Superannuation and Working for Families, will increase by 2.02 percent to compensate for the increase in GST. Two percent might not sound a lot, but it is 2 percent more than the previous Government ever put out there. This is something we argued for, right throughout the lead-up to Budget day\u2014that no one should be any worse off as a result of the Budget tabled today. It has been a hard slog to bring the need to protect our most vulnerable to the forefront of this debate. To be frank, it has not been the easiest Budget to promote amongst our electorate. I have just come from a M\u0101ori Party film evening fund-raiser, and there were about 120 people present who are really supportive of this Budget. I spoke to a couple who are superannuitants, and they are just so pleased that they will be getting $10 a week extra in their superannuation payment. An amount of $10 may not sound a lot, but to them it is mana from heaven and they are rapt; and so are the others. It is all about perspective, about restoring balance, and about taking a long, cool look at what will make the difference in order to create the promising financial outlook we all seek. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000627\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EThe M\u0101ori Party has spent many hours debating and debunking myths about the facts about tax. We know that in many respects this issue has much to do with perception\u2014the perception of punters about whether a tax cut or a rise in GST will directly impact on their lives. We have been told by National that once all the measures are accounted for, the Budget has almost exactly the same impact on the average incomes of low, medium, and high income households. When we looked at a range of different scenarios, and all scenarios, the GST increase was offset by the income tax decrease. In simple terms, there was no loss of money. What might be the breaking news of the day is that the biggest losers in terms of this tax package are foreigners who lose through a combination of the tightening of tax on foreign investment and also because they own a lot of property. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000628\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EThis is a policy goal that we in the M\u0101ori Party campaigned on, to protect and preserve our land, to keep it from falling into foreign ownership, which is something the previous Government did nothing about. The Budget will tighten investment property tax rules. One of the immediate impacts that will be achieved is that wealthy families will not now be able to use losses from rental properties to become eligible for Working for Families. Some might call this practice morally bankrupt\u2014a claim we could also throw at those rental property investors who manipulate the system to dodge tax. In that light, another feature of this tax legislation is that it puts a stop to those who try to rort the system for their own benefit. It seems a pretty hefty amount of money, $26.6 million for the next 4 years, allocated to the Inland Revenue Department, but if it can put a stop to what surely amounts to theft and deception, then that has to be positive. In fact, it is almost incredible to believe that these measures, according to Minister of Revenue Peter Dunne, are expected to generate an extra $2.48 billion in the next 4 years. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000629\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EI want to return to the concept around the redistribution of wealth to invest in well-being\u2014the \u201Cpay it forward\u201D mentality. Paying it forward is a concept of doing good for others, to repay the good that has been done to oneself. In effect, reforming the tax system can make our economy fairer, more sustainable, and able to provide a better support for economic growth. I think, therefore, that those who are hardest hit by this tax legislation are the commercial and industrial property owners. They are hurt the hardest by the new depreciation rules. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000630\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EI want to return to the discussion around M\u0101ori and Pasifika unemployment, generated just before the dinner break. We know that in the population aged 18 to 25 years, the number of M\u0101ori and Pasifika young people receiving the unemployment benefit demands that we take action. The figures are startling. Out of 19,000 youth receiving the unemployment benefit, 34.8 percent are M\u0101ori\u2014that is 6,500 of our rangatahi\u2014and 13.4 percent are Pasifika, which is another 2,500 young people. We must do something to ensure that they have a future to look forward to. We need to be able to support those young people with skills, work experience, and the confidence to invest in our future. Paying it forward is all about helping us to regain our footing, and in particular to help M\u0101ori and Pasifika youth to find employment as the economy continues to recover. We need the p\u016Btea in the national accounts, to help make that happen. I hope that part of the $2.48 billion that Mr Dunne promised can be set aside for just that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000631\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EThe M\u0101ori Party is supporting this bill in the interests of our young people, in the interests of our economy, and, most of all, in the interests of setting a strong pathway forward into our future.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00224a25943b-cb3b-49c3-bd10-74316fae17f1\u0022 data-id=\u0022f6f761b8d55347288c6772af95221dad\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000632\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a25943b-cb3b-49c3-bd10-74316fae17f1\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f6f761b8d55347288c6772af95221dad\u0022\u003EJACQUI DEAN (National\u2014Waitaki):\u003C/span\u003E What a pleasure it is to follow that contribution from our colleague in the M\u0101ori Party, who understands very clearly what matters in this country. I think this Budget delivers on what matters in this country, which is putting the right incentives into the New Zealand economy and looking after all the people who live here.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000633\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a25943b-cb3b-49c3-bd10-74316fae17f1\u0022\u003EThis Budget is about across-the-board tax cuts delivered to people in New Zealand. I will go through those tax cuts and tax rates, because I think it is worth repeating them. People who have an income of under $14,000, and who were paying a rate of 12.5 percent in tax, will now get a tax rate cut down to 10.5 percent, and that is significant. The tax rate for those people on an income between $14,000 and $48,000 goes from 21 percent down to 17.5 percent. That is significant for that range of members of our country. The tax rate for the people on an income between $48,000 and $70,000 goes from 33 percent down to 30 percent. That change has been welcomed across the board. The tax rate for the people on an income of over $70,000 has gone down to 33 percent. This Budget is providing across-the-board tax cuts.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000634\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a25943b-cb3b-49c3-bd10-74316fae17f1\u0022\u003EIt is interesting, is it not, that Opposition members are all at sea with this Budget. They are hardly putting up much of a fight, and do not seem to have latched on to anything they really dislike about this Budget. In fact, it was very interesting to hear the contribution of Trevor Mallard, who has largely agreed with a number of the provisions that have been brought about in this Taxation (Budget Measures) Bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000635\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a25943b-cb3b-49c3-bd10-74316fae17f1\u0022\u003EThere is a rise in the rate of GST to 15 percent from 12.5 percent, and, to balance that, there will be an immediate rise of 2.2 percent in income for those on superannuation, benefits, and Working for Families.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000636\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a25943b-cb3b-49c3-bd10-74316fae17f1\u0022\u003EA number of spending boosts are contained in this Budget. In health there will be $2.1 billion more over 4 years. That will go into front-line health services. It is good-quality health spending. In education there will be $1.4 billion more over 4 years for better schooling, and also for early childhood education. In research, science, and technology there will be $321 million, over 4 years, for new initiatives. That is all about growth in the New Zealand economy. And, of course, there is faster broadband\u2014$248 million extra over 4 years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000637\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a25943b-cb3b-49c3-bd10-74316fae17f1\u0022\u003EBut I want to talk about a Budget initiative that has not been mentioned so far. It is a tiny initiative, but it just goes to show that a very small amount in the Budget, carefully placed, can have a big impact on growing the New Zealand economy. The first initiative I will talk about is the $30 million to be used to promote New Zealand overseas as a tourism destination. That amount in the Budget is relatively small, but in my view it is significant for tourism in New Zealand because we are an exciting tourism destination. With the Rugby World Cup proposed to be held here next year, I believe that it is important that we promote ourselves overseas.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000638\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a25943b-cb3b-49c3-bd10-74316fae17f1\u0022\u003EThe other example I will raise is comparatively minuscule, at $5 million, but I am excited that the Department of Conservation is to put $5 million into developing more cycle trails and camping grounds over the next year. Why do I think that is significant? Although $5 million is relatively small in the grand scheme of things, I can tell members that in my electorate, the Otago Central Rail Trail has had a huge impact on the economic well-being of the Otago region. I will focus on one very small provider of tourism services, and that is the Chatto Creek Tavern. Before the rail trail came into being, the Chatto Creek Tavern\u2014which is at Chatto Creek, just out of Alexandra\u2014was struggling. It was one of those small businesses, in one of those very tiny little towns, that was struggling and facing closure. These days, 5 or 6 years later, the Chatto Creek Tavern not only is surviving but also is thriving. There are now 13 people working in the Chatto Creek Tavern. They serve 180 lunches in the high season and 100 lunches in the low season. Members opposite do not see the significance of that\u2014and I do not blame them because they do not represent the provinces\u2014but if we extrapolate that benefit out from Middlemarch down to Clyde, and all along the length of the Otago Central Rail Trail, we can quickly see the benefit that an initiative like the rail trail brings to the local region. Five million dollars is a very small Budget amount, but it is significant.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000639\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a25943b-cb3b-49c3-bd10-74316fae17f1\u0022\u003EThis Budget is about putting the right incentives into the economy. It is interesting to see how well it is being received. I will leave members with this one statistic. The Close Up poll returned a result of 80 percent of people being in favour of the Budget. That was on prime time television tonight. That is good news. I commend this taxation bill to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022 data-id=\u00227d6b560f3a854f5ea38c61d388d3951b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000640\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00227d6b560f3a854f5ea38c61d388d3951b\u0022\u003EHon CLAYTON COSGROVE (Labour\u2014Waimakariri):\u003C/span\u003E For those who do not know, the member who just resumed her seat was Jacqui Dean.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000641\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227c254129194144c8835e0f310b2531fa\u0022\u003EHon Trevor Mallard\u003C/span\u003E: I didn\u2019t know.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000642\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d86833b977e344349822b4e295f259b6\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Mr Mallard did not know. She is a member who is famous for two things. First, she is the member who thought that one should ban water. Secondly, she is the member who, during a public meeting with my colleague David Parker, showed that her in-depth knowledge of economics rivals that of Aaron Gilmore. She said: \u201CNo, we\u2019re not going to borrow money. We\u2019re going to get it from overseas.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000643\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022819832e3bfde4e75861984413a2faf9c\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Who said that?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000644\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228666ddbfdb494e1eb92481433a6faa0f\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: It was an economic theorist rivalling Aaron Gilmore.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000645\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003ELet me say that it has been an interesting day today. This is a very prophetic day, because on this day Mark Bryers, the biggest crook in the Blue Chip scam, got 75 hours\u2019 community service. On the same day that Mark Bryers, the biggest crook in the Blue Chip scam, got 75 hours\u2019 community service\u2014he is a very wealthy man, a multimillionaire\u2014the National Government gave him a $1,000 a week tax cut. In fact, it would be more than that, because he earns well over $1 million per year, and we know that, under this Budget, if one earns $1 million per year one gets a $1,000 tax cut.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000646\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022176ded6a34874ae4a58dd1e1bf8671ea\u0022\u003EHon Trevor Mallard\u003C/span\u003E: A week.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000647\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225a42c5d20d97484f924b2dfcd1caeb4e\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: I am sorry: it is a $1,000 tax cut per week. Mr Bryers, thanks to Mr Key, will get that. I am sure Mr Bryers will send Mr Key a nice Christmas card saying: \u201CThanks very much. I have done my 75 hours\u2019 community service.\u201D There were tears in court today, according to the media, but Mr Key was good enough to give him 1,000 bucks a week. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000648\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229ef2d654a3de4239a00248fb0310b853\u0022\u003EHon Trevor Mallard\u003C/span\u003E: And there\u2019ll be a pensioner who will deliver the card.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000649\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002206330593d463450ea78e6ca4dc6914e9\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: My colleague Mr Mallard said that a pensioner who was ripped off will deliver the card to Mr Key. It is a very, very prophetic day today. Mr Bryers will have a lot to celebrate tonight as he contemplates his whole 75 hours of community service.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000650\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003ELet us look at the Budget. What do we have? We have inflation. We have the highest inflation, I believe, since 1990\u20145.9 percent. I really enjoyed the M\u0101ori Party contribution, especially the contribution of Tariana Turia. I said that she had sold out her electorate and a number of other members have said the same thing. Well, those members are very proud of this Budget. I ask them how proud they can be when 72 percent of the constituents in Rahui Katene\u2019s electorate earn under $40,000 per year, and when we factor in the increases in GST and inflation, 72 percent of her electorate are going to be worse off. I say to Tariana Turia\u2014and I am sure that she will take another call to try to justify this\u2014that 73 percent of her electorate earns under $40,000, and will be worse off when we factor in the increase in GST and a 5.9 percent inflation rate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000651\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EMs Dean and others have said that it is fantastic that people who earn $70,000-plus will get a tax rate of 33 percent. Well, here is the problem with that for the M\u0101ori Party, which signed up to it today. In Ms Katene\u2019s electorate, the number of people who earn over $70,000 equates to 5 percent\u20145 percent. In Mrs Turia\u2019s electorate, it is even worse; there they equate to 3 percent. So I say: \u201CWell done!\u201D to the M\u0101ori Party. Those members have done a wonderful job of getting gains in this Budget for their electorate, because what they have got is some hocus-pocus, and a couple of prisons, which Pita Sharples has put on the deck tonight and which Judith Collins could not explain to the media, and they have sold out 72 to 73 percent of their constituents. I invite them\u2014the weekend warriors that they are\u2014to get up in this House and justify that to their constituents. If they are so proud of this Budget, then it will be very interesting during the hui on the campaign trail, when their constituents get up and say to Ms Katene that they are part of the 73 percent who missed out, and that she and her colleagues inside and outside Cabinet voted for this move, never opposed it, and ripped them off. That is what those constituents will say to the M\u0101ori Party. I do not know whether it is mana-enhancing when 73 percent of one\u2019s electorate is worse off thanks to one\u2019s vote and thanks to the fact that one is so proud of this legislation and this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000652\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThen we come to the other aspect of this Budget: the broken promise about the New Zealand Superannuation Fund. Mr English had a history of breaking promises to our superannuitants when he was last in Government, in the 1990s, when, under him, their pension was cut three times. Last year he said: \u201COh well, we will suspend payments to the Cullen fund, but when we get into surplus\u201D\u2014and the Budget documents show that, allegedly, that will be in 2016\u2014\u201Cwe will activate funding again.\u201D Oh no, that date is now 2019. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000653\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003ENational members and their leader went around the country with the second broken promise, which was that they would not raise GST. I invite them to front up on a Saturday, if they ever hold electorate clinics, if they ever get off their backsides and go and talk to the 73 percent of the people in some electorates, like the M\u0101ori electorates, who are affected, if they ever meet those folks, who are worse off as we speak tonight. I invite them to go to Grey Power and explain why their leader broke that promise. Every last member opposite got his or her backside over the line in the vote and was elected on two false promises.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000654\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EMr Gilmore should get off his chuff, go to Grey Power members, and explain to them why he broke his promise. They will not know who he is, of course, but he might get in the door. I am sure they would invite him in, and he could justify the pay he gets by explaining to them why his leader said that he would not put up GST, why Mr English said that he would not mess with superannuation, and why Mr English said that he would pre-fund superannuation when the Government accounts moved into surplus. It is the same with Nicky Wagner. But we will never see them fronting when it is bad news. They stand up in here, but none of them will front up out there. Well, I challenge them. Let us have a meeting. Let us get every person in their electorate, let us get 10 of them, five of them, three of them. Let us get Mr Gilmore, who does not have a patch, of course, to talk to everyone in the area where he lives who is on the average wage. After we factor in National\u2019s broken promise on GST and factor in record inflation of 5.9 percent, let us hear Mr Gilmore explain to them why National has ripped them off and why they are worse off. They are the battlers, the strugglers, and the people who are trying to provide for their families.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000655\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI remember polls about Budgets, too\u2014rolling out the 80 percent. Well, I have always held the view as a member of Parliament that people are not stupid. I know this about Budgets: the Government might win on the night, when the flashbulbs are flashing and certain people are tripping over camera cords, but as the days go on, and the pay packets are opened, and the GST receipts are added up at the end of the week, the people are not silly, and it is very dumb and stupid politicians in this House who think they can hoodwink the ordinary folk in the street. I say to them that it is a simple equation: get up and explain why the Government will borrow $240 million per week for the next 3 years, and get up and explain why the debt track and the interest costs do not start even declining until 2021. If we look in the Budget, we see that those are important numbers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000656\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EBut National members will not do that; they will not explain and they will not justify. They hide in their various patches and constituencies, and they will not explain to anyone why they broke their promises. Kate Wilkinson, a Cabinet Minister who occasionally resides in my patch, was told by the Prime Minister to go out and sell the increase in GST, but there was not a meeting, not a whimper, not a press statement, nothing. The invisible woman never ever fronts the bad news. Well, in my patch of Waimakariri 72 percent of my electors earn under $40,000 a year. Kate Wilkinson, who sits in Cabinet, who voted for every last measure in this legislation, who never opposed it, and who wants my job and everybody else\u2019s, has sold out that quadrant of the electorate. Seventy two percent of people in my patch are worse off as we sit tonight. They did not expect 5.9 percent inflation. I invite Ms Wilkinson, Ms Wagner, Mr Gilmore, and the other tumbleweeds over there to get off their backsides, get up in the House, and tell us tonight why they broke their promises to the people of New Zealand and to their constituents.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000657\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI ask why the member for Tauranga\u2014the Perry Mason in his own lifetime; I forget his name\u2014does not get up. He loves going on the Breakfast TV show and waxing eloquent about his golf handicap and how he got gold membership of his local golf club. Well, he will be able to afford a membership with his tax cuts, but a pensioner in Tauranga will not, and a person earning under $30,000 will not. I invite the next speaker to show some intestinal fortitude and tell us why National members broke their promises.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022 data-id=\u002282eaefd3a04e45ba88cc541688eabb6b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000658\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002282eaefd3a04e45ba88cc541688eabb6b\u0022\u003EMICHAEL WOODHOUSE (National):\u003C/span\u003E I begin by congratulating the member Mr Boscawen on the aplomb with which he is able to build matters relating to the emissions trading scheme into every single call he takes in the House. Tonight was a bit easy, because there was a little bit of that topic on the inflation figures. I think we need to make it a little bit harder for him. I propose a bit of Order Paper bingo, and I hope that when the following bills come up, he is able to mention the emissions trading scheme with the same aplomb: the Cultural Property (Protection in Armed Conflict) Bill, the Gambling Amendment Bill, and the Oaths Modernisation Bill. I look forward to those bills coming to the top of the Order Paper and hearing how he will handle mentioning the emissions trading scheme in debate on those bills. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000659\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003EI look forward very much to talking about the many, many good things in this Budget, but I cannot resist addressing some of the nonsense that has been spoken by our friends on the other side of the House. Their response to this outstanding Budget has been, frankly, anaemic, weak, half-hearted, and quite misleading. I will start with Mr Nash and his Rolling Stones tie. He said: \u201C(I Can\u2019t Get No) Satisfaction\u201D. Well, that is not what we have heard. I take the issue of the inflation rate. It has been mentioned, and it is true\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000660\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002267ec6ee679334c93899937ebdb063133\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: What goes around comes around.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000661\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ab9048d0564c4db1a1ebe96be2878989\u0022\u003EMICHAEL WOODHOUSE\u003C/span\u003E: That is right. I think that has been proven. Yes, inflation is higher this year, for reasons that are well understood by everybody but the Opposition. But the Opposition will not tell people that this is a one-off adjustment. Next year it will be 2.4 percent, the year after it will be 2.4 percent, and the year after that it will be 2.4 percent. What happens to the tax cuts? They stay and endure for a very, very long time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000662\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222e83ec4ee4eb4154853eea6d0c50167c\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Bad mistake tonight, sonny boy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000663\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223cdad06d07684ae49e45332efa05337a\u0022\u003EMICHAEL WOODHOUSE\u003C/span\u003E: That is not the mistake. We know that there is absolutely no doubt that the inflation figure would have been much, much higher had this been a Labour Budget. It would have been materially higher. Labour\u2019s spokesperson on finance, Mr Cunliffe, said as much in the New Zealand Herald this morning: \u201CIf Labour were writing today\u2019s Budget, it would spend more than National to ensure the recovery from recession remained on track.\u201D So there it is: Labour would spend its way out of recession, and continue to tax the heck out of hard-working New Zealanders. Well, that worked for Greece! It worked for Portugal! It worked for Italy and Spain! The UK is in a similar mire. Mr Cunliffe would take New Zealand down exactly the same tax-and-spend track that got those countries into trouble into the first place, and it would not stop there. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000664\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003EI will mention the emissions trading scheme. Labour\u2019s emissions trading scheme would have imposed double the cost, and it would have been introduced sooner than this Government\u2019s scheme. That would have added to inflation. More consumption leads to higher borrowing, and higher borrowing drives up interest rates. That is an unacceptable burden on hard-working New Zealanders. Electricity prices went up 72 percent under the 9 years of the previous Labour Government and I have no doubt that that would continue were Labour back in Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000665\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003EWhere is Labour\u2019s alternative budget? It does not have one. Labour does not know what it would do. Labour members crusaded around the country in a bus that said \u201CAxe the Tax\u201D. They did not need a bus; they could have saved on gas and travelled in a two-door Morris Minor. That is about as much interest as they got. They would have had enough room for a suitcase and a six-pack. But the slogan did not ring true. Would they axe the tax? We do not know, the public do not know, and the commentators do not know. The reason is that even Labour members do not know. Labour members cannot even make up their minds on whether to axe the tax they said that they would axe. That confusion was still evident in Mr Cunliffe\u2019s first call about loss attributing qualifying companies. He saw them as terrible things. I think he said that, yes, Labour put the system in place, but it saw it used for purposes that were never intended. God forbid that loss attributing qualifying companies were used to attribute losses! That is consistent with the sort of confusion around the tax arbitrage that Labour created over 9 years. These arbitrage measures are being put down. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000666\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003EI really want to focus on the last thing that, unfortunately, Labour members still do not get. Three-quarters of income earners will now have a top tax rate of 17.5 percent, which is nearly half what they had when the previous Government came into office. For that reason alone, this Budget will be applauded right around the country by all but the 20 percent of people who still support Labour.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022 data-id=\u0022e63fe97c5921464a854b90d89bf99451\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000667\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e63fe97c5921464a854b90d89bf99451\u0022\u003EHon LIANNE DALZIEL (Labour\u2014Christchurch East):\u003C/span\u003E I am very disappointed in this Taxation (Budget Measures) Bill, because it is not ambitious for New Zealand. Nothing in this Budget is ambitious for New Zealand. The only step change that I could see in this Budget and in this bill is a step back, not a step up. I would have thought that a step up was what the Government was talking about when it talked about a step change, but, no, we find it is a step back. I found in the regulatory impact statement on this bill that the Government was looking to achieve a step up in economic growth by improving the incentives to work, save, and invest. Well, that is not a very clear message to the people to whom I have been talking about the implications of this Budget in the lead-up to it today. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000668\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003EThis bill is not about providing a brighter future for the vast majority of New Zealanders who\u2014I really would like the Prime Minister to hear this\u2014contribute to the economic, social, cultural, and environmental aspects of what defines us as a nation. The Prime Minister dismissed the entire significance of their contribution to our nation when he told them not to be envious of the huge decreases in tax that the wealthy were to face. He told them that those who earned the most would get major increases to their income, increases beyond even the weekly earning capacity of some of the people who will receive the smallest additional amount. But he told people not to be envious of the wealthy, and the reason that he told them not to be envious was that we had to do something to assist those people because we needed to keep them in New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000669\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003EWell, the front page of the Dominion Post this morning had a very interesting article about who these valuable people were: lawyers and accountants. This is the first time that I have ever heard anyone describe lawyers and accountants as being major contributors to the productive economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000670\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f6e775db836c43aab67355cab9211732\u0022\u003EHon Trevor Mallard\u003C/span\u003E: That\u2019s you and me!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000671\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227162d0bd342e441cb3aad211414b6e7f\u0022\u003EHon LIANNE DALZIEL\u003C/span\u003E: That is Trevor Mallard and Lianne Dalziel. We are among these major contributors to New Zealand\u2019s economic capacity. How extraordinary! It is absolutely extraordinary.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000672\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221fb8d8db-3e96-49c7-ab1c-b7916a50e30e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002258c85608e6974d64bd54158b99c05023\u0022\u003EHon Steve Chadwick\u003C/span\u003E: I\u2019d be jealous.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000673\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cd52886a765249baada8bd6021469bca\u0022\u003EHon LIANNE DALZIEL\u003C/span\u003E: Are you jealous of me? I think members should be jealous. They should be envious of me because I am a lawyer, so I am one of the people who the Prime Minister thinks are so valuable that he wants to encourage us to stay in New Zealand. Well, I am determined to stay in New Zealand, and I am determined to make sure that we reclaim the Treasury benches in this country at the next general election. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000674\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003EScientists were also included in the list. Now I buy that. I agree with John Key that scientists are a valuable contributing factor with regard to our productive economy. The real economy needs more scientists to work in it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000675\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002255bfef3ec8734f40b25fe33dc1c734ea\u0022\u003EMoana Mackey\u003C/span\u003E: But they don\u2019t earn over $70,000.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000676\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b159d682f26e458298886a79fabaedaa\u0022\u003EHon LIANNE DALZIEL\u003C/span\u003E: No, they do not earn over $70,000, but I will come to wage rates in a minute. We actually get to the nub of the problem\u2014and scientists are included in this\u2014when we get to nurses. Nurses do not earn enough to put them into the extremely wealthy category. What is absolutely extraordinary is that\u2014[Interruption] I am listening to all of the National MPs, because I want it to be recorded in Hansard that the deputy chair of the Commerce Committee, Aaron Gilmore, the Dunedin list MP Nicky Wagner, and Simon Bridges are saying, when we are talking about nurses, that yes, they are in the extremely wealthy category. I said nurses had not been put into the extremely wealthy category, and \u201CYes, they are.\u201D is what we heard back in a barrage of interjections from the National Party members. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000677\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003EI make the point and put it on the record that nurses earn as much as they do because of the pay jolt that the previous Labour Government gave them because of the problems created by National. National opposed the pay jolt. In fact, National criticised the previous Labour Government for spending what we did in the public health system and for giving the pay jolt to nurses. Anyway, let us look at what National said. That pay jolt only works in the public health sector. How many nurses do members think are paid over $70,000 a year to work in rest homes? How many do members think? I think it would not be many. So let us look at what the Nurses Organisation said on the front page of the Dominion Post this morning, which was that nurses with 5 years\u2019 experience earn on average $60,000 per annum. So they do not even reach that category. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000678\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003EWhy have those professionals be singled out by National? It is to stop them leaving the country. But Statistics New Zealand tells us that workers across all sectors leave the country. Housekeepers, restaurant workers, drivers, and labourers are also among the top 10 percent of occupations of people who leave New Zealand, alongside nurses, teachers, and finance and sales professionals. I tell this House that these changes are not about reducing the tax paid by housekeepers. I am sure that Bill English has worked out exactly how much more he will receive in this pay packet each week, but I bet he has not worked out how much his housekeeper will receive, because that person will not receive very much, at all. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000679\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003EThe issue is actually not just about low-paid wage earners, as well. I know that we have talked about them tonight. But I have been talking to taxi drivers, other self-employed people, and small-business owners, and they say they are gutted by the increase in GST. It will put their precarious businesses under a real threat of failure. I know that National does not give a toss about small to medium sized enterprises, and certainly not about the self-employed. But when those businesses have to put 15 percent on their GST accounts, they will know that their precarious businesses are really under threat of failure. I have had conversations leading up to this Budget day with many taxi drivers. We use taxis a lot these days, and taxi drivers said they were very worried leading up to this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000680\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003EI had my first post-Budget conversation with a taxi driver in the dinner break, before I came back to the House. He said to me that when he had heard John Key say people should not be envious of the wealthy for receiving much bigger tax cuts then he was, he was reminded of the expression \u201CLet them eat cake.\u201D He was a very, very intelligent and capable taxi driver. Tonight he said that if there was a Bastille he would storm it; that is what he said to me tonight. That was absolutely extraordinary, and I said to him that I would quote him in the House tonight. He said that was great, and he would down tools and storm the Bastille\u2014he would switch the key off in his taxi, and he would storm the Bastille\u2014if we had a Bastille to storm. That taxi driver gets something that John Key simply does not get: it is not tax that is holding back incomes in this country; it is wages, and it is the income-earning potential of our small to medium sized enterprises sector. That is what holds New Zealand back, yet this Budget does nothing to increase wages, and it has nothing to do with improving the productive capacity and the earning ability of our small to medium sized enterprises sector. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000681\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003EMy taxi driver tonight knew the figures; he knew that Paul Reynolds was to receive over $6,000 more in his pay packet every week. He knew that the Prime Minister and Cabinet Ministers were to receive hundreds of dollars extra a week in their pay packet. He did not know what the minimum wage earner would receive. He did not know that, because the minimum wage earner\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000682\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022641fdadeedf4466d94564f822dc352fb\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: I raise a point of order, Mr Speaker. I know this debate is robust; this is a tax debate. But inane, endless barracking as the speaker is trying to speak, even though the member tried to take advantage of the microphone to combat it, is beyond the pale. Robustness is fair enough, but inane barracking is for the street.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000683\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d6d9b6b79eea4642b3e8c160990df13f\u0022\u003EThe ASSISTANT SPEAKER (Hon Rick Barker)\u003C/span\u003E: I thank the member, but I did call for order in the House. I say to people that this place can become a bit excitable on occasions, but members have a right to free speech. Free speech should be able to be heard. Of course we invite interjections, and I am sure the Lianne Dalziel responds to them and likes the cut and thrust of the debate, but it should not drown her out.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000684\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f80f3e94e9c74164bad2a36cb9d6254d\u0022\u003EHon LIANNE DALZIEL\u003C/span\u003E: What my taxi driver did not know was how much someone on the minimum wage would receive, which is that such a person will receive an extra $4 a week. Someone who earns five times the minimum wage will receive over $50 a week. Five times $4 is $20, so why is someone in that position to receive over $50? My taxi driver has worked it out\u2014this is a terribly unfair Budget, and the bill that is before the House today is very unfair. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000685\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003EThe last thing that I ask is why this is being done under urgency. This legislation is to take effect from 1 October, and today is only 20 May. We should have time for the bill to have a short period at the Finance and Expenditure Committee, and for public feedback to be given on it. Why are we not to have any public feedback? The Government does not want it. It does not want to hear from the public on this issue; it does not want to hear a single word. This is a tax swindle, not a tax switch.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002292824476-4e66-4052-8435-b049833d8b83\u0022 data-id=\u0022fcdfb6997cf941a8ae7c2aa071bd8739\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000686\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022fcdfb6997cf941a8ae7c2aa071bd8739\u0022\u003ENICKY WAGNER (National):\u003C/span\u003E I am enormously pleased to be supporting the Taxation (Budget Measures) Bill in the second reading debate. Today\u2019s Budget is a cracker. It promotes growth and competitiveness, and provides the right incentives for Kiwis to work, to save, and to invest. This bill cements these gains. It is good for New Zealand and it is good for future generations of New Zealanders. There has been a whole heap of wide-eyed histrionics from the Opposition: overzealous shouting, red-hot rhetoric, and numerous claims that are totally without basis or fiscal common sense. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000687\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003EI will inject into the debate some independent factual analysis from financial specialists. My comments will be based on the regulatory impact statement prepared by Treasury and the Inland Revenue Department. Treasury and the Inland Revenue Department understand our economy. Their job is to give independent financial advice to the Government. This is what they say in their regulatory report: \u201Cofficials from Inland Revenue and Treasury both agree that \u2026 the \u2026 tax reform package as a whole, will \u2026\u201D\u2014contrary to Lianne Dalziel\u2019s statement\u2014\u201Cachieve a step up in economic growth by improving incentives to work, save and invest\u201D. New Zealand needs this. They said it will \u201Cimprove the fairness, coherence and integrity of the tax system by reducing opportunities to avoid tax\u201D. New Zealand needs this. They say it will \u201Cresult in a tax system that supports New Zealand\u2019s competitiveness globally in a sustainable manner.\u201D New Zealand certainly needs this. This is what Bill English and the National-led Government set out to achieve, and we have been successful. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000688\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003EIt was great to see that 80 percent of New Zealanders in the Close Up poll tonight supported this Budget. It was also very interesting to hear from Colin Espiner, who said that this Budget was better than last year\u2019s effort and probably trumped anything Labour came up with in the past 9 years. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000689\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003ELet us have a look at this regulatory report. This report provides an index that analyses each taxation measure as to how it affects taxpayers and how it supports increased efficiency of the system, improves equity within the system, and strengthens the integrity of the system. All measures were rated as increasing efficiency and some, such as removing the depreciation loading, were rated as having significant improvements in efficiency. All measures were rated for equity. Again, removing the depreciation loading gave a significant improvement in equity, as did addressing the GST base maintenance that closes the loopholes for largely fraudulent taxpayers. All measures were rated for integrity. In this case, the 60 percent thin capitalisation threshold, the management of loss attributing qualifying companies, and the GST base maintenance have significantly improved the integrity of the tax system. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000690\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003EI repeat: today\u2019s Budget\u2014and this bill, which implements it\u2014is a cracker. It promotes growth and competitiveness and provides the right incentives for Kiwis to work, to save, and to invest. It is good for New Zealand and it is good for future generations of New Zealanders. I congratulate Bill English on a job well done.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u00224ac82483d0f8432997fc74099e687195\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the Taxation (Budget Measures) Bill be now read a second time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 67\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 58; ACT New Zealand 5; M\u0101ori Party 3; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 52\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 43; Green Party 9.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EBill read a second time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000691\u0022\u003EResult corrected after originally being announced as Ayes 67, Noes 53.\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000692\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u002288b48b5f16104d159933cb69899718d3\u0022\u003EIn Committee\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000693\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022ba8a465c9faf4c5c8fbc913f27e03988\u0022\u003EPart 1  Personal tax cuts, company tax cuts, and GST rate increase: 1 October 2010 start\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022 data-id=\u002263bb7db5969c42ddbd314ecd28dded6e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000694\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002263bb7db5969c42ddbd314ecd28dded6e\u0022\u003EHon TREVOR MALLARD (Labour\u2014Hutt South):\u003C/span\u003E We are at the technical stages of this bill, the Taxation (Budget Measures) Bill, where there is an opportunity to go through part by part and within the parts. Part 1 is the most substantial, although I think that it is fair to say that Part 2 reflects a lot of what is in Part 1 and some additional things. Part 3 may be described as a bit more technical and not quite as substantive, in the way that these things work. There will be, within Part 1, areas that the Opposition are supportive of and there will be areas within it that we are opposed to. I think, probably, in my first call that it is worth going through the areas that we are supportive of and asking the Minister in the chair, the Hon Peter Dunne, a couple of questions, because there is room for some explanation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000695\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EStarting off with that, I ask the Minister whether he can give some explanation as to the reasons for the CPI treatment of tobacco price increases. I think these are being excluded from CPI adjustments for the purposes of the benefit, of national superannuation, and, I understand, of war pensions. That is something that I can vaguely remember the background to and quite a lot of discussion on. But I think that it would be good if members who had not focused on that issue had an explanation of it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000696\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EOn the question of depreciation, again, this, at first glance, is pretty technical and might not mean much. As far as depreciation on buildings for rental purposes is concerned, it is fair to say that the Opposition is broadly supportive of this part, although later, when we focus more on short-life depreciation of assets, there will be more debate on that area, because the Government is yet to convince the Opposition that its plans in that area are appropriate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000697\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EAs far as thin capitalisation is concerned, the changes in the rules are logical. I think that giving the ability to shift the \u201Csafe harbour\u201D regime from 75 to 60 percent and the ability for the Inland Revenue Department to look more carefully at transactions under or over that threshold are matters that I do not think there will be much argument on from this side of the Chamber.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000698\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EIf we look at two areas, at personal tax cuts and the GST increase, there will be substantial opposition from the Labour Party and, I expect, from the Greens as well. As far as company tax is concerned, it is an area where we would like to have more discussion with the Minister to work the issue through. Members on this side want some reassurance that we are not just moving to further subsidies for Australian banks. I think the Minister is pretty aware of the views of some members on this side\u2014that is, for New Zealanders the company tax rate is essentially withholding tax. In the end, the people to whom the dividends are paid or who sell the company effectively end up paying the tax. For overseas owners, it is effectively the final tax\u2014certainly for the New Zealand taxation system\u2014that they pay. The likely major beneficiaries of this will be the Australian banks. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000699\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EAs I move through, I say that the Inland Revenue Department has done a good job with major litigation over recent years. I think the banks thought they would be able to see the department off, and I am pleased they did not and are paying. That is not exactly part of this, but the point I make is that the very people and institutions that have been forced by the courts to pay their tax appear to be being forgiven some of that tax in the future through the changes we are making here. Of course, I am not asking the Minister of Revenue to identify individual taxpayers, but I would like him to give an indication as to groups of taxpayers that are most likely to benefit from this change, and where it is a withholding tax rather than washing out as part of a final taxation rate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000700\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EI want to focus the major part of my speech on GST and personal income taxes. The more and more we look at the detail in this particular area, the more uncomfortable the Opposition is getting. We see a change to the rates of income tax from 38 cents to 33 cents for people who earn above $70,000. Frankly, I would find it pretty hard to argue if there was a threshold increase to $100,000 or even $120,000. I would not find it that hard to argue with if the vast majority of people who voted for the National Party at the last election had their tax effectively cut from 38 cents to 33 cents at the margin. It is not something I would support or promote\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000701\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e1e424c5c51c46e3a01dd855b35c5326\u0022\u003EChris Tremain\u003C/span\u003E: The vast majority of people who voted for National were under that threshold.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000702\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c7d83ec3c6f245449f435aa9d386a389\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: I tell that member, because he may not understand this, that at the margins we now have, working families are paying the top marginal tax rate. That is what the Prime Minister told us. I know the Prime Minister gets a bit loose; he is a bit Abbott-like with the truth every now and again. He gets a bit enthusiastic and he is not always right on the facts, but I believe\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000703\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229b67d1a87a8b465ebe1c762773da90cd\u0022\u003EChris Tremain\u003C/span\u003E: Three-quarters of New Zealand workers\u2019 tax is capped at 17.5 percent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000704\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002215f2ae5cd385480aa39d2e6a0c2eac4f\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: That member can tell me if I am wrong. Chris Tremain can tell me that the Prime Minister is a liar if he wants to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000705\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f26b2fbbd6874d91bc399089bd578bc5\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: The member cannot use the word \u201Cliar\u201D\u2014[Interruption] I am on my feet. The member said \u201Cthe Prime Minister is a liar\u201D. Under Speaker\u2019s ruling 43/6, members cannot use the word \u201Cliar\u201D. I ask the member to continue.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000706\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002262d4891124034cd6a9701813088b05d7\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: I do not think the Prime Minister is a liar, but Chris Tremain might be contradicting me\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000707\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c61ab572fc4442619c8edc09dc52cd77\u0022\u003EChris Tremain\u003C/span\u003E: I raise a point of order, Mr Chairperson. If you alleged that the member called the Prime Minister a liar\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000708\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224bc22feecc4e4c658f579eb877dcc7db\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I have ruled, and the member knows exactly what I said. Members cannot refer to anyone as being a liar, nor to say that they are not a liar. I know that the member knows what I am saying. I do not need any help in this matter. I invite the member to continue. I know it will be a robust debate over the next few hours, and I ask him to continue in that vein.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000709\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002230bc35f668e648c48f42e129eefa61e7\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: I raise a point of order, Mr Chairperson. It may be that we do not waste the time of the Committee with this, but I invite you to very carefully consider your last ruling, and I think I might be joined by some colleagues across the aisle. If it is the case that we are defending somebody by not calling them a liar or saying they are not a liar, we are in difficulty.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000710\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002283aed3ed22824773b4975ec287e27c20\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I am on my feet. Let me say this: the slate is clean.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000711\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022293c9c7926ff4afabd36b87dcdaa2628\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: I thank the Chair; I am glad we got there. I want to really thank Chris Tremain for his intervention as it was particularly helpful to get the truth on to the table, whichever way it went\u2014whether he was right or the Prime Minister was right, or whichever side of the National Party was accurate. We know that no one voted for the Prime Minister to get a $1,000-a-week tax cut. That is what he has come to this House to promote and vote for. Some of his mates will get tax cuts that are seven times that size. Some of his mates\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000712\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022578f6f0563c042fbae790996d4fb3ffa\u0022\u003EPaul Quinn\u003C/span\u003E: That\u2019s exactly what they voted for.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000713\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002260ecca486008462d8088ae34221e71a0\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: No one voted for that. I am saying that most decent Tories would have accepted a lifting of the threshold to $100,000 or $120,000. They would have thought that that was fair\u2014[Interruption]\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000714\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223d939f662703498287a80fe3362d91d4\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: I raise a point of order, Mr Chairperson. It is an absolute rule in the House that a member cannot move his or her seat to take advantage. \u201CMr What\u2019s-his-name\u201D sits right at the back in the cheap seats, and he has moved his seat to interrupt my colleague.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000715\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fd64b8b938d54a4db2dd0102b00d3df7\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I thank the member for that; the member is correct. I say to Mr Quinn, the member on my right, that interjections are fine, but he also brought me into the debate by saying \u201Cyou\u201D and he mentioned the member by his first name, not his full name, which one cannot do. I know that the member\u2019s seat is usually at the back and he has moved forward. I am happy to accept interjections and I am happy to acknowledge that this is a robust debate, but I ask the member to tone it down. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000716\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022badb0a39-849c-462a-b32f-77fc017c9fc2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fda03f3c521d4ab6b29d1dc57f816615\u0022\u003ESimon Bridges\u003C/span\u003E: Mr Speaker\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000717\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002279ed293c3f50432c9db75e545aae7e66\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I have ruled on this matter, and I am inviting the member to continue. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000718\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220789cf3aa8684a8d9e73bfead58df244\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: Thank you\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000719\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022badb0a39-849c-462a-b32f-77fc017c9fc2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226ed477363f354ae68a7a0664102c71d6\u0022\u003ESimon Bridges\u003C/span\u003E: I raise a point of order, Mr Chairperson. Mr Cosgrove referred to \u201CMr What\u2019s-his-name\u201D. I thought we had to use correct names in this House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000720\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221f01db92025b47fc91912f6903381247\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: This is getting silly. I thank the member for that intervention. The member knows exactly what needs to be done. I am inviting Trevor Mallard to continue. He has 1 minute 34 seconds to do so.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000721\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fe22e5e88ae74dacb826265497c315fc\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: The point I am making is that these tax cuts are inherently unfair. They are absolutely unfair because in the end, although some loopholes are being closed to give lower and middle-income people a little bit of relief, a massive GST impost is being put on those people to give the Prime Minister and people on similar incomes $1,000-a-week tax cuts. No one from the National Party, and certainly no one who ran against me in Wainui\u014Dmata, told the public that they would be voting for the Prime Minister to get a $1,000-a-week tax cut. We know that if National members had said that the Prime Minister would get a $1,000-a-week tax cut, they would never have been elected. If they had told the truth, if they had had integrity going into the election campaign, they would not have been elected. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000722\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EI finish the way I started an earlier speech, which is to congratulate Peter Dunne on the minor change he made to this legislation to make it slightly more palatable than it might have been.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022 data-id=\u002264d61c17c1434f4c91bae422af3b8091\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000723\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002264d61c17c1434f4c91bae422af3b8091\u0022\u003ECRAIG FOSS (National\u2014Tukituki):\u003C/span\u003E Part 1 of the Taxation (Budget Measures) Bill deals with some of the technical issues, as the previous speaker, Trevor Mallard, said. They were probably the only couple of words he got right. From there he departed a bit, but he was right in saying that Part 1 is the technical part that addresses the schedules, the changes in the income tax rate, the changes in the portfolio investment entity rates, the changes in company rates, and, of course, changes in GST rates. It also provides the mechanism for amendments to the Income Tax Act 2007, and their wording, so that we can have transitional rates, because much of these proposals move in halfway through the financial year. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000724\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EPart 1 is quite substantial, and I look forward to the Greens speaking on it, because it proposes an increase in GST. As members opposite have said, GST is a tax on consumption. I note that in many speeches in this House the Greens say that they are opposed to consumption, so presumably they will be speaking for this part of the bill putting a tax on consumption and perhaps even slowing down consumption.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000725\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EOther clauses in this part point to an encouragement in relation to financial assets, where portfolio investment entity rates go down from 30 percent to 28 percent. So, for once, I am looking forward to the contribution of Green members, to see whether they would encourage an increased tax on consumption a movement to more financial assets. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000726\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThis is a technical part and I have been reading some of the provisions to do with GST. I was trying to figure out how on earth one would write this bill if the GST clauses included exemptions for fresh fruit and veges. In the whole bill there are 50-odd pages dealing with GST. Apparently that absurd suggestion in relation to fresh fruit and veges was an opinion from the Labour caucus, but not from the leader, I understand\u2014and I am sure other members may correct me on that. We have a world-renowned tax on consumption in New Zealand. In fact, this very clean and crisp tax was brought in by the party now in Opposition\u2014some of its current members were either near or in Cabinet at that time; they were definitely in Cabinet when the rate was increased from 10 percent to 12.5 percent without any compensation\u2014so I will be interested to hear their comments about that. There are no exceptions to GST; it is an across-the-board goods and services tax. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000727\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EOne point seemed to be missed in some of the earlier speeches related to tilting New Zealand\u2019s economy away from consumption towards saving or reducing debt. Of course, if people want to go out and spend their entire after-tax income, that is fine, and 15 percent of that, as proposed in this bill, would attract GST. But, if people pay off their mortgage with their higher after-tax income, which would increase their home affordability, they will get a better bang for their bucks, so their net debt position would improve because of this Budget. If people have positive savings, they will attract tax at 28c in the dollar on their portfolio entity investment regime, as Part 1 changes those rates. