"\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=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000001\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022fd2a3086b52d4494a458baa95bbd8085\u0022\u003EThursday, 19 May 2011\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000003\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022527d0a1948b04bc48fbc1a93173b2273\u0022\u003EThursday, 19 May 2011\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000002\u0022\u003EMr Speaker took the Chair at 2 p.m.\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000004\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=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000005\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022478a9f46c566480b8333871e1491a36e\u0022\u003EAppropriation (2010/11 Supplementary Estimates) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000006\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022166fbe56fd3b4cf1b7fe1d1e29693dff\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=\u0022ae14ba49d0664e30936f60638a5ac772\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000007\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ae14ba49d0664e30936f60638a5ac772\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 2011 (B.7).\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000008\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002244f80a3abce7455c90dc8ee280452215\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=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000009\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022af43f97c74f545759c2be0343fd57426\u0022\u003EAppropriation (2011/12 Estimates) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000010\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022c20ab7c22dca44d3ac0740b93063082c\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=\u00222b35631033fd4c428441afd4f9943927\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000011\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222b35631033fd4c428441afd4f9943927\u0022\u003EHon BILL ENGLISH (Minister of Finance):\u003C/span\u003E I hereby present the 2011 Budget 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 2012 (B.5), the information supporting the Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2012 (B.5A, Volumes 1-10), the departmental statements of intent, and the Supplement to the 2010 Investment Statement of the Government of New Zealand (B.8). \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000012\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bd683e24485441e58b25043ce0936108\u0022\u003EMr SPEAKER\u003C/span\u003E: Those papers are published under the authority of the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000013\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00224438353856a84cd2b1b5073096ddd34a\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=\u0022b2d30e99522f47b0bea7fe0aff9031cf\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000014\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b2d30e99522f47b0bea7fe0aff9031cf\u0022\u003EHon BILL ENGLISH (Minister of Finance):\u003C/span\u003E I move, That the Appropriation (2011/12 Estimates) Bill be now read a first time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000015\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=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000016\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u002223fb2ccaf3ae456e8bdb44c68310dfc3\u0022\u003EBudget Statement\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000017\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022dcd435455ed444dc939e9bf1220e345a\u0022\u003EBudget Debate\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000019\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022304d99b1269442ed8d579068d109c764\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=\u00228457347c105c4fc6be33f98d2643a5e9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000018\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00228457347c105c4fc6be33f98d2643a5e9\u0022\u003EHon BILL ENGLISH (Minister of Finance):\u003C/span\u003E I move, That the Appropriation (2011/12 Estimates) Bill be now read a second time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000020\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIn 2008, this Government was elected to build a more prosperous and ambitious New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000021\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ESince then New Zealand has been hit with the lingering effects of the global financial crisis, the two earthquakes and other unforeseeable setbacks.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000022\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBut we have made progress regardless.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000023\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Budgets of 2009 and 2010 helped sustain economic activity and support jobs, and protected the most vulnerable New Zealanders.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000024\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAt the same time the Government has pursued a longer-term programme to lift growth. It has made major infrastructure investments, improved regulation, continued to reform and invest in science and innovation, shifted resources to frontline services and reformed the tax system.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000025\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThat work continues. Today I introduce a Budget that will further strengthen the long-term performance of the economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000026\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt supports economic forecasts that show growth returning to its highest in over five years and 170,000 net new jobs being created by 2015.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000027\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt channels resources into key social programmes, while ensuring they are well-targeted and protect the most vulnerable.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000028\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt provides certainty that Christchurch, our second largest city, can be rapidly rebuilt.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000029\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAnd, despite the earthquake, it eliminates the deficit and achieves surplus by 2014/15, a year earlier than forecast in last year\u2019s Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000030\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAs a result, the Government\u2019s need to raise debt will greatly diminish. This year we have raised an average of $380 million of net new debt every week.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000031\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ENext year that will fall by more than two-thirds to around $100 million. And from 2014/15 on we will be repaying debt.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000032\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=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000033\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000034\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOur main task remains to return New Zealand to sustained prosperity. The economy has been underperforming since before the global financial crisis. Indeed, per capita GDP has not grown since 2004.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000035\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis Government believes that a competitive and well-balanced economy can deliver more jobs and high incomes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000036\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBetween 1990 and 2004, a 15-year period, on average the New Zealand economy grew by over 3 per cent a year, and export volumes rose by over 5 per cent a year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000037\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOn average 35,000 jobs were created every year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000038\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ESo our plan is simple, and always has been.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000039\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt\u2019s about returning to conditions that allow New Zealand to focus on what it is good at doing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000040\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt\u2019s about making sure we have a tax system that encourages work and savings, rather than providing incentives to shelter income.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000041\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt\u2019s about having an efficient public sector that doesn\u2019t crowd out the internationally-competitive parts of the economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000042\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt\u2019s about limiting government debt, to reduce our reliance on foreign lenders and to give us a buffer against future economic shocks.