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000728\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003ETo be fair, I acknowledge that it was the previous administration that brought in the portfolio investment entity regime in recognition of the imbalances in the New Zealand economy. So I find it curious that members opposite seem to be attacking some of the moves in the bill before us, and I will be interested to hear their justifications for that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000729\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003ETo go back to the GST side of things, can you imagine what would have to be in this bill if it included the proposals from the other side? Essentially a cabbage that is dug out of the ground and an apple that is picked off the tree would not attract GST, but an apple that has gone through the pack-house and been washed and bagged, or a cabbage that has been chopped up, would attract GST. Can you imagine the legislation, the regulation, the holes, and the arbitrage you would have under that regime? The administration of it would far outweigh any gain to the Crown, or any perceived gain to the consumer, because they would have\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000730\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228e1c5196f34d4dc0904b31cf8e4f6847\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I remind the member that he is continually bringing me into the debate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000731\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022684af8c9346c4220981e7c288fea5c0d\u0022\u003ECRAIG FOSS\u003C/span\u003E: I apologise, Mr Chairperson. Someone somewhere would have to pay the impost on that. It would fall on the taxpayer or on small businesses, which a previous speaker was so concerned about earlier. The previous speaker contradicted another speaker on his side when he talked about some court cases today, totally forgetting the outcome of some cases that are now no longer before the court. The other Opposition speaker, who was the Minister of Commerce at the time when all that mischief happened, started to justify them, so again we have contradictions. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000732\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EClause 36 is one of the highlights of this part because it contains the changes to schedule 2, which includes the basic tax rates of PAYE income payments. Subsections (a), (b), (c), (d), and (e) are identified in that clause and I would like to read them for members opposite because they contain some highlights. In fact they highlight the changes, not the transitional rates. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000733\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EClause 36(a) states: \u201Cin clause 4, \u20180.21\u2019 is replaced by \u20180.175\u2019;\u201D, being the PAYE rate. That is interesting because three-quarters of New Zealand taxpayers will be attracting that rate or less. Three-quarters of New Zealand taxpayers will be facing a rate of only 0.175, or 17.5 percent, as they make their PAYE payments. At the next levels, \u201C0.33\u201D goes to \u201C0.300\u201D, and \u201C0.38\u201D goes down to \u201C0.330\u201D, which seems to be causing so much concern to Labour members opposite. There does not seem to be any acknowledgment whatsoever that it was that particular party that took the rate from 33 percent to 38 or 39 percent. It was the first thing Labour members did in regard to tax when they became the Government in 1999. I will be interested to hear their comments on that. If they are opposed to this, it implies that with the $7 billion of extra spending announcements they have already made, they would have to increase personal tax rates, corporate tax rates, savings PAYE tax rates, or GST rates. I thought they were going to axe the tax, but I do not know what they are doing now. I look forward to those members, as we talk about the clauses in Part 1 in particular, telling us what they would do if this Taxation (Budget Measures) Bill were their bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000734\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221dbff07decd74c319d51a48307e350e4\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: No, no, you\u2019re in Government, you\u2019re responsible, you explain.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000735\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228ee0c72a17d3488e8c4b59293cb24904\u0022\u003ECRAIG FOSS\u003C/span\u003E: No, I say to the gentleman from the South Island that the Chairperson is not responsible. I look forward to the comments from the Greens in relation to the increase in the consumption tax, which I believe aligns with their core philosophy. At least the Greens are consistent in their advocacy of a capital gains tax. If I look at the material from Labour when in Opposition and when in Government, there are huge inconsistencies, and we heard that in earlier speeches on the Budget itself. I look forward to those speeches and to this bill being robustly debated, but, overall, Part 1 is the real detail and the real thrust of the bill, and it is that which is getting the nod from New Zealand as we speak. I will be particularly proud to go on the hustings next year and debate and discuss these points.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022 data-id=\u0022aeba61cf5cf74eed89f7a5ce57913f07\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000736\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022aeba61cf5cf74eed89f7a5ce57913f07\u0022\u003EHon DAVID CUNLIFFE (Labour\u2014New Lynn):\u003C/span\u003E Sometimes people watching Parliament wonder why we appear to disagree all the time. It is certainly true that there are some things in the Tax (Budget Measures) Bill that we agree on. For example, I think both sides of the Committee agree on the need to improve New Zealand\u2019s parlous savings rate. The debate on the savings and tax interface is about whether the measures in the bill will get us there, or whether some alternative measures would be better. Likewise, both sides of the Committee agree very strongly on the need to rebalance our economy away from the tax privileges of the property sector towards a more neutral tax playing field. Again, the question is whether the measures in the bill get us to that objective.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000737\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b5e26d403caf46c49636a6a87c26548e\u0022\u003EHon David Parker\u003C/span\u003E: They say they want that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000738\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002214dbc26c53a84367b79f5f72edc1c282\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: They say they want that, but in fact the measures do not get us very far, and we will come to that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000739\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThe previous speaker, the member for Tukituki, said that three-quarters of taxpayers will be on the 17.5c tax rate. I wonder whether the taxpayers who go to the Government\u2019s online calculator to see whether they will be better off or worse off have factored in what that calculator rather sneakily leaves out: that next year they will face 6 percent inflation. That means that everybody has to take 6 percent off his or her gross income before working out whether he or she is better off or worse off. For example, by the time a family earning as much as $78,000 with two kids in preschool gets their great tax benefit, they face higher GST, paying more for childcare, and inflation, and they will be 55 bucks a week worse off. So Labour members will be working with the public\u2014the listeners and the viewers\u2014over the next week or so during this debate to uncover some of the hidden traps, the fine print, and the places where the gloss is not as good as people were led to believe it would be.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000740\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThere has been some discussion of whether GST should be on or off fruit and vegetables. Labour has not taken a position on it but we think it is worth having the debate. The reason it is worth having the debate is that it is easier to have a comprehensive GST programme when GST is at a low rate, but the higher we raise the rate, the stronger we make the case for a possible\u2014note, \u201Cpossible\u201D\u2014exemption. At the moment, prior to the increase in GST, New Zealand has\u2014wait for it\u2014the fifth-highest level of indirect tax in the developed world. And that is before the increase in GST. The arguments against taking GST off fruit and vegetables are partly based on compliance and partly on definition. But I do not believe that New Zealanders in their hearts would actually find it very difficult to say what a vegetable was. They might look at the members opposite. They might look at, say, the member for Maungakiekie and ask what he has done since he got to Parliament, and whether he would qualify. But that is not very nice, so I will back right off it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000741\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EMr Foss made another point about how fair this measure is. The word \u201Cfair\u201D keeps coming up almost as often as Craig Foss saying \u201CMr Chairman\u201D. What does he say? He says: \u201CMr Chair, Mr Chair.\u201D The word \u201Cfair\u201D keeps coming up, but here is something that is not fair in this bill: 14 percent of the tax refund goes to the top 1 percent of the population. Trevor Mallard is absolutely right: if you are earning a million bucks you will get $1,000 a week extra in your hand. If you are earning a million bucks, do you need anything extra in your hand? I am not asking you, Mr Chair; I am sure you earn much more than that\u2014I am sure you do. But if a person in the real world, the member Mr Foss for example, earned $1 million, he would get $1,000 in his hand. That is not a matter of need. If the Government is to be believed that the country needs to move forward and to address the structural challenges, then the country\u2019s needs should be put ahead of the need of millionaires to get another $1,000 a week in the hand, especially when a family with two kids on $78,000 is $55 a week in the red. That is not fair.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000742\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EOn the question of rebalancing, both sides of the Committee\u2014I think all sides of the Committee\u2014agree with the need to rebalance. What we are wondering is why the Government has lost its nerve. It has taken away only a part of the building depreciation tax allowance. The Tax Working Group said that $1.1 billion a year was sitting there; the Government has taken about $600 million. But it did not touch ring-fencing, which is worth $2.5 billion\u2014it did not touch that. What it did do, rather stupidly, is take $200 million off the depreciation of short-lived assets, which is technology, which is needed for innovation and growth. It is running against the growth objective in order to raise funds, because it did not have the bottle to really take some parts of the property industry to task. So the Government has not achieved the goal. It has not achieved the goal of comprehensive reform to achieve rebalancing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000743\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003ELet us sum up. In this Committee stage, Labour members will be going through the detail of the \u201Chow\u201D\u2014not so much the \u201Cwhy\u201D, which we will get back to in the third reading debate, but the \u201Chow\u201D. Are the measures in the bill going to deliver on the stated objectives of the bill? Will they encourage savings? Frankly, the Government has got a nerve to ask the question. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000744\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225e01ef41a8fe4843acd2e311ad7b835b\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Gutted KiwiSaver.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000745\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002243b7517bdc8c4eff98774f5b5cd2933e\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: It is the same Government that gutted KiwiSaver, as Mr Cosgrove said. Its members said they will return to pre-funding New Zealand superannuation when the country is back in surplus, except they have changed their mind, done a T\u016Bhoe, call it what one likes\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000746\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227233b95d102646cb882411888b78c5db\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Broken their promise.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000747\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002241a6f7d7b7cd4538b57af62a9412a331\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: They have broken another promise. The country will be back in surplus in 2016, but pre-funding does not resume until 2019. When will the Government have the courage to say to senior citizens that it is sorry but superannuation as they know it is for a limited time? Do they have the bottle to do that? I do not know. And if they do not, why not resume pre-funding?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000748\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f162acf8b0f346c2b8f62d3d1fa9de47\u0022\u003EHon Gerry Brownlee\u003C/span\u003E: I raise a point of order, Mr Chairperson. I am surprised that you did not pick up on the unparliamentary comment from the Hon David Cunliffe. Perhaps it is because his rhetoric is normally so filled with unparliamentary comments\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000749\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226dadfb5eedab4da686b6875906feb365\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I want the member to state exactly what the point of order is, and not make a speech.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000750\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022579abafcb5e7466a9df4913dff5cea9a\u0022\u003EHon Gerry Brownlee\u003C/span\u003E: To refer to another member or to any number of members as lacking courage is completely unparliamentary. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000751\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226f39dbba35bd4502886dcc6e11f5159e\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I say sorry to the member. I did not hear that comment. If David Cunliffe did say that, I say to him that in future he must not say that someone lacks courage.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000752\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fb16cdccc2b54938a4b44c0a45bc7dca\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: Thank you, Mr Chairperson. It is certainly good to have Gerry Brownlee back early from his dinner break, at a quarter to 10. We are summing up this part of the debate by showing that there is some common ground between the parties. We agree on the need to encourage savings; we are rather surprised that National has come late to that, but it is good that it has. We agree on the need to rebalance the economy, but we have serious doubts that this bill will get us there. What we disagree with is the \u201CRobin Hood in reverse\u201D of this Budget, which takes from the poor, takes from the forgotten middle class, and gives $1,000 a week to millionaires who do not need it and probably did not ask for it\u2014and it is being done at the expense of the country.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000753\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003ETo make matters worse, this Government is borrowing extra to give millionaires a handout. Next year it will borrow $450 million extra for the millionaire handouts, and that is $1.1 billion extra borrowing over 4 years for the millionaire handouts. Gross debt goes up, and interest payments double and do not come down till 2021. This is not a Government that has got its priorities right. This Budget neither is fair nor fixes the problems.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000754\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EAs this debate continues, Labour members will be showing, for each of the portfolios represented by members of our team, where the sneaky cuts have come, where the loopholes are, where the rules are wrong, and the better way that we could have achieved those objectives that are sensible and that are agreed across the House. We challenge the Government to be open-minded. It is not too late for it to accept sensible amendments. There is a very sensible Minister in the chair. The Hon Peter Dunne looks great on TV without his tie on. We hope that he will accept the odd amendment as the Committee stage goes on. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u002228d49860f77647168061a0c0404d422a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000755\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002228d49860f77647168061a0c0404d422a\u0022\u003EHon PETER DUNNE (Minister of Revenue):\u003C/span\u003E I was not going to intervene in the discussion as early as this, but given that some measures have been put on the Table that there seems to be a measure of agreement about, I thought I would address those now so we could then move on to the more substantive debate about the areas where we disagree on.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000756\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c2172d6f4fd04bb08a1ebea05b4e9a64\u0022\u003EHon David Cunliffe\u003C/span\u003E: We were just warming up.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000757\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002220df390f119149e3b30258a9b8d760fa\u0022\u003EHon PETER DUNNE\u003C/span\u003E: I appreciate that the member may be just warming up, and we have a long way to go yet and it can get very hot before it is all over. Mr Mallard raised a question earlier on about the reasons why the tobacco excise increase had been excluded from the CPI calculations in respect of changes to veterans pensions and New Zealand superannuation. The reason is quite simple: it is not a taxation argument; it is simply because compensation would be made available in due course in the normal course of events for that increase. That increase was made to encourage people to desist from smoking; it seems somewhat perverse to then factor in what would effectively be compensation for that decision that had been made. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000758\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002268a9ac1617204cdabe4a4589724ad2e2\u0022\u003EHon David Cunliffe\u003C/span\u003E: What about the broader 5.9 percent?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000759\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022aad806a6b8294fa696b6afc9c6b87d15\u0022\u003EHon PETER DUNNE\u003C/span\u003E: That is a question we will come to separately. I am answering questions that have been raised by other speakers. I will come to that point in a moment. But let me just say that when GST was introduced in 1986 the rate of inflation, post-introduction, rose to about 18 percent. The effect of that was comparatively short term. It is exactly the same here; if we look at the underlying track for inflation over next year, the year beyond, and the year after, it is around 2.5 percent flat. That, in fact, will mean that the tax changes will not have the negative effect that the member claimed in his address; they will be very beneficial by comparison. One cannot make an omelette without breaking some eggs. The change here gives that short-term boost but, in the long term, as I say, it will even out. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000760\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ELet me come to the question of depreciation, and the issue Mr Cunliffe raised, which I want to pick up on because it is quite critical. The Tax Working Group costed depreciation changes at around $1.3 billion. In fact, when officials retested that calculation, the figure came out at around half that. So when the member says that we picked up on only half the recommendation, in fact we picked up the actual cost, if he follows what I am saying. [Interruption] Let me just work my way through it. The issue there was not so much of saying we would go with only half the figure; when we looked at the size of a figure it was only half of what the Tax Working Group had set it as being. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000761\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe issue then came down to the introduction of the 50-year limit. That is a very practical exercise, given the nature of the buildings that will be categorised as being under 50 years. One may say that that is very easy to get around; I know that one or two colleagues had discussions earlier on about fit-outs and renovations, and I think we had given a pretty clear signal that that is on our agenda. There will be a discussion paper issued by the Inland Revenue Department in due course about how those issues will be handled. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000762\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI wanted to talk about the depreciation loading, particularly the 20 percent excess. The reason for the change is a twofold one: it is picking up on a recommendation from the Tax Working Group and it is also aligning the rate of depreciation to the actual economic rate of depreciation, not the accelerated 20 percent that was there previously. So this is really a streamlining, given the recommendation from the Tax Working Group. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000763\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EMr Mallard also raised a question relating to company tax, and I am tempted to remind him of his arguments, which he knows in reverse very well because they were rehearsed at the time of the 2007 company tax changes. But the reality is this: we live in, as members know\u2014I am not going to lecture on this point\u2014a competitive international environment. Our company tax rate was, even at 30c, out of line with a number of jurisdictions. The international average is around 26.3 percent. We were cognisant of the fact that the Henry review in Australia was likely to recommend a company tax change. In fact, it did. The time frame has been a slightly more elongated one. We felt that, given the scope of this package, it was prudent to make this change now. It certainly gives New Zealand a short-term competitive advantage. It preserves, if you like, the gain that we had when we cut the tax rate to 30 percent a couple of years ago. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000764\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EOn the point about who benefits, Mr Mallard is correct when he talks about the banks, to some extent. But I think the point needs to be made that a lot of New Zealand businesses pitch themselves against that company tax rate. In fact, many of those smaller businesses will be more advantaged by the change in the marginal tax rates than they will be by the change in the company tax rate. Some of the very small sole traders, I think, will do quite well out of that 17.5 percent rate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000765\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI simply wanted to take a call at this point to cover those points. I appreciate that issues relating to the imposition of the GST and the changes in personal tax rates will excite more debate, and I will come back in due course and take part in that.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022 data-id=\u00220d1e8977f21c4027866dab8879e35d4e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000766\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00220d1e8977f21c4027866dab8879e35d4e\u0022\u003EDr RUSSEL NORMAN (Co-Leader\u2014Green):\u003C/span\u003E I take a call to speak on Part 1 of the Taxation (Budget Measures) Bill, and in particular some of the rationale for the tax cuts that are outlined in this part. We have heard some arguments from the Government as to why it is so important that it makes these tax cuts, so I think it is important to examine its reasoning. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000767\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EOne of the reasons given, and probably the predominant one, concerns growth. The Government argues that as a result of these changes we will get increased growth, so it is important to look at some of the historical record and what we know in New Zealand about the relationship between tax rates and growth. We can draw on some case studies. For example, we know that in 1986 we cut the top rate from 66 to 33 percent. If the argument for this tax cut was correct\u2014that it results in increased GDP growth\u2014then one would expect that, if there is some relationship, there would have been an increase in GDP per capita growth after that tax cut in 1986. In fact, from the period 1984 to 1992 the average GDP per capita growth was 0.4 percent. After the tax cuts of 1986 the New Zealand economy flat-lined. So in spite of the rhetoric of the Government, the evidence, in fact, is extremely hard to find. Many, many studies from numerous countries will repeat that evidence: there is a very poor relationship between the top rate of income tax and GDP per capita growth. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000768\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EWe can compare that case to the year 2000, when we increased the top rate back up from 33 to 39 percent. In the 5 years after the increase in the tax rate compared to the 5 years before, GDP growth per capita doubled. So we see that the evidence for the central argument being made by the Government regarding growth is extremely thin. That evidence is not just from New Zealand; it is from the United States and many other countries. If the Government is to rely on that piece of evidence for its argument, then the Government does not really seem to have a leg to stand on. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000769\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe other argument that has been promoted by the Government is labour mobility. One of the key arguments relates in particular to Australia. The Government argues that our tax rates in relation to Australia\u2019s result in people moving to Australia. They also argue that that is the case in relation to wages. I will get to wages in a second. If we look again at the two examples of changes in the top tax rate, we see that we actually get the complete opposite result of what the Government would argue. In 1986 we cut the top rate from 66 to 33 percent. In the 5 years after we cut that top tax rate, we had a net migration of 65,900 people. So in the 5 years after we cut the top tax rate, on a net basis we lost about 66,000 people through their moving overseas. In 2000 we increased the tax rate from 33 to 39 percent. We actually had, in the 5 years that followed that, a net migration gain of about 84,000. So if the argument is that we have to cut the top tax rate in order to keep more people in New Zealand and to attract more people to New Zealand\u2014the labour mobility argument, which is obviously an interesting argument to have\u2014the problem is that the evidence goes in completely the opposite direction. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000770\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EWhether we look at GDP per capita or whether we look at labour mobility, the evidence for the arguments that the Government is putting on the table for the cut in the top tax rate is actually in the opposite direction. That is odd. We would think that the Government, with all its resources and the entire monolith of Treasury behind it, in looking at tax rates and legitimising a cut in the top tax rate would make two arguments in relation to GDP per capita growth and labour mobility, but the evidence in New Zealand is the opposite. The evidence is as plain as day. Anybody can go and look at that evidence; it is freely available. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000771\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EPart of the reason for all of this argument is that there is actually not a strong relationship, at all. I am not arguing that if we increase tax rates we increase GDP per capita, or that if we increase tax rates we increase net migration into New Zealand. In fact, the relationship is not very strong. That is the fundamental truth. None of us here would be able to prove that the relationship is very strong. The relationship is not very strong, so in making this argument there is not very strong evidence for the Government to rely on. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000772\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EI think that one of the arguments that ties into both of these relationships is about relative tax rates. The Minister spoke, for example, about the international environment, and that is a legitimate argument. We have seen a race to the bottom with tax rates, and particularly with company tax rates around the world but also with personal income tax rates, labour has, theoretically, been competing and playing countries off one against the other. Supposedly we have been seeing that race to the bottom and New Zealand has had to lead that race to the bottom. We are leading that race to the bottom. That reality is unfortunate for the Government\u2019s argument. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000773\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EPricewaterhouseCoopers and the World Bank, in their Paying Taxes 2010 report, compared the total tax take. When we look at the headline \u201CIncome tax rates\u201D, we know that it does not take into account everything else that goes with it. We do not know whether it takes into account a Medicare levy, as in Australia; state taxes; or all the different taxes that are allocated. When we look at Australia, we find that the total tax rate that PricewaterhouseCoopers and the World Bank came up with was 48 percent. When we look at New Zealand, and at all of its taxes together, we find that the total tax rate is 32.8 percent. So the New Zealand total tax rate is already dramatically lower than that of Australia. The problem with the Government\u2019s rhetoric\u2014rhetoric we hear constantly telling us that we have to do all of this to compete with Australia\u2014is that it does not stand up against the evidence. The evidence is that Australia is much more highly taxed than New Zealand, and if we look at the World Bank\u2019s Ease of Doing Business report, which is linked into tax rates, we find that New Zealand is rated right at the top of that report. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000774\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EIn relation to both of the key levers that the Government wants to use to promote economic growth\u2014tax rates and regulation\u2014Australia is both much more highly regulated, and much more highly taxed. One could make an argument, if one wished to, that there seems to be a correlation\u2014if we compare Australia with New Zealand\u2014between higher rates of GDP growth, more regulation, and higher tax rates. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000775\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThis part of the bill is justified on the basis that lower tax rates will result in higher GDP growth, but we see very poor evidence for it. To the extent that there is evidence, if we compare ourselves with Australia, we know that New Zealand has much lower tax rates than Australia does. Some of the members opposite disagree with that, but I ask them to go and read the PricewaterhouseCoopers and World Bank report Paying Taxes 2010, which compares the numbers. It may be that the Government does not believe the World Bank and PricewaterhouseCoopers, but although I do not agree with them on everything I think they do have a point: compared with Australia, New Zealand is a much lower taxed environment. So the arguments for this part\u2014the arguments based on GDP growth, labour mobility, and international comparisons\u2014do not have strong evidence. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000776\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EWe have to wonder why this bill is being brought into the House with justifications for which there is not strong evidence. Surely we should have an evidence-based approach to legislating. Just as we should have an evidence-based approach to medicine or to any other field, we should have an evidence-based approach to making decisions about taxation. But the truth, sadly, is that the evidence does not support the Government\u2019s position. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000777\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002280bb95809ddf47b7a5abfe315165a9e5\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I am sorry to interrupt the member. There is a lot of noise over on the Government benches. It is difficult for me to concentrate on hearing what is being said. If members want to talk, that is what the lobbies are for. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000778\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220462bba735e0415cb518c8722903d2ba\u0022\u003EDr RUSSEL NORMAN\u003C/span\u003E: Those arguments go on top of the other arguments in respect of this part, which, of course, are about equity and avoidance. I have already addressed those issues. The issue of equity particularly has been done to death in this debate; clearly these are regressive tax changes. The issue of avoidance is basically about rewarding avoidance behaviour rather than closing loopholes. Thank you. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022badb0a39-849c-462a-b32f-77fc017c9fc2\u0022 data-id=\u002288563b359c644091bbbd9142f1196f3a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000779\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022badb0a39-849c-462a-b32f-77fc017c9fc2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002288563b359c644091bbbd9142f1196f3a\u0022\u003ESIMON BRIDGES (National\u2014Tauranga):\u003C/span\u003E This Budget and this bill are about tax cuts for the many. This is the people\u2019s Budget, and I think that is why Labour members do not like it. That is why they are angry. Actually, I think they were a bit embarrassed when their leader was speaking this afternoon. Labour members had come to the Chamber prepared for a Budget that was about tax cuts for the rich; that is what they thought they were getting. They had done all their sums, and Phil Goff had a pre-prepared speech that he was to give on all of that. But what we have found is that this Budget has tax cuts for the many. Whether one is an employee at any level, he or she is getting a tax cut. In fact, the bulk of the tax cuts are going to those on lower incomes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000780\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022badb0a39-849c-462a-b32f-77fc017c9fc2\u0022\u003ELet me give a few, I think remarkable, facts that show very clearly why this is tax cuts for the many. This is not about doctors, lawyers, and people in those kinds of professions. It is also about cleaners, and the people whom the Labour Party says it thinks it is about. Two-thirds of the tax cuts apply to people on incomes below $48,000, and 73 percent of income earners will now face a statutory income tax rate of 17.5 percent or less. The tax changes that we are seeing in Part 1 are not about the rich. The effect will be felt by those people on low and middle incomes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000781\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022badb0a39-849c-462a-b32f-77fc017c9fc2\u0022\u003EIt is remarkable as well, when we look at these tax changes and tax cuts. Of course we know that, and I will not go through the various rates. The tax rate of 12.5 percent for people in the bottom income bracket, zero to $14,000, has gone down to 10.5 percent. We know all that. But what is also very interesting is that when we go through the various average tax rates, we find that the rates are even lower than that. The average tax rate\u2014I suppose we could say, the actual tax rate\u2014on an income of $48,000 is 15.46 percent. It is not 17.5 percent, but 15.46 percent. For someone on an income of $40,000, the tax rate is 15.05 percent. People earning $35,000 have a 14.7 percent tax rate, people earning $30,000 have a 14.23 percent tax rate, and those on twenty-five grand have a 13.58 percent tax rate. We have not brought a bill to this Parliament\u2014Bill English has not given a Budget today\u2014that is about the rich. The Budget has been about the many. It has been the people\u2019s Budget. We have the people\u2019s princess over there, the people\u2019s daffodil, but this is the people\u2019s Budget. It has not been about just doctors, lawyers, engineers, and consultants. It has been about ordinary Kiwi jokers, such as cleaners and house workers. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000782\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022badb0a39-849c-462a-b32f-77fc017c9fc2\u0022\u003EI can understand why Labour members are quite angry tonight. They thought they were getting something else. They had a caricature of the Budget ready to present and to hoe into. But they have had the rug pulled out from underneath them. We are giving these people\u2014the cleaners, the street workers\u2014an incentive to get ahead. But we are giving them more than incentive to get ahead; we are not doing just that. We are giving them future options, and a desire to get ahead, to make more money, and yes, to get into the top tax bracket. I am not one of those members who think that earning $100,000 is evil.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000783\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022badb0a39-849c-462a-b32f-77fc017c9fc2\u0022\u003EDebate interrupted.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520014c4b9b98024bc3be3f6e61b7bfdfb9000784\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022badb0a39-849c-462a-b32f-77fc017c9fc2\u0022\u003ESitting suspended from 10 p.m. to 9 a.m. (Friday)\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000001\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022053f312c92004e2abb60acc87b5f467f\u0022\u003EThursday, 20 May 2010\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000002\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00227940d9e797584530a8d63436136cc070\u0022\u003E(continued on Friday, 21 May 2010)\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000003\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022d73180e8e65242fd8ab52df479fce5b0\u0022\u003ETaxation (Budget Measures) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000004\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00222c74b25b500849abb7b7f0bc45040d16\u0022\u003EIn Committee\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000005\u0022\u003EDebate resumed.\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000006\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022f00766c579a341b4a0ab2424bc593b0a\u0022\u003EPart 1  Personal tax cuts, company tax cuts, and GST rate increase: 1 October 2010 start (continued)\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u00227f7a6c60d13d4ba7a877d882ef68bf45\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000007\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00227f7a6c60d13d4ba7a877d882ef68bf45\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E We heard some interesting speeches in the Chamber last night. One of the most interesting speeches was the one from Simon Bridges, who stood up and said this Budget was not about the wealthy lawyers\u2014and obviously he is one\u2014but about the street sweepers and the cleaners. Mr Bridges said this Budget allowed the street sweepers to actually get ahead and advance themselves. He thought that an extra $5 a week would allow that to occur. Well, I would argue, of course, that the street sweepers had a chance to get ahead because they had adult and community education. But I can tell members that in Hawke\u2019s Bay there are no more courses going on at the moment. Of course, cutting the education budget in real terms, cutting community education even further, and cutting tertiary education means that this Budget is not about getting ahead at all; this Budget is about going backwards. But I digress. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000008\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI will talk about the GST increases. I will give members a real-world example that Mr Quinn could well learn something from; I think that his mother, who lives in Napier, will be very interested in this. We are talking about the elderly sector. In Napier about 10,000 people rely on superannuation, and that number will increase by another 12,000 in 15 years\u2019 time. That does not mean we will get 10,000 plus another 12,000, because obviously some will fall out of that group. But I am saying a significant number of New Zealanders\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000009\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222334bdd7c4ab4edbb21f7494fa5b7f7f\u0022\u003EPaul Quinn\u003C/span\u003E: They\u2019ll be well looked after, and they\u2019ll do better than most.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000010\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229e9845ca12954011b7ee2cf1d13639ef\u0022\u003ESTUART NASH\u003C/span\u003E: \u2014and again I think Mr Quinn would agree with this, and he must be nearly there, because I think he is going a little senile\u2014rely on national superannuation to get through. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000011\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThese New Zealanders have worked hard for their whole lives. They have worked, they have strived, and by and large they have paid their taxes, no matter what the amount was. We heard that they used to pay 66 percent tax, then they paid 33 percent, and then it went to 38 percent. They have paid tax all their lives, and they do not ask for much. We must admit that our elderly do not actually ask for much, but they know when they are being had.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000012\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fd427be0-7196-4605-b39e-d665553240b0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d9b9f83523bb442891fac85bfaea40fd\u0022\u003ELynne Pillay\u003C/span\u003E: Just dignity.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000013\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a829644904a14c47958edd11d4aedcbc\u0022\u003ESTUART NASH\u003C/span\u003E: That is right, Lynne; they just ask for dignity\u2014they want to retire with dignity. When people have worked all their lives and reach 65, they want to be able to enjoy life. It does not cost much. These people do not receive much income from their superannuation, but they do not complain. They want to go out with their mates and enjoy their bowls. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000014\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EOf course, when adult and community education was cut the elderly were concerned, because that actually took away a lot of the support networks and friendships and clubs that they belonged to. But that was OK\u2014they grumbled, but they lived with that. With this increase in GST, though, they are really concerned, because the increase in GST erodes their spending power. What is worse than that is that we have inflation coming in, in 2011, of 5.9 percent. That is not a Labour figure. Someone said to me last night that that is just scaremongering. Well, I can tell members that that figure of 5.9 percent is not a Labour figure; it is a Government figure. If members look at page 3 of the Minister\u2019s Executive Summary, which is in volume B.2 and B.3 of the Budget documents, they will see that it refers to the figure of 5.9 percent inflation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000015\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EA lot of the elderly in our community rely on interest earned from their savings and investments to top up their national superannuation in order to live a life of dignity and have a decent standard of living. That inflation rate will erode the real spending power and the real value of these investments. We all know examples of this. We all know people who live in big homes and who say that they bought them in 1950 for only \u00A320,000, and we think: \u201CGoodness me, that was cheap.\u201D But, of course, those people would have earned only \u00A32,000 a year then. That is what inflation does: it erodes real value; it erodes the value of investments. An elderly person on superannuation who put away $100,000 and is living off the interest\u2014and the resident withholding tax will have already gone up on that\u2014will find that high inflation erodes those savings. I did a radio interview this morning, and I mentioned this. The guy said: \u201CYeah, but inflation is coming down after that. It\u2019s a one-off hit.\u201D It is a one-off hit; we admit that. But that does not mean that prices will drop; it just means that prices will increase by 5.9 percent, then increase by 2.4 percent again. It does not mean that prices will drop again. So the reduced value of investments created by the one-off hit of the GST increase will hit superannuitants a lot harder than I think the vast majority of people think. That is why I have a major concern about this increase.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022 data-id=\u002248b0cf954ac04f3882ddf411137cd1ef\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000016\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002248b0cf954ac04f3882ddf411137cd1ef\u0022\u003EPAUL QUINN (National):\u003C/span\u003E It is important to realise that the genesis of yesterday\u2019s tax announcements lies in the changes made by that chappie called Cullen in 1999, when, driven by his fantasy of what he called \u201Crich pricks\u201D, he introduced an envy tax. All this bill does is remove the envy tax that Cullen brought in in 1999. That enables people, the true professional people in this country, such as doctors and hard-working New Zealanders\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000017\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227381b5b8d4774dffb45cb96b4ae23f5d\u0022\u003EChris Tremain\u003C/span\u003E: Teachers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000018\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224af0b98557e9400bae24d61ad2b704b3\u0022\u003EPAUL QUINN\u003C/span\u003E: Exactly. It enables those people to get on. They are the people whom that shameful former Minister of Finance hit when he was trying to get at what he called \u2018rich pricks\u201D. The fact of the matter, as we know now, is that none of the real rich people\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000019\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222644476a2c4f4fdeb78d07aaa37c4835\u0022\u003EStuart Nash\u003C/span\u003E: I raise a point of order, Mr Chairperson. I take personal offence at the member calling Dr Cullen shameful. I think that is a slur on his character, and I take offence at it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000020\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022aeeb9de2b5e8413e9a7b720a759f03d2\u0022\u003EThe CHAIRPERSON (Eric Roy)\u003C/span\u003E: There are two measures here. The first is that members can take offence and register that to the Chair. The second test whether the offence is in fact one that should be accorded some response from the Chair. The kind of test of that\u2014and I think the member should look at Speaker\u2019s ruling 45/1\u2014is whether the House itself is offended. Otherwise members would be jumping up and down the whole time. But having said that to that member, I say to the other member that when we start getting into what we might call \u201Con the verge debate\u201D, the House itself descends to a level that is not productive. This is early in the day, so can we just have a bit of generosity.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000021\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c5551780060c4eca9490c643804319a4\u0022\u003EPAUL QUINN\u003C/span\u003E: You mean I should go soft on the Opposition, Mr Chairman. I am happy to go very soft on the Opposition. One has only to look at the straw polls that have flowed across the country to see that 80 percent of the populace, 80 percent of the people whom Labour alleges it represents, are actually in favour of this Budget. It is about time the Opposition benches conceded they are out of touch not only with ordinary New Zealanders across the board, across every career group including professionals, but with ordinary working people whom Labour alleges it represents in the House. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000022\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003EThe polls on this Budget demonstrate that people support this Government. That is why they voted us in\u2014to undertake measures like this. I know that that will be hard for Labour members to accept, but my advice during the course of this debate is that they concede the Budget is an outstanding one, and quickly move on through this debate. They will then be able to go home early this afternoon and actually get re-engaged with their constituents\u2014and find that those constituents support this Budget. That is my advice to the Opposition.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022 data-id=\u00225dbc983eb9f9496b9103aadee2fc5134\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000023\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225dbc983eb9f9496b9103aadee2fc5134\u0022\u003EMOANA MACKEY (Labour):\u003C/span\u003E It is always an honour to follow on from Paul Quinn, who, apparently, overnight has spoken to every person in New Zealand and is testament to the old adage that ignorance never sleeps. Mr Quinn talked about Labour\u2019s \u201Cenvy tax\u201D in 1999 when we raised the top tax threshold. At least we went out on the election campaign trail and were honest about what we were going to do. Mr Quinn\u2019s party, the National Party, went out on the election campaign and promised that it would not increase GST. In 1999 Labour did exactly what it promised. We did not hide anything during the election campaign, and I think that is an important distinction. Mr Quinn might not think so; he might think it is OK to say one thing to the voters of New Zealand before the election and do the exact opposite afterwards, as National said before the election that it would not increase GST, but has increased it afterwards. The people of New Zealand will see that for what it is, which is a tax swindle. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000024\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003EMr Quinn referred to the Close Up poll last night where he said 80 percent of people are for this Budget. I tell Mr Quinn that that is because the people who are opposed to it could not afford 75c a text to phone in like his rich mates can. The National research unit would have been sending emails around telling people to text in and make sure they say that they are for the Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000025\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225935c9a80d724ba5b0e76362a332fd5b\u0022\u003EPaul Quinn\u003C/span\u003E: What about the Dominion Post?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000026\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002255e5730cd3924f1fad90e7ace363a3a8\u0022\u003EMOANA MACKEY\u003C/span\u003E: I tell Mr Quinn that thanks to the Budget of the National Party that was put up yesterday, most people cannot afford 75c to text in and say what they think about the National Government\u2019s Budget. I suggest he stops listening to unscientific polls and goes out and talks to people. I think he stood in Hutt South; I cannot remember how well he did. But he should go out and talk to people in that electorate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000027\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bf12e76b995c4e3b8ac70218a46595d4\u0022\u003EPaul Quinn\u003C/span\u003E: Read the Dominion Post; the Dominion Post rang them.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000028\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226868249a9da04b1b9c082aff6950ec9e\u0022\u003EMOANA MACKEY\u003C/span\u003E: I ask Mr Quinn why he does not go out and talk to people, rather than read the Dominion Post. He should ask those families who will have their early childhood education subsidies cut whether they think it was a good Budget. He should go and talk to those people who are having their home help services cut about whether they think this is a good Budget. He should go and talk to those schools that are having their budgets cut and ask them whether they think this is a good Budget. This bill is a tax swindle, and Part 1 is one of the worst parts of this swindle. It locks into place the broken promises of the National-led Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000029\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003ENational promised there would not be an increase in GST, as I said. Mr Tremain might think this is boring, but the fact is that he went out on the campaign trail and promised that he would not increase GST. He promised that. Is this a broken promise?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000030\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fb769d3fbdb84aa2bc9bfcbd885ebb1b\u0022\u003EChris Tremain\u003C/span\u003E: No way.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000031\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002216af4696c97c47d28b667545c8240383\u0022\u003EMOANA MACKEY\u003C/span\u003E: Apparently looking down the barrel of a TV camera and saying: \u201CI will not increase GST.\u201D, then increasing GST, is not a broken promise according to the National Government. That explains a lot about this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000032\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003EHow is this being paid for? It is being paid for by borrowing for tax cuts. That was the other thing that National, when in Opposition, promised it would not do. The National Government has to now borrow half a billion dollars a year to pay for these unaffordable tax cuts for the people who funded them during the election campaign. The people who funded them during the election campaign are the people who get the biggest benefit from Part 1 of this legislation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000033\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003EI want to talk about the removal of the 20 percent depreciation loading on new plant and equipment for assets purchased after Budget day. This Government has been terrible for innovation. This Government took away everything Labour did when we were in Government, then brought back less than half what we did and proclaimed it to be a great day for science, for research and development, and for innovation. Lo and behold, in the Budget we have another whack on innovation. It is something else that will stop our most innovative companies from being able to get ahead and compete in this crucial area. This shows how hollow National\u2019s words are when it comes to supporting innovative businesses. The fact that National put Wayne Mapp in charge of the portfolio is another thing. He is the man who went out after the election and kept saying to people that he never wanted the portfolio.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000034\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226743a27b70dc418886b427e44a4898a4\u0022\u003EChris Hipkins\u003C/span\u003E: The political correctness eradicator.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000035\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022287c885cb1bc4dd9b33fc1f2e248d1ac\u0022\u003EMOANA MACKEY\u003C/span\u003E: Wayne Mapp, the political correctness eradicator, has also become the innovation eradicator in this Government. I ask how someone can stand up with a straight face and say that this is a Government that supports research and development, when the measures that have been lauded and brought back in Part 1 of this Budget are less than half of what Labour put in place when we were in Government.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022 data-id=\u0022a92f1d69822c4deebc7e939f4d47b6a9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000036\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a92f1d69822c4deebc7e939f4d47b6a9\u0022\u003EHon MARYAN STREET (Labour):\u003C/span\u003E I wish to speak to Part 1 of the Taxation (Budget Measures) Bill. There is only one part I wish to speak to, which is the increase in GST. I would like to unpack that a little bit in so far as the way it will impact on students. It seems to me that in this Budget, tertiary education is the big loser\u2014tertiary education across the board is the big loser.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000037\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003EIt does not matter how the Government chooses to spin this. Let us have a look at some of the facts and the details. There will be a GST increase, which all students will feel on their rent, their food, and their books. We have not heard anything about any compensation; we have not heard any specifics but let us assume that it is the same compensation that the Government says it intends for superannuitants and beneficiaries\u2014for example, a 2 percent increase on student allowances. First of all, it will not compensate adequately for the GST increase, and, secondly, the 4 percent annual maximum fee movement that the Budget provides for tertiary institutions is GST exclusive. So now students will have to pay not only the increase in GST in everything they purchase in order to live\u2014so that will cut their spending power even further in the supermarket as they search for the cheapest items they can find and for things that are on special\u2014but it will also mean that they will face a 4 percent increase in fees across their institutions and their courses. They will then have to pay GST on top of that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000038\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003EBut let us look more closely, because the 4 percent annual maximum fee movement is effectively a cut for most tertiary institutions. I do not know whether the members opposite grasp this point. Previously there was a spectrum up to 5 percent for institutions under the fee maxima policy\u2014they could raise their fees on courses by up to 5 percent. Now Auckland University is probably the only institution that is sitting at its fee maxima on its courses. Other institutions\u2014universities and polytechs\u2014are sitting somewhat beneath their fee maxima. Auckland University may do quite well because it is allowed to increase things by 4 percent, although it might have wished to be able to increase things by 5 percent. The 4 percent that it is getting now means that that was rather unexpected and will be useful, given that it is sitting at its fee maxima. However, other institutions whose courses are not sitting at their fee maxima may have wanted to go to their 5 percent in order to recover the costs that this Government is not putting into tertiary education. So they are getting a 1 percent cut. That is a cut to the institutions, and I want to know how the members opposite justify that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000039\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003EIt is clear that this Government is shifting the cost of tertiary education away from the Government and into the institutions, on to the institutions themselves and, further than that, on to students. So not only do students have to wear the 2.5 percent increase\u2014the 15 percent GST, which is in Part 1\u2014on everything they buy, but also they have to wear that on top of a 4 percent course fee increase. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000040\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003EI am not sure that members opposite have grasped this, but further to that there are cuts in this Budget to adult and community education, which indicate that this Government has learnt nothing from the intense protests last year about cuts to adult and community education. It has taken $3.4 million out of schools and community groups. I think that was about all that was left last year in the adult and community education budget, which went to schools and the community groups that they fund. I need the Minister to clarify what is left for night classes. These are the night classes that Mr English so praised previously because he said his mother was able to take advantage of night classes in secondary schools.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022 data-id=\u00229ab6ef7392e94571aa77160167f06eb6\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000041\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229ab6ef7392e94571aa77160167f06eb6\u0022\u003ECHRIS HIPKINS (Labour\u2014Rimutaka):\u003C/span\u003E This Budget demonstrates very clearly what a cruel hoax the National Party played on New Zealanders at the last election. National members went up and down the country and said that New Zealanders could have significant tax cuts, with no cuts to public services and no increase in borrowing. They could still have big tax cuts. Did they get that yesterday? No, they did not. They got both of those things: they got cuts to public services, and they got an increase in borrowing to pay for tax cuts. That is exactly what the National Party said it would not do. This is a Budget of broken promises\u2014be very clear about that. National broke so many of the promises made in its manifesto, it is almost impossible to count them all.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000042\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EJohn Key stared down the barrel of a TV camera and said that if he did a halfway decent job of managing the economy, National would not need to increase GST. Here we are, only 18 months into National\u2019s management of the economy, and what has it done? National has increased GST in order to pay for tax cuts that will disproportionately go to those on the highest incomes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000043\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EA full third of the money that was dished out in tax cuts yesterday goes to the top 5 percent of income earners. People like Mr Key, and me even, who are in the top 5 percent of income earners will get the lion\u2019s share of the tax cuts that are being dished out, while those on the lowest incomes will continue to scrape by in order to meet the increased cost of living that this Budget will impose through increased GST and increased inflation. Every time hard-working Kiwis go to the supermarket, they will pay more. Every time they fill up their cars at the petrol station, they will pay more. Every time they pay their rates bill, they will pay more. For every bill they pay that has GST on it, they will pay more. New Zealanders will pay more. People on average and lower incomes will be given only modest, very small tax cuts that will not compensate for the extra money that average, hard-working New Zealanders will be paying in order to fund the tax cuts that disproportionately go to those on the highest incomes. Broken promises are what this Budget is all about. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000044\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EThere were going to be no cuts to early childhood education under National, but that is exactly what it has done. Not only has National made cuts to early childhood education but it has made cuts to the highest-quality early childhood education. Those parents who send their kids to early childhood centres that made the effort to get 100 percent of their staff qualified are having their funding cut. They are going to pay more; if they have 2 kids they will have to, potentially, pay 50 bucks extra a week\u201450 bucks extra a week\u2014for their early childhood education. It will not be compensated for by the tax cuts that the Government has offered. Those families will get clobbered. That is a broken promise. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000045\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003ENational said that it would keep student loans interest-free. Well, the Government has not introduced a market interest rate: it has introduced a new annual fee instead. That is another broken promise. It said that it would not introduce interest-free student loans and instead it has introduced a new annual fee. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000046\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003ENational said it would focus resources on the front line, and would deliver tax cuts. National has not focused on the front line in respect of accident compensation. In fact, it has doubled the policy advice budget for the Accident Compensation Corporation. Why has National done that? Because Nick Smith wants more advice on how to privatise accident compensation. National says that in the Budget document. National has another $2 million going into policy advice on how it can privatise the accident compensation scheme. This is another broken promise from the National Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000047\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EThe biggest hoax of all, though, was that National would not increase borrowing to pay for its tax cuts, because that is exactly what it is doing in this Budget. I say to all of the baby boomers in particular who will retire in the next 10 years that there will be a significant increase in the cost to the Crown of their retirement. Where will the money to pay for their superannuation come from? Where will the money to pay for their health care come from? The Government has not been contributing to the Superannuation Fund, and it is still not contributing to the fund. Instead, it is giving out tax cuts to those on the highest incomes. What does that mean for the baby boomers who will be retiring in the next 10 to 15 years? John Key said that he will resign if their superannuation is cut. He will not be here in 10 to 15 years\u2019 time when the baby boomers retire, but he will have left a strategic deficit, a massive deficit. Borrowing to pay for tax cuts will be his legacy. In 10 years\u2019 time we will have increased debt and a baby-boomer population wanting to retire and wanting their superannuation, and the cupboard will be bare. There will be no money left to pay for it, because John Key and Bill English dished it all out in unaffordable tax cuts in this year\u2019s Budget.