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000043\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt\u2019s about regulation that encourages enterprise and flexibility.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000044\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt\u2019s about an education system that is producing skilled workers, and those workers knowing they have a successful future here in New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000045\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt seems simple but it\u2019s easy to get off track, as we have seen.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000046\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EHowever, it is the only way to create permanent, worthwhile jobs for Kiwis and their families.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000047\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt\u2019s a proven formula. It works.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000048\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000049\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ELet me first address issues raised by the Canterbury earthquakes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000050\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EChristchurch is not only our second-largest city - it is also a major industrial, tourism and regional hub, and is essential to the performance of the wider economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000051\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe estimated combined cost of the two earthquakes to the economy is around $15 billion, which is about 8 per cent of GDP.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000052\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ETo put this in context, the recent earthquake off the north-east coast of Japan is estimated to have caused damage equivalent to around 3 to 5 per cent of Japan\u2019s GDP.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000053\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Treasury\u2019s estimate of the direct impact on Crown expenses from the two earthquakes is $8.8 billion. This comprises a $3.3 billion cost to ACC and EQC, net of reinsurance, and an estimated $5.5 billion for all other costs. This includes repairing infrastructure, roads, schools and hospitals, providing temporary housing and providing the business support package.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000054\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe $8.8 billion cost is too much for Christchurch residents alone to bear.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000055\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBut it is manageable within the Government\u2019s fiscal programme. New Zealand\u2019s annual GDP is around $200 billion. The Government spends around $70 billion a year and has assets of over $220 billion.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000056\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EFor these reasons, the appropriate response is to initially debt fund this cost. That will ensure that the burden of reconstruction is borne evenly across all regions and spread across time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000057\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EDebt funding is both the quickest and fairest way to pay for it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000058\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBudget 2011 will provide certainty of funding for Christchurch by establishing the Canterbury Earthquake Recovery Fund.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000059\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis Fund will initially include up to $5.5 billion to meet all of the Government\u2019s earthquake-related costs, other than those funded by EQC and ACC.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000060\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Canterbury Earthquake Recovery Fund will ensure that there is transparency and control over the cost of the earthquakes. It is expected to take several years for the final bills to arrive, after which the Fund will be wound up.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000061\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government will also launch a new four-year maturity Earthquake Bond for New Zealand investors. The proceeds will be directed to the Canterbury Earthquake Recovery Fund.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000062\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThese arrangements mean that reconstruction of Christchurch can proceed with certainty that the Crown\u2019s contributions are fully funded.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000063\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000064\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe OECD, the Savings Working Group and others have pointed out that we need to make the economy more competitive and lift national savings.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000065\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ECurrently, most businesses and households have successfully lifted their own savings. While that has hurt retailers for now, in the long term it is a good thing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000066\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe main sector not saving is the Government.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000067\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe deficit in 2010/11 will be large, at $16.7 billion or 8.4 per cent of GDP. This includes a range of one-off costs, including the earthquakes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000068\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government believes there is a strong case to eliminate the deficit faster and target a lower level of public debt. This is for a number of reasons.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000069\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe fallout from the global financial crisis of two years ago is gradually receding.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000070\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe recent fiscal expansion, which began in the mid-2000s and saw nominal spending rise 50 per cent in just five years, has placed much strain on the economy. Exports, growth and productivity have all stagnated.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000071\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EFinance costs would otherwise rise unacceptably, squeezing out more worthwhile spending.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000072\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ERising debt leaves the Government vulnerable and less able to meet future shocks. Its double-A plus credit rating is on negative outlook with two rating agencies.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000073\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAnd productivity growth over the past decade has been less than one-sixth of that in the 1990s.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000074\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EFor all these reasons, stronger government finances are an essential component of moving to sustainably higher growth and job creation.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000075\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000076\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Budget forecasts show that, while Government spending will increase, it will do so more slowly than projected previously.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000077\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ECore Crown spending is forecast to rise from $73 billion in 2011/12 to $77.1 billion in 2014/15.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000078\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Budget identifies $5.2 billion of savings over five years that will be redirected to frontline public services and to reducing the Government\u2019s deficit.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000079\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ENew operating spending of around $4 billion over that period is tightly prioritised to health and education, which together receive three-quarters of total new spending.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000080\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe net result is a saving of $1.2 billion in operating spending over five years from those parts of the Budget funded by new spending allowances.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000081\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000082\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EPart of the adjustment involves examining programmes where costs have expanded rapidly, in ways that weren\u2019t anticipated, and without commensurate value to the community or taxpayers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000083\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EKiwiSaver, Working for Families, student loans and ACC are all examples where cost escalation has occurred.