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022 data-id=\u0022cca7eb9df3184195b6d902cf5c8c62bc\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000048\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022cca7eb9df3184195b6d902cf5c8c62bc\u0022\u003EHon CLAYTON COSGROVE (Labour\u2014Waimakariri):\u003C/span\u003E People have called this Budget a \u201Cborrow and hope Budget\u201D. In fact, Ganesh Nana on Morning Report this morning when asked\u2014[Interruption] Shirley Temple in the corner over there laughs, as she is wont to do. She laughs at everything. She laughs when a rapist is on the run, laughs when a corrections officer gets his bones broken, laughs, laughs, and continues to laugh. But here is the thing that Ganesh Nana said\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000049\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b0635b0600b647398655cdae78806727\u0022\u003EHon Judith Collins\u003C/span\u003E: I raise a point of order, Mr Chairperson. The member is now becoming extremely unparliamentary in his language. If he wants to call me by my correct name, Judith Collins, he can, but to refer to me as Shirley Temple is frankly just ridiculous and is just another example of his behaviour in this Chamber.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000050\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cde66b6088f74660ad9717494a42ab93\u0022\u003EThe CHAIRPERSON (Eric Roy)\u003C/span\u003E: There is a longstanding convention that members are addressed by their correct names and titles. The member should contain his remarks just to the bill and I advise him to do that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000051\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002254597dc526b94b4594b8a1e0c11abf20\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Absolutely. I note for the record that my friend Charles Chauvel, who is a bit of a movie historian, I am told, noted that the actress Shirley Temple was a far better diplomat than some around here. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000052\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EBut Ganesh Nana the economist said that this is a Budget where the Government has borrowed for tax cuts. He is a learned economist and said it has borrowed. It is very interesting because Judith Collins could be described as a bit of a cappuccino politician: if one gets rid of the froth there ain\u2019t a lot of coffee left in the cup. It is interesting. I did not call her that, Mr Chairman; I was making an analogy. This is a \u201Cborrow and hope Budget\u201D. It is \u201Cborrow\u201D for tax cuts for millionaires and \u201Chope\u201D that the inflation rate does not hit Treasury\u2019s forecast of 5.9 percent. That is what it is, so let the old cappuccino politician over there suck that one up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000053\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EIndeed, I invite Judith Collins to go to the people of her electorate, which I believe is Papakura. She is not keen on having public meetings in her electorate but I challenge her to have a public meeting and invite the 67 percent of her constituents\u2014she does not like this, of course\u2014who are earning under $40,000 per year. She is the great, tough Minister. She is going to get tough on everybody, right? I invite her to have a public meeting and get tough with those 67 percent of her constituents who are earning under $40,000 a year, and get a tax cut that is negated absolutely by GST, which is then negated absolutely by the 5.9 percent inflation increase\u2014and we have not even started on accident compensation levy increases, car registration increases, and the list goes on. So I invite that gutsy Minister of Police, that gutsy Minister of Corrections who is so tough, who wears a grin bigger than a Cheshire cat around this Chamber, who is tough with everybody, to continue to show her enormous intestinal fortitude and have a public meeting in her electorate with the 67 percent of her constituents who have missed out\u2014or worse\u2014and who are worse off, thanks to her.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000054\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI do not hear the cappuccino machine bubbling away. No, Judith Collins is not so tough now, of course, because she will not do that. I invite Judith Collins at her next police executive meeting to say to Howard Broad: \u201CLook, commissioner, I know that everything your department purchases will go up by 2.5 percent. I know that I have not compensated your department for the Budget cut that I have effectively put in place. But don\u2019t worry, commissioner, because I, as Minister of Police, will swagger around and be tough, and that will compensate you.\u201D Every Government department, every school, every church, every organisation, and non-governmental organisation that purchases goods and services gets a 2.5 percent cut to their budget as of this legislation going through and commencing. But no, we do not hear anything from the corner stall over there, do we? No, she is not so tough now. There are not so many grins coming from over there. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000055\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI say to Mr Sharples that in his electorate, 64 percent of his constituents earn under $40,000 per year, and our \u201Cweekend warriors\u201D from the M\u0101ori Party stood up one after each other last night to say how proud they were of this Budget, and how they had delivered for their constituents.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000056\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002297984b1b7be146b4bdc056f1f98e9209\u0022\u003EHon Judith Collins\u003C/span\u003E: Yep!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000057\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e8ed28dd408d404d93ca6e73127e10d5\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: The tough Minister says \u201CYep!\u201D. I tell members that that will be a great quote for Labour members who are, or soon will be, clustered around her electorate, to take to the 67-odd percent of her electorate whom she has sold out, and the 64 percent of Mr Sharples\u2019 electorate whom he has sold out. Those people are worse off, and the froth is starting to come off. But those members will not get up and justify that. I will make a bet with anyone in this Chamber that Judith Collins and Pita Sharples and all the old relics over there will not have a public meeting in their electorates.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022 data-id=\u00224dc4fea2368c4406961ad79f1f8b34a2\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000058\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00224dc4fea2368c4406961ad79f1f8b34a2\u0022\u003EBRENDON BURNS (Labour\u2014Christchurch Central):\u003C/span\u003E This Budget is a payback Budget. It delivers to people who have supported this Government in the past. It is a business-class Budget. It is moving people in business class up to first class, while those down in cattle class start paying for their lunch. This Government sometimes attempts to portray Labour as a party that wants to spend money. Well, the Government is borrowing to cut the top tax rate for those at the top end. We have seen that in the past. It is the sort of policy that Ronald Reagan introduced in the United States. It was called a strategic deficit, and all it did was rob the poor to pay the rich. It is voodoo economics. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000059\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003ESupposedly, the economy will recover to pay for this, but let us look at the Budget tables. The balance of payments has not been in surplus in this country since 1973, since we were last, as a nation, in the black. This Government says it wants to see export-led growth. Well, the balance of payments deficit goes from $4.9 billion this year to $8.9 billion next year, to $13.1 billion the following year, to $15.7 billion the year after that, and to $17.2 billion the year after that, according to Treasury projections. So where is the export-led growth that will reduce our balance of payments deficit? The balance of payments is the measure of what we, as a nation, export as opposed to what we import. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000060\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EList MP Nicky Wagner said last night that this Budget was a cracker. Well, she should explain that comment to the 76 percent of people in my electorate of Christchurch Central who earn less than $40,000 a year. They will not be calling this Budget a cracker. She should explain that comment to the Manufacturers and Exporters Association based in my electorate of Christchurch Central, who issued a press release about the Budget. It was headed: \u201CRhetoric does not match the reality.\u201D Chief executive John Walley said: \u201CThe changes to property taxation, the corporate tax rate and GST go some way \u2026 but they fall a long way short\u201D of what the Tax Working Group recommended. He said: \u201CThe removal of accelerated depreciation loading for plant and equipment will be detrimental to business investment.\u201D That is why we are seeing that balance of payments gap deteriorate hugely under this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000061\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EWe were told that there was a need to cut the top tax rate from 38 percent to 33 percent, because that kind of gap encouraged people to move their tax into company structures to avoid the top tax rate. So what does this Budget do? It cuts the company tax rate back to 28 percent, so the differential between the top tax rate and the business tax rate is still the same\u20145 percent. Obviously there is still every incentive for people to move their tax into a company where that is possible. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000062\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EWe are told that this Budget is supposedly about driving down the issues of tax shelters. The real impact of this Budget relates to GST and what is yet to come. As Treasury forecasts note, we will see inflation nudging 6 percent in the year ahead, which will simply erode the benefits of the tax cuts being introduced at the middle and lower end of the income scale. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000063\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI noted that a housing commentator on Campbell Live last night asked where the stimulus was in this Budget for building new homes. Of course, GST will apply to new homes, so they will cost an extra 2.5 percent. Already, the housing market is less than buoyant; in fact, it is dead flat. The projections are that this Budget will see an 8 to 10 percent depreciation of the existing housing market, which will fall most heavily on the new housing market. This Budget has done nothing to stimulate the building sector\u2014in fact, it is taking it backwards\u2014and we will see much fewer new houses built. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000064\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003ENothing in this Budget encourages younger New Zealanders, who are first-time home buyers, into their first home. In fact, it does absolutely the opposite. Before members opposite attempt to suggest that tax cuts will stimulate this, I ask them what $1,000 or $2,000 of tax cuts will do for a young couple trying to buy their first home. It will be absolutely eroded by the GST increase, but if there is anything left, what will that contribute to their ability to service a mortgage or to put down a first-home deposit? It will contribute absolutely nothing. Meanwhile, the Budget supposedly trumpets the increases in health and GST, but those are worth nothing with inflation of 6 percent.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022 data-id=\u0022ac2bd1939f6a43549cdc6ade3298771a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000065\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ac2bd1939f6a43549cdc6ade3298771a\u0022\u003ECAROL BEAUMONT (Labour):\u003C/span\u003E I rise, too, to speak about the great tax swindle. This Budget is meant to be delivering a taxation system that will better reward work and savings and that will make the system fairer. That is what is explicitly stated in the Government\u2019s rhetoric about this tax swindle. It goes on to say that the Government is delivering a package that not only is fair but is seen to be fair. The Taxation (Budget Measures) Bill has a number of aspects. I will talk about two of them, and those are the lifting of GST and the reducing of personal income tax. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000066\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003ELast night I thought that I would look at the word \u201Cfair\u201D, given that much has been made of fairness. We on this side of the House are certainly very committed to the concept of fairness. The Government has used the word \u201Cfair\u201D in its Budget statement and all its Budget documentation, so let us look at what it means. According to the Oxford Dictionary the word \u201Cfair\u201D is about concepts like justice, equity, and reasonableness. I want to know whether, in all honesty, those people across the other side of the Chamber can consider their actions to date to be fair. The Salvation Army, earlier this year, when it reviewed the first year of this Government in its document A Road to Recovery, noted very strongly that in the last 12 months: \u201C \u2026 gains that have been made over the past 5 years in reducing child poverty have probably been lost, and there are signs of a widening income gap between the well paid and poorly paid.\u201D One could ask whether that is fair. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000067\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003EOne could also ask whether the actions in this Budget will address issues like child poverty and widening inequality in New Zealand. I thought that I would look at some of the figures that were given out as part of the Budget package. What will people actually get? Well, if someone earns $16,000 per year, the tax cut will give that person a certain amount extra, but then of course he or she will be paying extra GST, so the person will supposedly be $1.36 better off a week. That is before the implications of inflation and other cost rises, like the increases to accident compensation levies and other costs, that have not been factored into that table are taken into account. So people who earn $16,000 a year will be better off by $1.36 per week. I went on to a supermarket website last night to look at what that would get them. I found that they could buy\u2014probably appropriately\u2014a four-pack of Home Brand toilet paper with what they will receive. The $1.36 will buy a four-pack of toilet paper\u2014that is great! \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000068\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003EPeople on $22,000 per year will also have a tax cut and pay extra GST. As I said, I am not counting in all the other costs associated with rising inflation, accident compensation levy lifts, petrol lifts, and all of those things; I am counting only the straight figures. Those people will receive an extra $3.56 per week. What can they buy with it? Well, on the supermarket website, I saw that they could buy themselves 2 litres of milk. That is pretty good! If people are on $30,000 per year, they will receive an extra $6.28 per week, and that would get them 2 kilos of apples. The supermarket website shows that people on $38,000 per year could buy a bit more than that. They will receive an extra $9.21, so they will be able to buy a loaf of Vogel\u2019s bread and 2 dozen eggs. They will be able to have poached eggs on toast\u2014fantastic! \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000069\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003EIf people are on $100,000 per year\u2014let us jump to the other end of the income scale\u2014they will be $41.66 better off a week, without including all the other costs that I have parked. At $120,000 per year, they will be $56 better off a week. On an income of $300,000 a year, which is the average salary of the chief executive officer of a large company, people will receive $178 more a week. Of course, the chief executive officer of Telecom will receive an extra $4,845.44 a week. I did not work out what that would get him at the supermarket, but obviously it would get him quite a lot. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000070\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003EHow can that be just\u2014being able to buy toilet paper, versus receiving an extra $4,000-odd a week? How can that be just for those on the lowest incomes, who cannot make ends meet, and who really are struggling? I do not know whether members opposite are talking to their local budgeting advice services, but I have been doing so all around New Zealand in relation to my member\u2019s bill, which deals with the issue of loan sharks. I can tell members that those services know how hard families are struggling. They know that most of the people whom they see have to resort to things like high - interest rate loans. I do not think that this Budget delivers for those New Zealanders, yet they are the New Zealanders who need to be given a helping hand. They need to receive something from the Government.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022 data-id=\u00225bb2da9d1ed54f74be0e88b351e6ab49\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000071\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225bb2da9d1ed54f74be0e88b351e6ab49\u0022\u003EHon DARREN HUGHES (Labour):\u003C/span\u003E Part 1 of the Taxation (Budget Measures) Bill is the \u201Crobbing Peter to pay Paul\u201D part. This is the part of the bill where tax rates are changed on the one hand, and on the other hand Government fees, the cost of Government services, and the goods and services tax go up to wipe out all of the gains that most people in New Zealand will receive by way of the first change that the Government is making. The National Government is robbing Peter to pay Paul, and when people work out in a few months\u2019 time that their financial situation has not changed enormously, I think it will rebound on National in quite a big way.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000072\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003EHere is the point. My colleagues have already pointed out that the Budget documents show that inflation will be 6 percent in the coming year. That is hardly a model of economic stability and orthodox management on the part of the National Government. A 6 percent inflation rate will immediately flow through to the cost of living, because higher inflation will erode people\u2019s purchasing power. When people pick goods off the supermarket shelves they will find that prices are higher. When they go through the checkout and get their bill they will find that the taxes on the products they have bought are also higher. So not only will inflation erode the cost of living of people but the GST changes will put a 15 percent fee on the final price of the product.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000073\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003EThat is hardly what people thought they were getting when they voted for the National Party at the last election. I do not remember the National Party campaigning at the last election on a policy of increasing GST. John Key, in that complicated way he has of explaining himself, said: \u201COh well, I said we wouldn\u2019t put up GST to fund a deficit.\u201D I looked at the Budget documents and in the next financial year we as a country will be in deficit, so GST will be put up at a time when we are in deficit, even though National said first of all that there would be no rise in GST, and we then had the complicated explanation from John Key that in his head he was trying to say that if there was a deficit he would not put up GST. National has failed on that test, as well.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000074\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003EThis measure affects hard-working New Zealanders, and that is people who work hard, full stop. Of course, in the eyes of National members one is a hard worker only if one earns a lot of money. We hear all the time from members opposite about hard-working New Zealanders who earn over $100,000 a year. Sure, there are probably some hard-working people who earn over $100,000, but lots of people who earn over $100,000 do not work very hard, and I can see quite a few of them this morning as I look across the Chamber. As I look across the Chamber I see plenty of people who earn over $100,000 whom I would never describe as hard-working New Zealanders.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000075\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220853c9c21cb74752af3366905d28bc6e\u0022\u003EPaul Quinn\u003C/span\u003E: Look in the mirror, Darren!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000076\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022062f753700e2412196e1a7b1ab95350e\u0022\u003EHon DARREN HUGHES\u003C/span\u003E: I would describe Mr Quinn as a loud New Zealander, but from the exchequer\u2019s point of view I would describe him as a rip-off, because we pay $100,000 a year for him, yet for 600 bucks one can get a better sound out of a flat-screen TV. So I do not think we need to waste any time on him.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000077\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003ELet us look at those people who earn over $100,000 a year. The people in New Zealand who earn over $100,000 have had tax cuts for 3 years in a row. In October 2008, people earning over $100,000 a year received a tax cut from the Labour Government. In April 2009, people earning over 100 grand a year got a tax cut from the National Government. Now, in October this year the National Government will give those same people a third tax cut. That is tax cuts for 3 years in a row for the highest-paid New Zealanders. Given that I think most members of the House agree that we have a wages problem rather than a tax problem in New Zealand, it seems to me that giving that 5 percent of people tax cuts for 3 years in a row has hardly resulted in economic nirvana when we look at what the opportunity cost for our country means.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000078\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003EI live in the Horowhenua district, where just over 1 percent of people earn over $100,000. So 99 percent of the people in the community in which I live do not get\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000079\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002294a76b927577442cbe4a421852ee6494\u0022\u003EPaul Quinn\u003C/span\u003E: You\u2019re one of them, paid by the taxpayer as you have been all your life!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000080\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c671057c12d740adbf13ad388553d294\u0022\u003EHon DARREN HUGHES\u003C/span\u003E: Paul Quinn, that great civic contributor in our country, has made an interjection. Paul Quinn is the man whom I think should be the quietest person. He should get the least amount of money for his contribution in Parliament. If we were paid by value of contribution, that man would be returning money to the taxpayer every week. So let us not hear anything from that rip-off artist in that sense, at all.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000081\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003EIn our community we have a problem with the number of hospital beds, because the Government wants to downgrade the number of hospital beds at the Horowhenua Health Centre. The Government says there is not enough money from taxes to fund our health services, yet there is money to give people who earn over $100,000 their third tax cut in 3 years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000082\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003EThe tax system today is radically different from what it was 3 or 4 years ago, because we already have had a reduction in revenue. Now the Government has to try to convince the country why we should have fewer services, higher inflation, and higher interest rates because of that higher inflation, as the Reserve Bank will inevitably have to make changes to compensate for the fact that this Government is putting $15 billion in tax cuts out into the economy over the next period. Then, of course, we have the changes to accident compensation levies and the increase in GST. All these things mean that we are robbing Peter to pay Paul, and from a long-term point of view\u2014looking at the future of our country\u2014the biggest concern is that we are borrowing to give away those tax cuts. This is hardly bold; we are borrowing for it.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022 data-id=\u0022865e350d055a4b97add8202a6197e8f4\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000083\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022865e350d055a4b97add8202a6197e8f4\u0022\u003EMICHAEL WOODHOUSE (National):\u003C/span\u003E I want to pick up on Ms Beaumont\u2019s analogy of the four-pack of toilet paper and perhaps remind her, in case her memory is a little bit short, about what we saw under 9 years of a Labour Government. Does the member recall Dr Cullen\u2019s \u201Cchewing gum Budget\u201D? What happened to the chewing gum? He took it back. In those 9 years he said: \u201CI\u2019m going to give you a pack of chewing gum and then I\u2019m going to take it back.\u201D But we then we had the pi\u00E8ce de r\u00E9sistance: after several days the top tax rate was raised by 9 percent. We waited 9 years, and what did we get? We got a block of cheese. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000084\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003EI want to go through some inconvenient truths for our friends on the other side. Under this Budget 73 percent of income earners will have a top tax rate of just 17.5 percent. That is nearly half what it was under the previous Labour Government. That is not the top income earners but the middle and lower income earners. These people will be far, far better off under this Government than they ever were under the Labour Government. People who earn the average income of $48,000 a year will pay a total tax rate of just 15.3 percent. A family with two children does not start paying income tax until its income exceeds $50,000. [Interruption] The member mentioned GST. I find it astounding that the members Hipkins and Street\u2014the latter has been a Crown Minister and sat around the table considering revenue bills\u2014did not know that GST is not payable on rents. It simply is not. There is no GST on residential rents. Those members both mentioned it in their calls. I think those comments continue the ignorance around the sorts of effects that the tax arbitrage frameworks that Labour put in place, after 9 years, had on hard-working New Zealanders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000085\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003EMr Burns talks about continuing the gap between the top personal income tax rate and the company tax rate. That was not the problem. The main problem was the large gap between the top personal income tax rate and the trust rate, because that was the vehicle that top income earners were using to protect their income. The company tax rate is ultimately paid by individuals and they get imputation credits attached to them. Whatever that company tax rate is, their personal income tax rate will be what it is. So the really important gap is the one between the trust rate and the top personal tax rate. I am very pleased to see that that has been lined up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000086\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003EMr Cunliffe was very confused about loss attributing qualifying companies, and in an astounding comment he made in his call in the first reading, he said that Labour had put in place loss attributing qualifying companies but Labour had no idea they would be used for the purpose to which they were eventually used. God forbid, loss attribution would be used to attribute losses! That just does not make sense. But it became worse with Dr Norman\u2019s analogy of shoplifting, I think it was. Does any member recall that comment in the first reading? He said that instead of controlling the shoplifting, what National has done is lowered the price of goods and applied a fixed charge across all the goods. But here is the thing: using legitimate tax vehicles to manage one\u2019s income tax liability is not shoplifting; it was perfectly legal, and it was legal because it was put in place by the Labour Government with the full support of the Greens. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000087\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003EBut here is what the Greens really want to do: to have equity, what they really want, but do not say, is to put all of the rates up to the top personal tax rate of 38 percent. If we want equity, they say we should raise the trust rate, raise the company rate\u2014raise, raise, raise. Well, that is what will drive our best and brightest New Zealanders across the ditch. That is what has been done over the last few years. It is the one thing we are No. 1 in the OECD on\u2014the export of our best and brightest. I am very impressed to see that, whereas a person needed to earn $228,000 in New Zealand to pay less tax than in Australia, that has just gone down to as low as $55,000. My prediction is that those best and brightest will start coming back across the Ditch. I am absolutely delighted to see that the rot is stopping in respect of those very talented New Zealanders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000088\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003EI will go on and touch on the tilt, because this Budget has support for what New Zealanders were already doing. The consumption and debt-fuelled growth that we saw after the last 10 years has stopped. People are not borrowing any more. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c3a88c42-f60b-4cf9-8065-8bfb80a020eb\u0022 data-id=\u0022305c5c356fa24d648c93ae19b936dc9d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000089\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c3a88c42-f60b-4cf9-8065-8bfb80a020eb\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022305c5c356fa24d648c93ae19b936dc9d\u0022\u003ECARMEL SEPULONI (Labour):\u003C/span\u003E I go back to something that the Hon Lianne Dalziel brought up last night. A taxi driver had pointed out something to her. It was the fact that John Key, with regard to this Budget, was basically saying to New Zealanders: \u201CLet them eat cake. They can\u2019t afford bread, but let them eat cake.\u201D We have heard from Mr Key that he does not value people who are on low incomes. He does not value those who earn the least amount of money, even though they are hard-working New Zealanders. We have heard him say in the House that those people do not contribute because they do not pay tax. Because they get Working for Families, they are not contributing members of our society. He does not value them. Whom does he value? He values those who are just like him, those who are earning high incomes in this country.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000090\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fbc7fcf96b8b4f4b823691e460431d3f\u0022\u003ECarol Beaumont\u003C/span\u003E: Money traders.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000091\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c3a88c42-f60b-4cf9-8065-8bfb80a020eb\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022752f6c4cfe4141e0b638ba0f2d375199\u0022\u003ECARMEL SEPULONI\u003C/span\u003E: Money traders. When we look at what these tax cuts mean for New Zealand, we see that we new backbench MPs will get an extra $120 a fortnight. Quite frankly, when I watched TV last night and saw the struggling family on Tagata Pasifika trying to raise four kids and feed them on $80 a week\u2014to feed a family of six on $80 a week\u2014I felt embarrassed by the fact that our New Zealand Government has just given us a tax cut of $120 a fortnight.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000092\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229144d25fd6e44c2b92fd01492a5e5063\u0022\u003EDavid Bennett\u003C/span\u003E: Well, give him your money, then. Give him your money. Let\u2019s see you give your money away, eh? Give your money to them.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000093\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c3a88c42-f60b-4cf9-8065-8bfb80a020eb\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222871a3d571f9473799e5682c732f74d8\u0022\u003ECARMEL SEPULONI\u003C/span\u003E: Mr David Bennett over there is screaming out because he thinks he deserves an extra $120 a fortnight. His attitude to people who feed a family of six on $80 a week is who cares about them; it is all about him, and making sure that he has an extra $120 a fortnight in his pocket. We on this side of the House are about fairness, and we do not agree with what this Government has done with regard to tax. We do not agree with the fact that the only people who will profit from those tax cuts are the people on high incomes. We have had to sit here and listen to Mr Key and the others on that side of the House say that it is all about rebalancing the economy. Well, actually, there is no balance in these tax cuts, because they are all in favour of the people who already have money, and all they do is make a bigger divide between people in New Zealand\u2014between the haves and the have-nots. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000094\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022be6fbf6d515c43b38ab777daac9348aa\u0022\u003EPaul Quinn\u003C/span\u003E: Get past the rhetoric. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000095\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c3a88c42-f60b-4cf9-8065-8bfb80a020eb\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b09eb957c9754b7789df8a1b127eff57\u0022\u003ECARMEL SEPULONI\u003C/span\u003E: There goes Mr Quinn again, shooting off and yelling out very loudly. He does not care about poor people. He does not care about the people who are struggling to feed their family of six on $80 a week. Mr Quinn does not care. He just wants to make sure that his wallet is better lined.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000096\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c3a88c42-f60b-4cf9-8065-8bfb80a020eb\u0022\u003EWe have been told by Mr Key\u2014and it has been repeated in the media over and over again\u2014that we should not be envious of those who receive high tax cuts from this Budget. Quite frankly, from all of the things that I have seen in the papers and online, most New Zealanders think that is quite offensive. One person said: \u201CJohn Key the Overlord says: \u2018Don\u2019t be jealous, you poor peasants.\u2019 \u201D That is basically the impression that the Government is giving. It still relies on the trickle-down effect. National members still think that if they give all the money to the rich people, it will somehow trickle down. But what will it mean? It will not necessarily mean the creation of new jobs. All it will mean is that a millionaire, who is already getting a lot of money, can go on an even more expensive holiday than he or she would have done otherwise. It will not mean that the people he or she employs will get better wages\u2014it will not mean that, at all. All it will mean is that the millionaire will be able to afford to buy another property.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000097\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c3a88c42-f60b-4cf9-8065-8bfb80a020eb\u0022\u003ESo, quite frankly, this country has a right to be angry at the Government. New Zealanders will realise, as the detail comes out, how this Budget will hurt their families and how it will hurt our country. In the meantime, the Government will have probably a 2 to 3-day honeymoon period over this Budget. But it will not last, because, alongside the tax cuts, New Zealanders will realise that the cuts to early childhood education will affect them, they will realise that the increase in GST will affect them, they will realise that the increase in inflation will affect them, and very quickly they will realise that, actually, these tax cuts mean nothing and they will get nothing extra in their pockets\u2014and, in fact, they will be paying more.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022 data-id=\u0022df23a18fce824206b8578c9c93e28799\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000098\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022df23a18fce824206b8578c9c93e28799\u0022\u003EJOHN BOSCAWEN (ACT):\u003C/span\u003E I congratulate Carmel Sepuloni on her speech, because I think she is absolutely right. She said that we may have a honeymoon period for this Budget. Certainly, the commentators are saying that it is a good Budget, and I think that most New Zealanders perceive it to be a good Budget. But she said that people will eventually wake up to the increases in GST, and they will eventually wake up to the increases in accident compensation levies. I have heard the words GST and accident compensation mentioned time and time again over the last 12 hours\u2014time and time again. The tragedy for the Labour Party is that it could actually make that criticism stick if it told the truth. There is another elephant in the room, and it is the emissions trading scheme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000099\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022848cfb21323b404683049b3cf9dafefb\u0022\u003EHon Members\u003C/span\u003E: Oh!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000100\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f37bda3cfc7e4ec9acb819f49623e465\u0022\u003EJOHN BOSCAWEN\u003C/span\u003E: Yes. Let me direct my comments particularly to National. I heard Darren Hughes having a crack at the Minister of Police, Judith Collins, about the proportion of people in her electorate who earn under $40,000. I ask Judith Collins, and the other National members, to look at the 550,000 people in their electorates who earn between $40,000 and $85,000 a year. Page 9 of the Budget 2010 Minister\u2019s Executive Summary, presented by Mr English yesterday, shows that people earning between $40,000 and $85,000 can expect an average increase in income of 0.4 percent\u20140.4 percent. The Reserve Bank tells us that the emissions trading scheme will increase the cost of living by 0.4 percent from 1 July. So the people earning between $40,000 and $85,000 get absolutely nothing\u2014absolutely nothing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000101\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EPeople listening to this debate on the radio and people watching it on television right now will hear a constant reference to the emissions trading scheme from the ACT Party, and the reason for that is that no other party in this Parliament wants to raise it. So, yes, there has been positive coverage of the Budget, but in my view some of the most interesting coverage came this morning from Paul Henry on television\u2019s Breakfast programme. Paul Henry seems to be the only commentator who picked up on the fact that the emissions trading scheme will add 0.4 percent to the cost of living from 1 July. That will actually reduce the net benefits to people who earn between $40,000 to $85,000 to zero\u2014absolutely zero. I say to members of the National Government that they need to start challenging their Ministers and start challenging their Prime Minister. If those members look at the appropriations, they will see that the allocation of New Zealand units has gone from $139 million worth of units in the last year to over $1 billion\u2014an increase of $900 million. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000102\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003ECarmel Sepuloni can talk about millionaires buying properties\u2014and she may try to create some envy\u2014but I say to her that her criticisms would be far more effective if she acknowledged that the money is going not to the millionaires but to the foresters, not so that they can buy more buildings but so that they can buy more forests. That is it: we have $1 billion\u2014$1 billion\u2014going to people who plant forests. People who planted forests are in two categories. The first category consists of people who planted trees before 1990. If they chop those trees down, harvest them, and do not replant them, they will incur a significant loss of value, but, only, I suspect, if the Kyoto Protocol is extended beyond 2012. The second category consists of those who planted forests from 1990 onwards. They will not harvest those forests until some time in the 2020s. They will be given an allocation of units\u2014officials tell me that it will be something like $700 million worth of units\u2014for trees planted in the early 1990s when there was no expectation of taxpayer subsidies. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000103\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI say to Labour members that if they really want to make an impact on this Budget, they should go out there and acknowledge that Labour would have had its own emissions trading scheme from 1 January, and that it would have increased electricity prices by 10 percent. But the world environment has changed, and National can respond to this, because it can suspend the emissions trading scheme. It can leave in place the incentives to ensure that trees planted from 1982-85 are not harvested, so that we can meet our Kyoto Protocol obligations.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022 data-id=\u00225f293ab1bb0f4288a7bc8559e7973424\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000104\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225f293ab1bb0f4288a7bc8559e7973424\u0022\u003EHon DAVID PARKER (Labour):\u003C/span\u003E I want to comment on what I think is the greatest misrepresentation of this Budget, and that is the myth that it rebalances the New Zealand economy. I will not deal with the issue as to whether the tax switch, as the Government has called it, is the right tax switch or whether it is weighted unfairly to the higher-income earners. I think other speakers have dealt with that well. But I will deal with the myth being pushed by the Minister of Finance that this is the greatest change in tax policy for 20 or 30 years. Plainly, it is not. Plainly, it does not rebalance the economy away from speculative investment in property towards the tradable sector and exports. That is plain from the forecasts that are included in the Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000105\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EIf we look at this Budget we see that it does not redistribute investment between property and the tradable sector; it redistributes the amount of income and consumption tax that is paid by different people in society. It states that, overall, less of those taxes, as a proportion, is paid by high-income earners, and more of them is paid by low and middle income earners. It does very little to change the balance between taxing capital and labour, because it does not do much to tax capital.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000106\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EIndeed, it is interesting that, in terms of picking up the recommendations of the Tax Working Group, it goes a little way in respect of investment in property. It does not catch the kernel of the problem, which is over-investment in residential property. This Budget could have done that through ring-fencing losses, but instead it has done away with the ability to claim depreciation on buildings, which has as much effect in the commercial property sector as it does in the residential property sector. The Budget does not curb the largest of the problems, which is over-investment in the residential property sector, with people incurring large losses in respect of their mortgages on residential borrowing, which they offset against their other income. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000107\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EWhy can I say with absolute confidence that this Budget has not rebalanced the economy? Because we see it in what happens with the current account deficit. If this Budget was going to improve the current account deficit, we would see the current account deficit going down, but we do not. We actually see the current account deficit going up year on year to 7 percent of GDP. I think that the best commentary on this so far from the commentators has come from Business and Economic Research. Business and Economic Research is not overcome by the somewhat surprising amounts of the Government\u2019s tax switch; it looks at the effects on the fundamentals of the New Zealand economy. Business and Economic Research says\u2014and I think it is right\u2014that at least it is good to see the Minister of Finance acknowledge that New Zealand\u2019s largest single vulnerability is now its large and growing net external liabilities. New Zealand now owes $168 billion, which is about 90 percent of GDP. So, overall, New Zealand\u2019s net asset position in the world is that we owe more than we own. We owe so much that if we total it up and compare it to the size of our economy, we already owe the equivalent of 90 percent of GDP. Under this Budget that situation gets worse, at the equivalent of 7 percent of GDP per annum. So by 2014, New Zealand\u2019s net asset position in the world is that our debt will be 100 percent of GDP. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000108\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003ESo if our growth is not coming from export growth, and if we have an increasing current account deficit, as is shown by the projections in this Budget, where is the growth in this economy to pay for the borrowings and to overcome the increase in borrowings that is needed to fund the tax cuts? It is actually coming from internal growth in the property sector. It is not coming from export growth; it is coming from exactly the problems that the Prime Minister and the Deputy Prime Minister said they were trying to overcome in this Budget. It is actually coming from those imbalances in the economy getting worse again. I think the Business and Economic Research analysis of this Budget is very interesting. This is a quote; it states: \u201CIf the net external sector is not the lead driver of Treasury\u2019s growth forecast, what is? Our reading indicates the growth forecast relies heavily on a noticeable rebound\u2019\u2019\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00228cf0fb6b-0b8f-4327-983d-73e1166c220e\u0022 data-id=\u0022b632d788bba548e8afae25f88e1aff4e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000109\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228cf0fb6b-0b8f-4327-983d-73e1166c220e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b632d788bba548e8afae25f88e1aff4e\u0022\u003EDr CAM CALDER (National):\u003C/span\u003E I compliment the previous speaker, David Parker, on his sartorial elegance. This Budget is the Budget of a Government that is committed to creating a strong economy that is built on and led by sustainable growth and value-added exports, which will underpin jobs and create opportunities for all New Zealanders to realise their hopes, dreams, and aspirations. This is a Budget of a strong and courageous Government that believes in acknowledging and rewarding the pursuit of hard work and excellence. This Government is a perceptive Government. It understands that the positive, can-do attitudes of every New Zealander are our edge in competing and ensuring our country\u2019s future success on the highly competitive global stage. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000110\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228cf0fb6b-0b8f-4327-983d-73e1166c220e\u0022\u003EThis Government is a standard-bearer for unlocking the potential that lies within the heart of every New Zealander. We are working relentlessly for every New Zealander to share a sense of purpose and a feeling of belonging. We have no time for the politics of envy. We will not rob Peter to pay Paul. What good is there for any of us if Peter or Petra is a neurosurgeon, a skilled sparky, a committed, effective teacher, a nurturing nurse, or a competent carpenter who decamps to Australia or further afield in pursuit of greener pastures? John Key\u2019s National-led Government is principled and pragmatic, and it believes in creating a brighter future with all New Zealanders, for all New Zealanders, and of all New Zealanders, right here in our homeland of Aotearoa New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000111\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228cf0fb6b-0b8f-4327-983d-73e1166c220e\u0022\u003EThis Budget, with its across-the-board tax cuts to help families get ahead and more money for education and health, will lift long-term economic growth, responsibly reign in past fiscal profligacy and massive public debt, and encourage better front-line public services. This Government\u2019s resolute decisiveness is a stark contrast to the looseness of the last late, unlamented Labour administration. It was an administration that has turned into a group of loquacious lobbyists whose only concern is legislative languor, listlessness, lassitude, and lethargy. This Government is a stark contrast to that cavilling caucus, where the words \u201Chope\u201D, \u201Centerprise\u201D, and \u201Cambition\u201D are heard as rarely as \u201CMine\u2019s a Laphroaig\u201D at a temperance conference. However, one must give Labour members their due. In some respects, they were virtual prestidigitators of fiscal policy and conjurors of economic underperformance. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000112\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228cf0fb6b-0b8f-4327-983d-73e1166c220e\u0022\u003EThe maladministration of the previous administration managed to parlay the best economic conditions since World War II into year after year of decline in the performance of our tradable sectors\u2014our exports, which are the drivers of our economy. They managed to turn the longest spell of global economic golden weather in modern memory into years of localised thunderstorms, hail, rain, and sleet over the whole of New Zealand. They hamstrung our economy. It is our economy that underpins the quality of life for all New Zealanders. It allows us to educate our young people, to provide world-class medical care for our sick and injured, and to protect the most vulnerable. That dance of the desperate and dateless dispensed fiscal doom and despondency because of blind adherence to a borrow-and-spend dogma. There was a remarkable record of failure by the last Government. I ask how effective Labour\u2019s illiterate economic policies were. They were as effective as a papier m\u00E2ch\u00E9 demolition ball, a one-legged man dancing the cha-cha, or an empty can of air freshener in an abattoir. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000113\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228cf0fb6b-0b8f-4327-983d-73e1166c220e\u0022\u003EThe global economic framework is still fragile and there may be some bumps ahead, but here in New Zealand this Government\u2019s effort over the short time we have held the levers of power has seen the right sort of recovery. It is one that is export led, rather than based on the previous model.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022 data-id=\u002286eac3f3360346cda90114717580a081\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000114\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002286eac3f3360346cda90114717580a081\u0022\u003EGRANT ROBERTSON (Labour\u2014Wellington Central):\u003C/span\u003E It is always a pleasure to follow on from the president of the North Shore Toastmasters. Members know that they are in trouble when Paul Quinn is nodding and saying: \u201CThat\u2019s right.\u201D beside them\u2014it is terrible. Part 1 of the Taxation (Budget Measures) Bill is about choices and priorities. National made it very, very clear to the country yesterday where its priority lies. Its priority does not lie in looking to the future and having a plan or a strategy. This Budget was given two out of 10 for its strategy yesterday, because no long-term plan is present in it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000115\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EYesterday\u2019s Budget speech by Bill English was remarkable in a number of ways. One of them was the complete absence of any plan for how to grow this economy. There is an obsession with tax cuts delivered to the rich and of avoiding talking about the Government\u2019s plan or strategy. Apparently we have to cut the top tax rate in order to keep people in New Zealand and stop them going to Australia. The message for the National Government is that it is not the tax rates that will send people to Australia; it is the wages and the jobs that need to be created as part of a long-term plan to grow a sustainable economy. Taxes in Australia, and the headline rate of tax there, are only one thing. Under the Kevin Rudd Government, Australia has been planning and investing in skills and training to try to get people into work. This Budget is devoid of a strategy or a plan for the future. It is a short-term-thinking Budget that will not deliver to New Zealanders the increased well-being and the standard of living that we all want. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000116\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EAn obsession with tax and with tax cuts for the wealthy is not a path that will deliver a sustainable economy. The priorities that the Government is putting out here show that, yes, we have to borrow money. What should we use that borrowed money for? Should we use it for tax cuts for the wealthy few, or should we use it to invest in something that will be good for our long-term future, like early childhood education? Why would a Government cut $400 million from early childhood education? Is that not a priority for this Government? That is the message that the public of New Zealand is getting, as 25 percent of the money that is being cut\u2014the so-called low-value spending\u2014is from early childhood education. The message that this Government is sending is that early childhood education is low-priority spending. That message will not be good for the future of New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000117\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThe National Government is doing a \u201Chit and hope\u201D Budget. National is lining up to take its shot\u2014and Mr Woodhouse plays a bit of golf\u2014on the first tee, but it has no idea where the hole is. National is just hitting the ball up in the air to see whether the tax cuts work and deliver growth. There is no real plan or idea of where exactly National wants the ball to go\u2014it is just hitting and hoping. From the international experience we know that tax cuts do not deliver a sustainable economy. Tax cuts will not\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000118\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022282e22201f7441629d81988db7f0d1ff\u0022\u003EPaul Quinn\u003C/span\u003E: When you go down the middle, it doesn\u2019t matter.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000119\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226bf315427e1840548bccfe8ac4ce7514\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: There is Paul Quinn, John Key\u2019s chief policy adviser, out there, telling us what to do. Tax cuts do not deliver sustainable growth internationally. Sustainable growth comes from investing in people and starting in the earliest years to invest in people. But apparently that is not a priority. Apparently it is OK for early childhood educators to have to run cake stalls in order to buy crayons, but for Paul Reynolds to receive over $1,000 a week in a tax cut. Early childhood education cuts will mean that parents will pay more, or that early childhood education centres will have to fund-raise just to be able to keep going, and at the same time the richest 1 percent of people in our country will receive 15 percent of the value of the tax cuts. That is not fair. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000120\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EWe heard yesterday a whole lot of rhetoric about fairness. There is nothing fair in a Budget that takes away hundreds of millions of dollars from early childhood education and millions of dollars from health and delivers that money to the richest people in New Zealand. That is not a recipe for a fair and equitable New Zealand. That is not a recipe for a country with a long-term plan. This is a short-term Budget that is designed to deliver a bit of money in the pocket that will make people feel good, but the value of that becomes eroded over time with the increased rate of GST. This Budget breaks promises. It breaks the promises around GST increases; it breaks the promises about not cutting public services. This Budget will not deliver a future for New Zealanders that will make people decide to stay here. Where is the work in this Budget around ensuring that we have an economy that brings together the environment and the economy? Where is that? The environment was not actually mentioned in the Budget speech yesterday.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022a40f5af7-f9b0-4b44-9669-9e63be1c3ced\u0022 data-id=\u002227181d3ac00243b68e160fa1242904e0\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000121\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a40f5af7-f9b0-4b44-9669-9e63be1c3ced\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002227181d3ac00243b68e160fa1242904e0\u0022\u003EDARIEN FENTON (Labour):\u003C/span\u003E Mr Chairperson\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000122\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022926a644e945f444fa984553560624a06\u0022\u003EPaul Quinn\u003C/span\u003E: It\u2019s a very nice blue jacket.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000123\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a40f5af7-f9b0-4b44-9669-9e63be1c3ced\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225ae6795a9b9c447c88a1c8086f661459\u0022\u003EDARIEN FENTON\u003C/span\u003E: I thank Mr Quinn for the compliment; I know he will keep it up all the way through my speech. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000124\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a40f5af7-f9b0-4b44-9669-9e63be1c3ced\u0022\u003EI am pleased to take a call on Part 1 of the Taxation (Budget Measures) Bill. I will talk also, as my colleague Grant Robertson just did, about the priorities that this Budget has demonstrated. I think that one of the saddest things we saw yesterday\u2014and we will see it as time goes on and we start to examine the Budget in more detail\u2014is that this Government thinks that spending $70 million on building a prison is more of a priority than early childhood education. There is $400 million gone from the funding for early childhood education. Early childhood education gets our children off to the best possible start and invests in our future. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000125\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a40f5af7-f9b0-4b44-9669-9e63be1c3ced\u0022\u003EI look at the other priorities, too, and I see that this is a tax cut, a tax swindle, where the richest are getting most of the money. I will talk about Paul Reynolds. He may be feeling a little bit picked on, but he is the \u201CSeven Million Dollar Man\u201D. He is the chief executive of Telecom. What has he done as the chief executive of Telecom? Well, during his tenure he has sacked 12,000 Kiwi workers\u2014that is what he contributed to the New Zealand economy. What is more, they did not get redundancy. But National thinks it needs to keep Paul Reynolds in New Zealand with this huge tax bribe using the money of ordinary working Kiwis. National has given him another $290,000 a year, which is coming from higher GST, higher rent bills, and the hard work of ordinary New Zealanders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000126\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a40f5af7-f9b0-4b44-9669-9e63be1c3ced\u0022\u003EIf Paul Reynolds was not getting this tax cut, with that money we could hire six more nurses or six more teachers. We could pay for 400 hours of early childhood education, or 400 workers would not have to pay the added GST bill. When I compare that amount to what someone on minimum wage will be getting, I think it is a disgrace. It is so unfair for $290,000 a week in a tax cut to be going to one of the richest people in New Zealand, when someone on minimum wage on $26,000 will end up with $4.82 a week. That is before accident compensation levies\u2014it is after GST but it is before accident compensation levies\u2014and with petrol going up and 5.9 percent inflation \u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000127\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c3a88c42-f60b-4cf9-8065-8bfb80a020eb\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226a5e465e2498454a8dacb2e2068a1ab9\u0022\u003ECarmel Sepuloni\u003C/span\u003E: And childcare.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000128\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a40f5af7-f9b0-4b44-9669-9e63be1c3ced\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220a88a1739c0442358d84004cc5ac657d\u0022\u003EDARIEN FENTON\u003C/span\u003E: \u2014and childcare, of course. They will end up worse off. In fact, they are already worse off, with the lowest pay increases we have seen in a decade. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000129\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a40f5af7-f9b0-4b44-9669-9e63be1c3ced\u0022\u003EOne of the things that I spotted in the Budget document yesterday was a miserable little sentence on page 69: \u201CThe redundancy tax credit will be removed\u2026\u201D. What are the tax credits for redundancies? It is when people get compensation when through no fault of their own they lose their job, and they get paid a lump sum payment that pushes them into a higher tax bracket. Labour fixed that by making sure that could not happen and that they could apply for a tax rebate to not pay extra tax on their compensation. So not only is this Government kicking low-paid workers but it is also kicking in the guts those workers who lose their jobs through no fault of their own.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000130\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002235aa5f7cffe748f3ae277482b5d58128\u0022\u003EChris Hipkins\u003C/span\u003E: Kicking them while they are down.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000131\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a40f5af7-f9b0-4b44-9669-9e63be1c3ced\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228e2e0bac3606475994d38db71a5b4f3a\u0022\u003EDARIEN FENTON\u003C/span\u003E: Kicking them while they are down through not supporting them getting redundancy compensation; the few who do are made to pay more tax. I think that is incredibly unfair. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000132\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a40f5af7-f9b0-4b44-9669-9e63be1c3ced\u0022\u003EThe other thing in this Budget is the education cuts. There are huge cuts to education throughout this Budget, and, as my colleagues have said, there is nothing in here about skills development. Where are the skills going to come from if this economy recovers, as the Government says it will? Where will the jobs come from? Where are the job creation packages? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000133\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a40f5af7-f9b0-4b44-9669-9e63be1c3ced\u0022\u003EOne other little miserable cut that I have noticed is in the Department of Labour, where it has cut the employment-related contestable fund\u2014the education fund for workers and for employers. It has cut that. That is workers\u2019 opportunity to learn how they can make a contribution in the workplace to growing productivity, to productive employment relationships, and to helping grow our economy. I think the problem with this Government is it does not think that people who do the work are part of the economy. It thinks that only big business is part of the economy. Actually, the economy is people doing work, and that is where the changes have to happen: in the workplace with productive employment relationships.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022 data-id=\u0022dece0202fbca4901b96c58b12315bf3b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000134\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022dece0202fbca4901b96c58b12315bf3b\u0022\u003EHon Sir ROGER DOUGLAS (ACT):\u003C/span\u003E It does not matter what side of the Chamber one is on, the fact is that this Budget to date has gone down particularly well. The next point I make to the Labour Opposition is that there are sound grounds to criticise this Budget, but when members opposite are using any story at all to criticise it, then they do not do themselves any good. Let us take Grant Robinson. He suggested\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000135\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224ca71ac435d840aaa5407e94baec669e\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Robertson!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000136\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227ba1082d3ae54b89938704db1624e63f\u0022\u003EHon Sir ROGER DOUGLAS\u003C/span\u003E: Robertson, sorry, my apologies. He made the point that this Budget was not doing enough in the area of redistribution and wanted more of the sorts of policies that the previous Labour Government followed over the last 9 years. I remind the member that during that period of time New Zealand workers probably lost, relative to Australian workers, about $100 in wages. Our wages over the last 30 or 40 years, relative to Australian wages, have dropped by $300 to $400 in relative terms. It is about time we had policy to deal with that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000137\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EThe only Opposition speaker I have heard come close to criticising this Budget on a sound basis was David Parker. I thought he made some points we should take up. He pointed to the risks that relate to the high level of overseas borrowing that New Zealand has already, and the fact that it will expand, and I thought that was a criticism worth making. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000138\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EI think the Minister in the chair, Peter Dunne, and the Minister of Finance, given what they have proposed, have done a pretty good job on the tax package. I personally have some problem with it. I believe that the 12.5 percent tax rate should not have gone down to 10.5 percent. I think they should have rounded the rates to 30 percent, rather than having the discrepancy that they will have with 28 percent for companies and 33 percent for the personal tax rate. I think the Minister in the chair, if he could have done that, may well have wanted to do that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000139\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EMy main criticism, however, is in the area of GST. I do not believe it was necessary to raise GST. It would have meant, of course, that the Government would have had to make some tough decisions in the expenditure field. But if we look through the Budget, there is about $2.5 billion there that I would classify as corporate welfare\u2014a lot of it unnecessary. That is about double the net benefit from GST. If we look at Government expenditure, this Budget is providing for a 9 percent increase in Government spending. It is just about as bad as Labour used to do during its time in office. Frankly, 9 percent increases in Government expenditure, year on year, are totally unsustainable. We have seen Government expenditure increase by approximately $6 billion, or 9 percent, and that is four times the rate of inflation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000140\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EI grant that the Minister would probably point out to me that 2 percent of that 9 percent is compensation for GST, and I accept that, but it is still an increase in Government expenditure at three times the rate of inflation. Had we not had to increase GST, instead of someone on $40,000 getting $10 a week, that person would have received $23 a week, and instead of a $500 benefit he or she would have received a $1,300 benefit a year. Instead of someone on $52,000 receiving $745 a year, that person would have received over $1,600 in benefit\u2014in other words, a $31 benefit per week rather than $14. But the die has been cast. I think in future the Government will have to pay a lot more attention to Government expenditure, particularly the Government expenditure that is not returning to the nation as much as it would have returned had it been left in the private sector.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022 data-id=\u0022bcefde05a54b4209a07035af720e325e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000141\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022bcefde05a54b4209a07035af720e325e\u0022\u003EHon TREVOR MALLARD (Labour\u2014Hutt South):\u003C/span\u003E That speech was a bit rich coming from that member, Sir Roger Douglas. He talked about the gap opening up between Australia and New Zealand. When did that gap open up? It was when his policies and those of his acolytes, especially Ruth Richardson, were biting. It was at the very end of the 1980s and through the 1990s that that gap opened up, and it was when his policies and his approach were at their height. It was especially in the early 1990s, when Ruth Richardson was implementing the things that Roger Douglas wanted to do but was not allowed to. That is when the gap opened up between New Zealand and Australia, and he should take some responsibility for it, rather than trying to develop again the policies that would make it worse. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000142\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u201CRip Van Winkle\u201D went to sleep for about a decade, and when he woke up he found that unemployment was down, he found that early childhood education was working well, and he found that Working for Families meant that a number of families that had been below the poverty line were now above the poverty line. He woke up and said that he did not like it, and that there was not enough pressure on the poor. He wanted to put some more pressure on the poor. That was the approach of Sir Roger Douglas when he woke up from his decade of sleep away from the political world. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000143\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EThis is a disgraceful Budget. I invite people to have a very good look at the table on page A2 of today\u2019s Dominion Post. Forget the headline; look at the numbers. I ask people to think carefully about what happens when we apply 5.9 percent instead of 2.2 percent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000144\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a68928ea-9dd8-4a30-8e2c-a0f49dfc8bea\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a48050ed0b1a47428c9128425da4e8d3\u0022\u003ELouise Upston\u003C/span\u003E: What about the headline? It\u2019s a great headline. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000145\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225fc0aa9252074d9bb44b61aeb7b0122e\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: The member wants someone to read her the headline. The member for Taup\u014D would like someone to read her the headline in the paper. I will do better than that. I will tell her that people on $120,000\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000146\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f5570ed670244aa796239e83758a951d\u0022\u003EPaul Quinn\u003C/span\u003E: That\u2019s Trevor Mallard.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000147\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002275fb8f7426244997860d8cea251489e6\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: No, I am on significantly more than that, I say to Mr Quinn.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000148\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a68928ea-9dd8-4a30-8e2c-a0f49dfc8bea\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022509a8f9cc2c34164889af2d06d93d913\u0022\u003ELouise Upston\u003C/span\u003E: How much more, Trevor?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000149\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227a8728a22e4746f185c88f0c1640205e\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: Enough\u2014that is the answer to that. When we apply 5.9 percent instead of 2 percent\u2014because 5.9 percent will be the inflation rate\u2014people who are on $120,000 a year are no better off. They are no better off at $120,000 a year when we apply the 5.9 percent inflation rate that Treasury says will happen. What does that mean? That is a cut-off point. What does that mean? Does that mean all the people below are better off? No, it does not. It means all the people below are worse off. So every family in New Zealand earning $120,000 or less is going to be poorer in 12 months than they are now. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000150\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EI ask members opposite how they will feel about that in November or August next year when they go to the election and we have the chance of inflation being higher than it has been at any time since Roger Douglas was the Minister of Finance. There is no debate about it; they are Treasury figures. It has never been so close. Roger Douglas has the record for inflation in recent times in New Zealand and it will not be broken. We will not get to Sir Roger\u2019s level, but it will be the highest level of inflation since the mid-1980s\u2014since GST first came in\u2014at 5.9 percent, which is slightly more than double the rate of inflation that the Government inherited, and with unemployment at about three times the level that it was. I ask members opposite what they will think about that and how they will explain to their constituents that they have done a big tax deal but their constituents will be worse off. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022 data-id=\u002273955d73b50345328a3cf648e970f4d1\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000151\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002273955d73b50345328a3cf648e970f4d1\u0022\u003EDAVID SHEARER (Labour\u2014Mt Albert):\u003C/span\u003E I want to touch on a point that was brought up by Michael Woodhouse about the differential between Australia and New Zealand: the fact that our taxes have gone down will somehow attract back here, in floods, people from Australia. The reality is, I say to Mr Woodhouse, that in Australia GST is at 10 percent, not at 15 percent, and if he thinks that people will come running back for the 3 or 4 or 5 dollars they have got as a result of this Budget, he should think again. Inflation is at 6 percent, and the Government has not factored in accident compensation levies going up, the tobacco tax, the power price rises, and\u2014for people unfortunate enough to live in Auckland\u2014the funding of the debacle that is the super-city. Nobody will be killed in the rush of people coming through Auckland Airport back from Australia. They will come back for better wages when we lift our productivity, but this Budget does not do anything to lift our productivity. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000152\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EThe way we lift productivity is to encourage companies to invest and to be innovative. Look at what Australia has done in innovation in the past year. It has increased its research and development spend by 25 percent. It upped its tax credits for innovative companies by giving a tax credit of 40 percent. What did the Government here do for innovation in this Budget? I am really pleased the Minister of Research, Science and Technology is here in the Chamber to hear this. This part of the Budget was announced early because of its importance, according to the Prime Minister. It increased our Budget in research and development by $56 million a year. Most of that goes into grants and vouchers to business. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000153\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003ESo what do businesses have to do? They have to get on their hands and knees and go to the Government to say: \u201CPlease give me a grant for R and D.\u201D And a bureaucrat sits there and says yes to this person and no to that person. Who benefits? Not the small innovative companies that are out there. I happen to believe\u2014[Interruption]\u2014I say to Mr Mapp that those people who put their butts on the line, who mortgage their houses, and who borrow from their friends and their family in order to get a good idea out there to market deserve a break. That is what the Labour Government did in its term of office. It gave them a 15 percent tax credit. Under this Government, businesses have to go on their knees to a bureaucrat who will assess their case and then possibly give them a grant at that point. Imagine the bureaucracy, the transaction costs, and the sheer frustration of small companies having to go through that ordeal. Our business research and development is one-third of the OECD average. What does this Government do to lift that? It is zip, zero. It increases the State contribution to research and development by 3 percent but it does not do anything to our business research and development shift.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000154\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022df788c48-b9be-42fd-b8f2-76629a5572b8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002286cdc225ce4d42d180d7530468f92c8d\u0022\u003EHon Dr Wayne Mapp\u003C/span\u003E: Yes, it will.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000155\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221b72f6dbeec14020a1b236770bd35423\u0022\u003EDAVID SHEARER\u003C/span\u003E: If the tax credit is put back, I say to Mr Mapp, if the Government acknowledges that that is the best way to do things, we would have doubled the research and development in business that businesses are doing. This is the biggest scam for businesses and it really upsets me. John Walley said that this Budget\u2019s contribution to research and development is a pale shadow of what the former Government put in place. It is not only that, it is half of what the Labour Government had in place, and it is also half of what that Government promised in 2008. So after all the \u201Cgood news\u201D around announcing this early, it is ultimately only half of what it promised in 2008 it was going to contribute. It is another broken promise, I say to Mr Mapp. He must sit there and feel dreadfully uncomfortable about the fact that he has given only half of what he promised. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022 data-id=\u0022c4afb6c930fe46699f218ea53fe6af54\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000156\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c4afb6c930fe46699f218ea53fe6af54\u0022\u003EMETIRIA TUREI (Co-Leader\u2014Green):\u003C/span\u003E This part of the bill deals with the tax cuts that will significantly benefit the rich and leave the poorest of our most vulnerable families, and particularly their children, with the least. It is considered by this Government to be fair that the children of the wealthiest families get more than the children of the most vulnerable and poor. National calls that progress and it calls that fair; the Greens call it a national disgrace. There are alternatives, of course. These tax cuts do not have to be so utterly regressive that our poorest children will suffer the most; they could be progressive tax cuts. I would like to outline a proposal that the Green Party presented on Monday in our Mind the Gap package, which is a set of solutions designed precisely to deal with the rising gap between rich and poor in terms of inequality and income disparity, which is one of the most significant social and economic problems in this country\u2014and a growing problem in this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000157\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EOne of our proposals is that there should be a tax-free band of $10,000 whereby all people who earn income, including beneficiaries, would not pay tax on the first $10,000 of their income. That is a truly fair and truly progressive personal tax cut option. It is a choice that John Key could have made, which would make a significant difference to the children of the poorest families. We know that the children of the poorest families in New Zealand go without. It is not because their parents do not care; it is because there simply is not enough money. Children go without shoes, raincoats, breakfast, lunch, school trips, and after-school programmes. Those children go without their basic rights to good health and a good education. Some members on the National side of the Chamber who believe in the deserving poor charity model might suggest that those people go to budgeting services. In fact, that is what Paula Bennett suggests as part of her reforms in social welfare. But there is no budgeting advice in the world that can make up the difference if there is simply not enough money to care for the needs of those children. The children who are in the worst poverty require more support. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000158\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EThe choice, which John Key could have made but did not make, of providing a tax-free band of $10,000 would provide\u2014we estimate, without Government resources\u2014something like $15 or $17 a week in the back pockets of every earner. That means that every person would receive the same amount, which is fair in the context of a progressive tax. But because $15 or $17 is proportionately much more significant for those on $10,000 a year, as opposed to those on $150,000 a year, it is a fairer tax cut for the country, for earners, and for the children who are the most disadvantaged. This measure, I say again, was a choice that this Government could have made. It is a cheaper tax cut option than National\u2019s package. It does not cost $4.5 billion; it costs around $3 billion. Any kind of tax cut that is imposed will cost the country money. There will always be a question of whom we choose to benefit the most from any tax cut. The Green Party would choose families who are on the lowest incomes. The Green Party would choose children who are living in the worst poverty. We would choose them to benefit the most from a personal tax cut. But this Government did not do that. This Government chose instead to benefit the most wealthy, some of our highest-income earners, by thousands of dollars a week, while those on the lowest incomes are arguably much worst off than they were previously. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000159\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EAt a best estimate, someone who earns $10,000 a year might get 85c a week. That is a very best, generous estimate. But why should the families who are on the very lowest incomes, and the children who suffer from the worst possible poverty in this country, be the ones who pay? Why should they be the ones who subsidise the wealthy? Why should they be the ones who enable the most wealthy New Zealanders to get thousands of dollars a week in their back pocket, when they got nothing? There is no justification for that. John Key\u2019s Government is increasing inequality in this country.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000160\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e906f17a83c04cf59a503796d14da295\u0022\u003ECarol Beaumont\u003C/span\u003E: That\u2019s right. Continuing to increase it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000161\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022110141c8c73c448db1391350f1b17e0c\u0022\u003EMETIRIA TUREI\u003C/span\u003E: John Key\u2019s Government is continuing to increase inequality, widening the gap between the rich and the poor.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000162\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002298df16e3f8864beeac7702dc7516cdfb\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Deliberately.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000163\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cb1d31ee426c44789060b45944a378ec\u0022\u003EMETIRIA TUREI\u003C/span\u003E: He is sucking the resources\u2014deliberately, I agree\u2014out of our families, away from our children. The children who go to school without shoes and raincoats and proper food are the children who are paying for John Key\u2019s tax cuts.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022 data-id=\u0022cd19aeae4c9147a29b0799523b005dd3\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000164\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022cd19aeae4c9147a29b0799523b005dd3\u0022\u003EJOHN BOSCAWEN (ACT):\u003C/span\u003E We often have banter in the Chamber, and when members with the call pick up on the comments of other members, it is recorded in Hansard. One particular comment was made this morning that was not picked up in Hansard, but I think it is very important that it goes on the record. My colleague Sir Roger Douglas said that no matter what one thought of the Budget, the reality is that the media are reporting it in a good light. If I heard correctly, I heard Steve Chadwick say: \u201CWait and see.\u201D I think that Steve Chadwick is absolutely right, just like I think her colleague Carmel Sepuloni is right. She said that all the hype will die down in 2 or 3 days and then people will be faced with reality. People will not have to wait until 1 October for the increase in GST, because the cost of living is going up from 1 July. That is when the emissions trading scheme is coming in, that is when Treasury has forecast that electricity will go up by 5 percent per year, and that is when Treasury has forecast that petrol will go up by 4c a litre. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000165\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EWe are debating Part 1 of the Taxation (Budget Measures) Bill today. This part increases the rate of GST. Trevor Mallard proudly got up and showed to the Committee the increases in GST that people will pay on various incomes. My message this morning is to National members. Steve Chadwick is absolutely right when she says: \u201CWait and see.\u201D There is no reference to the impact of the emissions trading scheme in people\u2019s average incomes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000166\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI come back to page 9 of the Budget document. We have just heard from the co-leader of the Green Party, who said that this is actually a subsidy from the poor to the rich. Well, I say to Metiria Turei that at least those people earning less than $40,000 a year get something. The Budget talks about an increase of 0.7 percent, and they will have to give back only 0.4 percent. So although they will not get much, at least they will get something. But we should look also at the big group of people in the income bracket of $40,000 to $85,000. The Budget forecasts here in black and white that they stand to get a net 0.4 percent out of it. Treasury forecasts that that whole benefit will be wiped out by the emissions trading scheme. It is no wonder that members of the National Party\u2019s grassroots are revolting against the emissions trading scheme. It is no wonder that a resolution was put at the central North Island conference of the National Party last week calling on the Prime Minister and the Minister of Finance to suspend the emissions trading scheme. It is no wonder that the T\u0101maki electorate, where I live\u2014Allan Peachey is my local MP\u2014have a remit before the National Party\u2019s Auckland conference in a fortnight\u2019s time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000167\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI say to Labour that Steve Chadwick is right and that Carmel Sepuloni is right. But Labour members should get out and criticise the emissions trading scheme. They talk about inflation of 5.9 percent. They should go out and tell the people that electricity is forecast to go up by 5 percent. They should go out and tell people that the price of petrol will go up. People will see those things soon. Carmel Sepuloni is right: people will not be fooled for ever. I say to members of the National Party that people will see it a lot earlier than some people think they might. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000168\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI will explain to Louise Upston\u2014who represents the electorate of Taup\u014D, which is an area that has huge amounts of forestry\u2014why GST is going up. Well, the reason it is going up is that there is an allocation of an extra $1 billion to people who planted trees in the 1990s and early 2000s, and also in the 1970s and 1980s. Those people planted trees and are now retrospectively being given over $1 billion of credits for those trees. It is a tragedy because there is no guarantee that the Kyoto Protocol will be extended. There is no guarantee that New Zealand will have any commitment beyond 2012. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000169\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EIn this measure we have a wealth transfer. It is not necessarily to rich people; it is to people who planted trees in the 1990s and early 2000s without any expectation of this massive subsidy. Although the National MPs in this House may want to put their heads in the sand, the members of National Party are not dumb. They see it, Paul Henry on Breakfast this morning sees it, and Steve Chadwick sees it. She says that we should wait and see. Time will tell, and people will realise that there is no net gain to them. Yes, there is redistribution.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022d4506109-be18-4b9d-9a79-1e15e2e2cd41\u0022 data-id=\u0022a4f377f29c5f47a2a1f856077607115b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000170\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022d4506109-be18-4b9d-9a79-1e15e2e2cd41\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a4f377f29c5f47a2a1f856077607115b\u0022\u003EHon CHRIS CARTER (Labour\u2014Te Atat\u016B):\u003C/span\u003E I rise in the Committee in an unusual circumstance, in that I agree with John Boscawen. It is not often that I do that, but I certainly agree with the comments he just made about this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000171\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c5caf623163e47d78c56e0685ea6f89b\u0022\u003EMoana Mackey\u003C/span\u003E: Not on the ETS.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000172\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022d4506109-be18-4b9d-9a79-1e15e2e2cd41\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d3ccd8923e0948f9b675213799e9e9cd\u0022\u003EHon CHRIS CARTER\u003C/span\u003E: Not all of it, but most of it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000173\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022d4506109-be18-4b9d-9a79-1e15e2e2cd41\u0022\u003EEssentially, this Budget is a fraud. It is a fraud because it is about transferring wealth from the poorest New Zealanders to the richest. You know, one of the myths of this country, perpetuated by conservative politicians led by John Key, is that somehow we are an overtaxed country. It is a case of \u201CNever let the facts stand in the way of a good story.\u201D The reality is that in the OECD New Zealand has the third-lowest rate of personal taxation among developed countries. Where will this transfer of wealth impact? It will impact on the delivery of services in this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000174\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022d4506109-be18-4b9d-9a79-1e15e2e2cd41\u0022\u003ENational and its coalition partners are saying that for having $90 in the pocket of a rich New Zealander, we will third-rate social services and Government services. Education is an excellent example. Four-hundred million dollars has been taken out of early childhood education. How will that cut impact? It is saying to early childhood education centres, where they have qualified teachers, that it does not matter who is working with those children and it does not matter how well educated or how lacking in skills the teachers are. The Government is saying that that does not count. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000175\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022d4506109-be18-4b9d-9a79-1e15e2e2cd41\u0022\u003EAs a former teacher and as a former Minister of Education, I know that a child\u2019s education journey\u2014his or her success in education\u2014begins with quality early childhood education. One of the great crocodile tears presented by the current National Government is about underachievement in our country. It is about the tail of unsuccessful students in our schools, the 18 to 20 percent. Actually, that is the standard percentage in all developed countries, but we will not explore that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000176\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022d4506109-be18-4b9d-9a79-1e15e2e2cd41\u0022\u003EHow will this Budget help them? In Manukau City 23 percent of children at the moment go to early childhood education, and that might include one afternoon at the local church, so there is very variable quality, but 23 percent of new entrants going into primary schools have been to early childhood education. The statistics from Manukau City and the failure of many students there in their educational achievement rests on that poor basis. How will a cut to early childhood education of $400 million\u2014the $400 million being taken out of early childhood education to pay for tax cuts for the richest New Zealanders\u2014impact on underachievement in our schools? It will make it worse, not better, and the same is true with the so-called 4 percent operations grant that has gone into schools. Actually, with the GST rise and the projected 5.9 percent inflation rate, schools are effectively getting a cut. They will get less in their operations grant than they currently have, because of the changed economic circumstances. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000177\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022d4506109-be18-4b9d-9a79-1e15e2e2cd41\u0022\u003ESo the nonsense we heard yesterday from Mr Key\u2014that there is an increase in funding for education\u2014is just that. It is a fraud. Schools will have fewer resources to spend on lifting educational achievement in New Zealand. I wonder how the M\u0101ori Party will address that question, because it will impact particularly on those students who figure largely in our underachievement statistics\u2014that is, M\u0101ori and Pasifika children. The very kids we want to lift up are being disadvantaged because wealthy New Zealanders are getting a tax cut. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000178\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022d4506109-be18-4b9d-9a79-1e15e2e2cd41\u0022\u003EI read in the media the other day that this tax cut and the changes in our tax system will take $16 billion out of the New Zealand economy over the next 4 years. We are currently borrowing $250 million a week to bridge the deficit. We are borrowing while at the same time we are cutting $16 billion out of our Government\u2019s resources. What madness! Can members imagine any other developed country doing that? Why is it happening? Because National is catering to the constituency that put it into power. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000179\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022d4506109-be18-4b9d-9a79-1e15e2e2cd41\u0022\u003EThe swing voters in the middle will see over the next year\u2014and I think my colleague Steve Chadwick from Rotorua talked about this\u2014what these cuts actually mean. The New Zealand Herald, I think, this morning referred to it as a thousand little cuts. Well, it could be a death by a thousand cuts. I ask members to go into the education system to see what cuts are being made there.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022 data-id=\u00224457cd270939444db9dac006e946c1b9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000180\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00224457cd270939444db9dac006e946c1b9\u0022\u003EHon DAMIEN O\u2019CONNOR (Labour):\u003C/span\u003E This Budget is a disgrace. It is a very dumb Budget if one wants to run a smart economy. It is a regressive Budget if one wants to run a progressive economy. I will quote from Bill English something that most people in this Parliament would accept: \u201CThis lacklustre performance from the export sector lies at the heart of our growing vulnerability.\u201D I ask what this Budget did for the export sector and for the primary drivers of that sector, the farmers and horticulturalists. Well, not once in the Budget statement did Bill English, whose brother is the chief executive officer of Federated Farmers, mention agriculture or horticulture\u2014not once. In fact, he made only a brief reference to exports or exporters. So how will this Budget grow our economy? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000181\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022\u003EWe should look at a few reports on our economy, because we would see that there are some challenges going ahead. We accept that we need to have better performance from the export sector. New Zealand\u2019s largest single vulnerability is now the large and growing net external liabilities. But having identified this vulnerability, what does this Budget do about it? Well, to quote Bill: \u201CVery, very little.\u201D If we do not grow our earnings, no amount of shuffling around of tax rates and tax benefits will get us out of the hole we are in, because we need to be driven by greater exports up and down this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000182\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022\u003ENot once was agriculture mentioned. That is a disgrace. But worse than that, if we had a productive sector wanting to invest in higher levels of productivity, new technology, and better machinery, the Government cut the depreciation allowance right out from under its feet\u2014right out from under its feet. I was talking with one of the largest exporters in this country less than 2 weeks ago. He said we needed a higher level of depreciation allowance for new plant and equipment to lift the level of productivity in this country. John Key has said a lot about productivity, but he thinks productivity is paying less to workers to give more to the people at the top. Well, he did that, I guess\u2014I guess he did that in the Budget. Yes, he has given crumbs to the people at the bottom and given a bigger slice of the cake to the very wealthy of this country. That is immoral. It is absolutely immoral, and it is dumb, dumb thinking if we are trying to develop a smart economy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000183\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022\u003EPeople will be packing their bags and going to Australia, because no amount of tinkering with the tax rates will make up for the huge gap between what we can pay workers in this country and what Australia can pay workers, and its higher savings rate, and its better superannuation benefits. But what did this Budget do to address that? Nothing\u2014absolutely nothing. It is a pathetic Budget from a mean Government that does not understand the terms \u201Cfair\u201D or \u201Cequitable\u201D. It has driven this economy further behind. There is nothing for the export sector and nothing for the farmers. In fact, if there were farmers earning over $70,000 a year, they might have benefited more. But Federated Farmers, reluctant as they may be to criticise the Government, admitted that very few farmers pay tax. So they will face higher levels of GST. I say to them that if they are bleating about the emissions trading scheme\u2019s cost to their business, they should sit down and do a calculation about the increased cost from the rise in GST. It is about time they did that, and Connor English should get off his chuff as a chief executive, challenge his brother, and say: \u201CYou, Mr English, my brother, have imposed huge costs on the farming and export sector and offered us nothing by way of your Budget.\u201D They do not have a vision\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000184\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fb4b06421d0049479447eeed278d8395\u0022\u003EJo Goodhew\u003C/span\u003E: Look at what your emissions trading scheme has done to farmers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000185\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f8951239639c46aebaecb1603a4917f9\u0022\u003EHon DAMIEN O\u2019CONNOR\u003C/span\u003E: Neither does that member from Timaru. She will find that the people who drive her local economy will be absolutely disappointed with this pathetic Budget, except if they earn over $70,000 per year. If one earns over $70,000 per year, one has the highest level of tax cuts. That member, Jo Goodhew, will be happy, because she earns over $70,000 per year. So does the person beside her, Chris Auchinvole. This is a pathetic Budget for the export sector.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022 data-id=\u0022e64aeb090aaf423391ab55fad36b9ad9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000186\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e64aeb090aaf423391ab55fad36b9ad9\u0022\u003ECHRIS HIPKINS (Labour\u2014Rimutaka):\u003C/span\u003E I am looking forward to the contributions from the M\u0101ori Party to this debate. Driving home last night, I had to stop for petrol. The M\u0101ori woman behind the counter asked me \u201CIs the M\u0101ori Party really going to vote to increase GST for me? Is it really going to vote to increase my GST? I have checked it out on the website and I do not get much of a tax cut. I am on a reasonably low income. I am working behind the counter at a petrol station.\u201D She told me that she had voted for the M\u0101ori Party and that she was pretty surprised that, given all of its rhetoric before the election, its members were now coming into this House to vote in favour of increasing GST. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000187\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EShe had seen Hone Harawira\u2019s comments in the paper yesterday. I told her not to worry, because I knew that Hone Harawira was a man of great courage. I do not think Hone Harawira would ever say outside Parliament something that he was not willing to come down and stand eyeball to eyeball with the National Government to say in this Chamber. I think he has a lot of courage and he will come down, he will be in the Chamber, he will take a call, he will speak against a rise in GST, and then he will cross the floor and vote against it. I do not think Hone Harawira would be a lion out in public and then be a pussycat curled up in John Key\u2019s lap here in the House. I do not think Hone Harawira would do that. I look forward to his joining us in the Noes lobby when it comes time to vote against this increase in GST, which will hit M\u0101ori particularly hard. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000188\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EThe people in my electorate ask me what is in this Budget for them. I say to them that for the 69 percent of people in my electorate who earn under $40,000 a year the answer is not very much. Most of the people who earn under $40,000 a year, according to the tax table that was produced with the Budget, will get less than 25 bucks a week in their tax cut. They will pay at least another 13 bucks a week in increased GST, so that is less than 10 bucks a week in the pocket. If they have children in early childhood education, they will be looking at about another 25 bucks a week per child for early childhood education. They will be worse off. If they are superannuitants who have had their home help cut, they will be worse off. If they are tertiary students who now have to pay extra on their student loans, they will be worse off. Even worse, if they want to be tertiary students but find they cannot get into a university or a polytechnic, they will be worse off. They may get an extra 10 bucks a week\u2014that is if they are at the highest end of that 70 percent who earn under $40,000. If they are on that $40,000 mark, they will get about $9.94 a week according to Bill English. But for those people down at the bottom end, at the minimum wage level, who earn around $28,000 a year it is about five bucks a week. That is worth about two or three packets of chewing gum to the people on the lowest incomes. The tax cuts from the National Government are certainly not enough for a block of cheese or even half a block of cheese for those people on the lowest incomes. National is interested only in those who are at the top of the heap. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000189\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EI am really looking forward to hearing the contributions from the M\u0101ori Party members, who campaigned before the election about removing GST from food altogether. I am looking forward to hearing their justification for voting in favour of a 2.5 percent increase in GST\u2014hiking up the food and grocery prices for every working family in New Zealand. And it will not be just food and grocery prices that will be going up, either; it will be rates, insurance, and all the other services that will go up as a result of the extra 2.5 percent on GST, which will go up to 15 percent. It is a tax swindle, not a tax switch, as the Government has talked about. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000190\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EThe hollow rhetoric from the hollow men in the National Government is simply misleading. It shows that their promises before the election were simply a hoax. They promised that everyone could have a tax cut, that they would not increase borrowing to pay for it, and that they would not cut public services. Well, they are giving tax cuts to the people on the highest incomes while those on the lowest incomes face a tax increase through higher GST. They are increasing borrowing and cutting spending on public services. They are cutting spending on health. They are not allowing health spending to keep up with the growing population or the growing demand. Health spending will not keep up with the demands of an ageing population, so people will be paying more. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000191\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EI heard Ganesh Nana from Business and Economic Research Ltd on Radio New Zealand National this morning saying that in the short term this Budget is affordable but in the long term the tax cuts the Government has delivered are not affordable. The National Government is mortgaging up the nation\u2019s children and grandchildren to pay for the tax cuts it is dishing out today. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u0022bee3a03677ab4082b8240ee463bae9cd\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000192\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022bee3a03677ab4082b8240ee463bae9cd\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E I heard the most amazing thing in the Chamber when my colleague the Hon Damien O\u2019Connor was speaking a few moments ago. He asked what this Government had done to increase the growth of this economy, and Dr Wayne Mapp, who is the Minister of Research, Science and Technology, said it had cut taxes. That was what the Minister of Research, Science and Technology said about how to grow the economy. He said the Government had cut personal taxes. My colleague David Shearer stood up here and asked what had happened to the funding for research and development, which we need in order to drive the economy forward. The best answer that the Minister could come up with was to cut personal taxes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000193\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI can picture National Ministers sitting around the Cabinet table and Bill English asking what the Government could do to drive the economy. Dr Wayne Mapp would have had his head down, and Bill English would have asked Dr Mapp what he thought the Government should do to drive economic growth. His reply would have been that National should cut personal taxes. Why did he not stand up and say the research and development spend needed to be increased, or that we should at least go back to what Labour did? Did he stand up and say that? Did he stand up and fight for those companies in this country that require research and development funding in order to drive this economy forward? That is what is needed. We have the smart men and women of this country saying we need to invest in research and development and develop a high-class, highly educated economy. We need companies that can take things to the global market. The Government has done nothing about that. It has cut research and development spending to half of what Labour provided. It is one of the more ridiculous things that I have heard in this House, and I think it is a crying shame. Quite frankly, it astounds me, because I really thought Dr Mapp was better than that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000194\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI would like to talk about another thing that astounds me\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000195\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c788b0ded7374d64b2133fda987565e5\u0022\u003ECraig Foss\u003C/span\u003E: Satisfaction!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000196\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002281aa59569a8944338271fbe51db468ed\u0022\u003ESTUART NASH\u003C/span\u003E: \u2014because we cannot get any satisfaction from this Budget. The vast majority of Kiwis have got no satisfaction. A speaker stood in this Chamber and talked about the shameful Dr Cullen. I will not hear a bad word said about that man in this Chamber. Do members know why? It is because under his management we halved gross Crown debt, and when he left office there was no debt. Dr Cullen had to listen to John Key and Don Brash baying for tax cuts. They said New Zealanders must have tax cuts. If Dr Cullen had listened to them, then we would be in the same situation as Greece. Dr Cullen paid down debt. In fact, the Governor of the Reserve Bank, in his latest Financial Stability Report, said the reason that the New Zealand economy is doing as well as it has in this recession is the state that Dr Cullen left the books in. He did brilliantly, and his legacy is sound. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000197\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThis Government is destroying Dr Cullen\u2019s legacy. Dr Cullen refused to borrow for tax cuts. Dr Cullen knew that an economy has to be managed prudently. He knew that tax cuts are inflationary. I will tell members one thing that Dr Cullen never did: he never looked at the camera and said he would not increase tax, then increased tax. That is what John Key did. He stood in front of the camera, in front of every New Zealander, and said he would not increase GST. Well, he has done that; he has increased GST. He also said he would not borrow in order to fund tax cuts. Well, he has done that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000198\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI turn to clause 45 of this bill, which deals with increasing the rate of GST. The GST rate is increasing from 12.5 percent to 15 percent, so one assumes that everything will increase by 2.5 percent. I have news from this side of the Chamber: that will not happen, and I will give members an example of why it will not. Retailers price things with psychological considerations in mind. That is why we pay $49.95, not $50, for goods. The GST increase on that amount means that the price should go up to $51.06, but no retailer will price anything at $51.06. The next level is actually $54.95, which is a 10 percent increase. This also comes back to the poll done in the New Zealand Herald where 33 percent of small to medium sized businesses\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022 data-id=\u0022ec2c588322524ea19756084ae845f87f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000199\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ec2c588322524ea19756084ae845f87f\u0022\u003EMETIRIA TUREI (Co-Leader\u2014Green):\u003C/span\u003E It is a shame that we do not have the pleasure of John Boscawen\u2019s company. In his earlier contribution he said that those on the very lowest incomes should be terribly grateful that they got 85c or some such in the Budget, because they could have got nothing. He is quite right. John Key\u2019s Government had a choice about who would benefit the most from this Budget and who would benefit the most from the personal tax cuts in the Taxation (Budget Measures) Bill. His decision was that those on the lowest incomes would not benefit the most, and certainly that we should not have a progressive and fair tax system or progressive and fair tax cuts in this Budget. John Key\u2019s choice was that the richest people in this country\u2014the richest New Zealanders\u2014should benefit the most. We certainly see that that is the case. Of course, John Key could have chosen differently, but he did not. He has chosen to increase the gap between rich and poor. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000200\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EEarlier I talked about an alternative\u2014and I see that John Boscawen is now here\u2014to this tax cut regime that would be progressive and fair, which is having a zero tax rate for the first $10,000 of income earned. I mention in relation to that alternative that not only is it progressive, fair, and cheaper than the current tax cuts proposed in this Budget and in this bill, but also it is used in many other OECD countries. In Australia the zero tax threshold is $16,000, in Canada it is $10,000, in France it is $5,600, and in Germany it is $7,800. We certainly would not be leading the charge on a tax-free band of income that is progressive and benefits those on the lowest incomes. Of course, in those countries too they have much higher tax rates at the top. In Australia, for example, there is a 45 percent tax rate for those who earn over $180,000. So it is a more progressive system of tax than we have here. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000201\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EOne of the other provisions in this part of the bill is the increase in GST. That is an additional regressive tax on top of the regressive personal tax cuts that are being proposed. The increase in GST is not fair, because it will hurt the poor more. We know that those on the lowest percentile or 10th percentile pay 14 percent of their income in GST, and those on the very top percentile pay only 4 percent. So proportionally those on the very bottom percentile will pay more GST in proportion to their income than those at the very top. Therefore any increase in GST is grossly unfair. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000202\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EThat is why the Green Party continues to propose the much fairer system of a capital gains tax, excluding the family home. In the long term that system would return some $4.5 billion to the income sector. It would also broaden the tax base across the community and provide significant incentives for a shift in investment away from the property sector into more productive investments. The John Key Government says it wants to do that, but it has done nothing to make sure that it happens. It has no kind of strategy to ensure a genuine shift of productive investment away from a property boom into more productive areas. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000203\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EThe Government had another choice with tax cuts, whereby people on the lowest incomes could benefit. Inequality is one of the bigger issues that this country faces. The Greens released the Mind the Gap package on Monday, and in it we proposed that the in-work payment, which replaced the child tax credit and applies only to some families, should be extended to apply to families at the very bottom of the income sector. Those families are beneficiary families; 140,000 families do not qualify for the in-work payment because they are beneficiaries or they do not meet the working hours criteria. The children in those families live in the worst poverty in this country. Some 200,000 children live in the worst poverty and they are the children of these families. Why are these children suffering just because John Key wants to put thousands of dollars in the back pockets of some very, very rich people? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000204\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EIt would cost around $300 million a year to extend this payment, so there is a cost.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022fd427be0-7196-4605-b39e-d665553240b0\u0022 data-id=\u0022b223917bf6dd4bee9606c33b22a99afc\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000205\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fd427be0-7196-4605-b39e-d665553240b0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b223917bf6dd4bee9606c33b22a99afc\u0022\u003ELYNNE PILLAY (Labour):\u003C/span\u003E First, I commend Metiria Turei for a great speech. I totally agree with all the points that were raised. We all know on this side of the Chamber\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000206\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022df788c48-b9be-42fd-b8f2-76629a5572b8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220cdb8fc681cc48339428707f45a923ee\u0022\u003EHon Dr Wayne Mapp\u003C/span\u003E: When is Labour going to start to decrease the deficit? It didn\u2019t do it in 9 years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000207\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fd427be0-7196-4605-b39e-d665553240b0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c8c0edcfffe04c63ba2d5bdc766ca37a\u0022\u003ELYNNE PILLAY\u003C/span\u003E: I hear Wayne Mapp and see that he is feeling embarrassed about this tax swindle, which is based on total self-interest. How do we know that these tax cuts are based on self-interest? We know because the big winners are the people who earn high incomes. The tax cuts are for the privileged few. They are really, really unfair. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000208\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fd427be0-7196-4605-b39e-d665553240b0\u0022\u003EIf we look at people on low incomes, those who need tax cuts the most, we see that they are hit by the rise in GST. That is very unfair in terms of the distribution and liability on people on low incomes. The effect on them is very disproportionate. Then there are the tax cuts. If we look at people on low incomes\u2014those on 20 grand or 40 grand a year; people with families\u2014we see that they get next to nothing out of the tax cuts, yet this Government is borrowing big time and cutting public services in order to fund them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000209\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fd427be0-7196-4605-b39e-d665553240b0\u0022\u003EWhen we look at people on high incomes like those that members of Parliament are privileged enough to earn, we see that is where the big gains are. If we look at even higher incomes, the tax cuts are so much higher. That action has been taken by a Government led by a Prime Minister who categorically said that National would not raise GST. I ask Mr Mapp whether that is correct, because he is not interjecting very much now. Did John Key say that National would not raise GST\u2014yes or no? Did John Key say that? The members opposite know very, very well that John Key said that, but it has all changed. That promise was broken so that one-third of the tax cuts goes to the top 5 percent of income earners. The top 1 percent of earners will get 15 percent of the tax cuts\u201415 percent of the tax cuts goes to the top 1 percent of earners. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000210\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fd427be0-7196-4605-b39e-d665553240b0\u0022\u003EDoes that sit alongside the funding that was reintroduced by the Government, such as the big funding boost for private schools? That was done at the cost of the most disabled children in New Zealand. We know there has been some increase in funding for disabilities, but when we look at it we see that the Budget has a paltry amount for people living with disabilities. If we compare that funding with the extra $1.4 billion, we see a big hole in health spending. That is what this Budget is about. This Budget is about a great big hole in health spending because a huge amount is going in tax cuts to the wealthy in New Zealand. Members on this side think that that is grossly unfair. It is actually immoral. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000211\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fd427be0-7196-4605-b39e-d665553240b0\u0022\u003EWhere else do we see casualties?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000212\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221fb8d8db-3e96-49c7-ab1c-b7916a50e30e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002246974c126a5d4c6480ba3ff95ac312fc\u0022\u003EHon Steve Chadwick\u003C/span\u003E: Casualties in State housing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000213\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fd427be0-7196-4605-b39e-d665553240b0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022165aa39362dd477ab24bb17df51a1325\u0022\u003ELYNNE PILLAY\u003C/span\u003E: I ask my colleague, who has been a strong advocate for State housing for our most vulnerable families, whether it is correct that $18 million\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000214\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221fb8d8db-3e96-49c7-ab1c-b7916a50e30e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002239c7b72f0bf341f29d3b048572f70b50\u0022\u003EHon Steve Chadwick\u003C/span\u003E: $80 million.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000215\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fd427be0-7196-4605-b39e-d665553240b0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226d5df5ea36a44518afddd66a32982f89\u0022\u003ELYNNE PILLAY\u003C/span\u003E: How much has been cut? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000216\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a40f5af7-f9b0-4b44-9669-9e63be1c3ced\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f42707c91c4944b2a246b55897e644e2\u0022\u003EDarien Fenton\u003C/span\u003E: Nearly $100 million has been cut from housing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000217\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fd427be0-7196-4605-b39e-d665553240b0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022636c6c15c41d49b28ee5ff7a5ef0ebec\u0022\u003ELYNNE PILLAY\u003C/span\u003E: Nearly $100 million has been cut from housing, and that is by a Government that says that it cares about people. We all know that one of the key things that families need is safe and affordable housing. We know that in cutting that area the real casualties will be the families most in need in New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000218\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fd427be0-7196-4605-b39e-d665553240b0\u0022\u003ELet us talk about early childhood education. When Labour brought in its early childhood policies the National Opposition vehemently opposed them. In this Budget the Government did not have the guts to cut the funding, but by stealth it is cutting away all of that really good investment. Those building blocks for our children\u2019s future are being cut. It is absolutely reprehensible that the members of this Government will take money away from families, from children, and from those who need it most in order to fund tax cuts for themselves.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022 data-id=\u0022acb5b4f9094e4bfe8bb0a2dee510379a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000219\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022acb5b4f9094e4bfe8bb0a2dee510379a\u0022\u003ECAROL BEAUMONT (Labour):\u003C/span\u003E One of the most annoying things I have heard in this debate so far is that every time members on this side\u2014Green or Labour\u2014outline the absolute unfairness of the tax changes that are being made by the Government, we have levelled at us that our comments are about the politics of envy. I can only conclude that the reason that little Crosby/Textor line, no doubt, about the politics of envy is being trotted out is that those members know that what we are saying is true. They know that the small tax cuts that people on low and middle incomes will get will be completely offset by increases in GST and other inflationary pressures.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000220\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003EThat is unfair. How just is it that those on the lowest incomes, who cannot make ends meet at the moment, will get a paltry increase in income, while those with more than enough will get huge increases? How just is that? How just is it that they will face significantly higher costs as a result of inflation peaking at 5.9 percent, which will wipe out their tax cuts? How just is that? How just are these changes, when they follow on from the previous unfair tax cuts made by this Government? In the electorate of Maungakiekie, where I am working, 64 percent of people earn $40,000 or less, and they received no tax cut in 2009 or 2010. Now they will get a paltry tax cut, which will be offset by increased costs. How just and how fair is that? Members opposite can call my comments the politics of envy if they like, but they know that that position is not fair.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000221\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003EI want to talk about the economy. The rhetoric of the Budget\u2014and we heard it leading up to the Budget, and we hear it in the Budget-speak\u2014is all about rebalancing the economy. The Government says that we will have a smart economy, and that it values education. Actually, the only measure to appear in the Budget is the waving of the magic wand of tax cuts. Suddenly, the economy will be rebalanced! Suddenly, there will be the growth in productivity that there is a lot of rhetoric about! There is a lot of rhetoric about lifting productivity. Nobody in this House would disagree about the need to lift productivity, but talking about it is not sufficient. Where is the investment in people? What is going on in terms of tertiary education funding is social and economic vandalism.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000222\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003EI will talk particularly about investment in people who are already in the workplace. There are further cuts to adult and community education, which will affect those who want second-chance learning. Where is the money for industry training? Where is the money that would actually lift us in terms of the technical skills we need? We have a structural skills problem in New Zealand. Where are the initiatives in the Budget to deal with that? I ask that somebody opposite stands up and answers that question. Eighty percent of the people who will be in the workplace in 10 years\u2019 time are already in the workplace, so to change our skills deficit we cannot just invest in people entering the workforce; the Government also has to focus on investing in those who are already in the workforce. People who, in their own time, want a second chance at education through adult and community education are out of luck in many parts of New Zealand, and I am sure that position will get worse. What about those who want to learn when they are in the workplace? Where is the extra funding for that kind of learning? There is a lot of talk about productivity, but without the skills to change how work is undertaken, without the skills to implement and utilise new strategies and new technology, we will not go forward as a country.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000223\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003EWhen we look at the reduced increase in funding for research and development, the complete absence of initiatives in terms of skills, and the absolutely minuscule funding for tertiary education, we have to ask ourselves how serious the Government is about lifting productivity. The answer, I am afraid to say, is it is not serious at all. Cutting taxes will not lift productivity. Other measures have to be taken. There have to be economic development strategies. There needs to be investment in our people. I would have really appreciated seeing some effort put in that area, but, no, there has been none.