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000084\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government is committed to all of these programmes. With modest adjustments, they will emerge more effective, better targeted to those who really need them, and aligned with what the economy can afford.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000085\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000086\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government has looked closely at KiwiSaver.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000087\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EKiwiSaver is now well established. It has nearly 1.7 million members, and is gaining about 20,000 new members a month. KiwiSaver funds provide a pool of long-term capital which can be invested with relative certainty.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000088\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EKiwiSaver balances are currently around $7.9 billion. Of this, about $3.5 billion has been directly contributed by the Government, and the balance by individuals and their employers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000089\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIn 2010/11 alone, the Government is contributing $1.2 billion.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000090\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAt present, KiwiSaver\u2019s contribution to national savings is ambiguous. It helps individuals to save for their retirement.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000091\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBut it means the Government is borrowing, mostly from foreigners, to contribute to private savings.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000092\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis does not lift national savings.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000093\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EA better approach is to have New Zealanders actually saving for their future.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000094\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ETo achieve this, the Budget makes the following changes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000095\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe default and minimum rate of member contributions will increase from 2 per cent to 3 per cent from 1 April 2013. Employees will retain the option to opt out.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000096\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe rate of employer contributions will also increase from 2 per cent to 3 per cent from 1 April 2013.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000097\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Member Tax Credit will be reduced to 50 cents per dollar of individual contribution, with the cap halved to $521 per year from the year ending 30 June 2012. This change will be reflected in payments to KiwiSaver accounts from the second half of 2012.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000098\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe exemption from the Employer Superannuation Contribution Tax will be scrapped from 1 April 2012. This exemption is regressive, in that those on higher incomes receive larger subsidies.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000099\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EExisting Kick-Start payments will remain unchanged.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000100\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe combined impact will be to see KiwiSaver inflows largely unchanged, but funded more by private savings and less from the Government. The fiscal saving to the Crown will be $2.6 billion over the next four years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000101\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EKiwiSaver remains an attractive, subsidised investment. The Government is planning to contribute $650 million next year and $2.5 billion over the next four years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000102\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThese changes put KiwiSaver funds on a sound footing. On current projections, KiwiSaver funds will total around $25 billion by 2015, and nearly $60 billion in 10 years\u2019 time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000103\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EKiwiSaver funds are well placed to participate in the Mixed Ownership Model, which I will come to shortly.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000104\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWhere State-owned Enterprises raise outside equity, New Zealand investors will be at the front of the queue to invest. We expect KiwiSaver funds to become substantial long-term holders of these investments.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000105\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe decisions to lift default contribution rates, to keep KiwiSaver membership voluntary and to remove the Employer Superannuation Contribution Tax exemption were all recommendations of the Savings Working Group.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000106\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000107\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis Budget makes changes to Working for Families to better target assistance toward lower-income families, and to put the scheme on a more sustainable footing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000108\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWorking for Families will remain essentially in its current form. The changes consist of small adjustments to the abatement threshold and abatement rate, and a gradual alignment of the over-16 rate with the 13-to-15-year-old rate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000109\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThese changes will be phased in over four steps as Family Tax Credit rates are adjusted for inflation. This is a very gradual transition which is expected, given current inflation forecasts, to take eight years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000110\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ELower-income families and beneficiaries will be largely unaffected by these changes, and the majority will actually get an increase in their Working for Families payments after 1 April next year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000111\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EA number of families higher up the Working for Families scale, however, will receive a little less than they currently do now, or will no longer qualify. In most cases, the impacts will be small.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000112\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ETo put this in context, total Working for Families payments have almost doubled over the past five years, and are forecast to cost about $10.7 billion over the next four years. These changes represent about a 4 per cent trimming of the scheme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000113\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000114\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Budget also makes changes to the student loans scheme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000115\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOnce again, the scheme will continue in essentially its current form.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000116\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis year, the Crown will lend almost $1.6 billion to assist students, up 50 per cent over the past five years. There are currently more than $12 billion of loans outstanding.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000117\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EHowever, at present, for every dollar lent out the Government receives only around 55 cents back in 2011 dollar terms.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000118\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBudget 2011 tightens the lending criteria so that the scheme is better focused on those who really need assistance.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000119\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe measures tighten borrowing conditions for those aged over 55, for part-time students and for those already overdue or in default. There are a number of additional changes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000120\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe estimated operating and capital savings over four years are $447 million. The Crown still expects to lend students a further $6.5 billion over the next four years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000121\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000122\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe public sector has a wider role to play in lifting productivity and national saving.