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022 data-id=\u0022d188bb1502d54b9ca9d20c72082e3854\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000224\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d188bb1502d54b9ca9d20c72082e3854\u0022\u003EMETIRIA TUREI (Co-Leader\u2014Green):\u003C/span\u003E I will briefly refer to the corporate tax rate, which is being cut in Part 1 of the Taxation (Budget Measures) Bill. We know that the corporate tax rate will go from 30 to 28 percent. We also know that this Government has an intention to continue its approach concerning alignment, and I wonder whether\u2014we have heard nothing, as far as I am aware, from the Government at this stage\u2014the Government, in fact, intends to eventually bring the top tax rate down to 28 percent. If it is truly committed to alignment, that is obviously what it will do next. The question is whether it would do that in an election year\u2014which would be the next Budget\u2014or afterwards. Will the Government tell New Zealanders that it intends to not only lower the top tax rate by 5 percent in this Budget, which is twice as much as the tax rate has been lowered for those on the lowest incomes, but that it intends to give those on the very top incomes another tax cut in the very near future to 28 percent\u2014the corporate rate? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000225\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EThat discussion has not been raised yet in the debate on the corporate tax rate, as far as I am aware. It is of serious concern if it is the intention of the Government to continue to lower the top tax rate, because the burden and the cost of that will be borne by those at the very bottom. They will pay, and continue to pay, not only for the corporate tax rate, whether in GST increases or in some other form, but also for increasing cuts to the top tax rate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000226\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EI referred earlier to one of the other choices that this Government had to reduce the gap between rich and poor, income disparity, and inequality in Aotearoa. I described the alternative that we had proposed in Mind the Gap regarding the in-work tax credit. I follow that up by saying that if the in-work tax credit were extended to those who are on benefits and those who are not working and who currently do not meet the hours criteria for paid employment, we would see $60 a week in disposable income going to 130,000 of the poorest New Zealand families who have up to three children. The 10,000 poorest New Zealand families who have four or more dependent children would benefit even more. It is about benefiting and supporting our children, the children who need the most because they are the most vulnerable and the poorest. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000227\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EPart of it is also about housing. There are clauses in the bill that deal with housing. What is obvious, and my colleague from Labour talked about this earlier, is that this Government has cut provision for the building of new State houses. It has cut at least $100 million from the State housing budget such that there will be no upgrades and no building of new State homes. That is a disgrace. We have 10,000 families on the State house waiting list. All that is happening is that those families are churning around through the existing State housing. Some come out and try to get into private rental housing; some go back into State housing. The waiting list has continued to churn. This Government is doing nothing to provide housing\u2014homes\u2014for our most vulnerable families. Those are families who are desperate just for somewhere to live. Instead, we have two or three families crowded into private rentals that are expensive, cold, and damp. That is causing $1 billion worth of health problems from cold, damp, overcrowded housing. Yet this Government will give thousands of dollars in cash to the richest people while families are desperate for just somewhere to live. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000228\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EThis is the Aotearoa that we have now\u2014an unequal country where those families who need somewhere to live have nowhere, because this Government will not build houses and invest in those families. This Government will spend $10 billion on new motorways, which are holiday highways for their friends, but they will not spend money on homes for our families who need it the most and for our children who are in the worst poverty\u2014the 200,000 children who live in the worst poverty in this country and the poorest families who are in desperate need. This Government does not even see those people. They are invisible to this Government. They do not know them, they do not see them, they do not care.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u0022fe613e259ad146fa9cba9367c0e3a00c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000229\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022fe613e259ad146fa9cba9367c0e3a00c\u0022\u003EHon PETER DUNNE (Minister of Revenue):\u003C/span\u003E I take a brief call to respond to some of the points just made by the member who has resumed her seat, Metiria Turei. She asked whether some dastardly plan was afoot to align the personal and corporate tax rates at 28c at some point in the future. I disillusion her by saying that there are no present plans to move in that direction. The Government\u2019s medium-term intention remains the alignment of rates, but, frankly, that will occur as fiscal circumstances permit. If one looks at the Budget tables and the Budget figures, one sees that there will not be a rapid path in the direction that she fears and that others would welcome. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000230\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI come to the real point that lies behind the issue. As the Tax Working Group disclosed, the big issue was the discrepancy between the top personal rate and the trust rate, because over the last decade, since the Labour Government in 1999 hiked that top rate, we have seen a massive explosion in the use of trusts.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000231\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002288648b5339c64aed9eea6e67b26f9a50\u0022\u003EMoana Mackey\u003C/span\u003E: We campaigned on that and were honest about it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000232\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022655ef4d306914697b873935779cb6e1c\u0022\u003EHon PETER DUNNE\u003C/span\u003E: I acknowledge that Labour campaigned on it, but it was the most stupid and inept tax decision made in the last decade. It has created a massive explosion in the use of trusts, not for property protection reasons, but for income sheltering reasons. That explosion has cost revenue and has cost the taxpayers of New Zealand around $300 million a year in revenue forgone. Over the period of the decade, that was about $2.7 billion. If Metiria Turei wants to talk about having a tax-free threshold, which is extremely expensive, she should just bear in mind that she would have been able to achieve that, had we not had that leakage over the last decade. The point that needs to be made is that by aligning the rates in terms of the trusts and the top personal rate, as is set out in the Taxation (Budget Measures) Bill, we will actually secure revenue for the future that can be used to give funding to some of the dreams that members might have. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000233\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI will talk about the in-work tax credit. I am in the unusual position of having been part of the previous Government when the Working for Families scheme was being developed. One of the things that was critical there, and members opposite have quite rightly campaigned on it, was that that Government wanted a difference between the level of support provided to people who were in work and to those who were not\u2014hence the title, the in-work payment. If we were to extend the in-work payment to those who were not in work, we would actually defeat the whole purpose of what Working for Families was about. The title was deliberately chosen; it was about families who were in work and struggling to make ends meet, and about giving them a boost. Extending it across the field simply broadens the welfare net. I give credit to the previous Government for not including that idea in the original thinking. I think that point detracts from the member\u2019s argument. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000234\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe other thing I mention was that the hoary old chestnut of the capital gains tax was wheeled out by the Greens as part of their Mind the Gap package\u2014I thought that was a railway term from the United Kingdom, but never mind. The reality is that a capital gains tax in New Zealand would add hugely to compliance costs, would not be fair, and would not raise the revenue that is supposed to be attached to it. Over a long period of time it might, but it is a simplistic argument to say that we should have a comprehensive capital gains tax, exempt the family home, and all the revenue that will flow will allow nirvana to be created in this nation. It simply does not work that way. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000235\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI am delighted that we have rejected the notion of a capital gains tax; I think it is time to bury the idea once and for all. It has been floated over the last 20 years, and no Government has ever picked it up, because whenever a Government has looked at the reality of what it would actually mean, it has worked out that it would be worth far less than the trouble, the disruption, and the chaos it would create. It is far better to move to an alignment of rates, far better to smooth out some of the discrepancies that are there at the moment, and far better to deal with some of the abuses that we will talk about in later parts of this bill\u2014which are distorting investment patterns and creating biases in the economy\u2014than to impose what would be the ultimate of envy taxes. That is where that policy becomes a complete failure and a nonsense. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000236\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EAs I conclude, I acknowledge that this debate may have a little bit longer to run, but I say that it has been a good, constructive debate today, and I congratulate all of the members who have participated. I disagree profoundly with many of the things that have been said, but I think there has been a good airing of the issues. Let us hope that we can continue in this spirit.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022 data-id=\u002226705134f78046c6b32fab5a8a926025\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000237\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002226705134f78046c6b32fab5a8a926025\u0022\u003EMOANA MACKEY (Labour):\u003C/span\u003E I thank the Minister in the chair, the Minister of Revenue, for taking a call. You know, it is interesting that the Minister was responding to the Green member Metiria Turei. Well, she talked about people and about the impact of this Government on people. With the greatest of respect to Government members, I have been noticing that they are not talking about people. They like to talk about the taxation system, but they do not like to talk about how that system works for the people of New Zealand, because these changes will not work for the people of New Zealand. The Minister said the Government may be looking at making a further alignment of tax rates, as fiscal circumstances permit. Well, fiscal circumstances do not permit the changes that are happening in this Budget and in this legislation. In fact, we have a hole of half a billion dollars coming from a Government that promised not to borrow in order to fund tax cuts. Members on this side of the House would argue that fiscal circumstances do not permit these changes to be made, so why should we have any confidence that the Government will wait for fiscal circumstances to permit further changes to be made? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000238\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003EThe Minister of Revenue also mentioned the revenue windfall that will come from the alignment of the trust rate and the personal income tax rate. Well, if there is to be such a windfall, why are we increasing GST? Why do we need to increase GST when the changes to the income tax rates, by the way, as an unintended consequence happen to deliver a $1,000 a week tax cut to someone who is on a million dollars a year? Why are we doing that if we have to raise GST? Clearly, the revenue windfall will not be as great as the Minister and the Government would have us believe, because we have to load a tax increase on to the poorest families in New Zealand, which John Key promised before the election that he would not do.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000239\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022df788c48-b9be-42fd-b8f2-76629a5572b8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225be1c7bbb5de49328f671a2a602906fe\u0022\u003EHon Dr Wayne Mapp\u003C/span\u003E: We\u2019re moving away from the decrepit, old, wretched ways of Labour.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000240\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220ad9f6eb19cf4862961e61fdd04feaca\u0022\u003EMOANA MACKEY\u003C/span\u003E: Dr Wayne Mapp has been sitting here throughout this entire debate and chipping away. Instead of sitting there like a dried arrangement, why does he not get on his pins and take a call? Instead of chipping away, why does he not take a call? This is the Minister of Research, Science and Technology who has gutted the funding for research, science, and technology. He has not been a good advocate for that sector, and that has continued in this Budget. Less than half the money that was in place when Labour left office is now in place, and he expects scientists to be happy about that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000241\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b91b2def85f74b61b4783bdd9fec6908\u0022\u003ECraig Foss\u003C/span\u003E: I take offence at the reference to his pins.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000242\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e7200442745d46f99f86fecef351d6c5\u0022\u003EMOANA MACKEY\u003C/span\u003E: Craig Foss takes offence that I called them\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000243\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002202b7031f09f948efbee22782e29ec450\u0022\u003ECraig Foss\u003C/span\u003E: Can we table his pins?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000244\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e97704c86975424fb831337ebef9132b\u0022\u003EMOANA MACKEY\u003C/span\u003E: I say to Mr Foss that he can table Dr Mapp\u2019s pins if he would like to; I will leave that entirely up to him. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000245\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003EThis legislation puts in place the tax swindle that is Budget 2010. It is based on three main broken promises. One is that the Government swore black and blue before the election that it would not increase GST. Less than 18 months later we are passing legislation that will raise the rate of GST by 20 percent. That is a broken promise. Secondly, National swore black and blue that it would not borrow in order to fund tax cuts. We are putting in place legislation today that borrows in order to fund tax cuts. That is broken promise No. 2. Broken promise No. 3 is that no one will be worse off. Well, by the Government and Treasury\u2019s own figures, someone who is on the average wage will be $30 a week worse off under this regime, when we factor in the GST increase and the effects of inflation. Is it not interesting that the Government\u2019s tax calculator, which it had up on Treasury\u2019s website, factored in inflation at less than 2 percent, when the Budget documents said it will be 5.9 percent? What kind of swindle is it that the Government\u2019s own tax calculator is deliberately producing misleading figures in order to make\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000246\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022df788c48-b9be-42fd-b8f2-76629a5572b8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022eb0922ff086b47b38ec3e8414a19f445\u0022\u003EHon Dr Wayne Mapp\u003C/span\u003E: No, you\u2019re misleading\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000247\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a1ed2aa5ba3a4d2aa771660e064a4d89\u0022\u003EMOANA MACKEY\u003C/span\u003E: I ask Dr Mapp not to point at me. He should stop sitting there like a dried arrangement and get up and make a speech, instead of doing it from the comfort of his chair. He has not bothered to get up to explain to scientists in this country why he has slashed their funding since coming into Government and becoming their Minister. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000248\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003EDo members know that a number of scientists were laid off at the Institute of Environmental Science and Research this week? Why? It is because of health cuts and cuts in the budget that that Minister oversees. Scientists in the health science area are some of the better-paid scientists in New Zealand. The Minister says that scientists are rich. I think he needs to go out and talk to them, because the Prime Minister included scientists in the list of people who are rich in this country, along with nurses\u2014and the Nurses Organisation had something to say about that\u2014and teachers. I suggest that he goes and talks to some of them, instead of sitting in his chair and chipping away. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000249\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003EI will have a lot more to say about housing in my Budget debate speech, as well. When we look at how it is being paid for, we see that the Government, which went on and on about how it would be great for State house tenants, has made a $100 million cut relating to the procurement and building\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022 data-id=\u0022b69cbd5bfa8b4a7c9bd26c1adc73fc3c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000250\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b69cbd5bfa8b4a7c9bd26c1adc73fc3c\u0022\u003EDAVID SHEARER (Labour\u2014Mt Albert):\u003C/span\u003E I want to take another call in the debate on Part 1 of the Taxation (Budget Measures) Bill. Basically, Tracy Watkins has it pretty much right: the Budget is an \u201COld-fashioned vote-winner\u201D. It is not really about increasing our productive economy, and it is not really about trying to grow our economy; it is really about the Government getting back into power in 2011.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000251\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EThere is a lot of positive talk out there about the tax cuts and how much they will bring in. I believe that over the next few days, as we start to unpick what the Budget really means, we will get to the real core of what it means\u2014that, in effect, the small amount of money that people on the average wage will get in their hands will be chipped away by GST, by power prices, by accident compensation, by tobacco tax, and by increased rates, if one happens to live in Auckland, to pay for the super-city structure. On top of that, there have been the lowest wage increases in a decade. When the combination of those facts sinks in, people will start to understand that the Budget, as we have been saying today, is an enormous swindle, and it will leave a bitter taste in people\u2019s mouths.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000252\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EWhat I want to talk about is what the tax cuts mean in terms of our productive economy. Let us take a look across the Tasman, as this Government always wants to do, and see what the Australians are doing. They will decrease their company tax rate down to 28 percent, like New Zealand is doing. We have got the jump on them, as the Government says. But companies in Australia pay superannuation contributions of 9 percent to 12 percent. Let us think about how much money in that economy\u2014how much savings\u2014is available for the productive sector to reinvest in the economy. What has been done here in New Zealand? The Government has dropped the employer superannuation contribution from 4 percent down to 2 percent. Our savings are woeful. In Australia people understand that increasing their savings, increasing their capital to be able to invest into their productive economy, is the way forward.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000253\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EAustralia has given a 40 percent tax credit to its innovative companies\u2014a 40 percent tax credit. So a company in Australia that invests in innovation gets 40 percent of its tax back for its efforts. We used to have a tax credit, and it would have doubled our business research and development. Instead, we have the State subsidising our companies. The State, which cannot afford to do so at the moment, is subsidising our companies. On top of that, we have a farcical scheme called Primary Growth Partnership. Thirty million dollars was supposed to go into the Primary Growth Partnership in 2009-10. How much has gone out of the scheme? About $3 million went to greenhouse gas research. The rest of it has delivered nothing. So 18 months after the Government axed the Fast Forward Fund, which transferred $700 million into productive research, what do we have? We have nothing\u2014zip, zero\u2014going out of the Primary Growth Partnership. For 18 months, during which our scientists, in combination with business, could have been investing in our productive economy, they have not received a thing. What has happened as a result? I will tell members. Thirty-six staff from AgResearch\u2019s wool and meat sector have been laid off. That used to be a productive enterprise. Under this Government, it will no longer be a productive enterprise. We have lost 12 to 15 people from the Institute of Environmental Science and Research. We have seen today that the Budget\u2019s reprioritisations, as the Government is calling them, will move money out of environmental research and out of heath research, and a bunch of good policies will be cut as a result.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022 data-id=\u0022ec3e537def824fc6b97e1b3777a07ead\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000254\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ec3e537def824fc6b97e1b3777a07ead\u0022\u003EJO GOODHEW (Junior Whip\u2014National):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u0022ecfb1fc529504a54a26577e5bfb80579\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the question be now put.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 66\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 58; ACT New Zealand 4; M\u0101ori Party 3; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 50\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 43; Green Party 7.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EMotion agreed to.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022 data-id=\u0022b1dc6d2234aa4fada6fd89a3709493d5\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000255\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b1dc6d2234aa4fada6fd89a3709493d5\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: Before I put the question on Part 1, there are four amendments to Part 1 in the name of the Hon David Cunliffe. The three amendments to clause 45 are not in order, as the Minister has issued a financial veto certificate in respect of each of them. These certificates are on the Table.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000256\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003EThe question was put that the following amendment in the name of the Hon David Cunliffe to the cross-heading above clause 44 be agreed to: \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000257\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003Eto omit \u201Cto Goods and Services Tax Act 1985\u201D and substitute \u201Cdesigned to Increase Goods and Services Tax\u201D.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u002284d8f3c4d067413f929595b92a15c4d3\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the amendment be agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 50\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 43; Green Party 7.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 66\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 58; ACT New Zealand 4; M\u0101ori Party 3; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAmendment not agreed to.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u00226eb9b98a328543f9a345cd31bce75300\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That Part 1 be agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 66\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 58; ACT New Zealand 4; M\u0101ori Party 3; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 50\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 43; Green Party 7.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EPart 1 agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000258\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00221e4c4b005d8942d9831491d59b86137c\u0022\u003EPart 2  Personal tax cuts: 2010-11 start\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u00225f06bfadbe7044eda630c2eeb1cc4709\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000259\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225f06bfadbe7044eda630c2eeb1cc4709\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E Sorry, Mr Chairman; I did not hear you at first. I was dreaming a little bit about what I would do if I were Paul Reynolds and I was about to receive $1,700 a week extra in the hand. That is about $7,300 a month. I could go first-class home once a month I suppose\u2014or I could buy a rental property. Here was a classic opportunity to change the structure, and balance the economy around rental property investment, but that opportunity was not taken. But with about $88,000 in the hand every year, thanks to these tax cuts, I think Paul Reynolds will be smiling. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000260\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe thing is, as my colleague Trevor Mallard pointed out, inflation will really eat into the majority of New Zealanders\u2019 tax cuts. The Minister will know better than I do but I think that about 0.89 percent of people earn over $150,000. Those people who earn over $150,000 will do very, very well out of this Budget. They can do exceptionally well. But, then again, if I were on the median income, I would be getting about $5 a week in the hand. I would be getting about $250 a year. What can a person do with $5 a week in the hand? Simon Bridges said this Budget was about all New Zealanders. He said the Government was providing opportunities for street sweepers\u2014those were his words. Well, the Government has taken away community education, but, anyway, that is another story. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000261\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EOne thing that has not been factored into this, which I think really has to be, is the inflation rate of 5.9 percent. I do not think that that inflation figure is right. I think it is too low, and the reason I point that out is that there is an overlying assumption that prices will increase by about 2.5 percent, because that is the rate of the increase of GST. What will happen\u2014and I started to talk about this before but I ran out of time\u2014is that businesses will price strategically. Let us consider an item priced at $49.95. We do not pay $50; we pay $49.95. The reason is that it sounds lower than $50. We know there is only a 5c difference but it sounds lower. It is a feel-good factor. So if we take off GST of 12.5 percent and put on GST of 15 percent the price comes up to $51.06. No retailer will price something at $51.06c. It does not sound good; it does not sound like a bargain. The next strategic price point on that item is actually $54.95, which represents about a 10 percent increase. We will see this practice on a lot of goods. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000262\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ENow, there is an argument that the market will not allow that\u2014it will allow only $49.95 and therefore the increase will not happen. The problem with that is that the retailer\u2019s margins will be really squeezed, and he or she will look for other ways to claw back that margin. So we will get a completely uneven distortion of prices. Here is my real concern for a lot of New Zealanders, and I include superannuitants in this. They believe or have been told it is only 2.5 percent, which will raise $2 billion a year, but it will be a lot more than that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000263\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe other thing is I did a radio interview this morning and I talked about inflation at 5.9 percent. That is not a Labour figure; we are not scaremongering. That figure is in the official Budget documents. I said inflation was going up to 5.9 percent, but the guy said it was dropping down to about 2.4 percent again. I said it would, but that does not mean that prices drop down. I think there is a perception out there that if inflation increases, then prices go up, and if inflation drops from 5.9 percent to 2.4 percent, then prices drop. That is not the case. It means that, everything being equal, prices increase by 5.9 percent, then increase by only 2.4 percent. The real value of savings, tax cuts, and all that money people put away is eroded right down to the point where it is worth nothing. Anyone on the median income or anything below $70,000\u2014and people on that income are not wealthy\u2014is worse off than before the Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000264\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI want to talk about something that the Minister of Revenue, Peter Dunne, talked about, on which I am in total agreement with him; that is, aligning the trust and the top marginal tax rates. I do not agree with dropping the top marginal tax rate down to 33 percent; I think we could get away with increasing the trust rate. As the Minister alluded to, people were channelling profit through trusts. When people get dividends from a company, they pay tax on that at their marginal tax rate. Before this Budget, people were paying tax on their dividends, their profits, from a company at 38 percent if that was their correct marginal tax rate.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022 data-id=\u0022aceae6afe7034b4abe464336c11b3763\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000265\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022aceae6afe7034b4abe464336c11b3763\u0022\u003EMETIRIA TUREI (Co-Leader\u2014Green):\u003C/span\u003E Before I discuss the issue of energy poverty in terms of the tax cuts in Part 2 of the Taxation (Budget Measures) Bill, I will refer to a couple of statements made by the Minister of Revenue, Peter Dunne. One was his criticism of a capital gains tax, excluding the family home. He mentioned the compliance costs and how difficult it would be. There is a capital gains tax in practically every OECD country on the planet. It is an area of tax reform that is progressive and broad, and New Zealand is seriously lagging behind. Not only do most of the other OECD countries have a capital gains tax of some form but also they include\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000266\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002277d24ed0ad41447b8aaea4e57d45c2da\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I bring the member back to Part 2. Part 2 is not about capital gains tax, so I ask the member to concentrate on Part 2.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000267\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225f90036b2ba84308829c76ed68941367\u0022\u003EMETIRIA TUREI\u003C/span\u003E: Part 2 is about the rates, but it is also about personal tax cuts and decision by this Government that the best way to fund those personal tax cuts is by giving to the richest a tax cut that is funded by an increase in GST, which affects the poorest. The alternative is a capital gains tax, as the Minister was describing just a few moments ago. I remind Minister Dunne that the UK, the US, and Australia have a capital gains tax, but New Zealand does not. On that basis alone, we are obviously lagging behind. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000268\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EThe other issue the Minister raised, again in terms of the justification for cutting taxes for the richest in this country, concerned the corporate tax rate. The fact is that those who are the richest and who were using dodgy means to avoid paying the top tax rate will now have to pay only 33 percent if they are being straight up. But now they can use business as a means to funnel their income to the tune of a 28 percent tax rate as opposed to a 38 percent tax rate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000269\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003ENew Zealand is one of the easiest places in the world in which to do business and to establish a business. It is very common for New Zealanders to set up businesses for a variety of purposes. I am very concerned that the corporate tax rate dropping to 28 percent opens up another loophole for those who are very wealthy to avoid paying their fair share. There are other choices too. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000270\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EOne of the issues with the personal tax cuts is that prices are increasing. We have seen energy prices increase by 40 percent in the last 9 years. People are having to pay more in all sorts of areas, but they are not being compensated in these personal tax cuts. One of the areas where they are not being compensated is that of energy and electricity. We know that a pensioner who lives on his or her own in an old house has a 97 percent chance of living in energy poverty. There is nothing in this legislation, or in the personal tax cuts this legislation deals with, that will address the needs of that pensioner, or of a solo parent in the same situation, who is living in energy poverty. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000271\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EWe need to have reform\u2014and this is a choice John Key could have made\u2014of the electricity system to provide for progressive pricing so that all families have access to a fixed cheaper rate of electricity to help alleviate energy poverty. Seventy thousand of our poorest families are suffering the most, but 350,000 would benefit from that change. These were the choices this Government could have made, but it did not make them. Instead, in this legislation it has chosen to give the biggest tax cuts to the wealthiest and to make the poorest people pay. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000272\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EIt begs the question of why this Government would make those choices. Why would it place the burden on those who have the least? Why did it not look at alternatives\u2014alternatives that would not cost the Government money except for set-up costs? Certainly that would be the case if we looked at progressive pricing. National did look at progressive pricing in the 1990s and considered it as a potential option as a means to reduce the costs on families. These are costs they cannot avoid and that they have to bear in order to keep their families safe and warm. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000273\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EWe know that families in this country are not safe and warm in their homes. We have a terrible problem with cold, damp housing, and it is causing a billion dollars of costs to our economy in lost productivity, in truancy and education costs, and in health costs. There is no plan in this legislation, which is so urgent we have to deal with it on a Friday, to deal with any of the expected costs that our poorest families must deal with. The personal tax cuts will do nothing for those families who are living in energy poverty. We are coming up to winter. It is May and we need it now.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022 data-id=\u00224cbe123693dc42d9b598211e726b54e7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000274\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00224cbe123693dc42d9b598211e726b54e7\u0022\u003EBRENDON BURNS (Labour\u2014Christchurch Central):\u003C/span\u003E I am very pleased to speak on Part 2 of the Taxation (Budget Measures) Bill. My colleague Stuart Nash chose a Rolling Stones analogy for this Budget and this bill, in terms of saying it did not give people satisfaction. There are other Rolling Stones songs that are equally appropriate. One is \u201CPaint it Black\u201D, because this is a \u201Cblack\u201D Budget and bill for many New Zealanders at the lower end of town. Another song is \u201CGimme Shelter\u201D from the top tax rates\u2014and, in the words of another song, \u201CGimme my money back\u201D. If members recall, there is a Rolling Stones album called \u201CVoodoo Lounge\u201D, and this bill is about voodoo economics. President Reagan believed that if he cut the top tax rate, suddenly there would be a new surge of economic growth that would pay those funds back. We will see the borrowing of half a billion dollars in order to pay for tax cuts at the top end of town. \u201CJumping Jack Flash\u201D is another Rolling Stones song. Jack Flash is very happy. He is jumping because he is receiving the benefits of this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000275\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003ELet us turn to Part 2 of the bill, which has two changes. The one that I want to speak in support of is the integrity of the Working for Families package and the efforts of the Government to remedy the problem arising from some people offsetting investment losses, such as losses from rental properties, against their taxable income, for the purpose of increasing their Working for Families entitlements. There are no problems from this side of the House with that change in the bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000276\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EBut the other change relates to the indexation of the Working for Families abatement rate. The party opposite used to rail about the impact of fiscal drag on working people and say we needed to adjust the rates so that people would not have their incomes eroded by inflation. Yet here were are heading into an inflationary period that Treasury estimates will hit darn near 6 percent, and we see this bill de-index the abatement rate for Working for Families. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000277\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EThose working New Zealanders who\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000278\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022df788c48-b9be-42fd-b8f2-76629a5572b8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c41025328d0a426d9e3acbe9815a1988\u0022\u003EHon Dr Wayne Mapp\u003C/span\u003E: There is a tax reduction instead.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000279\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229e147e63a9564e698ebed9b23b3a2687\u0022\u003EBRENDON BURNS\u003C/span\u003E: They will get tax reductions instead? Oh, wonderful! I ask Mr Mapp whether those reductions will not be affected by 6 percent inflation or by the July increases in power and petrol prices as a result of his subsidies in the emissions trading scheme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000280\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EIn this part of the bill we see a move to stop indexing for the impact of inflation on the abatement rate. There is no surprise about that, coming as it does from the party opposite. Was it not the Prime Minister who described Working for Families as communism? \u201CCommunism by stealth\u201D was the phrase that he used. Well, excuse me if I am a mite suspicious of Part 2 when we are seeing very stealthily the de-indexation of the abatement rate at a time of high inflation, and at a time when it is most important that Working for Families continues to rise with inflation. Yet this bill does absolutely the opposite of that. It will stop the inflation indexation of the abatement rate, and that, of course, will mostly come at the expense of lower to middle income families, who are the major beneficiaries of Working for Families. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000281\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EYes, as the bill acknowledges, there are people who are perpetrating rorts and maximising their exposure to Working for Families, and this part attempts to close off that. We have no difficulty regarding that. But de-indexing from inflation, at a time when we are expecting, by Treasury estimates, to see inflation go to 6 percent in the year ahead, is being done at absolutely the wrong time. It is being done because this Government really has no commitment to Working for Families; it regarded it as a terribly, awfully socialist policy. The fact is that Working for Families has lifted many thousands, tens of thousands, of New Zealand families out of poverty, and it sees many families not pay tax because they are on low to middle incomes and have a number of children. Those families deserve to be supported. We are supposedly a Parliament, a Government, and a nation that wants to protect and preserve families and their integrity. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000282\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EThe changes in Part 2 are around the integrity of the Working for Families package. I applaud the changes that will mean that people cannot rort Working for Families. But at the same time, this part clobbers ordinary working families, because at a time of such high inflation we will see an end to indexation. This will simply be one of those exercises that this Budget repeats time and time again: it gives with the one hand, and it takes back viciously with the other. It takes back viciously with the other because we will see an end to the indexation of Working for Families, at a time when inflation will go through the roof. That is wholly inappropriate. Members opposite should be screaming against that change.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u0022360df48273784d2d97f2277804362d2b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000283\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022360df48273784d2d97f2277804362d2b\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E My colleagues have let me speak because I wanted to continue on this theme that I talked about before, because I think it is quite an important piece of legislation. As I mentioned, I agree with the Minister of Finance on this, and I was explaining what used to happen. If people paid their marginal tax rate at 38 percent, they could channel money through a trust, and the final rate on a trust was 33 percent. But the dividends, or the disbursements, from the trust were not counted as income, and as someone said, there are trusts sprouting up like rabbits in Southland; I think John Shewan said that. People were setting up trading trusts that owned the companies, so they were paying a company tax rate. They were paying themselves about $70,000 or $69,995, just below the top marginal tax rate, and then that dividend from the company went into a trust, and they were paying money from the trust, disbursing it at 33 percent\u2014that is how they were avoiding tax. That is why it is very important to align the top marginal tax rate with the trust rate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000284\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI do not agree personally with dropping the top marginal rate down to meet the trust rate; one could have increased the trust rate to meet the top marginal rate. The difference with a company, for example, is that one does not need to have a trust to run a company. People were setting up trusts to avoid tax. There are a whole lot of reasons why people have trusts, and I know that the vast majority of members on this side of the Chamber have trusts, but the reason a lot of Kiwis have trusts is to protect their assets, not to run income through them. But the difference with a company is that dividends that were paid from a company were paid at its marginal tax rate, so it was harder to avoid. This will still create an avoidance industry, as Metiria Turei has pointed out, because if there is a differential, it will still create an avoidance industry. But it will not be nearly as high as it was under the trust rate. This is something we would have changed, there is no doubt about that. So I support the Minister on this change. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000285\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe Inland Revenue Department also estimated that about 9,800 Kiwis were channelling their income through a trust, and therefore saying it was not a part of their income and claiming Working for Families. The cost of this was about $57 million. Here is a story. I have a very good friend, whom I talked about yesterday, who is one of New Zealand\u2019s top entrepreneurs. He went to his accountant, who said to him that he was paying too much money in tax and the accountant would channel his income through his trust and he would claim Working for Families for him. This guy is worth about $80 million or $100 million, and he threw up his hands and said that Working for Families was not for him and that it was put there for the 335,000 Kiwis who actually need that extra money. He said that he was not prepared to do that at all. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000286\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EUnfortunately I showed my indignation too early so I could not get the name of this accountant. But although the Inland Revenue Department estimates the number is 9,800 people, this accountant had told my friend that most of his clients do this, so I suspect the figure was a lot higher. I suspect we did not know the half of it. This is why I support this clause in terms of allowing the Inland Revenue Department to get rid of the avoidance industry around restructuring things through trusts. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000287\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ELet me talk to Part 2. Am I right in saying that the Minister in the chair, the Hon Peter Dunne, was the person who set up the Families Commission?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000288\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bed6e1653f8848fcb772c8e83c05e1ee\u0022\u003EHon Ruth Dyson\u003C/span\u003E: Say that again.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000289\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002297b37ebfae6d46229ff1c7e1e651349f\u0022\u003ESTUART NASH\u003C/span\u003E: Did Peter Dunne set up the Families Commission? He did. We have an ex - Families Commissioner in our caucus, Rajen Prasad, and the thing that astounds me is that Part 2 also takes away the automatic indexing of Working for Families to inflation. That is astounding. I ask the Minister to stand up and tell us his logic behind that. I ask him to stand up and take a call, because he set up the Families Commission and Part 2 means it is not now automatically indexed to inflation. It is at the will of the Government. So if inflation, which is running at 5.9 percent\u2014that is the Government figure\u2014does not get indexed, that means there are a whole lot of Kiwi families who could really miss out. Working for Families was set up because the previous Labour Government understood how hard it was for families to re-engage in the workforce. Kids cost money; we absolutely love them dearly, but they cost money.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022 data-id=\u002261ea238016184e3eae2e8d8cdc1218a5\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000290\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002261ea238016184e3eae2e8d8cdc1218a5\u0022\u003EJOHN BOSCAWEN (ACT):\u003C/span\u003E We are debating Part 2 of the Taxation (Budget Measures) Bill, which makes changes to the Working for Families allowances, and also adjustments to the personal rates of taxation. It sets up much lower rates of taxation. In particular, it drops the rate of taxation for those earning less than $14,000 from 12.5c in the dollar to 10.5c in the dollar; for those earning in that big bracket from $14,000 to $48,000, the rate goes down to 17.5c in the dollar, and for those earning from $48,000 to $70,000, the rate is reduced to 30c in the dollar. One of the reasons the Government has given for these reductions in personal income tax rates is the need to compensate for the increase in GST. Of course, the first part of this bill gives effect to that increase in the GST rate from 12.5 percent to 15 percent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000291\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EBut I challenge these decreases in personal tax rates. I was very pleased to hear Brendon Burns say just a short time ago that one of the things these tax reductions will not do is compensate for the increases in power and petrol that we can expect from 1 July as a consequence of the emissions trading scheme. Mr Burns has been the first MP I have heard from the Labour side to acknowledge that the emissions trading scheme will have an effect on inflation. I am very pleased that Mr Burns has done that, because his colleagues have talked in very general terms about the inflation rate of 5.9 percent, and how a rate of 5.9 percent will eat into these tax reductions. There are two components to that 5.9 percent: there is the general effect of inflation, and there is the one-off effect of the increase in GST and in the price of power and electricity, which will flow throughout the economy as a consequence of the emissions trading scheme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000292\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI find it also interesting that Labour is constantly referring to Paul Reynolds, the chief executive of Telecom, and the impact that these tax reductions will have on his take-home pay. I suggest that another group of people we should be looking at is not individual persons but farmers. I ask what impact these personal tax reductions will have on the incomes of farmers, who are the actual backbone of our economy. We have heard a lot from the Government in recent times about the fact that the costs of the emissions trading scheme will not affect agriculture until 2015. But farmers, like all New Zealanders, will be affected by increases in electricity, petrol, and diesel prices from 1 July. Meat and Wool New Zealand, the lobby group that represents sheep and beef farmers, has said that the impact on farmers, as a consequence of the electricity and petrol cost increases, will be about $1,300 a year, and will be a further $1,300 at the beginning of 2013 when the emissions trading scheme is effected. Essentially, that is $2,600 for electricity and petrol costs. Will these tax reductions fully compensate farmers for that? No, they will not.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000293\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EThere is another cost that the emissions trading scheme will impose on dairy farmers\u2019 incomes from 1 July. Fonterra has announced publicly that the cost on its company from 1 July will be about $38 million, which is firstly a consequence of electricity price increases, but also because the emissions dairy herds give off will have to be accounted for in the processing of milk. That cost of $38 million on Fonterra will be passed directly back to farmers. Dairy farmers will be paying, on account of the emissions trading scheme and the processing of milk, about $2,600 a year from 1 July and a further $2,500 from 1 January 2013. All up, those two costs\u2014on the one hand the cost of electricity and petrol, and on the other hand the cost of Fonterra processing dairy farmers\u2019 milk\u2014will affect dairy farmers\u2019 incomes by $3,900 on 1 July 2011 and a further $3,900 on 1 January 2013. I acknowledge that the Government has said that it may well review the emissions trading scheme and that that secondary increase may not come in, but certainly Meat and Wool New Zealand are quoting $3,900 as the first one-up impact on dairy farmers\u2019 incomes. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022 data-id=\u0022e665f7d6d10b445f82d0b2ac5d5acdad\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000294\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e665f7d6d10b445f82d0b2ac5d5acdad\u0022\u003EDAVID SHEARER (Labour\u2014Mt Albert):\u003C/span\u003E I want to lead on for a second from where Mr Boscawen ended just now in terms of what this Budget is doing to the productive economy. I think that buried in amongst the detail is a significant cost to farmers and other productive industries that want to be able to invest\u2014for example, to invest in capital. If they invest in the leading edge technology that will be able to drive and increase their businesses, they no longer have the ability to claim depreciation. So they will not be able to invest in that way. That will be another impact on the productive economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000295\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EI have spoken earlier about the need to look at investments, our savings rate, and our ability to increase our exports, and the complete absence of real incentives in this Budget for that to occur. I particularly touched on innovation and research and development. Frankly, if we look at the history of our economy, we see that it was innovation and research and development applied to our natural resources that made us wealthy. It is as simple as that. When we see the paltry amount of money that this Budget invests in research and development and innovation, we know that this Government is not serious about moving New Zealand\u2019s economy up the value chain and increasing its productivity.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000296\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002216c0b2e95ca74cd48ca9aeed88fa660e\u0022\u003EStuart Nash\u003C/span\u003E: What\u2019s the Labour budget on this?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000297\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e849ee7d35ae42e08a1131327fc8cc67\u0022\u003EDAVID SHEARER\u003C/span\u003E: I can tell members right now that if Labour\u2019s 15 percent tax credits for innovation and research and development had been continued, business research and development would have doubled. The productive end of the economy is not being looked after in this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000298\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EThe other part that is not being looked after is the people at the bottom of the pile. The previous Labour Government, through the Working for Families scheme, was able to lift 130,000 people out of poverty and put them into productive enterprise. That was the legacy of the Labour Government. It was really touching last night to look at the Tagata Pasifika TV programme and see the impact that this Budget will have on families at the bottom of the pile. I refer to the family of a husband, wife, and four kids on that programme. By the time they take off their rent, their electricity costs, the cost of running their car, etc. they have $80 a week left to feed six people. According to the budgeting service, the family need more than $200 for food; they are trying to get by on $80 a week.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000299\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EThe family rely on Working for Families to give them the incentive\u2014and I emphasise the word \u201Cincentive\u201D\u2014to move forward, to get into productive work, to do the best for themselves, and, obviously, to benefit our economy. What will the family get from this Budget? They will get a kick in the teeth, because, as a number of speakers have said, the Government has removed the indexing to inflation. That is what it has done with this Budget. So the Working for Families incentive that people receive will be slowly eroded over time. It is not only that poor family in Manurewa that will not benefit from the Budget; the many poor families in my electorate\u2014which make up most of my electorate\u2014will not benefit from the Budget, at all. Most of them will find that the paltry tax breaks that the Budget gives them will be eroded by the GST increase, by power prices, by fuel prices, by the tobacco price increase, and by the accident compensation levy hikes. That is what will happen to the people in my electorate, and that is what will happen to that particular family. Inflation, as Mr Nash pointed out before\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000300\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d0eb0be5b855432aae104bffa3c6b398\u0022\u003ECraig Foss\u003C/span\u003E: 0.9 of the 5.9 percent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000301\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022885047808ca44bbd935c406a58b024fa\u0022\u003EDAVID SHEARER\u003C/span\u003E: I get a bit tired of members on the other side quoting percentages at me. These people cannot eat percentages, I say to Mr Foss; they cannot eat percentages.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022 data-id=\u0022e4052405a7d940ea956bab9018d47341\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000302\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e4052405a7d940ea956bab9018d47341\u0022\u003EDAVID CLENDON (Green):\u003C/span\u003E The Budget release is one of the big political events of the year. It is a time when the public pay a bit of attention to what goes on in this place, and, of course, the media get excited. I think one of the best media commentaries, one of the most astute, and also one of the most succinct, is on the front page of today\u2019s Dominion Post. The headline reads simply: \u201CLollies for all\u201D. I think that brief phrase captures the essence of this Budget. After all, what are lollies? They give us a momentary sense of sweetness and they give us a bit of a sugar rush, but there is not a lot of long-term value in them. There is not much nutrition in lollies. There is nothing to build strength or, over time, to add value. I think that sums up this Budget quite nicely. We all get a nice wee sugar rush; we get a tax cut. The difference between the gross income figure and the net income figure is reduced momentarily, or it will be in a few months\u2019 time, but the apparent benefit, that sugar rush, will not last for very long. Inevitably, people will get over it, and what will be left is quite a sour taste.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000303\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EAlready people have lost some of the benefits of the tax cut, through such things as accident compensation levy increases. When families need to re-register their cars, they will discover it will cost them a great deal more than it did last year. The accident compensation employers\u2019 levy has also gone up. Electricity prices have been mentioned; they are on the up. That is because the Government is not adopting a progressive system, such as the one the Greens are proposing in our Mind the Gap package, which is a system whereby people would get affordable electricity and would pay extra for excess use only. No, the Government chooses to stay with a much less progressive policy. People will be paying more for their public transport, because of the insistence on dumping massive amounts of cash into roads, which is a subsidy for road transport, albeit that is denied. People using public transport are being forced to pay more, because, apparently, some ideological purity demands that public transport must pay its way. So in many ways people are being cheated by this Budget. The little sugar rush is all they are getting. There is no long-term value in it for the average family.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000304\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EGST, clearly, is where the rubber hits the road immediately. In a few months\u2019 time, every time people purchase an item they will be paying more. GST is a highly regressive form of taxation, because those who earn the least will pay the most in terms of their overall expenditure. People will pay more for food, petrol, and accommodation\u2014all of those things that people must have. The people who have the least choice will have even fewer choices than they had before.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000305\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EWhat has been missing from some of this debate is the effect on retailers when people spend their money. The retailers will be the ones in the front line, bearing\u2014literally, in many ways\u2014the cost of the increase in GST. We know that when the Government proposed to raise the level of GST it did not talk to small-business owners and it did not talk to small to medium sized enterprises. We know this because some weeks ago we asked the Minister of Finance what consultation there had been with small to medium sized enterprises over the probable impact, the cost to that sector, of raising the level of GST. The answer from the Minister was that there had been no consultation. Despite the fact that 85 percent of New Zealanders earn their living in the small to medium sized enterprise sector, that sector was not consulted about the cost to it and to the wider community of GST being put up in this way.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000306\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EThat is a remarkable reflection, and it says something about the priorities of this Government and its blindness to what happens in the real economy in the real world. We know that there will be a cost to retailers in particular, and that cost inevitably will be passed on to consumers. There will be the one-off cost of rejigging the way in which they charge\u2014the technology change, effectively\u2014and repricing everything on their shelves. There will be an inbuilt cost. What do retailers do when they are running near a sensitive price point on a given product? Do they simply add the GST, which puts the product into another pricing point, which creates consumer resistance? They then have to either cut their margin or face consumer resistance to purchasing the product.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000307\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EFour months is a very short time for small-business people without the resources of large companies and large organisations to try to get their heads round how they will actually manage the transition. They have not been consulted by this Government. I fail to see anywhere any measure with which this Government will assist them with that transition, and that cost will come back to hit consumers, to hit the families who are already struggling. Suddenly their tax cut will be seen for the illusion it really is. Again, the Dominion Post headline showed that very well. Kia ora.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u0022f061f4dd127a43868ab26dc59eabba22\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000308\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f061f4dd127a43868ab26dc59eabba22\u0022\u003EHon PETER DUNNE (Minister of Revenue):\u003C/span\u003E I am very happy to follow the member who has just resumed his seat, David Clendon, because today I am announcing the establishment of a special GST advisory panel precisely to deal with the interests of retailers and the small business sector in terms of the technical adjustments that they will need to make through to the introduction of the changed rate on 1 October. That panel will be in place until the end of this year. It has a 6-month lifespan and it will be out there consulting with those who are most affected to make sure that the very things that the member was talking about are able to be addressed in time for 1 October. I simply say to him that the reason that we did not make that announcement earlier was that, quite obviously, until yesterday there was no announcement of a decision to increase the rate of GST. So we are getting the cart behind the horse rather than in front of it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000309\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI come back to the comments that Mr Nash made regarding the abatement rate for Working for Families. I point out to him that he has the wrong part of the bill; the clause that gives effect to that change is actually clause 94, which is in Part 3 of the bill, which we are yet to debate. But since he has jumped the gun, I am happy to address at this stage some of the points that he raised. Clause 94, in Part 3\u2014which we will debate when we get to it\u2014holds the abatement at the current threshold of $36,827. The reason for this is quite simple. A person earning $36,827\u2014or above, but we will stick just with the bottom rate at the moment\u2014as a result of the tax changes we passed in Part 1 of the bill, will be $1,078 a year better off. So the issue about whether the automatic indexation that was provided for previously needs to continue is somewhat overtaken by events. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000310\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI ask members to bear in mind that people earning that rate of income and below will now be paying a marginal rate of 17.5 percent. That is a big drop on the current 21 percent rate, and it is a virtual halving of the rate that only a couple of years ago was as high as 33 percent for that bracket of taxpayers. In fact, around 73 percent of taxpayers will be paying no more than 17.5 percent as a marginal rate. So against that background the notion of a periodic indexation for the Working for Families abatement rate becomes somewhat irrelevant. The provision will be there, as set out in clause 94, for it to be adjusted by Order in Council from time to time as circumstances dictate. But the real point of the change, and why we felt it was unnecessary to continue with the automatic indexation\u2014which was, in effect, a form of compensation for a lack of movement in tax rates\u2014was the fact that we are making not only a change in that marginal rate but, proportionately, the biggest change in any of the measures in the bill. The drop-down from 21c, as it currently stands, to 17.5c is being made for the very group affected by that provision.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000311\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228cf0fb6b-0b8f-4327-983d-73e1166c220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002236da8dead3cb480f99c4fb3ea5e206e5\u0022\u003EDr Cam Calder\u003C/span\u003E: Eminently sensible.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000312\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229d0ac641b65a4d06aa58ccfb31866a3d\u0022\u003EHon PETER DUNNE\u003C/span\u003E: I take the member\u2019s point; it was eminently sensible. It delivers a far bigger benefit to those households than would have been possible under the regime that was in place. As I said, even for someone at that threshold level, their tax gain is over $1,000 a year\u2014around $20.75 per week. That is a good advantage and far better than anything an adjustment in the abatement rate would have delivered. So although the member jumped the gun, I am happy to respond to him at this point and indicate the reasons why that change was made.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022490ccdbf-7c22-4e12-98f2-f3aa08f8e676\u0022 data-id=\u00224d3e3fc7d2584817a5c96c47f7a71ee9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000313\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022490ccdbf-7c22-4e12-98f2-f3aa08f8e676\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00224d3e3fc7d2584817a5c96c47f7a71ee9\u0022\u003EIAIN LEES-GALLOWAY (Labour\u2014Palmerston North):\u003C/span\u003E I am very pleased that the Minister in the chair, the Minister of Revenue, traversed the subject that he did, because I would also like to discuss the same material. The Minister talked about percentages and things that are somewhat intangible to real families. I would like to talk about the real example of a real family who actually happen to live not far from where I live in Palmerston North, and the effects that the changes set out in Part 2 of the Taxation (Budget Measures) Bill will have on them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000314\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022490ccdbf-7c22-4e12-98f2-f3aa08f8e676\u0022\u003EThis family has four children. Dad works\u2014he is a scientist, funnily enough, and he earns a reasonable income. Mum is at home with the kids. One of the great things about Working for Families is that it allows many families to have one parent at home, and I am sure the Minister in the chair thinks that that is a good idea. Using the Government\u2019s tax calculator, that family figured out that even with the dodgy inflation calculations in that calculator, the tax cuts would get them between $16 and $20 a week extra. That sounded quite nice, on the surface of it. But then we have the changes to Working for Families and the lack of indexation, as set out here in this bill. So the inflation rate is to hit 5 percent to 6 percent, yet we have no indexation of Working for Families. That family, a hard-working family that this Government reckons that it is targeting, will see the benefit that they are receiving from Working for Families become slowly eroded over time. They will become steadily worse off. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000315\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022490ccdbf-7c22-4e12-98f2-f3aa08f8e676\u0022\u003EBut that is not actually the worst thing that will happen to this family. The worst thing concerns the fact that they have kids who still need to go through early childhood education\u2014in fact, my youngest will be going to kindy with their youngest. The cost to them of early childhood education will be far greater than the amount that they receive from tax cuts. So the Government gives with one hand but it takes an awful lot away with the other hand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000316\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022490ccdbf-7c22-4e12-98f2-f3aa08f8e676\u0022\u003EThat is the truth about this bill, that is the truth about this Budget, and that is one of the biggest swindles in this Budget. The Government goes on and on about what it is doing for hard-working, battling Kiwi families, but in truth, what it is doing is giving a tiny amount with one hand and taking away a whole lot more with the other hand. Let us look at the regulatory impact statement for the bill. Why is the Government looking at taking these measures around Working for Families? We see that it is to save money. The Government hopes that it will spend a lot less money on Working for Families. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000317\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022490ccdbf-7c22-4e12-98f2-f3aa08f8e676\u0022\u003ELet us look at the impact of the equity measures, which Treasury has looked at. It says the impact is mixed. When Treasury says the equity measures will have a mixed impact, that is hardly a ringing endorsement of this bill for the middle-income families of New Zealand. Basically that means that even Treasury knows that the changes happening as a result of this bill will be unfair on middle-income families\u2014at best. At the very best, if we are very charitable to the Government, we could say that hard-working families are no better off than they have been. But the truth is that when we talk about real families, when we step away from percentages and the theory and get down to the practical impact of this taxation bill on real families in New Zealand, we find the truth is that they will become worse off. They will become worse off because this Government wants to appear to be supportive. It gives with one hand with the tax cuts, but when we look at what is happening with Working for Families, we see the truth is that with the inflation that we will no doubt see through the increase to GST, through higher power bills and higher rent, those inflationary increases will be passed on to families through the changes that this Government is bringing into place. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000318\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022490ccdbf-7c22-4e12-98f2-f3aa08f8e676\u0022\u003EWorking families will become worse off. Let us make no bones about it; that is the fact. That is what is happening as a result of the changes to Working for Families that are made in Part 2 of this bill.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ffff330f-1757-41d6-9973-25244f0fdada\u0022 data-id=\u0022e86687e530f24e2d9ce7b879ac0f4647\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000319\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ffff330f-1757-41d6-9973-25244f0fdada\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e86687e530f24e2d9ce7b879ac0f4647\u0022\u003ECOLIN KING (National\u2014Kaik\u014Dura):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u0022e61dceb6a52843a886957fd6c1e0b381\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the question be now put.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 67\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 58; ACT New Zealand 5; M\u0101ori Party 3; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 50\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 43; Green Party 7.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EMotion agreed to.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u002273d6853b03bb4c2a9d2bfb4f56e342d4\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That Part 2 be agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 67\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 58; ACT New Zealand 5; M\u0101ori Party 3; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 50\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 43; Green Party 7.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EPart 2 agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000320\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022b9afcf1a95c14170a8a184be8065a6d6\u0022\u003EPart 3  Other measures\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u0022ff96c033ae3f45fa8f40505a1c6d97dd\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000321\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ff96c033ae3f45fa8f40505a1c6d97dd\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E It is interesting to see Rahui Katene in the Chamber; I welcome her to the Committee. I am interested to see how she votes on the Taxation (Budget Measures) Bill, because she had a member\u2019s bill pulled out of the ballot that seeks to remove GST from healthy food.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000322\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002225a0479fbe6f4307b3b71b79024f1726\u0022\u003EHon Trevor Mallard\u003C/span\u003E: And Kentucky Fried Chicken and chips.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000323\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227e8b0756e2134be5ab40b12a251a145f\u0022\u003ESTUART NASH\u003C/span\u003E: Yes. At the moment we are debating a tax bill to increase GST from 12.5 percent to 15 percent on all items: healthy food, petrol, electricity\u2014everything. Am I right in hearing that that member voted for this bill?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000324\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b3ccbf90c0784effb3c411d87b142182\u0022\u003EHon Ruth Dyson\u003C/span\u003E: The M\u0101ori Party did.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000325\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e79f4d8a2e724639b8fec3eef32ab5d6\u0022\u003ESTUART NASH\u003C/span\u003E: The M\u0101ori Party voted for this bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000326\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002243ed03c349b54283be6cfa4d35304f18\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Only three of them did.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000327\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022dc6073778b644d46810232b22ace111e\u0022\u003ESTUART NASH\u003C/span\u003E: Where are the other two? Where is Hone Harawira? Hone Harawira puffs out his chest\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000328\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022922ccebece31469aa0b8573740caf443\u0022\u003EThe CHAIRPERSON (Eric Roy)\u003C/span\u003E: Members cannot refer to the absence of members from the Chamber.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000329\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002293e57b15750b4500bd228708def441d1\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Ask why they didn\u2019t vote.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000330\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220d351fce86af4f109a6c9c51bfb4c081\u0022\u003ESTUART NASH\u003C/span\u003E: I ask why they did not vote. Are ructions going on in the M\u0101ori Party? Is this the split of the marriage between the M\u0101ori Party and National? Members should watch this space, and the public should watch this space. The press will have picked up on the fact that only three M\u0101ori Party members are voting for this bill. I thought they had more than three members. Two M\u0101ori Party members are not voting for this tax legislation. That says something about what is happening here. It says something about the dynamics. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000331\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI wonder why two M\u0101ori Party members are not voting for this legislation. When I look at the statistics, I see that 71 percent of people in M\u0101ori electorates earn $40,000 or less. The median income of all those in the M\u0101ori electorates is $21,900. What do we think that an increase in GST will do to the people who have an income of $21,900? I will tell members what it will do. It will increase the price of petrol. It will increase the price of apples. It will increase the price of fruit, vegetables, Kentucky Fried Chicken, rates\u2014everything. It will increase the price of everything for everyone in those M\u0101ori electorates, yet three people in the M\u0101ori Party are voting for this legislation. That is astounding. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000332\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EIt is quite amazing that Rahui Katene is the one down here providing the votes for this bill. As mentioned, that member has a bill that has been drawn out of the ballot to remove GST on healthy food. That is quite astounding. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000333\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI move to Part 3. We have already had a good debate on Part 3. I have some concerns with the Minister\u2019s argument, because the huge rate of inflation will erode the real value of wages and, therefore, their spending power. This Government increased the minimum wage last year. What did it increase it by?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000334\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222de9cd644b584d33911c23e116371cfc\u0022\u003EMetiria Turei\u003C/span\u003E: 25c.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000335\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fa732d25fe3a4b1c8870bfaaebb19300\u0022\u003ESTUART NASH\u003C/span\u003E: The Government increased the minimum wage by 25c. How will that help people cope with 5.9 percent inflation?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000336\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bbb51332be9b4ec49e6046765cb3f8df\u0022\u003ECraig Foss\u003C/span\u003E: Look at page 63: nominal wages are up 14 percent over the next 4 years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000337\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220a5c016d81b04c4c8c2124cceec6b66e\u0022\u003ESTUART NASH\u003C/span\u003E: I say to Mr Foss that we are talking about people on the minimum wage. If we look at that member\u2019s electorate, we see that 76 percent of people in the Tukituki electorate earn under $40,000. They got absolutely nothing in tax cuts last year, and they will be hurting this year. I challenge that member to hold a public meeting with all his constituents, with the 76 percent of constituents who earn under $40,000, to see whether he can sell this Budget to those constituents. Will he tell them that inflation will eat it away, that they will not get much at all, and that GST will eat it away? What are those 76 percent of constituents\u2014and let us not forget that the median income is only $22,500\u2014going to get out of this Budget? They will get nothing but pain and heartache. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000338\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EIt will be a winter of discontent. Mr Boscawen has mentioned increasing power prices. Those increases will not come from the emissions trading scheme; they will come from the fact that Mr English said to Mr Brownlee that he wants a greater dividend out of State-owned enterprises. What does that mean? It means an increase in power prices. This will be a winter of discontent for many, many Kiwis, and I tell members that leading up to this election, many people will say that they voted for a change, but this is not the change that they voted for. I would like Mr Foss to organise that public meeting. I will come along and see how he sells this package.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022 data-id=\u002257a9e5444e164a138cb0cf641ef77bcc\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000339\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002257a9e5444e164a138cb0cf641ef77bcc\u0022\u003ECHRIS HIPKINS (Labour\u2014Rimutaka):\u003C/span\u003E I am going to talk about superannuitants and the old diggers, the people who receive war pensions. Part 3 of the bill will supposedly compensate our superannuitants, our pensioners, for the cost of living as a result of the increase in GST. But that is another cruel hoax, as is much of the Budget, because it does not say that the compensation has an expiry date. The cost of living will increase. In fact, the compensation being offered does not compensate for the true increase in the cost of living, because for superannuitants who live at least a little on the interest from their savings, the increase in GST will lower the actual value of their savings. They may still have $20,000 or $30,000 in the bank, but the value of that will be less in real terms after GST is increased; there is no compensation for that. Although they may receive some short-term compensation in superannuation, in the longer term their savings will not be compensated for. Of course, in the longer term if the Government commits to retaining superannuation at 66 percent of the average wage, in fact the value of that compensation will disappear and erode over time. It has an expiry date on it. If the Government were saying that it was going to permanently increase the level of superannuation in order to compensate for the GST increase, then that would be an entirely different thing. But it is not doing that. The Government will not compensate superannuitants on a permanent basis for the increase in GST. Our senior citizens are being swindled by this Government. It promised that it would not increase costs for superannuitants, but that is exactly what it is doing. Superannuitants will have to face 5.9 percent inflation, which means that the value of their savings in the bank will be worth 5.9 percent less, but the Government is not doing anything to offset that or to help them. Senior citizens are being diddled out of the value of their savings.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000340\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EThe other thing that is directly relevant to this, which I get asked about by superannuitants in my electorate, is the kind of country we are leaving for future generations. That is something that superannuitants think about. They think about their grandchildren; they will be thinking about how this Budget loads up a mortgage on their grandchildren to pay for tax cuts that are disproportionably targeted to those on the highest incomes. Superannuitants are concerned about that, because they want to think they will be leaving the country for their grandchildren in a better state than it was when they found it. But in fact they will not be. This Government is spending that inheritance and loading up debt on future generations. This Government is interested in only the next 18 months. It is interested only in being re-elected.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000341\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EIt is not interested in 10 years from now, when half a million New Zealanders will be retiring. It is making no provision and no saving for that. It has not recommenced contributions to the New Zealand Superannuation Fund. It has not done that. In fact it will not do that even when it gets back into surplus, which was another of its promises. So now that is another broken promise. I ask members how many there have been. I have lost count. I cannot remember how many broken promises we have had out of this Budget. It is full of broken promises. There are broken promises on interest-free student loans, broken promises on early childhood education, broken promises on GST\u2014it is all just broken promises. This is a Government that cannot be taken at its word before an election.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000342\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b139dac65af94520a1d8df1c27f07ca7\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Or after.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000343\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228b91f8a49f654b53b1f1d5f9555f65ff\u0022\u003ECHRIS HIPKINS\u003C/span\u003E: People cannot rely on the Government delivering on what it says it will, before an election. As Trevor Mallard has pointed out, we cannot rely on the Government\u2019s word after an election either, because it is a Government that simply shifts around.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000344\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EJohn Key is very relaxed about it all. I ask members how prime ministerial his speech was in the Budget debate yesterday; he spent the first 10 minutes laughing and cracking jokes. That was very dignified and prime ministerial! People have rung me to ask whether I think it was undignified; I think that it was very undignified of him. It would have been good to hear the Prime Minister in the first 10 minutes of his speech actually mention the Budget. He can focus on the Labour Party if he likes, but maybe he should have talked about the Budget that his Minister of Finance had just delivered.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000345\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EPerhaps the Prime Minister is just embarrassed by the Budget; perhaps he is embarrassed about the number of promises he has broken. He was the one who stared down the barrel of a camera and said that his Government would not increase GST. In fact, he said \u201CIf we do a half decent job growing the economy then that won\u2019t be happening.\u201D That is a broken promise. By the Prime Minister\u2019s own admission, the Government has not done a good job of managing the economy, because 18 months\u2019 into its term of government it has already broken that promise, and it has already increased GST. This is a Budget of broken promises.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022 data-id=\u00225ddd39d80c864f72963d533eb34fc3e1\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000346\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225ddd39d80c864f72963d533eb34fc3e1\u0022\u003EMETIRIA TUREI (Co-Leader\u2014Green):\u003C/span\u003E Part 3 of the Taxation (Budget Measures) Bill deals with the property tax changes that are being proposed by the Government around depreciation and capitalisation. Those are two areas where the Greens agree that changes need to be made. We are pleased that there has been a small step in the right direction, but there is nothing like the kind of serious reform that was necessary and could have been provided through a capital gains tax, excluding the family home. We see that the Government has made some small steps while making more significant changes, of course, to the top tax rate. But it has made some small steps in the property area. It has not, however, done anything to deal with the inevitable rise in rents that will result from the changes\u2014any changes\u2014it makes to property tax, a capital gains tax included. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000347\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EA truly responsible Government that talked and thought about a smart economy that was good for our people and our environment would have a joint approach whereby one not only shares the tax obligation more fairly through property taxes but ensures that there is provision of more affordable rental housing for those families who need it because of the inevitable rent rises. Treasury has, I understand, estimated an increase in rents of some 1.4 percent as a result of these small steps in property tax changes. I think that is a very conservative estimate, and I think it is quite possible that we will see an increase of more than 1.4 percent, because we also have the impact of inflation on rents and a growing need for rental accommodation. We have families who are desperate for somewhere to live. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000348\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EThe Green Party\u2019s Mind the Gap package, which we released on Monday and which provides an alternative set of solutions to deal with inequality and our economic and environmental issues, had not only a capital gains tax to provide the sharing of the tax obligation but a programme to build another 6,000 State houses over 3 years. That would cost $2 billion, and we would need to make sure that we could find that money\u2014$2 billion dollars over 3 years. It would also provide 28,000 new jobs. So not only does it have our package of capital gains tax and building State homes, and not only would it provide an income for the Government and spread the tax obligation more fairly, but it would provide housing for those families who are desperately in need. We would have not just housing but good-quality, warm, dry housing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000349\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EOne in four households spend more than 10 percent of their income on energy just to keep warm\u2014just to keep warm. Three out of four New Zealand homes are too cold to be healthy. That causes costs to our economy. There is a cost to the economy in excess of $500 million in terms of energy, lost production, and hospitalisation. There are 50 admissions a day for respiratory illnesses. That costs $54 million a year. One hundred and eighty thousand workdays are lost to sickness caused by cold and unhealthy housing. Over $400 million is spent unnecessarily on energy. That $400 million comes from the budgets of our families, who have to spend so much of their income on energy just to keep warm. So we must invest in housing in this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000350\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EHousing is much more important than new motorways. Housing is a core part of New Zealand\u2019s infrastructure. It supports our families so that our families can be productive, healthy, and well. Yet this Government has cut $100 million from the State house building budget. There will be no new State houses built under this Government, because it does not believe that New Zealanders deserve to be housed. It will give money to the road-building lobby\u2014sure, that is fine\u2014but it will not invest in homes for our families so that our families can take care of their children. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000351\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fc8ab326-1806-41d3-8c41-cd58c95dcb45\u0022\u003EWe have 10,000 families on the State house waiting list who are desperate for somewhere to live. We have people living in garages. Thirty to 40 percent of our most vulnerable young people in this country are living in unsafe housing, which puts them at risk. Where the investment for those families, those children, and those young people? It is nowhere from this Government.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022 data-id=\u002241e4af76f1b146d9beb10a360c19c344\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000352\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002241e4af76f1b146d9beb10a360c19c344\u0022\u003EHon Sir ROGER DOUGLAS (ACT):\u003C/span\u003E I will be brief. I want to ask the Minister in the chair, Peter Dunne, a couple of questions in relation to rental property and the loss of the depreciation rights. I must say that I certainly had not contemplated the 50-year rule. It seems to me that it is a relatively neat provision. I thought that the Minister might have reduced it to about 1 percent or something of that nature. I am interested in the administrative handling of it, particularly for older houses\u2014maybe a house that is 60 to 70 years old. One would hope that the procedures would not be too bureaucratic. But that is a minor issue. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000353\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EThe second issue is really the more important one, and that is what economic analysis has been done on whether the measure, which is in Part 3 of this bill, is in fact likely to change New Zealanders\u2019 attitude towards, or love of, investing in rental property. I think one of the big reasons that people invest in rental property is not just the fact that the sharemarket is prone to go up and down but that they tend to understand rental property. From my calculations, the loss of deductions is probably equal to an interest rate rise of about 1 percent. It is equal to an interest rate rise of approximately 1 percent, and I am not sure that that is likely to deter property investors from investing in rental property. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000354\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EIf we take a house in a regional town worth $200,000, and we take 40 percent off that for the value of the land, that brings us down to about $120,000. We then take off $20,000 for chattels; they will still get the depreciation, as I understand it, on the chattels. That leaves $100,000. At 3 percent, property investors will lose the depreciation on that\u2014on $100,000 that is $3,000. Those people are likely to be on the new top rate of tax\u2014and we thank the Minister for that\u2014so after those savings they will lose about $1,000. They will have to pay an extra $1,000 in tax. On a borrowing of $100,000 that is equivalent to 1 percent. If it is as high as 80 percent, then the equivalent borrowing cost is probably only 0.75 percent. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000355\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003ESo I am not sure that this provision will change the approach of New Zealanders to rental property, and I wonder whether the Minister received any analysis of it from Treasury or anyone else. I think that what might deter people from moving into rental properties in the near future is the likelihood that interest rates will rise by 3 percent over the next 2 or 3 years. If we look at the prediction at the back of the Budget we can clearly see that mortgage interest rates are likely to rise by at least 3 percent and maybe hit 8.5 or 9.5 percent. I just wondered what economic analysis the Minister had received. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u002279fefb9cd8da4a8ba1fe3219074c99e6\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000356\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002279fefb9cd8da4a8ba1fe3219074c99e6\u0022\u003EHon PETER DUNNE (Minister of Revenue):\u003C/span\u003E I thank the member for raising the point about depreciation and the way in which the package has been constructed. I thank him for his comments, which, on the whole, I think were helpful. Essentially, what we have done is as follows. The Tax Working Group had an estimate of about $1.3 billion as being the cost of depreciation. When we recalculated the figures they came out at around half of that. What we have done by introducing the 50-year provision is allow for buildings that have a transitory lifespan\u2014for instance, farm buildings, warehouses, and various industrial settings where the short-term use is likely to be around 50 years\u2019 duration. Beyond that, when we looked at residential property and other commercial buildings, it was our assessment that, firstly, most of those are going to endure for more than a 50-year period, and, secondly, over their lifespan, whatever it is, they certainly will not depreciate in value. If we take the example of a turn-of-the-century villa that may have originally gone on the market for \u00A31,000 many, many years ago, even in real dollar terms today it certainly will not have depreciated over time. So the notion that people could then claim depreciation against something that was not depreciating seemed to us to be a bit silly. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000357\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI guess the bigger question the member raises, though, is why we did the depreciation measures and did not look at some other measures that might have had a more dramatic effect. There is a question of balance here. We wanted to send a signal to people who entered into property investment for essentially speculative purposes and used the mechanisms that were available to advantage their tax circumstances, as opposed to those who wanted to enter into the property sector because they thought it was a good investment. It is the old argument that the member will be very familiar with about investments being made on the basis of the quality of the investment rather than the tax advantages that accrue. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000358\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EOur estimate about the likely increase in rents, on the best advice available from Treasury, was that it would be about 1.4 percent, from memory, so we do not expect there to be a significant impact, although over time there will be a modest impact. Again, we have to offset that against the tax changes that are taking place, and look at the broader picture there. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000359\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EOne issue that people will immediately leap on will be to say that we will now see a big explosion in fit-outs, renovations, and other things designed to change the character of a building. The Inland Revenue Department will be issuing a discussion document in the very near future about how we might address that, and we will be working our way through that issue with the sector and other interested parties over the time ahead. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000360\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EIn conclusion, I simply say that any investors who have some doubts as to where they are left as a result of these changes, and about what their appropriate depreciation rate should be, should immediately contact the Inland Revenue Department. A list is being developed. Basically, it is a reformulation of the existing list that takes account of the various situations and circumstances. On the whole I think that the measures we are introducing in this part are a balanced response. They will certainly shift the emphasis to the quality of the investment. But the one thing they will not do, because the tax system is not capable of doing it, is shift what the member referred to as the emotional attachment of people to various forms of investment. There will always be the attraction to property because it does not depreciate over time. What we intend to put in place is a regime that is fair, reasonable, and, ultimately, enforceable. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000361\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EA party vote was called for on the question that Part 3 be agreed to.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022 data-id=\u0022a849e7dc98ea48be85d2c2048ce39074\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000362\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a849e7dc98ea48be85d2c2048ce39074\u0022\u003EHon TREVOR MALLARD (Labour\u2014Hutt South):\u003C/span\u003E I raise a point of order, Mr Chairperson. I thought that the normal practice was that when there was a short vote, the question was asked as to whether there were any other votes to allow for the possibility of abstentions. I wonder whether that practice is being followed.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000363\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002234be7b0b420b46d39262adde411055ba\u0022\u003EThe CHAIRPERSON (Eric Roy)\u003C/span\u003E: Technically that is right and I ask the Clerk to put that. Before I declare the vote, I point out that I cautioned the House yesterday about members calling out during voting, and maybe to reinforce that it may well be time that someone takes a walk, as that used to be the practice. I just affirm that no members will vote in this Chamber under duress, and we need to hear the votes.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u00222435c6c347114b8cae7a5b84e4544480\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That Part 3 be agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 67\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 58; ACT New Zealand 5; M\u0101ori Party 3; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 50\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 43; Green Party 7.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EPart 3 agreed to.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022 data-id=\u0022521cb702a6d3409eb6392b50ec7bce5f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000364\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022521cb702a6d3409eb6392b50ec7bce5f\u0022\u003EHon TREVOR MALLARD (Labour\u2014Hutt South):\u003C/span\u003E I raise a point of order, Mr Chairperson. I understood that this was a confidence vote for the Government and therefore there is an obligation on the part of the coalition and confidence and supply partners to support it. Clearly, that has not been\u2014[Interruption] Therefore, I am slightly surprised at the declaration of a short vote and ask whether that is an indication of some members having now left that confidence and supply arrangement.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022 data-id=\u0022393a750ea6b841e0b1a9cc33e4e0f6cd\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000365\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022393a750ea6b841e0b1a9cc33e4e0f6cd\u0022\u003EHon GERRY BROWNLEE (Leader of the House):\u003C/span\u003E It is somewhat rare and unusual to have to do this, but the situation is that parties, of course, cast their votes within the requirement that they can have some people away from the House but can still cast a full vote. All parties are in that position. In this case, not only is public business taking one of our colleagues away but also I understand that two tangi are also part of proceedings. There was an absolute full vote yesterday. When it comes to personal matters there is not a lot the House can do other than, in these circumstances, meet the requirements of public functions that have been committed to and, of course, take care of family business.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022 data-id=\u00227a9d69702e604c3782508cf6812f3518\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000366\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00227a9d69702e604c3782508cf6812f3518\u0022\u003EThe CHAIRPERSON (Eric Roy)\u003C/span\u003E: I am not sure whether that is a matter of order for the Committee, but it does possibly relate to matters that are related to the order of the Committee. However, the member has had an explanation and I think we should accept that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000367\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022dbe4a094803c484ab6066c3d9fac3731\u0022\u003EClauses 1 and 2\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u00223bb5fde237bd4d3ab2661ed4344e4108\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000368\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00223bb5fde237bd4d3ab2661ed4344e4108\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E When we talk about the commencement date, there is a slight concern. GST increases are coming in on 1 October, and cuts to personal taxes are coming in on 1 October. The systems are changing over in the middle of a financial year. Firms have the end of their financial year either at the end of April or at the end of the calendar year; I have never heard of any starting their financial year on 1 October. As we know, and as the Minister in the chair, the Hon Peter Dunne, himself pointed out, the Minister has set up a commission or a task force or something to help small to medium sized business with their questions, their concerns, and the issues of compliance costs around GST. This commencement date will only compound that further, because I suspect businesses will have to run two series of accounts and two payrolls, and the cost of that will be higher than it should have been. So I have some concerns around that clause.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000369\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ESitting suspended from 1 p.m. to 2 p.m.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000370\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002287194bac8bd244dc8898cec322b43d02\u0022\u003ESTUART NASH\u003C/span\u003E: I was looking at the title over the break, and I do not think that the title we have at the moment is a true reflection of the bill. The bill is called the Taxation (Budget Measures) Bill; it should probably be called the \u201CTax Cuts for the Extremely Wealthy Bill\u201D. If people earn really big money, they will get a really big tax cut from this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000371\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe name of Paul Reynolds has been dragged out at every debate, but there is a good reason for that: he is one of our highest-earning people. He will do incredibly well out of this bill. He will get about $1,600 extra a week, or an extra $88,000 a year in the hand, so he is absolutely rapt about this bill. But for the worker on the median wage, the tax cut is about $5 a week or $262 a year. Eighty eight thousand dollars versus $260\u2014that is not really very equitable, is it? I do not think that that is equitable, at all, in fact, and I think that the vast majority of New Zealanders out there will be looking at this\u2014not enviously, because New Zealanders are not envious sorts of people\u2014and thinking that it is not really fair. So we could call the bill the \u201CDon\u2019t Be Envious Tax Bill\u201D\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000372\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022525882ab61814833b3179b3e05f3ddd0\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Jealous.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000373\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002294eac7e4ac1e41d2a87511c0386e11e4\u0022\u003ESTUART NASH\u003C/span\u003E: \u2014sorry, the \u201CDon\u2019t Be Jealous Tax Bill\u201D\u2014because the Prime Minister signalled very early on, before we knew what would be in this bill, that he thought there would be Kiwis who would be jealous about this bill. What message does that send? We did not even know what the tax package would be, yet the Prime Minister told Kiwis not to be jealous. Immediately, everyone knew that this was a bill where the top players, the very wealthy, would get a substantial amount of money\u2014like Paul Reynolds\u2019 extra $1,600 a week\u2014and the person on the median wage would get an extra $5 a week. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000374\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d023c6d6e98a4644ae1a3901878e987a\u0022\u003EH V Ross Robertson\u003C/span\u003E: How much?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000375\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002254d1169f903e465e96b4ecc53c2b63b6\u0022\u003ESTUART NASH\u003C/span\u003E: Five dollars a week. As I said, Kiwis are not envious by nature; we are not jealous by nature. In fact, we do not ask for very much, at all. But what we do ask for\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000376\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223b534c2d4da44ae5b605bf9c2bf7f464\u0022\u003EDavid Shearer\u003C/span\u003E: We want a fair go.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000377\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221cfb260e967444ecacc53007443b12b0\u0022\u003ESTUART NASH\u003C/span\u003E: Mr Shearer is dead right\u2014we want a fair deal. We kind of know when we are being ripped off or rorted, and we do not like it. We just do not like it. So when someone on the median wage, who will get an extra $5 a week, hears about someone like Paul Reynolds getting an extra $1,600 a week, or John Key getting an extra $350 a week, it does not feel right. It actually feels to them as if they have been ripped off a little. As I say, it is just not fair. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000378\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EHow about a title like the \u201CBudget of Broken Promises Bill\u201D, or the \u201CBroken Promises Bill\u201D? John Key looked at the camera and said that he would not raise GST. He also said that he would not borrow for tax cuts. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000379\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223c1fc46463e34be5a199138f1be03a37\u0022\u003EHon Darren Hughes\u003C/span\u003E: Jonathan Coleman said that too.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000380\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022012063f0017f410d9e5a6688356bcf76\u0022\u003ESTUART NASH\u003C/span\u003E: Yes. In fact, every member on that side of the Chamber went to the electorate and said that they would not raise GST or borrow for tax cuts. But this bill allows the Government to borrow $1.1 billion over 4 years for tax cuts\u2014$1.1 billion over 4 years for tax cuts. In this bill there is provision for increasing GST. This bill increases GST for every single New Zealander. It increases it for Paul Reynolds, but he does not care; he has about $1,600 a week extra. But average people on the median wage will get an extra $5. This is the bill of broken promises. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000381\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EHow about the \u201CInflation Upwards and Onwards Bill\u201D? As the Government has said in the Budget, because of this bill inflation will rise to about 5.9 percent. That rise will eradicate the real value of the savings of many, many Kiwis. There is a bit of a misconception over on that side of the Chamber, because this bill is about broken promises and inflation. This is not a great bill, at all. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022 data-id=\u0022d9563181aee64cacbc0053fefecefe07\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000382\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d9563181aee64cacbc0053fefecefe07\u0022\u003EHon CLAYTON COSGROVE (Labour\u2014Waimakariri):\u003C/span\u003E I probably cannot do any better than my colleague Mr Nash in his summation of the Taxation (Budget Measures) Bill as the \u201CBroken Promises Bill\u201D.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000383\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002251ebaa218f3a460fb6f23bac9d0c696b\u0022\u003EH V Ross Robertson\u003C/span\u003E: Give it a go!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000384\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227484da816cd14f02839882033d388334\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: I will give it a go, anyway. We could also call this bill the \u201CMark Bryers (I Am Getting a Thousands Bucks a Week After I Finish My 75 Hours\u2019 Community Service) Bill\u201D, because, as I said last night to \u201CThe Maestro\u201D who is sitting in the back row over there, after Mark Bryers, the biggest crook in the Blue Chip scandal, has finished his 75 hours\u2019 community service he will get a lovely little letter from John Key\u2014because Mark Bryers earns over a million bucks a year\u2014saying \u201CThanks, do not pass go and do not go to jail. You will get $1,000 a week in tax cuts from the Government.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000385\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022aae5588b5af24146886d115724a691b5\u0022\u003EDavid Shearer\u003C/span\u003E: As a reward.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000386\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022310adeae818a4de9acb2a694359db2d7\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: As a reward. So we could call the bill the \u201CMark Bryers (Thanks for Coming) Bill\u201D. We could call it that. We could also reflect on the fact that as Mark Bryers gets his extra thousand dollars a week\u2014because he earns a million dollars a year\u2014all the people on the average wage will be worse off after taking their meagre tax cut, flicking on the increase in GST, and then being exposed to 5.9 percent inflation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000387\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022603ae58e-47c4-46f9-bfc8-8355a48988ad\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002208ff77de6d36442f90c661a5ecd40f41\u0022\u003EHon Dr Jonathan Coleman\u003C/span\u003E: What about the \u201CGoodbye Labour 2011 Bill\u201D?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000388\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221c58cb90947a4bf183cd4675d5568aef\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Oh no. You see, that member over there, the great \u201CMaestro\u201D\u2014the man who did such a wonderful job in the Mt Albert by-election that his name as a tactician is mud\u2014thinks he is so good; I wish I were half as good as he thinks he is. Even in his electorate\u2014what is that member\u2019s electorate; I cannot remember\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000389\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228f1cbc722ea84035a308254342d50c22\u0022\u003EGrant Robertson\u003C/span\u003E: Northcote.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000390\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223f52a900aca54d928aebf0dc8dfa8017\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: \u2014Northcote\u2014about 60 or 70 percent of the people earn below $40,000 a year. Therefore, with the increase in GST and with 9.5 inflation, they will be worse off. The great \u201CMaestro\u201D, I am sure, will organise one of those wonderful public meetings that he tried to organise in Mt Albert\u2014in a telephone box or a Portaloo. He should collect together the 60 to 70 percent of his electorate who are worse off, hold up the bill, say it is the \u201CI Broke My Promises Bill\u201D, and explain to those of his constituents who remember his name why he broke the promise not to increase GST, why he broke the promise on the Superannuation Fund, why he comes into the Chamber and says that National members are here to encourage savings when he kicked the living daylights out of KiwiSaver and never told his constituents about it, and why he said before the election that National would not borrow for tax cuts yet, under the scenario in the Budget documents, $240 million per week is being borrowed for 3 years, and the financing costs of that will not even start to track down till 2021. I say to the great \u201CMaestro\u201D that those are a couple of political problems that he might want to exercise his mind round, given the hopeless job that he did in Mt Albert.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000391\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThis bill could be called the \u201CBroken Promises Bill\u201D, as my colleague Mr Nash said. People will be reflecting on that tonight. We know that Government members held a big breakfast meeting this morning, and we know that they puffed out their chests when they read a few of the headlines. We know that they are going around gloating that a poll on Close Up said that 80 percent of the public is positive about the Budget. But I can tell those members that we have all been there after Budgets\u2014we have all been there. We have seen those wonderful polls. The people in our communities will take a little bit of time to work through some of the malarkey that the media put out, and some of the spin from the National Government, but then they will get out their calculators, and they will work out that although the Government has given them a few dollars here, the pile of GST receipts on a Friday from the grocery store has gone up a bit. Then they will work out that the price of vegetables, the price of meat, school fees, car insurance\u2014everything\u2014have gone up. The electricity bill has gone up. Education costs have gone up by 5.9 percent. Then they will work out, of course\u2014it is called inflation, I say to \u201CThe Maestro\u201D\u2014that the National Government giveth with one hand and grabbeth all of it back, and then some, with the other hand. If the great \u201CMaestro\u201D thinks that his constituents are silly and cannot work their calculators\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000392\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ddd630ff5e3449f19161074b5fe0e577\u0022\u003EHon Darren Hughes\u003C/span\u003E: Open their eyes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000393\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ed5478472ea541929adba4a2d885d357\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: \u2014if he wants to pull the smokescreen down over their eyes, as he has been wont to do from time to time with the odd cigar, as we know, he is treating those people with disrespect.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000394\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThis bill is quite rightly more appropriately called the \u201CBroken Promises Bill\u201D. I will go on to say that if\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000395\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022603ae58e-47c4-46f9-bfc8-8355a48988ad\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b41b5d615b5e495c8a90adb461240501\u0022\u003EHon Dr Jonathan Coleman\u003C/span\u003E: What about the \u201CClayton Could Be Leader Soon Bill\u201D?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000396\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221b8c55b7e47c4e7abf4dcc0ca6f5498a\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: No, no. There is no danger of that\u2014no danger, at all, I say to the member. But, you see\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000397\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225db0a23e-1579-44c6-9194-76e34cf5ae99\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022596c71190ff64decb5b17231ec84a889\u0022\u003EDr Rajen Prasad\u003C/span\u003E: Take a call.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000398\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022698973b71df444ec89d1ac4dae095b4e\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Well, that is a good point, actually. Rather than sitting there barracking from the sidelines, that member should stand on a street corner in his electorate and hold up a sign that says \u201CI ripped off and sold out 60 to 70 percent of my electorate; what do you reckon?\u201D. He should do that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000399\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225db0a23e-1579-44c6-9194-76e34cf5ae99\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002268f8aeead6aa41a8bcecd1cb25c1e9d8\u0022\u003EDr Rajen Prasad\u003C/span\u003E: Sorry!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000400\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022746166b4c30c43edade100f48843cb35\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Maybe he could say sorry, but he just giggles and laughs. He has Judith Collins-itis. He is grinning away like the Cheshire Cat. But as the weeks and days go by, the men and women in this country\u2014the battling families\u2014will examine this bill and see it for what it is. They will examine the fact that it will cost them an extra $25 a week because of the $400 million cut to the funding of early childhood education. The Government has piled that cut on top of the GST increase, then it has piled inflation on top of that. And we will not talk about\u2014because it would not be appropriate\u2014the accident compensation scheme levy increases, the increase in the cost of car registration, and all the other taxes that have been piled up.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000401\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002297efc4974c074f3e8f6180530837a8ef\u0022\u003EDavid Shearer\u003C/span\u003E: Interest rates.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000402\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d1b0fb9fb86f40f68ed1f7ee7377e4a6\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Then, as my colleague Mr Shearer says\u2014I say to Jonathan Coleman, the great \u201CMaestro\u201D, that he is the one who thrashed the living daylights out of his candidate in Mt Albert, whom he managed so well\u2014there is that thing called interest rates. Dr Bollard will look through the 2.5 percent increase in GST, but he will not be able to look through the added 4 percent that, when one makes the calculations, makes up the 5.9 percent increase in inflation. What does that mean? Mr Foss said that some members on this side of the Chamber will pay off their mortgages with their tax cut. Well, I say to Mr Foss, who is an economic genius, that I suspect that most New Zealanders\u2014and I am talking about the 20 or 30 percent who are on the top rate, or even less, who will actually get something\u2014might try to pay down their debts and their mortgages, but the vast majority of people will be exposed to an increase in interest rates.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000403\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022616d601983744e788a26b5defd39bcdc\u0022\u003ECraig Foss\u003C/span\u003E: Phil Goff stated he would use it to pay his mortgage.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000404\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229c0af586a2194fce804bc575fbda3aec\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: I ask the member whether he will go to his constituents and explain that because of the 5.9 percent inflation rate\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000405\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002215014fde2ba94a6b84d0ca27b4e83264\u0022\u003ECraig Foss\u003C/span\u003E: What interest rates\u2014which ones?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000406\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220cbca0561ea5402fa0591a05f8ba0aa9\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Well, maybe we should explain the policy targets agreement to that member. Maybe we should explain that the Governor of the Reserve Bank, given a 5.9 percent inflation forecast, will have to lift interest rates in order to get inflation back within the target range. But Mr Foss says that Dr Bollard is wrong. Everybody is wrong except for Mr Foss. [Interruption] The Chairman is not wrong. I would never say that the Chairman is wrong; he is the Chairman. If we add up the mortgage interest, the increase in inflation, the adjustment to the cost of living, and the increase in GST\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000407\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b0f08906196742548a3538f3017502fe\u0022\u003ECraig Foss\u003C/span\u003E: Why are you reviewing monetary policy if Dr Bollard is wrong?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000408\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226c624e71f10743019a2aca4cdff0da42\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Oh, those members are very vocal now, but I say to Mr Foss that if he is so vocal, he should hold a public meeting. He should hold a public meeting. But, oh no, he laughs; he will not front up to his constituents. If he is so good and has such a gift of the gab, then he should take this bill, which we are calling the \u201CBroken Promises Bill\u201D, and have a public meeting on it in his patch. He should fill the hall with people who fall in the various tax brackets that he has put in place in the legislation, and let them hear an explanation.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000409\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229c96977c51cb4d23bbfe3f2204d4b34f\u0022\u003EHon Darren Hughes\u003C/span\u003E: And in Nelson.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000410\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022123b3f36deb643fb8a58015f3a8ec91f\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Oh yes, goodness, gracious, I forgot about the Minister for ACC, whose electorate is Nelson. Let us look at Nelson, because Nelson is interesting. In Nelson, which is Nick Smith\u2019s electorate, 76 percent of people earn under $40,000 a year\u201476 percent. After he parks his little car at Nelson Airport and rolls into Nelson Airport, I wager that one or two people on the aircraft might ask him: \u201CDr Smith, you are our MP. Why am I worse off?\u201D, because they will be one or two of the 76 percent of his electorate who are worse off thanks to that member and his Government. But, oh no, Nick will not front up to his constituents. This bill is the \u201CBroken Promises Bill\u201D, so I challenge that member to hold a public meeting. He should ring up people, get some of the 76 percent of his electorate who earn under $40,000\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000411\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022dd562b7ea6ae41409869e59870dc8d91\u0022\u003EHon Dr Nick Smith\u003C/span\u003E: They\u2019re better off.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000412\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223318384f727d40edbea084eed4e5979c\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: No, they are not. Just as Mr Nick Smith cannot do the calculations on accident compensation, he cannot do a decent tax calculation. I say to him that he should hold public meetings. We will be there.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000413\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f5545a43da124f8e94433a0ea291befd\u0022\u003EHon Darren Hughes\u003C/span\u003E: It\u2019s his last term.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000414\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229e41175aff2d4b83bc783c6d5319a4dd\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: It is his last term, all right. We will be there. If National members do not give explanations, then we are quite happy to do that on their behalf. As we speak, 76 percent of Nelsonians will be worse off when this legislation commences, thanks to that member. The Government\u2019s tax calculator does not factor in inflation.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022 data-id=\u002250b542a8401b48db8c30b9a157d13111\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000415\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002250b542a8401b48db8c30b9a157d13111\u0022\u003EGRANT ROBERTSON (Labour\u2014Wellington Central):\u003C/span\u003E The title of this bill, the Taxation (Budget Measures) Bill, is an anodyne one, is it not? But I think we need to look deeper than at just the title to see what this bill really means. I think that a more appropriate title would be the \u201CTaxation (Cake Stalls for Crayons) Bill\u201D, because that is what will be happening in early childhood centres all around New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000416\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c7ac87183db4407b911b97722aa453fe\u0022\u003EJo Goodhew\u003C/span\u003E: Four percent operations grants.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000417\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225642cbaa063343f99fcf2be0d19b0f6d\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: I say to Ms Goodhew that early childhood centres all around New Zealand are now thinking about how they will make up that deficit. The priority in this bill is tax cuts for the wealthy, not early childhood education. Early childhood centres all around New Zealand know, and parents reading the New Zealand Herald this morning all know, that their early childhood education is at risk. Those cuts of $400 million over 4 years\u2014$400 million over 4 years\u2014will have an impact on the quality of early childhood education services. The cuts will have an impact on access to early childhood education.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000418\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EI ask what could be more important than that. This is not a Budget where Bill English came down and said that we were in a recession and that we had to pull back. No, this was a Budget where he thought he could be generous. And who did he decide to be generous to? He was generous to people who already had had three tax cuts from this Government. He was generous to them but took money out of early childhood education.