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000123\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOver the past two years the Government has signalled the need for the sector to become more efficient, and has been mindful of the large increases in most budgets that have occurred in recent years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000124\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIn its first two Budgets, the Government successfully reprioritised $3.8 billion of spending into higher-priority areas.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000125\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIn Budget 2011, $980 million of efficiency savings will be sought from the public sector over three years, starting from 1 July 2012.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000126\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government will require agencies to fund the cost of KiwiSaver, and some State sector retirement schemes for their employees. This will generate savings of $650 million. At present these contributions are centrally funded and not visible to public sector employers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000127\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EA further $330 million in back office savings will be sought from 31 core government agencies.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000128\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe savings are part of the ongoing improvement that the Government expects, and are consistent with the adjustment the households and businesses have had to make in recent years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000129\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000130\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOne area where the benefits of cost reductions are already apparent is ACC.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000131\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOver the past two years, ACC has successfully controlled its previously run-away costs, and delivered better results from existing spending.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000132\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOne immediate benefit is that the Government will need to contribute $638 million less to the non-earners\u2019 account over the next four years than previously projected.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000133\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EACC members in other accounts will also benefit, with future levies also trending lower as a result of the cost savings within the scheme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000134\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000135\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EI now turn to the Budget\u2019s main new initiatives.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000136\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 front-line government services.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000137\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe health sector will receive $1.7 billion of new funding over the next four years. In addition, a further $500 million of expenditure has been reprioritised within the sector.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000138\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EDistrict Health Boards will receive the bulk of this funding, including around $400 million in the next year alone.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000139\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis will fund a wide range of initiatives, including care for first-time mothers, widened access to medicines funded through DHBs, additional elective surgery, increased disability support services and training more doctors.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000140\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government\u2019s commitment to raising education standards remains strong, so that all young New Zealanders reach their potential.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000141\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Budget provides an extra $1.4 billion for education, including over $100 million of new capital spending. In addition, a further $356 million has been reprioritised.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000142\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis builds on the past two years\u2019 investment in early childhood education, National Standards and the Youth Guarantee.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000143\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EEarly childhood education also receives an additional $550 million.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000144\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe justice sector is to receive $157 million in new funding in Budget 2011 to ensure access to justice and increase public safety.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000145\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThere are significant initiatives elsewhere where a strong case was made for additional funding.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000146\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EStatistics New Zealand receives $58 million of new funding to rebuild 20-year-old IT systems that will ensure the ongoing supply of important economic and social data.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000147\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Irrigation Acceleration Fund has been expanded with $35 million of new funding over the next five years. This will help support the development of new water harvesting, storage and distribution infrastructure.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000148\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBudget 2011 provides significant capital and operational funding to strengthen delivery of school and community-based M\u0101ori language initiatives, help schools to engage better with M\u0101ori students, improve literacy and support Kura Kaupapa M\u0101ori.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000149\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBudget 2011 provides an additional $25 million over the next four years for Wh\u0101nau Ora, with a further $5 million to be reprioritised from within Vote M\u0101ori Affairs.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000150\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=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000151\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000152\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Budget also includes a range of new capital spending, mostly focused on improving New Zealand\u2019s infrastructure.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000153\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government believes that efficient infrastructure will underpin improved productivity in a growing economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000154\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBudget 2011 allocates a further $942 million of capital funding to ultra-fast broadband, as Crown Fibre Holdings completes negotiations for the roll-out. This brings the total invested over the past three years to $1.4 billion.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000155\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EA further $28 million has been allocated for ultra-fast broadband in schools.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000156\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Budget includes the second $250 million tranche of the Government\u2019s intended $750 million investment over three years as its contribution toward KiwiRail\u2019s $4.6 billion turnaround plan.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000157\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAnd there is an additional $88 million over eight years to complete the upgrade and renewal of the Wellington Metro rail network.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000158\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOther key parts of the Government\u2019s infrastructure programme are continuing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000159\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWe continue to invest over $1 billion a year in state highway improvements, including the seven Roads of National Significance and a number of other significant regional projects.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000160\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAnd the investments in the new prison at Wiri, and a number of new schools, remain on target to deliver worthwhile savings to taxpayers via Public-Private Partnerships.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000161\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000162\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThese capital commitments are part of a larger programme of investment in public assets. The net value of government-owned assets is expected to increase by $34.3 billion between 2010 and 2015.