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000419\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThat is an absolute outrage, because one option now available to early childhood centres is that they will probably get rid of their trained teachers. But I ask what good that will do for early childhood education in New Zealand. Other options, potentially, are that centres might have to cut back on hours or try to raise some money some other way. We had someone on the news last night saying that they will have to do fund-raising to buy paper. They will be fund-raising to buy paper. That is why this bill should be called the \u201CTaxation (Cake Stalls for Crayons) Bill\u201D, because that is effectively what this taxation bill will mean. Those early childhood centres, rather than focusing on the quality of the education they are delivering, and ensuring that trained teachers are there and giving children in New Zealand the best possible start in life, will be forced to be out there raising money or cutting back on quality teachers. In many cases, some parents simply will not be able to enrol their children, and that is what people are already saying in the New Zealand Herald today. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000420\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EAnother title could be the \u201CTaxation (Field of Broken Promises) Bill\u201D. Let us be absolutely clear: National went into the election in 2008 saying that there would be no increase in GST. Mr Key can dance on the head of a pin and say he was saying that if a National Government had a deficit or say he was talking in some other way. But he stared down the barrel of that camera and told New Zealanders that there would be no increase in GST when National came into Government. That promise has been broken, and that is why this bill should be renamed the \u201CTaxation (Field of Broken Promises) Bill\u201D.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000421\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EAnother promise was made that there would be no borrowing for tax cuts, but that is exactly what we are seeing today.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000422\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002255415c2ffc4e47918c3e77d2ecacc67d\u0022\u003EHon Dr Nick Smith\u003C/span\u003E: Rubbish!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000423\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002217991feb8b2c4967996f1f8eec20f94d\u0022\u003EGRANT ROBERTSON\u003C/span\u003E: It is what we are seeing, I say to Dr Nick Smith. If we are to borrow money, which we may well need to do, I ask whether it should not be in things where we are getting a return on an investment. Should it not be in making sure that we have investment in education, and in research and development? That would be real investment, and that should not be broken down. That would be real, proper investment in ensuring we had research and development that grew companies and that grew our economy, but that is yet another broken promise within this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000424\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThen there is the broken promise on public services, which is another reason why this bill should be renamed. This Government came in saying that it would cap but not cut public services, but it has continually cut them. In this Budget Bill English tells us there is $1.8 billion of low-priority spending. That \u201Clow-priority spending\u201D is in tertiary education, it is in early childhood education, and it is in health. Those are areas where this Government thinks there is low-priority spending. That is another broken promise, and it is another reason to rename this bill. Public services in New Zealand have to be rebuilt time and time again by Labour Governments, who come in on the back of National Governments that know they can get away with undermining public services while delivering tax cuts. This is not a Budget about the long-term future of New Zealand; this is a Budget about short-term political thinking from National. It is not good for the economy of New Zealand, and it is not good for the society of New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000425\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EWe could also rename the bill the \u201CTaxation (Rob Peter to Pay Paul) Bill\u201D\u2014literally, to pay Paul Reynolds\u2014and that, in fact, is what this bill will be doing. It ensures that people like Paul Reynolds, who have already benefited significantly from pay rises and tax cuts, once again are the main beneficiaries of this bill. The main beneficiaries are not the strugglers in New Zealand; they are not the people who have been facing higher power prices and who are now facing higher GST.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022 data-id=\u0022f396b9ee5e2047838d91e269be60870e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000426\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f396b9ee5e2047838d91e269be60870e\u0022\u003EJOHN BOSCAWEN (ACT):\u003C/span\u003E We are debating clauses 1 and 2 of the Taxation (Budget Measures) Bill\u2014that is, the title and the commencement date. I note that the Labour Opposition has focused its efforts on renaming this bill. I would like to focus on the second clause, which is the commencement date. The substance of this bill starts on 1 October. I know that various provisions come into effect on the day after the date of Royal assent, but the substance of this bill commences on 1 October.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000427\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220c2d9c819361413b9abf9470c2655e86\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: The man\u2019s a genius!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000428\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bf672b768df34f47871211594fbff5d4\u0022\u003EJOHN BOSCAWEN\u003C/span\u003E: I thank Mr Cosgrove. We have a GST increase from 1 October, and we have the start of the personal tax cuts and the income tax cuts on 1 October. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000429\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI suggest that this legislation should start on 1 July. I actually think the country needs to have tax cuts on 1 July. The reason I say that is that National has been at absolute pains over the last 4 months to say that if it went ahead with an increase in GST, it would make sure that there were at least equal compensatory reimbursements or equivalent tax cuts. Well, we have another tax coming into effect on 1 July, and it is the emissions trading tax. I know that National does not like me referring to that as a tax, and, no, it is not a tax in the true sense of the word. It is not revenue collected by the Government and redistributed, but the substance of it is a tax on electricity and petrol. Treasury estimates that the impact of that emissions trading scheme tax is to add 5 percent to the price of electricity and 3c or 4c a litre to the price of petrol, and that will double again on 1 January 2013. The effect of that, the Reserve Bank tells us, is to add 0.4 percent to the cost of living. That starts on 1 July. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000430\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EWe could actually bring this legislation further forward than that. We could introduce the tax cuts in June, because Contact Energy, a company that generates electricity from gas and that has to pay for its emissions from 1 July, has already announced tariff increases effective from the middle of June. Naturally, the electricity companies will not all come together and increase their prices on 1 July. So what has happened? Contact Energy has the early running. It has moved to increase its tariffs 3 weeks before 1 July. So we do not need to wait until 1 October for the tax reductions; they need to be brought forward to at least 1 July. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000431\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EFinally, I will comment on the Minister\u2019s Budget speech. He said, when referring to tax cuts: \u201CFirst, for all income earners at all taxable income levels, the reduction in personal income tax will be sufficient to match the increase in GST.\u201D The Prime Minister and Government Ministers, including the Minister of Finance, have been at pains over the last 3 or 4 months to say they were going to reimburse people for the increase in GST. The Prime Minister even went and gave a speech at North Shore Grey Power back in April about that. But this Government has continuously refused to acknowledge that we have a tax being put on electricity and petrol, and that that tax will make its way through the whole economy. It puts a cost on every single individual in this country. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022 data-id=\u0022c140cd599f0149cfb1c0b871c49cc2c7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000432\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c140cd599f0149cfb1c0b871c49cc2c7\u0022\u003EHon DAVID CUNLIFFE (Labour\u2014New Lynn):\u003C/span\u003E At this title and commencement debate in the Committee stage, we have the opportunity to reflect upon some of the arguments that have been made of a more technical nature. The first issue I wish to bring to Parliament\u2019s and the Minister\u2019s attention is the inappropriateness of this Taxation (Budget Measures) Bill including within it matters of a technical nature that are not required for the purposes of implementing the Government\u2019s major pieces of Budget policy. There is precedent to put major Budget policy through in urgency in all stages, but it is well established and bipartisan\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000433\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e597405dace94661a9f504dd357e9e82\u0022\u003EHon Gerry Brownlee\u003C/span\u003E: Ha, ha!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000434\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022835aa045650e41ada17adee36d626ee3\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: The member may laugh, but he is not known for detailed attention, and it would be of value to him as well as to taxpayers if any unintended wrinkles or mistakes of a technical nature in this legislation were sent to a select committee, as has been the normal practice. I see the officials, who are aware of the risks\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000435\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002246ab0d91b686406a947b4f81478a5e9a\u0022\u003EHon Gerry Brownlee\u003C/span\u003E: It has not. My goodness, we\u2019ve forgotten our recent history.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000436\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221bf2a2c5374b4b06881732af8d08cd72\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: The member is in danger of digging himself in a deeper hole. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000437\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228fc113db70644695808677a02b2cefbc\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: It\u2019ll be a big hole.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000438\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e28ad2a3252f447383626eac8d61a7d4\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: We all know it will be a wide as well as a deep hole, and there will be plenty of his colleagues ready to put the dirt in on top when he burrows down. The Leader of the House is misnamed. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000439\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EWe need to put the marker down right at the start that we think it would have been more appropriate to restrict this 96-page bill, much of which is technical. The reason for that is that, try as our officials might, and assiduous as they are, it is always possible that material of a technical nature would benefit from submissions and the review of tax practitioners and others at the select committee process. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000440\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThe Committee of the whole House has made much note of the fact that, as last evening\u2019s first reaction sees the cold light of dawn, and people\u2019s expectations of being better off meet the reality of next year\u2019s inflation, three-quarters of New Zealanders will find themselves worse off after this budget, at least until 2012 or 2013. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000441\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a937133b746744fb826f2e73a0f5432c\u0022\u003EHon Gerry Brownlee\u003C/span\u003E: What rubbish!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000442\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d53f9b4ff1114c6ea610801807db3450\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: Here is some simple mathematics for the Leader of the House. Let us apply 6 percent inflation to that member\u2019s gross salary. Does that member believe he could multiply his gross salary by 6 percent and come up with a number? I would yield to the member if he would like to do that sum in his head. Would the member like to do that sum in his head\u20146 percent times God knows what he earns; a quarter of a million dollars? How about 10 percent times a quarter of a million dollars, for the member sitting opposite? Ten percent times a quarter of a million, I say to Gerry. That is an easy one. A round number, I say to Gerry. I ask him to give it a go. Well, I say to Mr Brownlee, that is around about the amount he would lose from inflation over the next 2 years because this ill-informed Budget will stretch the borrowing capacity of the economy. Poor old Alan Bollard\u2019s job just got a lot harder. He will have to raise interest rates to sterilise off this Budget, which ends up borrowing to give a $1,000 a week tax cut to a millionaire. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000443\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EIt does not worry Gerry, because he cannot multiply 250,000 by 10 percent. Detail focus, I think, proves the point that this bill should have gone to a select committee. I ask members whether I am right. I am right about that. When we go beyond the fact that most Kiwis will get nothing out of this Budget for at least 2 years, we then come down to the question of priorities. The Government is really saying that it is a higher priority to give a millionaire $1,000 a week than it is to give a rape victim counselling, to give a frail, elderly woman an hour a week of home help, or to help all the people who are reliant\u2014because they have not got $1,000 a week extra tax back\u2014on our public hospitals and public health services to be there for them and their families when they need them. The health budget is $300 million a year short\u2014$1.2 billion short over 4 years. That is the real change to the health budget when we apply inflation from this Budget. There will be 6 percent inflation, so the health budget will be $300 million short.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022 data-id=\u0022d6b9f6f0c4a04230a2dcb55a1e18f0ca\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000444\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d6b9f6f0c4a04230a2dcb55a1e18f0ca\u0022\u003EDAVID SHEARER (Labour\u2014Mt Albert):\u003C/span\u003E I concur with my colleague Stuart Nash in terms of renaming this bill the \u201CBroken Promises Bill\u201D. The Taxation (Budget Measures) Bill is a little bit like one of those sugary drinks: it looks good and it tastes good, but when we have had it, we think it is not so good for us after all. This bill really is not so good for us after all. As David Cunliffe just said, if we subtract from the tax that we are supposedly getting back in this Budget the 6 percent inflation, the accident compensation levies, the car registration increases, the Auckland tax increases that will be imposed upon us in terms of rates because we are making such a mess of the Auckland super-city, the tobacco tax, and the power prices\u2014and, of course, because the inflation rate has gone up, interest rates will go up\u2014what do we have? We have a rather uncomfortable feeling that maybe we have just been had. It will take a couple of days to work through, but, as my colleague Clayton Cosgrove said before, we know what it is like. The Government puts its Budget down, it gets plaudits saying that it is a good Budget, and after 2, 3, or 4 days the real oil comes out, and suddenly we realise that, actually, it is not so good, after all. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000445\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EI will touch on another aspect of this Budget, and what this Budget really does not address, at all. The Budget mentions agriculture only once or twice. It does not look at the productivity of this country. Productivity is based on, for example, our savings rates. If we look across the Tasman to Australia we see that Australia\u2019s employers\u2019 contribution has just gone from 8 percent\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000446\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b5acfdc9d27e452d88746e36b7427863\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: We are debating clauses 1 and 2.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000447\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022022b0785629d4b828e889209b01bc1c7\u0022\u003EDAVID SHEARER\u003C/span\u003E: I beg your pardon, Mr Chairman. The title of this bill should be the \u201CBroken Promises Bill\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000448\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EI will tell members about one other broken promise. In 2008 the National Party said it would double the amount spent on research and development. What do we have today? We have half the rate of research and development that National promised in 2008. Not only that, it took away the 15 percent tax credit that the Labour Government had already put in place. So that is why I believe this bill should be called the \u201CBroken Promises Bill\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000449\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EThis Government has broken its promises about what it has already said. Not only has the Government broken its promise not to increase GST but also it has broken its promise to increase spending on research and development. The research and development spend that the Government came out with was $56 million a year, which will be paid in the form of grants and vouchers. That means that small and medium sized businesses have to go on their knees to Government bureaucrats to ask for money in order to be recompensed for their research and development. That is what they have to do. If the Government had stayed with the tax credits that Labour put in place, it would have been able to double the amount of business research and development spend in this country. It could have been upped from $1 billion to $2 billion. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000450\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EThis bill is aptly named the \u201CBroken Promises Bill\u201D, as my colleague Mr Nash has said. It breaks the promises on innovation. The Government therefore breaks its promise on productivity, and it breaks its promise on GST. As I said, the \u201CBroken Promises Bill\u201D is an apt name for this bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000451\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EThe question was put that clause 1 be agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000452\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EA party vote was called for on the question that clause 1 be agreed to.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022 data-id=\u00223ece559a130e41559f846c101f7abca7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000453\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00223ece559a130e41559f846c101f7abca7\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: Before I give the result of the vote I remind members that the previous Chairman, prior to the luncheon adjournment, said that there was to be silence during the taking of votes. I ask members to respect that.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u0022973d8c765ece4307b8f1cd5d6a1d467c\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That clause 1 be agreed to\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 67\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 58; ACT New Zealand 5; M\u0101ori Party 3; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 51\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 43; Green Party 8.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EClause 1 agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000454\u0022\u003EThe question was put that clause 2 be agreed to.\u003C/p\u003E\u003Ca id=\u002225093c32dd9f453fb38fcbb283f05109\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That clause 2 be agreed to\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 67\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 58; ACT New Zealand 5; M\u0101ori Party 3; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 51\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 43; Green Party 8.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EClause 2 agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000455\u0022\u003EThe Committee divided the bill into the Taxation (Budget Measures) Bill, the Government Superannuation Fund Amendment Act 1969 Amendment Bill, the National Provident Fund Restructuring Amendment Bill, the Social Security Amendment Bill, the War Pensions Amendment Bill (No 2), and the New Zealand Superannuation and Retirement Income Amendment Bill (No 2), pursuant to Supplementary Order Paper 124.\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000456\u0022\u003EBill reported without amendment.\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000457\u0022\u003EReport adopted.\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022 data-id=\u0022106322ee347b4a63816015feae50c477\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000458\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022106322ee347b4a63816015feae50c477\u0022\u003EThe ASSISTANT SPEAKER (Hon Rick Barker)\u003C/span\u003E: Before I call on the Minister to move that the bills be read a third time, I have a small matter to attend to. The result of the vote on the question that the Taxation (Budget Measures) Bill be read a second time was announced as Ayes 69 and Noes 53. The correct result is Ayes 69 and Noes 52. I order that the record be corrected.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000459\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022c7a2dc21c4ed46e18fb12ab6818eafea\u0022\u003EThird Readings\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000461\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00220d644b92d20a4a289cf2346dad859fbc\u0022\u003EThird Readings\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u0022b85e616d24754891a366d9c2e8f9c64c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000460\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b85e616d24754891a366d9c2e8f9c64c\u0022\u003EHon PETER DUNNE (Minister of Revenue)\u003C/span\u003E on behalf of the Minister of Finance: I move, That the Taxation (Budget Measures) Bill, the Government Superannuation Fund Amendment Act 1969 Amendment Bill, the National Provident Fund Restructuring Amendment Bill, the Social Security Amendment Bill, the War Pensions Amendment Bill (No 2), and the New Zealand Superannuation and Retirement Income Amendment Bill (No 2) be now read a third time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000462\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThese bills give effect to the decisions in the Budget yesterday regarding the most radical restructuring of taxation in New Zealand probably since the 1980s. The Committee has spent some time discussing the impact of those changes: the dramatic changes to personal tax rates; the reduction in the company tax rate; the lift in the rate of GST and the associated compensation made available to all those in receipt of superannuation, welfare benefits, Government superannuation, veterans pensions, etc.; and the changes to the company tax to help create a more balanced and rational tax system in New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000463\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe Committee spent time considering the contention made by the Minister of Finance in the Budget speech that these measures as a package were designed to strengthen growth by rebalancing our tax system so that it better supports and promotes productivity, savings, and investment. I have to tell the House that although there was a lot of debate during that period of consideration, the legislation has emerged unaltered. The position that the Government advanced in the legislation has been held intact by the Committee, and as a consequence we have legislation that will give people greater incentives to work, save, and invest. It makes our tax system fairer and more coherent, and it makes it a more integrated system with more integrity. It will also encourage productive investment in New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000464\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThere was widespread agreement during the Committee stage that those aims were laudable aims for New Zealand, and the fact that this legislation emerges with majority support at the end of that debate demonstrates that this House, like the country as a whole, accepts the validity of these measures, accepts that they are the right course to follow, and looks forward to their early implementation. I am delighted to commend these bills to the House, because they give good tax reform for all New Zealanders.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022 data-id=\u0022b3da15167faa4f1eb2e2eef38ec4282c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000465\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b3da15167faa4f1eb2e2eef38ec4282c\u0022\u003EHon DAVID CUNLIFFE (Labour\u2014New Lynn):\u003C/span\u003E In relation to this tax legislation we have seen the Government bring down a Budget of broken promises. The promise not to raise GST has obviously been broken by this legislation. The promise to make everybody better off has been broken by inflation, and by the skewing of this tax package to the wealthy, who need it not. The promise to protect the elderly and restore superannuation pre-funding has been broken. The promise to protect front-line services, and the funding of entitlements that the public of New Zealand expected under the previous Government, has been broken. The promise to rebalance the economy and put it on a sustainable path to growth has been broken by Treasury\u2019s own calculations. We will prove all of these things in this third reading of the debate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000466\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EAt this stage of the proceedings I guess some people over there will be feeling a bit in need of a Berocca. They will be feeling that the champagne has worn off after their orgy of self-congratulation last night. Like a lot of New Zealanders, they will be asking to be told again how this Budget leaves them better off. The Labour Opposition can tell New Zealanders that it will not leave them better off. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000467\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThe first reason is that 6 percent inflation will deal in short order to the small crumbs that fell from the rich folks\u2019 table. Middle New Zealand will see no benefit from this Budget until at least 2012 or 2013. We believe that New Zealanders will be worse off in the medium term because those upper-income tax cuts are funded in part by extra debt and extra borrowing, but the Minister of Finance has the nerve\u2014the gall\u2014to lecture the Labour Party about fiscal prudence. He is borrowing more to give tax cuts to the wealthy while old people go without; he should be ashamed. Inflation will feed into mortgage rises and interest rate rises. If there is one sure way to kill off a recovery, as we all know, it is to raise interest rates. Alan Bollard\u2019s job just got harder, and New Zealanders will pay for it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000468\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EIt is OK that the middle-income brackets got some income tax relief; members can bet that Labour would have done that too\u2014and raised tax thresholds, as our leader has already said. But it is not OK\u2014and members on this side cannot see past this\u2014that people on a million dollars a year get a thousand dollars a week extra in the hand that they do not need and did not ask for.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000469\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022805fda71d35c4d2a8af703857be0f3a1\u0022\u003EHon Tau Henare\u003C/span\u003E: They can go and spend it on the economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000470\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cdfdcd63ba424bf0b92f6b52779fae81\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: Well, that member says they will spend it, but his leader says they will save it. Would somebody please pass the key lines to Tau Henare, because he is off the song sheet again.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000471\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221afd0f7871924cd290b6af249718e1e4\u0022\u003EHon Tau Henare\u003C/span\u003E: Let them have their own money; stop stealing their money.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000472\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fa6023fd624d4d908bdbe7a9fad057df\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: I say to the member \u201CSame to you with bells on.\u201D Underneath all of that is the underlying agenda that National is proposing over time, of progressively shrinking the State by strangling revenue flows. Then National will tell New Zealanders that they will have to do without the services they have counted on. As my colleague Grant Robinson pointed out, New Zealanders will not have enough for the paper and crayons in their sons\u2019 and daughters\u2019 schools, let alone in their preschools. There will not be money for the hip, knee, or cataract operation for granny, because National will be underfunding hospitals by $300 million in the next year. As my colleague the Hon Ruth Dyson so eloquently put it on the radio today, the health system has been on life support and somebody has just turned off the switch. Who has done that? Bill English and John Key have done that, and senior citizens on waiting lists for a hip operation will remember this day\u2014$300 million short. Waiting lists are growing longer but National is shrinking the State, out of pure ideology.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000473\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003ENational also said it would be rebalancing the economy and fixing the tax preference towards the binge-bust property cycle, but that has not happened. National has tinkered with depreciation, and it has mingled around the edges in relation to qualifying companies, but it has not solved the problem. It has not offered for the economy a clear path forward that rebalances a tax system that has got out of whack. National will be condemned by that in the years ahead when Kiwi businesses, especially small businesses, cannot borrow or access the debt and equity finance that they need in order to grow and create good jobs, create higher incomes, and drive New Zealand forward in an evermore complex world.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000474\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThe Government said the bottom line was that it would create growth when it cut taxes for our best and brightest, but it told mainstream New Zealanders not to get jealous: \u201CWe need those people; they are better than you.\u201D Well, here are the Budget\u2019s numbers on the growth forecast. There has been no manipulation; this is a straight quote. By the Government\u2019s own calculation, it is shown that in fiscal year 2012 growth will go down, in fiscal year 2013 growth will go down, and in fiscal year 2014 growth will go up by less than one-tenth of one percent. That is the step change. After the high-income tax cut, growth will go down in 2 years out of 3, and will hardly budge in the third. So New Zealanders are being told to put aside\u2014if they can\u2014the fact that granny will get her home help cut and have to wait for her hip operation, put aside the fact that they cannot get a subsidy in the early childhood sector, and put aside the fact that millionaires do not need an extra thousand dollars a week, and judge the Budget by whether it will deliver in the future in terms of jobs, incomes, and growth. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000475\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EHere is the proof: in Treasury\u2019s own numbers, the Budget fails. On its own objectives and its own numbers, the Budget is a waste of time. It was a waste of ink; it should not have been printed. It takes New Zealand backwards, it does not rebalance the economy, it is not socially just, and it does not leave New Zealanders better off.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000476\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EWhen the rosy glow of Beehive spin wears off, New Zealanders will know that they have been swindled. They were promised a step change but they did not even get baby steps. They got a step back in time to the failed policies of an old-fashioned National Government Budget that rewards the rich at the expense of the poor, and in which the forgotten middle class is forgotten again. But this time, what is different is that the middle class is being told not to be envious because the upper class deserves it! Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022fbe3f87c-849c-4eee-84cc-119edeb1a681\u0022 data-id=\u00223be276bfd40e40619338cddf8627daac\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000477\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fbe3f87c-849c-4eee-84cc-119edeb1a681\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00223be276bfd40e40619338cddf8627daac\u0022\u003EAARON GILMORE (National):\u003C/span\u003E It gives me enormous pleasure to stand and speak in the third reading of these various bills. Today I was phoned up by my brother in Christchurch. He said the shopkeepers, the taxi drivers, and the rubbish collectors are happy. In straw polls up and down the country about 80 percent of people are happy with this Budget. The only people who are not happy are those Labour Party members over there, because in 18 months\u2019 time, when we get on the hustings, they will all be sad and depressed. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000478\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fbe3f87c-849c-4eee-84cc-119edeb1a681\u0022\u003ELabour members cannot count and they cannot read. We have heard time and time again from those members about the hairy, scary things regarding 5.9 percent inflation. I do not think those members read the Budget to page 63. I do not think they got as far as that; they got to about page 5 and gave up. On page 63 of (B.2), (B.3), in the Economic and Fiscal Update, a whole lot of numbers are outlined, and it might be a bit too tricky for some members over there. It says that, yes, the CPI will go up\u2014as it normally does\u2014but so will nominal wages. Low and behold, wages go up, the CPI goes up, the world is a better place, and the people are better off. We have heard all the rhetoric from the other side of the House, and we have heard all their discussions, but here it is in black and white. I encourage those members to look at page 63\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000479\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224c714df207dd45d3b4b566646b385cda\u0022\u003EHon David Cunliffe\u003C/span\u003E: I raise a point of order, Mr Speaker. There has obviously been some dispute about Treasury\u2019s numbers. Therefore I seek leave to table\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000480\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002201e29545c50a4591966a3182f2c0c52d\u0022\u003EThe ASSISTANT SPEAKER (Hon Rick Barker)\u003C/span\u003E: The member will sit down. It is the accepted practice in this House that members do not interrupt a member who is speaking to table a document. Mr Gilmore was on his feet, and there is no need for the member to table a document at this point. Should the member wish to table it, he can do so at another stage. I advise members that we will wind up this debate with some semblance of decorum, and we will let members give their speeches.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000481\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fbe3f87c-849c-4eee-84cc-119edeb1a681\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002244418584f8584f5d8f00adea212756cf\u0022\u003EAARON GILMORE\u003C/span\u003E: On page 63 it is there in black and white. I encourage the Opposition members to actually read it, because they did not get as far as that. However, some of the journalists have read it, and I encourage them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000482\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fbe3f87c-849c-4eee-84cc-119edeb1a681\u0022\u003EThe shopkeepers up and down the country and the people visiting their shops are all very happy. I look forward to standing up against whomever I am running against, in 18 months\u2019 time, in any meeting up and down the country, and talking about this and pointing out what has happened. People are happy. Every school up and down the country is getting $10,000. Every school will have more money to spend\u2014that buys a lot of pens and paper. I think that is great. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000483\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fbe3f87c-849c-4eee-84cc-119edeb1a681\u0022\u003EThis legislation is wonderful legislation by a wonderful Minister of Finance led by our wonderful Prime Minister, John Key. I look forward to selling it up and down the country, time and time again. Thank you very much.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022 data-id=\u00225ac8e1b639674547b6de7c0461b950a4\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000484\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225ac8e1b639674547b6de7c0461b950a4\u0022\u003EHon SHANE JONES (Labour):\u003C/span\u003E The previous speaker, Mr Gilmore, makes Paul Quinn sound and look clever. The previous speaker, Mr Gilmore, shares the name of a bikie from Wanganui who is known as Shagger, and that was the nature of his contribution to this debate in the budgetary session. Mr Mallard has suggested that he is not actually to be referred to in that fashion because he resembles the janitor, and that is why the nature of his speech and the volume of Paul Quinn\u2019s noise show that every Kiwi knows this Budget will put the cost of living up. There is all the brouhaha about the Budget; it will pass, and in October, November, December, when interest rates are up at 9 percent, or 10 percent, property developers will realise that they have been given a \u201Cget out of jail free\u201D card and rents will rise, and that is when people will come to us. As day follows night, the cost of living is definitely going to go up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000485\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EThis Budget was designed by the Prime Minister, the \u201CPrince of Parnell\u201D, to create a caste society\u2014a society where if people have wealth either inherited or from protected areas of the economy, then their mobility and their kids\u2019 prospects are protected, but that is not the vast majority of New Zealanders. This is not a Budget that will advance social mobility. A society that is riddled with the absence of social mobility breeds resentment. It breeds fear, and society does not like being told to shut up and not be envious. That is the view of someone who is embedding a caste-like structure in our economy and forcing people to eke out an existence; in the absence of collective investment, they do not have the opportunity to advance. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000486\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EThe Aussies have a vision that 40 percent of their workforce will be either tertiary or advanced post-secondary qualified. Nothing in this Budget advances those people, as shown by Victoria University\u2019s need to cut university spaces. I ask members to point out to me one single page that narrows the gap between our country and Aussie. There is not one single page. The entire Budget rests on the assumption that the only lever this Government has at its disposal to effect economic development is taxation. That is exactly the recipe used by Bill Birch, and, indeed, goes back to Ruth Richardson. What sort of economic growth or closing of disparities did we see during that period of time? We saw a worsening. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000487\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EThis Budget has an assumption that if we give more money to people who are already wealthy, somehow it will unleash a level of dynamism. That will not happen. In that sense, this Budget will not narrow the gap\u2014this is the test the Government set for itself. It has said \u201CNew Zealand, judge us on how we can narrow the gap of the Tasman Sea between Aotearoa and Aussie.\u201D It fails in every measurable form. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000488\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EIt needs to be said that when we change the tax system and move it more to consumption, there are some valid arguments in public policy as to why that would be done. But why would we do it in order to enrich a tiny, narrow caste of people who already exercise an inordinate amount of power through their vested interests? All it does is deepen the roots of their ascendancy; it is almost as if a group of aristocrats have seized control of the fiscal levers and are enriching themselves. So it will take a while for the average family to work it out, but as day follows night, come 2011 when families go to buy the basic necessities, they will find that they are more expensive, rents will have gone up, and those who are trying to encourage nieces, nephews, and children to buy a house will feel that 10 percent interest rate. They can look forward to that. It will hurt the people who are currently silent, not the lobbyists who toppled this Government from the property sector. If they did not like the depreciation changes, it is no wonder that the Government is afraid to take a capital gains tax to them. The lobbyists have triumphed. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000489\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EThere was an invitation on this side of the House at our most senior level to have an open discussion, but we learnt the lesson after we made a similar response to the emissions trading scheme\u2014we did not want anything\u2014that we cannot rely on the integrity. We made a similar request that if it was going to effect a substantial change and look at both income and capital, we were willing to talk. There was not a single response. The lobbyists have conquered this Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000490\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EWhere are those lobbyists coming from? They are coming from a narrow range of people. There are a host of other advocates, and we will hear about them. Where are the interventions to change the structure and the nature of our wealth generation? We all know that we have soil, we have water, we have climate, we have fibre, we have food, we have fish, and we have agriculture. But, other than the filching of Jim Anderton\u2019s scheme and its anaemic current example reflected in the Government\u2019s research and development policies, nothing in this Budget moves our wealth up from commodity production into value added. It is probably the case that the Government does not know how to do it. The reason it does not know how to do it is that it is listening to a narrow group who feel that far too much has been done for everyone but their narrow interest. That is not a recipe for advancing a prosperous or cohesive society. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000491\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EIn 2011 there will be a very simple choice to be made. The choice will be made for those of us who unashamedly believe in, and want to harness the power of, collective power, not atomise individual base approaches to human welfare. That is what this is based on, and we will have that debate and we will show that the vast majority of New Zealanders who have been caught in a wage economy for way too long will not vote for the effects or the architects of this Budget. There will be people who are willing to give the Prime Minister the benefit of the doubt\u2014we accept that. He will get the benefit of the doubt, but that doubt will be eclipsed by poverty. We should look at the statistics of the children and the grandchildren in the vulnerable parts of society where people\u2019s ability to pay their way goes right down. That is the first point. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000492\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EThe second point is to look at the institutions that are designed to enable future generations of New Zealand to do better than their parents and grandparents\u2014they are being starved. We should look at the shape and the form of the firms that currently earn our export earnings, and at how many of them have been given a recipe for a step change in collaboration with the Government. None of them have. There is a forlorn belief that by exclusively pulling on the levers of the Inland Revenue Department, a whole new entrepreneurial flow of wealth will be unleashed.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000493\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003ENot only did the Prime Minister break the GST promise, but he has sent garden-variety, hard-working Kiwi families out of the workforce\u2014because they will not be able to put the mokopuna into early childhood education; but in addition to that broken promise, it reflects a narrow, quite frightening focus on the caste defined by the amount of money one can deny others enjoying, just to enrich oneself. That is why this Budget, after all the puffery has passed, will be seen as having driven up poverty in New Zealand. Kia ora t\u0101tou.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022 data-id=\u00225b82787149ce411bbd0f4be884bcbd55\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000494\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225b82787149ce411bbd0f4be884bcbd55\u0022\u003EHon DAVID CUNLIFFE (Labour\u2014New Lynn):\u003C/span\u003E I apologise. I should have sought leave prior to my colleague\u2019s very eloquent speech, after the architect\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000495\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224e298dc536d04114aa66c8f52530ced8\u0022\u003EThe ASSISTANT SPEAKER (Hon Rick Barker)\u003C/span\u003E: The member knows that when he seeks leave, he is to be succinct and to the point. It is not the time to have a preamble of a speech\u2014to offer congratulations, and so on. If the member wishes to seek leave, he should raise the Standing Order and say what he is seeking leave for.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000496\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022757b39ffa490401894f0f9a03d49c07b\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: I seek leave to table the statistics on growth expectations resulting from the Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000497\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f992f40dae3b434488ad09881203c5d9\u0022\u003EThe ASSISTANT SPEAKER (Hon Rick Barker)\u003C/span\u003E: I will not accept that document. It is a published document and it is on the Table of the House. It has been given to everybody else.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000498\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002242ef2a7e53e44afa9faf4760086fe82e\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: The actual graph is not a published document. The data\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000499\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022304d0c7b42eb4f0b95b10fad80929d63\u0022\u003EThe ASSISTANT SPEAKER (Hon Rick Barker)\u003C/span\u003E: The graph is not?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000500\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022dc3496a0ff304d058a609fb65f1cca84\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: The graph is not. It is new material.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000501\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002290e1c68986814b24adab6286aa75f39a\u0022\u003EThe ASSISTANT SPEAKER (Hon Rick Barker)\u003C/span\u003E: It is new material; OK. Leave is sought for that purpose. Is there any objection? There is objection.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022 data-id=\u00221a7b7ed66caf451a9eda3b17206fe39f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000502\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00221a7b7ed66caf451a9eda3b17206fe39f\u0022\u003EDr RUSSEL NORMAN (Co-Leader\u2014Green):\u003C/span\u003E I stand to speak on the third reading of the Government\u2019s tax legislation. This is a rather sad day for our country. The reason it is a sad day is that there is in our country a dream of equality. There is a dream of egalitarianism, which runs as a thick current right through our history. It goes back to our most famous and our best Prime Minister, Michael Joseph Savage, who was a champion of egalitarianism. He dedicated his Government to making New Zealand a better place for everyone. The idea at the centre of egalitarianism is that people are judged on their moral character rather than on how much is in their wallet, or on how much was in their father\u2019s wallet. The tragedy of this Budget is that it turns us back to the day when people were judged on how much money was in their wallets rather than on the nature of their characters.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000503\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EOne of the revealing facts that came out very clearly during this debate was the Prime Minister\u2019s comments about envy. The Prime Minister said he did not think that ordinary, middle-income earners should envy those at the top. What this reveals about the Prime Minister\u2019s character, and the Prime Minister\u2019s view of the world, is that he thinks we should judge people on how much money they have. What it reveals about the Prime Minister\u2019s, and the National Government\u2019s, view of the world is that people should be judged on how much money they have.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000504\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EIn this Budget the Government is turning its back on decades and decades of egalitarian tradition in our country. For many years, along with the trade union movement and the Labour Party in earlier days\u2014except for a rather unpleasant middle period during the Roger Douglas period\u2014we have had a tradition of fighting for egalitarianism and making our country more egalitarian. Yet this Budget turns its back on that tradition. For me, it is a sad day in our country when we turn our back on one of the central traditions that is part of our identity, which is a commitment to egalitarianism: the commitment to the idea that people should not be judged on the size of their wallets but on their moral character\u2014on the nature of their character. People should not be judged on which private school they attended, but on the kind of person that they are. That is one of the central themes in our history and in our identity, but with this Budget we are turning our backs on that tradition.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000505\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EBy making our tax system far more regressive than it currently is, by flattening the income tax rate, and by adding to GST, which is by its nature a regressive tax, we are sending our country down a path that is different from the one we were travelling on before. We are sending our country down a path on which there will be more haves, because there will be some people who get richer. But there will be an awful lot more have-nots, because the impact of the tax system will be to increase inequality in our country. It is also important, I think, to remember the history of inequality in our country. Up until the fourth Labour Government we had a relatively egalitarian structure, but during the period of the fourth Labour Government and in the Bolger years, inequality in our country increased dramatically. Moves to address inequality flat-lined, relatively speaking, during the last Labour Government; the only significant difference was made by Working for Families, where there was some reduction in inequality. But we have still ended up in the situation of having a dramatically unequal society, and this Budget will make it only worse.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000506\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe other aspect of this Budget that is perhaps surprising, coming from a National Government that prides itself on its fiscal probity, is that it borrows for tax cuts. There is an extra $660 million in borrowing this coming financial year, in order to pay for tax cuts. That means we will have to borrow an extra $660 million\u2014about a billion dollars over 4 years\u2014in order to pay for these tax cuts, in order to pay for motorways that make us more dependent on oil, and in order to pay for climate pollution subsidies. It seems to me absolutely irresponsible that a Government that is already borrowing heavily should borrow further for tax cuts that mostly go to the wealthy, to motorways that increase our dependence on oil, and to climate change subsidies. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000507\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003ETwo parts of the triple deficit of this Budget are the fiscal deficit and the social deficit, and the third deficit is the environmental deficit. Part of that deficit, of course, is the subsidies to greenhouse gases, and part of it is the increased subsidy to irrigation schemes. We live in a country now where some of our groundwater is so polluted that it is dangerous for babies to drink, because it causes blue babies down in Canterbury, but that subsidy is a subsidy to allow further destruction of biodiversity. New Zealand is in the middle of a biodiversity crisis. We are losing native vegetation at present at the fastest rate since European colonisation, but this Budget has more subsidies for irrigation schemes, which will drive that loss further. The Budget also lacks a capital gains tax, which could have put some downward pressure on the escalation in rural land prices that is driving a lot of the biodiversity loss. So the Budget has a triple deficit at its heart: a fiscal, social, and environmental deficit.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000508\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EAnother aspect of this Budget that I think is quite worrying concerns the fact that we know that the National Government has said very clearly that in this term it will not privatise. In that regard accident compensation might be a debate, but within limits National has kept to that promise, to some degree. However, it is clear that in the Government\u2019s next term in office it wants to privatise; that is in its genes, so to speak. It is also clear that the Government will use public debt as the rationale for more privatisation. So by adding to public debt, by driving out public debt further than it would have been driven as a result of paying for these tax cuts, the Government is creating the justification that it will use at the next election campaign for the privatisation debate. There will be a privatisation debate at the next election campaign, because National has made it clear that it plans to put privatisation on the agenda at the next election. It will use public debt as the justification for privatisation\u2014mark my words.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000509\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe rationale for tax cuts in the legislation before us needs to be challenged. It has been given on the basis that it will reduce tax avoidance. Of course, the other way to reduce tax avoidance is to close the loopholes. But this Budget rewards tax avoidance, so that argument is a specious one. The Government also argued that we had to have tax cuts for migration reasons\u2014that is, to reduce outward migration. We know that that is false from previous times, such as in 1986, when we had big tax cuts and there was a large outward migration from New Zealand. When taxes increased in 2000, after that period a lot of people came into our country, so the migration argument does not hold. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000510\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EIn terms of GDP growth, the argument does not hold, either. There is an awful lot of evidence, just from the New Zealand experience, that there is not much of a close relationship between the top rate of income tax and GDP growth. So that argument does not really hold, either.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000511\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EOne of the things that was interesting, and was a surprise, of course, was the company tax rate cut. I think two things are worth talking about, in terms of the company tax rate cut. The first is that when the whole new-right embrace of globalisation was adopted by Labour and National, the Green Party, amongst others, said the problem was that it would create a race to the bottom. It would create a race to the bottom in terms of standards and taxes. The arguments about cutting the company tax rate have proved how right the Green Party was about the race to the bottom. We are now in a race to the bottom on tax rates, and company tax is part of that. The other part of dropping the company tax rate is that we have now opened a 5 percent gap between the company rate and the top personal rate. I ask members to remember that part of the rationale for why we had to cut the top personal rate from 38 percent to 33 percent was the 5 percent gap between the top personal rate and the trustee rate. Companies were also being used to minimise tax. We have now opened a 5 percent gap between the top personal income tax rate and the company tax rate. There will be people\u2014tax advisers\u2014out there right now, sitting down and figuring out how they can arrange their affairs in order to take advantage of the 5 percent gap that this bill opens up. So on the one hand the Government says it wants to reduce tax avoidance, but on the other hand it has opened up a new loophole.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000512\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EFinally, I come back to climate change. It is hard to believe that we are sitting in this Parliament debating this tax legislation, but not putting climate change at the centre of it. Climate change is the central greatest challenge facing our planet right now; it is the central greatest challenge facing our country right now. I had the privilege of going to a talk by Dr Robert Bindschadler, who is the former Chief Scientist of the National Aeronautics and Space Administration\u2019s Hydrospheric and Biospheric Sciences Laboratory, earlier this week. We are facing at least 1 metre of sea level rise this century. There is little doubt that we will have at least 1 metre of sea level rise this century, and that will require the displacement of 145 million people globally. It will have a dramatic effect on our country and on the rest of the world. Yet this Budget provides subsidies to greenhouse polluters. It does not make any sense. What kind of Budget is it that does not put climate change at its centre? Instead it provides subsidies for greenhouse polluters. Climate change should be at the centre of this Budget.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022 data-id=\u002228fc85d8714947beb6d7b410ffa7763f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000513\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002228fc85d8714947beb6d7b410ffa7763f\u0022\u003EJOHN BOSCAWEN (ACT):\u003C/span\u003E What a great place that is to start from, because we have just heard from Mr Norman that the central greatest challenge that we face as a country is climate change. He reminds me of Kevin Rudd, who said just last year that the greatest moral dilemma facing the world was climate change. That is what Kevin Rudd said. And what did he do? He planned to introduce an emissions trading scheme, then less than a month ago he said he would not introduce an emissions trading scheme until at least 2013. The impact of that is to put New Zealand right out in front; we are the first and the only country to have an emissions trading scheme, which will put our businesses and our exporters at risk when our three largest trading partners, Australia, China, and the United States, do not have an emissions trading scheme and do not put a tax on electricity and petrol in the same way that we will be doing. I challenge Mr Smith to name one country in Europe with those same costs in relation to its three largest trading partners. I say to Mr Norman that to suggest that the great challenge is climate change puts him in the same place as Kevin Rudd. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000514\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EThere is much to commend in this Budget. One of the great tragedies of the last 10 years is that it has been a period of wasted opportunity. It started off in December 1999 when the then new Prime Minister, Helen Clark, imposed an envy tax. She increased the top marginal rate from 33c in the dollar to 39c in the dollar, and what did that do? That spurred out best and our brightest to commit their time and resources to tax evasion and tax restructuring. We had a whole growth in trust developments, and tens of thousands of new family trusts were formed to take advantage of that gap that opened up between the 33c and the 39c rates. On this occasion the National Government has moved to reduce that top marginal rate from 38c to 33c. That is one thing to congratulate this Government on. It has also moved to lower marginal tax rates. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000515\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EIt has reduced the rate of company tax from 30c in the dollar to 28c in the dollar. The Prime Minister was very proud yesterday\u2014indeed, he should have been\u2014that our company tax rate is now lower than Australia\u2019s. What he did not say, however, was that we have an emissions trading scheme tax on electricity. Our electricity is already more expensive than electricity generated in Australia, and we will make our electricity even more expensive. So it is little wonder that we need to reduce our company rate of tax from 30c to 28c to enable our businesses and our exporters to compete. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000516\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI want to focus on just three groups of people affected by this Budget. I turn first to farmers, because National has been very good at saying farmers are affected by this Budget or by the emissions trading scheme no more than the average New Zealander. That is simply not correct. Meat and Wool New Zealand has calculated that the cost of the emissions trading scheme for the average dairy farm will be $10,200 by 2015. Those costs fall into three categories. First, they fall into the cost of electricity and petrol, which most New Zealanders would pay, and Meat and Wool\u2019s estimate of the cost to the average dairy farmer is $1,300 from 1 July this year. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000517\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003ESecond, dairy farmers are faced with the costs of Fonterra: Fonterra\u2019s processing costs and the costs incurred by other dairy processors\u2014that is, electricity, and the emissions they have to pay for on gas and coal that they purchase to create steam that is necessary for processing milk. The costs that Fonterra and other dairy processors are expected to incur come to $2,600 from 1 July, with a further $2,600 coming in 2013, and those costs are borne by the dairy farmers. Fonterra is a cooperative of dairy farmers, and those costs fall to dairy farmers. So the cost that dairy farmers will face in the first year of the emissions trading scheme is $3,900. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000518\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI notice that Mr Mallard was quoting from the tax tables in this morning\u2019s Dominion Post. The newspaper also states that dairy farmers would need to be earning in excess of $150,000 for them not to be worse off as a combination of the emissions trading scheme tax and this Budget. The same can be said of beef and sheep farmers. They do not incur costs to the same extent, but they certainly incur far more than the average New Zealander, and they incur them not just for electricity and fuel\u2014diesel, and petrol. I say to the farmers of New Zealand that there is only one party here that is prepared to stand up to fight the emissions trading scheme, because this Budget was a real opportunity for the Government\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000519\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002267f74839d6684455ad2c0154dd45763d\u0022\u003EHon Dr Nick Smith\u003C/span\u003E: What did you tell the foresters?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000520\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224f515653d36e4280a808f92172003ce9\u0022\u003EJOHN BOSCAWEN\u003C/span\u003E: I say to Mr Smith that I will come to foresters. This Budget was a real opportunity to suspend the emissions trading scheme. I explained earlier that Australia has put off its emissions trading scheme until at least 2013, and the reason Mr Rudd gave for that was simply the fact that no other countries were following. Australia was not prepared to lead the world. Our Prime Minister promised that he would not lead the world, and that is exactly what we have done; we have been catapulted into world leadership. Unlike the countries of Europe, unlike the countries of the European Union, which put costs on themselves to equally disadvantage each other, this country has put costs on businesses and exporters that none of our three largest trading partners are incurring. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000521\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003ELet us look at foresters. Mr Smith asks what we are going to do with regard to foresters.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000522\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ca5184e6652c4b2b98d06b077cf441e0\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Dr Smith.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000523\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f3e16c2d236942228e35cafd53167824\u0022\u003EJOHN BOSCAWEN\u003C/span\u003E: Dr Smith told this House, if I heard him correctly, less than a month ago that this Government will allocate $1.1 billion of credits to foresters who have planted trees since 1989\u2014$1.1 billion. I spoke to Dr Smith\u2019s officials the day after that, and I am very grateful to him for making his officials available to me. They explained to me that it was actually not $1.1 billion for forests planted since 1989; it was $685 million for forests planted since 1989, and some $400-odd million for forests planted before 1990.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000524\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EThat is a very important distinction, because foresters who have planted trees since 1990\u2014and there have been hundreds and hundreds of hectares of New Zealand planted in forest since 1990\u2014did not plant those forests in the expectation of subsidies from this Government. They did not plant them in the expectation of $1.1 billion worth of subsidies. Let me quote what a newsletter from Greenplan, a company based in the Taumarunui - Te K\u016Biti area, says to its investors: \u201CWhen most of you invested in Greenplan the ETS wasn\u2019t known about and global warming had just started to become a buzz word. The prospectus didn\u2019t mention who would get what if ever we sold carbon credits. In fact carbon credits didn\u2019t become common jargon until after the turn of the century.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000525\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EThere is a real reason that the income tax cuts in this Budget are not greater and that we have to have a 2.5 percent increase in GST, and it is that this Government is determined to give $1.1 billion of credits to people who were not even expecting them. By their very own words, Greenplan\u2019s newsletter to its forest investors says: \u201CYou guys have never had such a good deal. You will get a windfall gain, and all we ask is that you give us 10 percent, and you as clients can keep 90 percent.\u201D It is an absolute tragedy, because unless this emissions trading scheme is suspended before 30 June, we will give up $1 billion to $2 billion. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000526\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI see Mr Mallard listen, interestingly. I ask him whether there is anything that the Labour Opposition can do to stop this massive transfer of wealth\u2014not to millionaires, so that they can buy more property, but to owners of forests, so that they can plant more forests. I understand that Dr Smith is concerned about our Kyoto Protocol obligations, and there is a very real way we can ensure that we keep within our limits. The trees that are being harvested right now at the end of their 28-year growing life are trees that were planted in 1982, 1983, and 1984. There may be some smaller trees that have been taken for thinning, but, essentially, they are trees planted in the early 1980s. There is a financial disincentive on foresters to harvest those trees without replanting them. It would be absolutely possible to amend the emissions trading scheme so that those people continue to have that financial disincentive. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000527\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI could go on to talk about the fact that there are superannuitants who will not be fully compensated. This Budget, which has achieved so much, could have done so much more.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022 data-id=\u002224250cf965dc4d24bf21d64d0d57b4b5\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000528\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002224250cf965dc4d24bf21d64d0d57b4b5\u0022\u003ERAHUI KATENE (M\u0101ori Party\u2014Te Tai Tonga):\u003C/span\u003E The confidence and supply agreement the M\u0101ori Party has with the Government requires us to vote in support of the tax changes that the Government proposes. We well know that without the supply of funds, the Government cannot function, so from the outset of this legislation it was always quite simple: if we voted against the legislation, we would effectively be voting against the hefty achievements that were announced yesterday. Amongst them are Wh\u0101nau Ora, Whare Oranga Ake, M\u0101ori tourism and enterprise, and the Youth Guarantee for 16 and 17-year-olds, as well as other generic initiatives such as the $91.8 million worth of support to the early childhood sector, targeting low socio-economic communities\u2014of which many will be M\u0101ori and Pasifika\u2014or the $90 million allocated to the Community Response Fund. That was a price too dear for our constituents to pay. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000529\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EAs a party we have been talking with our members and our constituents ever since the Prime Minister mooted the increase in GST. We have received back a very clear, very strong message to honour the agreement we made with the Government, to vote in favour of the changes, and to continue to get all the wins we can. No matter how strongly we feel as individuals, ultimately, as a party built on kaupapa M\u0101ori, the wishes of the group prevail over those of any individual. That is the expression of kotahitanga. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000530\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EAs we have said throughout this debate, we appreciate the rationale for why tax changes are necessary, and we have some sympathy with that view. We support the notion that it is our collective responsibility to clear the heavy burden of debt that our generation has built up and not leave it to the next generation to clean up. This is consistent with our kaupapa of manaakitanga, whanaungatanga, and kaitiakitanga. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000531\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EThere are three key planks to the M\u0101ori Party\u2019s economic policies: tax relief for those on the lowest incomes, small business development, and better targeting of Government funding to achieve positive outcomes for M\u0101ori. With Wh\u0101nau Ora and an additional $9 million invested into M\u0101ori exporter firms and tourism operators to grow their businesses, we are confident that two of those three key planks are well on the way. But we are not a \u201Ctwo out of three\u201D party. We are not satisfied that the Taxation (Budget Measures) Bill has delivered what we needed it to deliver to close the gap and support those on lower incomes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000532\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EI am proud to confirm that we will not shirk the responsibility of continuing to promote the need for protection for those on the lowest incomes and, in particular, addressing the unacceptable levels of child poverty evident in Aotearoa. The entire country will suffer if the number of children living in poverty continues to rise. We agree with the Child Poverty Action Group that the Government could have used the opportunity of the tax reforms to improve incomes for beneficiaries with children by immediately extending the in-work tax credit to all low-income families. That did not happen, despite the 2 percent lift in spending on benefits, superannuation, Working for Families, and the student allowance. The problem is that no matter how the other side of the House may paint it up, the Working for Families package has always been highly selective, and in doing so it leaves about 220,000 children behind. These are largely the children whose parents do not meet the paid work hours requirement and/or are on benefits. No matter the crocodile tears shed now by that side, this decision was made by the previous Government. Of these children, about 150,000 live in families experiencing severe and significant hardship. These families miss out on at least $60 a week for their children. Labour had 9 years to clear it up and it did not. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000533\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EIt gets worse. The costs of poverty-related disease afflict the nation in many ways. Estimates suggest that up to $136 million is spent every year on the costs of hospitalisation and deaths from diseases such as rheumatic fever, meningococcal disease, whooping cough, viral hepatitis, and tuberculosis, which are all preventable and were not dealt with under the previous Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000534\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EIn this context, I assure the House that we in the M\u0101ori Party will continue to advocate hard for taking GST off healthy food. I want to let the House know that there has been a tremendous groundswell of support for my bill to remove the goods and services tax from healthy food. I have received letters of support from, amongst others, the M\u0101ori Women\u2019s Welfare League and the Federation of Country Women\u2019s Institutes. I believe that all members will have this week received a letter of endorsement for my bill from Dr Gay Keating, the chief executive of the Public Health Association of New Zealand. She alerts MPs to the research from the University of Auckland that showed that when GST was removed there was an 11 percent increase in the buying of healthy food. She went on to say\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000535\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002248223857d20149c794a3bfdfdbd8b605\u0022\u003EBrendon Burns\u003C/span\u003E: I raise a point of order, Mr Speaker.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000536\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022974317fb9b6d479788c340722a68b0f4\u0022\u003EThe ASSISTANT SPEAKER (Hon Rick Barker)\u003C/span\u003E: I hope this is a point of order about the order of the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000537\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cd0a43952d4749238a9c2ba66e81669f\u0022\u003EBrendon Burns\u003C/span\u003E: I thought we were talking about the Taxation (Budget Measures) Bill, not a GST reduction.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000538\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cb66cf58ff5f470285189f9d215b49f6\u0022\u003EThe ASSISTANT SPEAKER (Hon Rick Barker)\u003C/span\u003E: I say to the member that it is unacceptable to this House to take a point of order to interrupt the flow of a speech. We have already had one example of that. The speeches in this debate have been quite broad ranging, and if the member is going to raise points of order on Government members about the wide-ranging nature of speeches, the member should also do so on his own benches. I just want to say\u2014[Interruption] I have not finished yet. It is unacceptable to take points of order to interrupt a member\u2019s flow of speech. I find that that point of order is in that particular category. I say to members that they are entitled to have their speech of 10 minutes. If they break the rules of the House, that is fair enough. But if they are speaking in the same tenor as that member\u2019s own party has spoken without complaint, then the point of order is not fair enough.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000539\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022027d0996ab0a4fadb7f3f4037c773b46\u0022\u003EHon Dr Nick Smith\u003C/span\u003E: I raise a point of order, Mr Speaker. When you came into the House and took the Chair, you made the point that you wanted a higher level of decorum in the debate. I have been, with a great deal of interest, trying my best at short range to listen to the member\u2019s contribution. But continuous barracking\u2014for instance, from Mr Darren Hughes\u2014has made it near impossible to hear the member\u2019s speech. I think the House owes the member concerned the dignity of its actually being able to hear the rest of her speech.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000540\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ba47cec301af40e19090efdf2dc2ccac\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Speaking to the point of order.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000541\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022872148aff16349ffacc909f4c3ceb527\u0022\u003EThe ASSISTANT SPEAKER (Hon Rick Barker)\u003C/span\u003E: No, I will not take any more points of order on this matter. I say to the member that I could hear the member speaking. Yes, I said that about the decorum of the House. The member you referred to was not barracking; he was asking a line of disjointed questions, but they were questions. Barracking is something different. Had he been engaged in simply barracking, I would have stopped him, but he was not. Whether or not the member thought they were good questions is another matter. That is the point. I say that the point has been well made.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000542\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ac44aa875c274b3eba1f3aac0f8285a2\u0022\u003EBrendon Burns\u003C/span\u003E: I raise a point of order, Mr Speaker. I am not wishing to challenge your ruling, but I ask you to just consider this point: as I heard it, the member opposite was starting to traverse another bill, which will be coming before Parliament quite soon. I think that when we are debating the Budget, that is the issue that should be before the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000543\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002227d3ceabed744f14bbbdbfa7f82ce583\u0022\u003EThe ASSISTANT SPEAKER (Hon Rick Barker)\u003C/span\u003E: I say to the member that whenever members stand up and say that they are not going to challenge my ruling, the fact is that they do exactly that. When you concluded your comments I thought: \u201CQED, my case is proved beyond all doubt.\u201D You were challenging my ruling. I say to the member that if a member is speaking about a bill and there are other related issues, I think it is fair enough for the member to pull those issues in, as long as it is not the substance of their speech. The member made a few references to it\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000544\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002249f35c01283840b58ba9f429c6991a9e\u0022\u003EHon Trevor Mallard\u003C/span\u003E: We\u2019re all going to be doing that, don\u2019t worry.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000545\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228a930a1588164e3b80c6dda4dc116b25\u0022\u003EThe ASSISTANT SPEAKER (Hon Rick Barker)\u003C/span\u003E: The member can get picky about it, but I am not going to be as picky as that about it. If the member Mr Mallard wants to get up, I would say to him that nearly every contribution that he made during the Committee stage was outside of the strict Standing Orders of the Committee stage. He made no reference at all to the actual substance, the nuts and bolts, of the bill. Instead\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000546\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e934b13581c845ebb50f5312f2da0eca\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Oh, read the Hansard. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000547\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002284af0bd2afac482e85220363ea86527b\u0022\u003EThe ASSISTANT SPEAKER (Hon Rick Barker)\u003C/span\u003E: I will. We had great dissertations about 1984 and Roger Douglas, I heard, with much interest and a personal reflection. Let us not get too prissy about this. We have had what I think is a very good debate; it has been quite wide ranging. We have had rewrites of history, we have traversed economies around the world, we have had various reviews of 1984, and it has all been pretty good stuff. Let the member continue with her speech.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000548\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022126314a58b4a40bdaee76a40e79d4236\u0022\u003ERAHUI KATENE\u003C/span\u003E: Dr Keating spoke about taking GST off healthy food by saying: \u201CThose benefits include helping all New Zealanders improve their diet, particularly families on lower incomes which are likely to be harder hit by any increase in GST. Supporting Ms Katene\u2019s bill would be a great move towards increased fairness. It would also be a great start towards lowering the high rate of avoidable disease, hospital admissions and premature deaths that plague lower-income families.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000549\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EThis proposal is part of the long-term economic outlook that we believe any responsible Government must plan for. We advocate for taking GST off food on the grounds that GST hits low-income people disproportionately. Removing GST from healthy foods may be one way of encouraging healthier living as well as supporting the many families who are currently struggling to provide just the basics. I know that some concerns have been raised about the cost of such a proposal, but I think those who are sceptical need to look closer at the figures before they judge. Analysis of the Statistics New Zealand Household Economic Survey (Income): Year Ended June 2008 estimated that annual GST on all fruits and vegetables sold to New Zealand households was just $167 million. If we were to take off GST from all dairy products, fresh fruit, and vegetables the total cost would be $302 million. Either way it is not insurmountable. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000550\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EIf members are still in any doubt about the value of taking GST off food, I think they would benefit from a close reading of a recent article by Gordon Campbell. He debunks some of the prevalent myths that have built up, reassuring cynics that if compliance is an issue we should look to Australia, which operates its food exemptions so smoothly and cost-effectively that compliance is no longer an issue. He also identified the fact that the Australian Taxation Office has established a computerised model that makes GST food and beverage compliance extremely easy to manage. It would be great if the GST advisory panel that Mr Dunne has announced today could be asked to look at this model and to provide us with some advice about how the model could work in our setting. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000551\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EThe other finding that the Campbell article reported on was the results of a major New Zealand research study released in March. The research proved that if supermarket customers were given a 12.5 percent price discount, an almost dollar for dollar higher investment in healthy food will result and will still be observable 6 months later. In other words, cutting GST on food will result in lasting health benefits. To quote Mr Campbell: \u201CThe question then is not why do it\u2014but why not do something so easy, so readily manageable by business, so justifiable on grounds of social justice, and so likely to deliver practical health benefits to the community?\u201D. I cannot help but be thrilled about the strength of support that is building for the move to take GST off food.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022 data-id=\u00228a71c003ab1d4e96b0dec0e80f5c40ab\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000552\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00228a71c003ab1d4e96b0dec0e80f5c40ab\u0022\u003EJOHN BOSCAWEN (ACT):\u003C/span\u003E I seek leave to table the Greenplan Forestry Investments newsletter dated December 2009, which refers to the windfall gains to 1990 foresters.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000553\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220412c42b61e14b7f876923a79c4311d4\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: Is this document in circulation?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000554\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002220d8de918da345a8a03a7cc8f046037f\u0022\u003EJOHN BOSCAWEN\u003C/span\u003E: It is a\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000555\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022de862386621a4bffae0920f364fa035e\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: Is this a public document in circulation?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000556\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220a280108c395474ba3d7f21268b34811\u0022\u003EJOHN BOSCAWEN\u003C/span\u003E: Well, it is a newsletter to the people who invested in forests in Taumarunui. It is not readily available.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000557\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002222b323abe777478bad82c4db676c8cd9\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: Leave is sought to table that document. Is there any objection? There is no objection.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000558\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003EDocument, by leave, laid on the Table of the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022 data-id=\u0022d9f31fd4e7f8420f9ccbe3ef05d5a3c1\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000559\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d9f31fd4e7f8420f9ccbe3ef05d5a3c1\u0022\u003EHon Dr NICK SMITH (Minister for the Environment):\u003C/span\u003E I seek leave to table the New Zealand Environment and Energy Business Week, in which Mr Rodney Hide said he supported carbon credits going to foresters.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000560\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221f24aa87beed44b4ad346be80e64ea1d\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: Leave is sought for that purpose. Is there any objection? There is objection.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022 data-id=\u00220efb790051db41fc9eb9d48665d4ca83\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000561\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00220efb790051db41fc9eb9d48665d4ca83\u0022\u003EJOHN BOSCAWEN (ACT):\u003C/span\u003E I seek leave to table the Meat and Wool New Zealand calculations of the cost of the emissions trading scheme on beef farmers, sheep farmers, and dairy farmers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000562\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225eb01e0a5e254ff38e0422e8d8bf648a\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: This document is definitely in the public domain, because I have read it. I will not accept that document.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022cc9c47c0-4409-44ca-ad2f-498707f27d69\u0022 data-id=\u0022f9c8dbd071b34cc7aff19f65a587823e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000563\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cc9c47c0-4409-44ca-ad2f-498707f27d69\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f9c8dbd071b34cc7aff19f65a587823e\u0022\u003EJONATHAN YOUNG (National\u2014New Plymouth):\u003C/span\u003E We are gratified to hear of the concerns that the Opposition has in regard to inflation in this country. Its members must be very happy that we repealed their emissions trading scheme, which would have seen 10 percent added to power prices on 1 January as well as an increase of 7c a litre in fuel prices.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000564\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cc9c47c0-4409-44ca-ad2f-498707f27d69\u0022\u003ELooking at the third readings of the bills arising from the Taxation (Budget Measures) Bill, we understand that the legitimate increase of wealth essentially comes in two ways in this country: either by what people earn or by what the Government gives them\u2014or in the case of tax cuts, what the Government gives back. We need to be reminded that the previous Labour Government gave nothing back\u2014oh, of course, 1 month out from the last election it gave us a tax cut. After 108 months of Government, what a coincidence that in the last month we got a tax cut! Well, it was because Labour could never afford to give tax cuts, for a number of reasons. One them was that it just could not afford to. The previous Labour Government\u2019s expenditure grew by 50 percent in its last 5 years, a bureaucratic blowout to regulate and control New Zealanders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000565\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cc9c47c0-4409-44ca-ad2f-498707f27d69\u0022\u003EIn fact, the 2007 Budget papers released under the Official Information Act, show that the previous Labour Government Ministers were well aware of the contribution overspending would make to higher interest rates and higher exchange rates. Treasury warned them that they needed to stay close to previously agreed limits, otherwise the Government would risk an interest rate response from the Reserve Bank, an exchange rate staying higher for longer, and a more pronounced economic slow down. And that is exactly what happened. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000566\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cc9c47c0-4409-44ca-ad2f-498707f27d69\u0022\u003ENational came into Government at a time of dire financial circumstances. It was great to read what John Armstrong from the New Zealand Herald said about yesterday\u2019s Budget announcement. He said: \u201CIt has turned those muddy economic waters into wine by constructing a clever package of significant tax cuts when the Government\u2019s books are written in deep dark red.\u201D\u2014just like Mr Mallard\u2019s tie. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000567\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cc9c47c0-4409-44ca-ad2f-498707f27d69\u0022\u003ENew Zealanders should know what Phil Goff said, should they ever consider returning Labour to the Treasury benches. He said that he would lift the highest marginal tax rate back up to 38c, he made no commitment to reduce GST back to 12.5 percent, and Shane Jones said today that Labour would consider a capital gains tax. New Zealanders see the economic futility of the type of Government that Phil Goff wants to go back to. True wealth generation, in essence, is not about what the Government gives or gives back. Stimulus packages can assist, and it is important for the Government to prime the pump at times, but true wealth generation is when New Zealanders can, with confidence, invest their money into businesses, big or small, which will, in turn, earn them a profit. They can then employ other New Zealanders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000568\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cc9c47c0-4409-44ca-ad2f-498707f27d69\u0022\u003EOur incomes are below those of countries we like to compare ourselves with, including Australia. It is important that the legislation arising from the Taxation (Budget Measures) Bill sends a signal to all New Zealanders that this Government has confidence in the country\u2019s future and confidence in New Zealanders to be able to build true wealth, given the right environment. As I close, I congratulate the Minister of Finance, the Hon Bill English, and his team, and the Prime Minister, on their great leadership of this nation. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022 data-id=\u0022ed5c74a56f6d4789a8d644cde90ea13e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000569\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ed5c74a56f6d4789a8d644cde90ea13e\u0022\u003EHon TREVOR MALLARD (Labour\u2014Hutt South):\u003C/span\u003E I raise a point of order, Mr Speaker. I put on the record the fact that Mr Quinn has accepted my donation to his campaign for Hutt South on the basis that he will be my candidate. I want to put that on the record. Thank you very much.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000570\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226c1212c6597d4908a4a81fb1c3a7ec8c\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: Although we can have a bit of a laugh at this time in the proceedings, with not much time to go, that is really just interrupting things. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u002252727a00655746a48d5a133ae9675a2a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000571\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002252727a00655746a48d5a133ae9675a2a\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E It is easy to have a bit of a laugh, but it is not easy to have a bit of a laugh when I look at this tax package and see that it delivers absolutely nothing. It was interesting that the gentleman who last spoke, Jonathan Young, asked whether we wanted to return to the sort of Government that we had had. I will tell him about the sort of Government that we had. We had a Minister of Finance who completely eradicated Government debt. Our leader did not stand in front of a camera and say: \u201CI will not increase GST.\u201D, then do that. What do we call that? The sort of leader we have in the Labour Party would not stand in front of a camera and say: \u201CI will not borrow to pay for tax cuts.\u201D, then do that. What did the National leader do? He broke his promise. This is a Budget of broken promises and these bills are broken promises. It is a disgrace. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000572\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EMr Gilmore stood up and said before that it was all going to be OK and we should not worry about it; the statistics on page 63 of the Economic and Fiscal Update say that it is all going to be OK. Well, I can tell members that in the same document, on page 65, Treasury says that it assumed that pre-tax wages would not respond fully to the price rises caused by the higher rate of GST. That is what Treasury says\u2014that is what Treasury says. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000573\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EAs for Ms Rahui Katene, I cannot believe that she stood up and said that she is not satisfied with this legislation. I tell the House that we are not satisfied with this legislation, either. What we do when we are not satisfied with legislation is vote against it\u2014that is what we do. How dare that member opposite stand up and say that she is not happy with the legislation, then vote for it! What is that called?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000574\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e5aaace75dcc4587b1a41b439d17f9df\u0022\u003EHon Darren Hughes\u003C/span\u003E: We can\u2019t say what it\u2019s called.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000575\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229885e4cc4fd34e3ba7b6446c829f552d\u0022\u003ESTUART NASH\u003C/span\u003E: That is right. But, worse still, the member outlined why she was not satisfied with this legislation, and it was because it increased GST. In that member\u2019s electorate 72 percent of people earn under $40,000. Those people will be worse off.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000576\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221bb6087e91874ef999a97e553ac1c9ec\u0022\u003EHon Darren Hughes\u003C/span\u003E: What\u2019s she doing about it?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000577\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221326d8a534484a9c89b2a788f569a9f4\u0022\u003ESTUART NASH\u003C/span\u003E: Well, she is not voting against it. She is supporting this legislation. Then she had the nerve to talk about her member\u2019s bill, which she says will take GST off healthy food\u2014of course, it defines healthy food as fish and chips and Kentucky Fried Chicken. She says she wants to take GST off healthy food, but she votes for this legislation! I think that is a travesty, and I think the 72 percent of people in her electorate who earn under $40,000 will think exactly the same thing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000578\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe last National speaker was right: this legislation does send a message to the people of New Zealand. The message it sends is that we cannot trust the Government, because its leader promised us that he would not do what he has done in this Budget. This is not aspirational legislation for all of New Zealand, at all. I cannot see how it drives growth, because the economic theory behind it is outdated, and that was highlighted by Tau Henare, who stood up and said: \u201CIf you give money to the wealthy they will spend it.\u201D That is the economics of Margaret Thatcher and Ronald Reagan. It is the economics of last century and it does not stack up in this day and age\u2014it has been proven not to stack up in this day and age. I can tell members what the wealthy will do with this tax cut: they will either retire debt, or they will save it. That is what economic theory has now proven.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000579\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EBut there is one thing this legislation does do. It delivers tax cuts for the very wealthy. Paul Reynolds, who is the head of a company called Telecom\u2014and we all know what a fantastic service Telecom has provided recently\u2014has a base salary of $1.7 million.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000580\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228e686b62-8dc4-4f03-a7b6-2d0f9c874e9a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002247d2ba7445bf4c22a920a38b8db69ade\u0022\u003EHon George Hawkins\u003C/span\u003E: How much?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000581\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002296f9ef57ac7b465bbbf74c9a749a88e0\u0022\u003ESTUART NASH\u003C/span\u003E: About $1.7 million. He will get about an extra $1,600 a week in the hand. That is about $88,000 extra in his back pocket every single year. Very few Kiwis earn as much as that, but that is going to be his tax cut.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000582\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a68928ea-9dd8-4a30-8e2c-a0f49dfc8bea\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229e5e54ffea0c4d0785313bf8aec94bfe\u0022\u003ELouise Upston\u003C/span\u003E: Reynolds is great for our tax coffers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000583\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a5dbcea1c71c42549ebf770a0d07083b\u0022\u003ESTUART NASH\u003C/span\u003E: I tell that member that the 73 percent of people in her electorate who are on the median wage will get about $5 a week. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000584\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI also tell the member that the president of the New Zealand Property Investors Federation has now come out and said that the Treasury figures about rent going up about 1.5 percent are wrong. This man represents the people who own investment properties and rent them out to people who cannot afford to buy their own home. He has said that rents will go up between about 4.5 and 6.5 percent. Then he said there might be an inflationary effect thrown in there, as well. Well, Merry Christmas to the people of New Zealand. This is not a tax cut that delivers anything. It is a tax cut that delivers something to the very wealthy and nothing to the vast majority. It is a disgrace. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000585\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe gap between Australian and New Zealand workers could not be starker. Yes, Australia did lower the company tax rate. But do those members opposite know why it lowered the company tax rate? I will tell them. It lowered the company tax rate because it gave back to the workers. The Australian Government gave back 33 percent and said that it was going to increase the savings of Australian workers. That is why it gave a tax cut to Australian companies. What has this Government done? It has said there will be tax cuts for New Zealand companies but nothing for the workers\u2014nothing for the workers. There will be tax cuts for the wealthy, but nothing for the poor. That is not the way forward. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000586\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EIt brings me back once again to Mr Key\u2019s comment about people being jealous of the tax cuts for the rich in this bill. It shows his true colours. It shows that Mr Key judges people by the amount in their back pocket, by how much they earn, not by the sort of person they are. Many people in our communities contribute significantly. They do not earn as much as Mr Key, or a law partner, or an investment banker, or a top scientist, but that does not mean that they do not contribute. We all know that there are people in our community who give their time freely to help others less fortunate. In fact, sometimes the opposite can be true; it is often the less well-off in our communities who contribute the most to the safety and the well-being of our fellow citizens. They often volunteer. What sort of message do they get from this tax legislation? The Prime Minister\u2019s statement on envy did nothing to make them feel valued. In fact, it did quite the opposite. They contribute in toil and hard work, and they give their hours freely for the benefit of the whole community. I tell Mr Key to not treat them like they are worth less than someone who earns $500,000. They are not lesser people and they deserve better.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000587\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EMy beautiful daughter is taught by a teacher earning under $70,000. My wonderful son is in a fantastic day-care centre\u2014that industry has just been gutted\u2014and is being taught and looked after by amazing staff who earn under $70,000. A lot of our police who patrol our streets and keep us safe earn under $70,000. The vast majority of the nurses who fix us up when we fall over earn under $70,000. The people who make our communities tick are the people who receive nothing in the legislation we are now debating. Those people are just as valuable as\u2014in fact, I would argue that they are often more valuable than\u2014a merchant banker who makes millions betting on our exchange rate but creates nothing and cares for no one.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000588\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThis is a Budget and this is legislation that do not deliver for New Zealand. This Government came in on the promise of a step change. That has not occurred. Paul Reynolds, one of our wealthiest, will get $1,600 extra a week\u2014$1,600 a week in the hand. That is how much he will get. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000589\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226e1ead03-bf7f-496a-a02f-ce52859c58c1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022afb1fecaa94e43f38c09979d2885138d\u0022\u003EHekia Parata\u003C/span\u003E: How much is he paying?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000590\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002205d9b0bc73144e998f070a8d7869c7df\u0022\u003ESTUART NASH\u003C/span\u003E: But someone on the median wage in that member\u2019s electorate will get $5 extra a week\u2014$5 a week. How is that aspirational? On top of that, the rent will increase. This legislation will widen the gap between the very few who have the most in our society, and the vast majority who are struggling, and who will struggle, with increases in GST, increases in the price of power, increases in the price of everything they buy, and increases in rent. It is a sad day in this House for the vast majority of New Zealanders, because they have received nothing from this Government except broken promises. Thank you. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226e1ead03-bf7f-496a-a02f-ce52859c58c1\u0022 data-id=\u00229b83b3f2ebd64033bb20a33b8e93395d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000591\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226e1ead03-bf7f-496a-a02f-ce52859c58c1\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229b83b3f2ebd64033bb20a33b8e93395d\u0022\u003EHEKIA PARATA (National):\u003C/span\u003E T\u0113n\u0101 koe, Mr Deputy Speaker. T\u0113n\u0101 t\u0101tou e te Whare. Is it not terrible that we have to sit here and listen to a depressing outlook from people who are sent to this Parliament in the best interests of this country? We have been treated to a tired litany of lethargic arguments about what is wrong with the country. We on this side of the House are committed to a better New Zealand. We are committed to the politics of hope. We are committed to the politics of potential. Unlike members on the other side of the House, we are not mired deep in the hope that things will go wrong. That is the wishful thinking that we have been treated to by the Opposition this afternoon. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000592\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226e1ead03-bf7f-496a-a02f-ce52859c58c1\u0022\u003ENew Zealanders will be ashamed of the kind of sentiment that has been expressed by members on that side of the House. Their ambition is so low that it is below the lowest, as we sit here and listen to the terrible hopes of members on that side of the House about what could possibly go wrong. It is our settled conviction that this Budget is transformational. It is transformational because it strikes the balance between giving immediate opportunity and gain to New Zealanders, and restructuring for the long-term focus on how we get growth and productivity. Unlike members on that side of the House, we do not focus on how we can get ever smaller slivers of the pie; we focus on how we can grow it bigger so that more people can enjoy a higher quality of living and have greater prospects for the future, for themselves and for their children. This Budget is a transformation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000593\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226e1ead03-bf7f-496a-a02f-ce52859c58c1\u0022\u003EFrom that side of the House we have heard quoted a figure of 72 percent. Well, let me tell members a remarkable fact: 73 percent of income earners will now face a statutory income tax rate of 17.5 percent or less. For those near the top of that income range the tax rate has been halved\u2014it is down from 33 percent in just 2 years\u2014and this rate will apply to their incomes and savings, including KiwiSaver. So there we are\u2014three-quarters of New Zealanders paying tax will now be on the 17.5 percent rate. Do members know why? It is because this Government trusts New Zealanders to make better choices for themselves. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000594\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002208f874c2a92c4e6aaf2aa03adadf22ec\u0022\u003EHon Trevor Mallard\u003C/span\u003E: She\u2019s reading Jonathan Young\u2019s speech. It was better the first time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000595\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226e1ead03-bf7f-496a-a02f-ce52859c58c1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002275df32b9e58c4019963e85764608d9e8\u0022\u003EHEKIA PARATA\u003C/span\u003E: Actually, I tell Mr Mallard, that is not so. I am quite capable of standing here for a couple of hours and not reading anything and still making sense. I am threatening to do that, so perhaps the member could keep quiet. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000596\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226e1ead03-bf7f-496a-a02f-ce52859c58c1\u0022\u003ETwo-thirds of the cost of personal income tax cuts has gone into reducing the lowest two tax rates. That means that two-thirds of the tax cuts apply to those earning $48,000 or less. So although the Opposition wants to focus on a very small handful of people\u2014who, it is true, will get tax cuts, and who, it is also true, pay significant amounts of tax\u2014two-thirds of tax cuts will apply to people on incomes below $48,000. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000597\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226e1ead03-bf7f-496a-a02f-ce52859c58c1\u0022\u003EOpposition members do not have to take my word for it. They can read every headline in this country. They can listen to every radio, and then they can go out and listen to New Zealanders, who are very pleased with the opportunity for the potential they see to improve their lives, not only immediately from 1 October but for the future. But what do we hear? There are cries of condemnation in the hope that, no, people will not improve their lives. Well, that view is for that side of the House. This Budget is a historic document, and we are proud of this document. We make policies for the many and we deliver for the many while members on that side of the House just talk about it. I commend this bill to the House. Kia ora t\u0101tou.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022 data-id=\u002280dabb2c5a55400aad5b16648165b0c7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000598\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002280dabb2c5a55400aad5b16648165b0c7\u0022\u003EBRENDON BURNS (Labour\u2014Christchurch Central):\u003C/span\u003E It is interesting to follow the previous speaker, Hekia Parata, and her comments about this being a transformational Budget. A transformational Budget it will be, all right; it will transform the wealthy into the super-wealthy\u2014that is what this Budget is about. This is a shiny Budget, but it is a hollow Budget. It is a Budget that has been designed to repay the shiny but hollow men. It has some sizzle in it, but there is not much meat in the sausage. It is a cappuccino Budget with a lot of froth.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000599\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EWhat it exercises and what it shows is that the National Party in Government has only one raison d\u2019\u00EAtre, it has only one real tool in the economic toolbox, and that is tax cuts. There is nothing new in that, because the National Party promised tax cuts as the main plank of its election platform in 1999. It promised them as the main plank of its election platform in 2002. It promised them as the main plank of its election platform in 2005. It promised them as the main plank of its election platform in 2008. Here we are in 2010 and those at the top end of town are getting their third tax cut in 3 years, and all the time we are being told that, somehow, cutting taxes will lead us out of the economic woods. Well, where have we heard that before? I wonder whether that is a philosophy that Greece followed. Effectively, it had tax cuts, because nobody paid tax, and now it is in economic meltdown.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000600\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EWe are in a world that is still so precarious that somebody entering a wrong figure on to a Wall Street screen can take billions of dollars off the value of Wall Street. We are somehow meant to believe that all is well, we have gone through the recession, we are absolutely out of the woods, and it is time to deliver the third set of tax cuts for the top end of town, when we have just got through supposedly the worst economic situation the world has faced since the 1930s. I say to the National Party members opposite that you are supposed to be the conservatives. Where is the fiscal prudence in this Budget? Where is the party that was once the introducer of fiscal responsibility? You are supposed to be a conservative party; that means conserving. You accuse the Labour Party of being\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000601\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e87a30c8a79241519a4da13e9f944ffd\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: You know what I am going to say.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000602\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022422f06a3625c469a906f20437f8bd1d1\u0022\u003EBRENDON BURNS\u003C/span\u003E: My apologies, Mr Deputy Speaker; you are quite right. The National Party is supposed to be a conservative party. It accuses the Labour Party at times of being a tax-and-spend party, yet this Budget represents a cut tax, borrow-and-hope approach. The member opposite referred to hope; that is what is encapsulated in this bill. It is all about hope. This is a Budget that is all shine and no substance.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000603\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EAt first glance the tax cuts\u2014modest though they are\u2014for low to middle income earners may look good. But people will soon work out the not so hidden costs in this Budget. They will take time to work them out. Once the tax cuts take effect people will rapidly see an inflationary tsunami. Nearly 6 percent is the Treasury prediction of what will engulf households budget as a result of this Budget\u2014a 6 percent increase in inflation, which is more than twice the rate we have had over previous years. We will see GST go up to 15 percent with this legislation. Well, 76 percent of people in my electorate of Christchurch Central earn below $40,000 a year. A poll in the Press this morning indicated that the majority do not believe that that increase is appropriate, no matter what promises this Government makes about compensating them, because they are suspicious. They can see the writing on the wall. They know, especially those on lower incomes who spend every dollar they get, that a one-off compensatory move will not compensate them for the long-term inflationary impacts of this legislation and what it introduces.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000604\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EWhat about the people who will lose some of the funding they currently enjoy in terms of early childhood education support? The estimation is that that could mean adding $1.50 an hour on to the costs that some parents are meeting to place their children in early childhood facilities. If parents who have one child in early childhood education pay $1.50 extra an hour\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000605\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226e1ead03-bf7f-496a-a02f-ce52859c58c1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229b1087c46526487d95c805d4e82c66e7\u0022\u003EHekia Parata\u003C/span\u003E: What about the $91 million for those who aren\u2019t participating at all?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000606\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226f3f76bf527f4421a46f0e72a6d2b522\u0022\u003EBRENDON BURNS\u003C/span\u003E: \u2014I say that Hekia Parata should tell that to her constituents, if she has any\u2014that is $60 extra a week for one child. That is twice what the average income tax cut will be, even before the GST increase takes effect.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000607\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI understand that projections today from the Property Investors Federation show that the changes will mean a 6.5 percent increase in rents. A 6.5 percent increase in rents plus 15 percent GST will engulf any prospect people have of being better off as a result of this Budget. And that is before we start talking about rising interest rates, which will be fed by this Budget, as well. The inflationary boom that will follow this Budget will very, very much erode the incomes of those on middle and low incomes. It will not worry Paul Reynolds a jot whether he rents or owns his own home, because he will be getting $1,650 a week extra as a result of this Budget, as will many, many others.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000608\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EThe message, if the Government would only listen to it, is that tax cuts do not actually deliver prosperity. The Government should have taken account of the fact that the top Australian tax rate remains at 45c in the dollar, which is 12c or 13c above the rate that we will see in this country from October, if this legislation is passed.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000609\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EWhat this Budget should be about is higher productivity, higher wages, and higher skills. What is in this Budget to deliver any of those? Well, we see that there is reference to a Productivity Commission being formed. I wonder whether it will pick up on the work of the task force led by Don Brash. He produced a wonderful report on productivity for this Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000610\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022187e4099-cc16-4bb8-8379-82c881af1724\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bb9c9c54ae564bc78d61db6f27079b06\u0022\u003EDavid Garrett\u003C/span\u003E: It\u2019s wonderful.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000611\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022038e54a09091426faa12a1c1bc039716\u0022\u003EBRENDON BURNS\u003C/span\u003E: It was absolutely wonderful, said the member David Garrett from ACT; of course, the Government took on board all the recommendations of that previous look at productivity!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000612\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EWhat is this Budget doing about savings? We have heard reference time and time again to Australia in comparison with New Zealand. Well, the most recent Australian Budget moved to increase the employers\u2019 contribution to superannuation to 12 percent. Where is the remedy in this Budget to the vicious, venal cut to the KiwiSaver scheme introduced under Michael Cullen? He was a prudent Minister of Finance, a Minister who paid off debt, and a Minister who established savings regimes in terms of KiwiSaver and the Cullen fund. Where is the move in this Budget, if we are to feed economic growth, to use some of the supposed new surpluses that will be emerging to fund superannuation and savings? There is nothing in it about restoring the employer contribution to KiwiSaver to a very modest 4 percent, while the Aussies go to a 12 percent contribution to their superannuation schemes\u2014nothing whatsoever.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000613\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EThe National Government has only one tool in its tool box, and that is tax cuts. There will be huge gains for those earning over $100,000, but in effect there is nothing in this Budget, once we have taken into account all of the inflationary and other impacts, for students, low-income workers, and battling families.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000614\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI will comment on the matter of economic growth, which supposedly is at the heart of this Budget. I am reading from page 78 of the volume containing the Minister\u2019s Executive Summary and the Economic and Fiscal Update. I note that exports are this year supposed to increase by 2.8 percent, but what are imports doing in the same period? Well, they are increasing by 9.9 percent. Next year there will be a 2.4 percent increase in exports, but what will imports do? There will be a 10.8 increase. That is the measure of this Budget. It will feed into import growth, because some at the top end will be spending their money. There may be some modest increase in internal economic growth as a result, but I ask where the productive sector will gain from this Budget. Where is the benefit for the productive sector? There is nothing for that sector. No wonder Business and Economic Research has commented\u2014and has quoted the Minister, in fact\u2014that our single largest vulnerability as an economy and a nation is our net external liabilities, and has said that we owe the world around 90 percent of our current GDP. What is this Budget doing? Well, we will see the percentage of our Budget as a measure of our external liabilities grow over the next 3 to 4 years to 99 percent of GDP. So we are actually going backwards at the very time that we become increasingly vulnerable as a nation; our balance of payments goes further and further into debt.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000615\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EThere is nothing in this Budget. It is framed around trying to ensure that the National Party is re-elected next term. It does nothing to improve the state of our economy. It does very little to improve the household incomes of moderate and low income New Zealanders. It is a payback Budget for the hollow men. It is a payback Budget for those who are in business class. It moves them up to first class, and it means that those at the back end, back in economy class, are now paying for their lunch. It is a Budget that is shallow. It is hollow. It will not deliver for New Zealand. It will not make New Zealanders wealthier. It is actually illusionary and very, very much a shallow, shiny-but-hollow Budget.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c0f78f60-c2fd-46f4-8138-72f39692fc20\u0022 data-id=\u00225b821db9783845609df6ae12ebfc0143\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000616\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c0f78f60-c2fd-46f4-8138-72f39692fc20\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225b821db9783845609df6ae12ebfc0143\u0022\u003ETODD McCLAY (National\u2014Rotorua):\u003C/span\u003E Before coming to the House I asked my colleague Dr Cam Calder whether, if I listened to Brendon Burns in the House, I would live longer. He said I would not, but it will certainly feel like that was the case.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000617\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225207445f1d9646b2aa113c5ca12c57ad\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Well\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000618\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c0f78f60-c2fd-46f4-8138-72f39692fc20\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f03c0ec1cbc8476fb1487a501894f852\u0022\u003ETODD McCLAY\u003C/span\u003E: I say to Mr Mallard that it might be cold outside, but it is definitely barbecue season. After the horrible speech made by the Leader of the Opposition yesterday, it is certainly barbecue time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000619\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c0f78f60-c2fd-46f4-8138-72f39692fc20\u0022\u003EI have a piece of paper in front of me. Members opposite have spoken about GST going up and the effects that that will have. This piece of paper comes from the BBQ Factory. In fact, that store has a special at the moment. It is a small, red barbecue that few people would ever use, with an adjustable cooking grid. It has a shield to protect the flame from the wind in winter, and it is priced at $49.99. I guarantee that when GST goes up on 1 October, there is a reasonable chance that that barbecue will still cost $49.99. Some members already know about this special, because they have been out today looking for the closest BBQ Factory, and they have bought one.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000620\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002286422b3099ea40e9a49308746dfb9731\u0022\u003EHon Darren Hughes\u003C/span\u003E: Sit down.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000621\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c0f78f60-c2fd-46f4-8138-72f39692fc20\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a81a37392b884507abf8df5358319313\u0022\u003ETODD McCLAY\u003C/span\u003E: I say to the member opposite, whom many have respect for, that he is right: it is often better to be silent and be thought to be a fool than it is to speak and remove all doubt about that. I might have offered the member that advice earlier, most certainly. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000622\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c0f78f60-c2fd-46f4-8138-72f39692fc20\u0022\u003EWhat has this Budget done for New Zealanders? It is the biggest reform of our taxation system in 25 years: 73 percent of New Zealanders will now pay a tax rate of 17.5 percent. Is that not wonderful? What about some of the people out in the public who do not spend as much time here as we do? I received some messages overnight from people in Rotorua. Joe from Rotorua said: \u201CThank you, Todd. I remember asking what you were going to do for me before the election. Thank you all. Finally, something for those of us who work hard, do overtime, and want to get ahead.\u201D Then we have John, who is also from Rotorua. He said: \u201CGreat Budget, Todd. Watching the debate now, with Goff and Cosgrove, etc. spitting tacks.\u201D He corrected himself; he actually said they were spitting \u201Ctax\u201D. He went on to say \u201CIt shows you guys have done well.\u201D There is a final message that I will read out: \u201CJ K said yesterday middle-income earners have received nothing from Labour. In fact, we have been shafted\u2014in other words, received nothing. Our kids, three of them, have all left home. We have two incomes, and finally have a chance to keep a little more of what we earn.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000623\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c0f78f60-c2fd-46f4-8138-72f39692fc20\u0022\u003EThose people are real, everyday New Zealanders, not the people who write on Labour members\u2019 blogs.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000624\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221fb8d8db-3e96-49c7-ab1c-b7916a50e30e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bd38555d90d44c32be9eb616cd617db4\u0022\u003EHon Steve Chadwick\u003C/span\u003E: What about the 70 percent of Rotorua citizens? Ask them in one year, Todd.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000625\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c0f78f60-c2fd-46f4-8138-72f39692fc20\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a174380a4b484d7584049c9b4bb2474b\u0022\u003ETODD McCLAY\u003C/span\u003E: Mrs Chadwick has just asked whether this Budget will be good for Rotorua. It would be pretty hard to know what is good for Rotorua when one sits in an office in Tauranga. But that is a debate to be had on another day; we will do that next year. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000626\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c0f78f60-c2fd-46f4-8138-72f39692fc20\u0022\u003EThe only thing that stands between the people of Rotorua and these tax cuts is the rest of my speech. This was to be a 10-minute speech. I say to members that those people have waited 10 long years for a tax cut. For the good of the people of Rotorua, I will happily give up the rest of my time so that we can vote after this speech, and give the people of New Zealand the tax cuts that they have wanted for a long time. I support this legislation. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u00226960415af28944a9af79cee64fc22dfc\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the Taxation (Budget Measures) Bill, the Government Superannuation Fund Amendment Act 1969 Amendment Bill, the National Provident Fund Restructuring Amendment Bill, the Social Security Amendment Bill, the War Pensions Amendment Bill (No 2), and the New Zealand Superannuation and Retirement Income Amendment Bill (No 2) be now read a third time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 67\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 58; ACT New Zealand 5; M\u0101ori Party 3; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 51\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 43; Green Party 8.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EBills read a third time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000627\u0022\u003EThe House adjourned at 4.11 p.m. (Friday)\u003C/p\u003E\n      \u003Cp id=\u0022id20100520d1da25b9af544964a372a1ff3cb205c3000628\u0022\u003E\u003Cbr\u003E\u003C/p\u003E\n    \u003C/div\u003E\n  \u003C/body\u003E\n\u003C/html\u003E"