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000163\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis includes a range of high-priority areas, including social infrastructure such as schools, hospitals, housing and student loans, as well as the investment in roads, rail, broadband, electricity transmission and increased investment in financial assets.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000164\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ESome of this extra investment will occur within the State-owned enterprises and Crown entities. But about $21 billion will be invested in core social infrastructure and student loans.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000165\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government\u2019s objective is to maintain investment in core public assets without increasing debt. This highlights the need for the Government to prioritise where its capital is used.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000166\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000167\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAt present, our commercial assets present the greatest scope to change the Government\u2019s asset mix.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000168\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EEarlier this year the Government announced it would explore extending the Mixed Ownership Model for some of its commercial assets.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000169\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis model frees up Crown capital, provides the companies involved with wider access to capital and imposes greater transparency and commercial discipline and reduces the need for extra government borrowing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000170\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt also provides Kiwi investors with opportunities to put their money in solid, New Zealand-controlled companies.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000171\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt provides the opportunity for KiwiSaver funds, and large government investors like the New Zealand Superannuation Fund and ACC, to increase the proportion of their funds invested in New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000172\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government therefore intends to apply the Mixed Ownership Model to Mighty River Power, Genesis Energy, Solid Energy and Meridian Energy, along with reducing its shareholding in Air New Zealand, starting in 2012.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000173\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIn all cases the Crown will retain majority ownership.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000174\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe expected revenue from offering minority stakes in these five companies is between $5 billion and $7 billion.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000175\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis will therefore fund about one-third of the core Crown\u2019s increased investment in social assets in the period to 2015.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000176\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe alternative would have been to borrow more. The Government believes it is much better to reprioritise existing capital, in this case from commercial to social assets, rather than always accumulate debt.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000177\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government will seek a mandate in the 2011 general election before proceeding with the Mixed Ownership Model.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000178\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000179\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe lift in private savings will benefit from a sound savings environment. Investors need both confidence to invest, and quality, reliable investments to invest in.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000180\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe collapse of the finance company sector was a major setback to confidence.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000181\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ESince then, the Government has materially improved the savings environment.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000182\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis includes creation of the Financial Markets Authority, overhaul of securities law, regulation of the insurance sector and of financial advisors, and prudential supervision of non-bank deposit takers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000183\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIn terms of investment opportunities, both the issue of Earthquake Bonds, and the offer of equity to New Zealand investors under the Mixed Ownership Model, will help deepen the local capital markets.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000184\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIn addition, the Debt Management Office will issue a new, long-dated, inflation-indexed bond. This reflects clearly expressed demand from long-term investors.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000185\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe local government funding agency will start operating later this year. It will be a collective vehicle, providing cheaper funding for local body projects as well as more liquid, better diversified assets for investors.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000186\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000187\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis year the ACT Party will bring two challenging Bills to the House, which the Government will support to select committee.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000188\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Regulatory Standards Bill seeks to improve the quality of regulatory processes. It includes a mechanism for providing transparency around the making of regulations, and an incentive mechanism to ensure compliance with the process.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000189\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe other ACT Party Bill is the Spending Cap (People\u2019s Veto) Bill. This Bill seeks to cap real per capita government spending.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000190\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIn both cases the Government will give the Bill, and the submissions on it, careful consideration.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000191\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000192\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe final elements of last year\u2019s tax package have now come into force, including tighter income definitions related to State assistance and reducing the company tax rate to 28 per cent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000193\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis low rate of tax on businesses demonstrates that we are prepared to back them and recognise that business is the growth engine in a modern economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000194\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000195\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ELast year\u2019s review of the thin capitalisation rules did not include banks, which are subject to a separate regime because of their high gearing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000196\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EHaving reviewed the banking sector, we have decided to lift the minimum level of non-deductible capital from 4 per cent to 6 per cent, which is more in line with international norms.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000197\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis will provide estimated revenue of $100 million over the next four years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000198\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EI thank my colleague, the Hon Peter Dunne, for his ongoing work in improving our tax system.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000199\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000200\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe measures announced in this Budget will put both the Government\u2019s finances and the economy on a much sounder footing despite a series of adverse events and a slower economic recovery.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000201\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe projected operating deficit will fall dramatically over the next three years. It will be in significant surplus from 2014/15.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000202\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis is a year sooner than the position forecast last year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000203\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EContributions to the New Zealand Superannuation Fund are projected to resume from 2016/17.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000204\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe debt projections have also improved.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000205\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EEven absorbing the cost of the earthquakes, net core Crown debt is now projected to peak at 29.6 per cent of GDP in 2014/15 and then decline steadily.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000206\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis contrasts strongly with the outlook of ever-rising debt which the Government inherited in late 2008.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000207\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EDebt would have peaked at around 27.5 per cent of GDP in the absence of the earthquakes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000208\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ELooking further ahead, continuation of current policy would see net debt eliminated entirely by 2024.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000209\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis emphasises the responsible, longer-term approach taken by this Government, which will leave future governments with choices about whether to invest, spend or reduce taxes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000210\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt will also provide room to ride out future recessions, which surely will occur.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000211\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOur long-term fiscal objective remains to ensure that net debt remains no more than 20 per cent of GDP by the early 2020s. The current projections show this being comfortably achieved.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000212\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000213\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBudget 2011 is about building our future.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000214\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=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000215\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis is not a typical election year Budget. It is a responsible Budget appropriate to New Zealand\u2019s situation.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000216\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EBudget 2011 shows how, from the depths of the global financial crisis when a decade of red ink was in prospect, and despite the devastating Canterbury earthquakes and other setbacks, the Government has laid the basis for future prosperity.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000217\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt is within sight of budget surpluses and falling public debt.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000218\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt has funded reconstruction of Christchurch, our second largest city.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000219\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt has in prospect the strongest growth for a decade.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000220\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt has materially improved the tax system.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000221\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EIt has placed KiwiSaver onto a sounder, more sustainable footing, and instilled a culture built on savings rather than debt.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000222\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EAnd it will provide future New Zealanders with real choices about further lowering taxes, adding quality public services, or both.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000223\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWe set a path for responsible government spending from the start of our term, and we maintain that path in this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000224\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis Budget continues to build a platform for a much stronger, more ambitious New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000225\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EMr Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000226\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=\u002241272656b83748f19a237e2c40684c96\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000227\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002241272656b83748f19a237e2c40684c96\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 borrowed heavily and created a record deficit of $16.7 billion; has no plan and no vision to improve New Zealand\u2019s economic performance; has broken its promises not to cut entitlements to KiwiSaver and Working for Families; has made cuts that will hurt but will not solve New Zealand\u2019s economic difficulties; and has failed to act fairly in the interest of all New Zealanders.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000228\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EToday New Zealand needed a Budget that gave it a shot in the arm. It needed a vision for a better future and how to get there. We got neither. There is nothing innovative or transformative in this Budget to address New Zealand\u2019s economic problems. In fact, this is the worst Budget that I have seen in 27 years in this House. It is the least imaginative, and it is the most lacklustre. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000229\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThis is not a zero Budget; it is a subzero Budget. It has frozen New Zealand in time. It seeks to balance the books on the back of broken promises, and on the flogging off of $7 billion worth of assets that New Zealanders built up and paid for with their taxes, and that belong to them. The Government has banked the proceeds from those sales, and from the broken promises, without any mandate to do so. It has broken its word, and no amount of verbal gymnastics will disguise that fact. This Budget leaves the country with a record $16.7 billion deficit and an unsustainable borrowing level of over $300 million a week. It is a Budget that hurts; it does not help. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000230\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EToday we needed a Budget from a Government that had the guts to make the right decisions, however tough those decisions may be. We needed a Government that was absolutely committed to ensuring that everyone paid their fair share no matter what they do for a living and no matter where they live or how much they earn. This Government has failed on both counts. We needed a Government with a plan, but this Budget makes it clear that National has no plan. It is not only the Opposition and the trade union movement saying this; the business community is saying this, and even National\u2019s ally the ACT Party. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000231\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EJohn Key has made a lot of his economic skills, but in this Budget he has failed absolutely to deliver. Today\u2019s Budget does nothing to address the real problems facing our country: high debt, low wages, low productivity, high unemployment, and poor economic growth. When I read these books I see that the total debt of New Zealand, public and private, is currently 86 percent of GDP. Where does it go by 2015? From 86 percent to 85.3 percent. That is the achievement of this Government in reducing New Zealand\u2019s debt. That is a failure. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000232\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThis Budget was meant to be about saving. That was to be the centre point of this Budget we heard from the Minister of Finance. But all this Budget does about saving is to cut the entitlement that National sincerely promised New Zealanders it would never cut. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000233\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThis Budget will do nothing to help hard-working New Zealanders who are struggling to pay the bills every week, because their incomes cannot keep up with the cost of living. That is because John Key and National have failed to face up to the big problems. The Government keeps promising that the good times are around the corner. Really, New Zealanders do not believe that. It is tinkering around the edges. It wants to play it safe, but right now this country needs a bold plan to fix a broken economy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000234\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThe legacy of this Budget and this Government is a $16.7 billion deficit. That is seven times higher than the 2008 prediction by Treasury of what the deficit would be this year\u2014seven times higher. In November 2008 National inherited one of the lowest Government debt levels across the developed world from a Labour Government that ran surpluses for 9 years, not deficits, and built up $14 billion in the Cullen superannuation fund. Yes, there was a global financial crisis in 2008, but that was over by 2009. What did Mr English say in December 2008? He said: \u201CNew Zealand starts from a reasonable position\u201D. That is where he started in December 2008, but there is no way this Government can claim that New Zealand\u2019s debt today is in a reasonable position. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000235\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EWhy were we in a reasonable position, according to Mr English in December 2008? Because the Labour Government had saved for the rainy day. The fact that New Zealand is better than it might be owes much to the careful management of the previous Labour Government. We should be in a better position. Our economy should be booming. The returns that we are getting from our exports to thriving markets such as China, with which I negotiated a free-trade agreement, are the highest they have been in 35 years. We had earthquakes in Christchurch, which did not help, but $10 billion in reinsurance money will flow into Christchurch over the next couple of years. I am informed that only 10 percent of the deficit owes anything to the earthquakes. The fact is that the New Zealand economy was in trouble from the time of Mr English\u2019s last Budget\u2014long before the earthquakes struck. New Zealand, in the 6 months after Mr English\u2019s last Budget, was failing to achieve the projected growth. In fact, we had nil growth, rising unemployment, and the highest quarterly inflation in 20 years. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000236\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThe problem is that the National Government has no vision of what a successful economy looks like, and no plan to get there. Gimmicks will not do it\u2014gimmicks such as job summits that create no jobs, cycleways that create 200 jobs, Mr Brownlee\u2019s promise to mine our national parks, which did not run at all, and, of course, the increase in GST, which did not help growth but just made it harder for families to meet the rising cost of living. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000237\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThe truth is that National\u2019s three Budgets have failed to deliver a real plan for prosperity, and they have failed to meet the fairness test. Top earners have done very well, getting hundreds and sometimes thousands of dollars extra in tax cuts each week. In fact, the top 10 percent of New Zealand took 40 percent of all the money for the tax cuts. What did the bottom 20 percent get? They got 1.4 percent of the money. That is neither fair nor smart. Spending $2.25 billion every year on tax cuts for the top 10 percent of earners simply does not make sense when the Government is borrowing $300 million a week. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000238\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EJohn Key and Bill English made reckless election promises in 2008, in the middle of the global financial crisis, knowing full well that this country could not afford the promises they were making. What is more, while they were making those promises about the big tax cuts they made some other promises. They promised they would not cut KiwiSaver; they did. They promised they would not touch Working for Families; they have. And the biggest promise of all was John Key saying: \u201CWe will not be increasing GST.\u201D We know what happened there. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000239\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EIt is clear why this country\u2019s deficit has blown out of control. Firstly, the National Government spent $14 billion on tax cuts when it could not afford to. The second reason is the failure of the New Zealand economy. When we do not get growth, when incomes are actually falling, and when unemployment is going up, the Government\u2019s revenue fails. It falls. That is exactly what has happened. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000240\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EI remember well in 2009 John Key promising the country that New Zealand was coming aggressively out of recession\u2014coming aggressively out of recession. He had hardly uttered those words when we went back into recession. So New Zealanders will be sceptical today about the heroic Budget forecasts that predict economic growth and higher wages around the corner\u2014or at least, that is what John Key told us. When I look at the Budget forecast for growth, I see that actually that growth will be below the long-term forecast levels. If we take the Rugby World Cup 2011 and the Christchurch reinsurance out of that forecast, growth will be about 2.2 percent. That is a pathetic level of growth coming out of a recession, when normally a country\u2019s growth would be up around 6 or 7 percent. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000241\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EWe have a real problem: the big debt built up by this National Government. That means prudent financial management for an incoming Government. It will mean reprioritising. It will mean efficiencies. Existing spending is not sacrosanct, but I tell members that if cuts have to be made, they must be both justifiable and fair. They must help the economy to grow and they must lift incomes. If they do not, they just hurt and they do not work. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000242\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022edd08beb34bb43ef87d510e6186ee0da\u0022\u003EHon Dr Nick Smith\u003C/span\u003E: What would you cut?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000243\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ebe2834fce354035ad9ec68f95078291\u0022\u003EHon PHIL GOFF\u003C/span\u003E: Despite the massive borrowing, this Government refuses to reconsider the affordability of the billions of dollars in tax cuts to top-income earners. I tell Dr Smith that I would cut the $200 or $300-a-week tax cuts that members of his Government gave themselves in the last Budget. That is where I would start: at the top. Not on the people who are losing their Working for Families payments: the mum and dad on an average wage of $35,000 to $40,000 a year working hard to try to bring up their kids. John Key and Bill English have taken $2,000 a year out of the support those families were getting. That is what happens if one is a middle-income person, but if someone is a top-income person, I tell Dr Smith, that person will keep the money. John Key will keep the $1,000 a week that he gave himself. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000244\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003ELabour is not in favour of giving a privileged position to the wealthy and the powerful; it is in favour of looking after low and middle income New Zealanders who need and deserve that help. That will be what a Labour Government does when it delivers the Budget this time next year. I thank Dr Smith for his question. While top-income earners have become richer over the last few years, those on middle incomes have become the new working poor, and those on low incomes are simply struggling to survive. Should the top-income earners not be leading by example? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000245\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EI want to know from the Prime Minister why it is OK that his Government has cut home care for so many elderly people, which is provided so that they can live independently in their homes, while Cabinet Ministers get record levels of payment to live in their own homes. What about Ruby Martin? The Prime Minister said the other day that he did not know of any such people. I can tell the Prime Minister that Ruby Martin lives in Timaru. She is 86 years old. She is so crippled with arthritis that she cannot even hang out her washing, but the Prime Minister\u2019s Government took out of her pocket the $30 a week that she was getting in home care, while Mr English put in a claim for $45,000 a year to live in his own home. That is not good enough\u2014that is not good enough. When people are struggling to put petrol in their car each week, why is the Minister of Foreign Affairs taking a $75,000 plane flight to Vanuatu when he could have got there for $4,000? Middle-income people are working hard, but they are finding their incomes dropping below the cost of living. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000246\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThe lower-income people are suffering. I was in McGehan Close the other day. The residents there wanted to know when Mr Key was going to come back to their street, where he was before the election, and explain to them why he had broken every promise he made about what he was going to do to help. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000247\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThis Budget has nothing on helping the 77,000 young people who are out of work. When young people leave school, they should go on to learning or earning, not be thrown on the unemployment scrap heap, not be a lost generation, and not be part of a social disaster waiting to happen. I want to know where in this Budget was the provision for trade training. The building industries tell us they need 90,000 people over the next year in building and construction trades. I want to know why the training package for Canterbury is less than the $55 million cut in training that the Government made last year. I want to know from Mr Brownlee why, 9 months after the earthquake, not one extra person has gone into a training programme. Mr Key might think it is a good idea to recruit from the Philippines and Malaysia for skilled work, but Mr Key should give a chance to the 10,500 unemployed 15 to 24-year-olds in the Canterbury region. Mr Key should give them the chance first. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000248\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EI want to know why, when this Budget was meant to be about saving, the Government has cut savings. Every KiwiSaver will be losing $520 a year. Even Standard and Poor\u2019s says that that policy, which is cutting a successful Labour Government scheme, will risk damaging New Zealand by pushing it further into debt. I want to know why this Government thinks it can keep moving the goalpost\u2014reversing the reversal it made 2 years ago\u2014and New Zealanders will still have trust and confidence in the savings scheme. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000249\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EI want to know why this Government thinks it is sensible to sell State assets when no individual or business would do anything as stupid as selling efficient and profitable enterprises. National has learnt nothing from history\u2014nothing from history. This election will be about whether National has a mandate to sell off those assets, which in the majority will end up being foreign-owned. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000250\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EThis Budget is a failure. The Government is simply tinkering around the edges with the problems that are hurting Kiwis. It is not making a difference. We need bold and courageous action; we did not get it. We did not get it on skills training. We did not get it on research and development. We did not get it on taxation and monetary policies that would help the productive sector instead of favouring the speculative system. We did not get policies to relieve the pressure on everyday families who are finding it hard to make ends meet because of the soaring cost of living. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000251\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003EI give the House the pledge that a Labour Government in the next Budget will put hard-working families at the centre of what we do. We will be driven by the belief that our country can be better than this. We can turn things round with vision and courage. There is a different and a better way of doing it. This Budget offered not one idea, not one plan, and not one suggestion of how this country can go forward. This Budget fails.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022 data-id=\u0022a50d3ff5faeb46a58d85d2bf390baccd\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000252\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a50d3ff5faeb46a58d85d2bf390baccd\u0022\u003ERt Hon JOHN KEY (Prime Minister):\u003C/span\u003E That was not a Budget speech from Phil Goff; it was a valedictory. The \u201Cface of the future\u201D told us that this was the worst Budget in 27 years. Well, I say this: what about the nine Budgets that Labour delivered just before this National Government that saw interest rates double in this country? What about those nine Budgets that saw no wage growth? What about the fact that the only way that New Zealanders got ahead under Labour was to borrow more money? That was the only way forward. What about the fact that our economy went into recession when it came to exports back in 2004, under Labour? Phil Goff might not like this Budget, but Standard and Poor\u2019s does. It has just given this Budget the tick.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000253\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EIt is clear that the Leader of the Opposition has no clue about economics. That was abundantly clear from his speech. He came out with a couple of crackers. One of them was that the global financial crisis ended in 2009. That is interesting. He should go and tell that to the people of Ireland, Portugal, Spain, and Greece. While he is at it, he can go have a chat to the IMF and the World Bank, because they are bailing out people left, right, and centre. On his way home he can go via America, see the 10 percent of Americans who are unemployed, and ask President Obama why he is borrowing US$1.4 trillion a year. But, according to Phil Goff, the global financial crisis ended in 2009.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000254\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWhat did I learn from that speech from Phil Goff? Here is the answer. It is not just Helen Clark who is texting Phil Goff from New York; Bernard Madoff is, as well. I can tell members that that was not an alternative budget; it was the Labour Party Ponzi scheme to spend more money, borrow it from someone else, close one\u2019s eyes, hope, and, eventually, leave it to a National Government to tidy up. I can tell members that that strategy might go down well in Greece, but in Grey Lynn they want real answers and this Government is delivering them. They want a grip on reality. Phil Goff does not live in Mt Roskill; he lives on \u201CFantasy Island\u201D. Over here on \u201CReality Island\u201D we have some serious things going on.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000255\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EI want to say to Bill English: \u201CThank you for a Budget for the times.\u201D We are proud of him. Our balanced, fair, and affordable Budget is a Budget with a plan. It is not a plan when one just borrows more money. [Interruption] The muppets are going on over there. That says it all. You see, this is a Budget that gets us back into surplus within 3 years. This is a Budget that will see interest rates lower for longer. This is a Budget that will see 170,000 new jobs created. This is a Budget that will see real wage growth. But those muppets do not think that is a plan, because we are not spending more money, which the Chinese would have had to lend to us. According to Labour, unless we spend other people\u2019s money it is not a plan. Well, this is a Budget with a plan.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000256\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EThis is what this Government and New Zealand inherited from Labour: a decade of deficits. We inherited 10 years of rising debt and no end to that. We inherited 10 years of rising debt that would have seen debt to GDP at 60 percent, not the 29.6 percent that is delivered today\u2014even while paying for an earthquake of the magnitude we have had to put up with. The parting gift from the previous Labour Government was a decade of deficits and no end in sight to that borrowing. [Interruption] Those members do not like it, but that is the truth. It is in the Budget and it is in those documents that, as the incoming Government, we got from Treasury.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000257\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EI am proud to stand here today and say that this country is going back into surplus. It will be going back into surplus, in my view, before the end of a second term of a National Government. This is what the deficit looks like. It is a large deficit this year because it pays for Christchurch and, actually, it insulates the most vulnerable New Zealanders who rely on the Government. I am proud to have looked after those vulnerable New Zealanders through the tough times. But this is a deficit that halves next year, halves the year after, then is gone. That is what good economic management looks like. That is a plan.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000258\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EThis is a Budget that delivers real wage growth. Let us go back and look at 9 years of a Labour Government. We had 3 percent wage growth in 9 years. The only way New Zealanders could get ahead under a Labour Government was to borrow more money\u2014borrow more money, or leave. Those were the options. This is a Budget that quite clearly demonstrates 170,000 new jobs for New Zealanders over the next 4 years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000259\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWhat is very interesting about this Budget is that it includes $8.7 billion for Christchurch. So when my MPs go to Christchurch and say to the people of Canterbury that we are committed to their city, we believe in them, and we care, we put our money on the line. This Budget does that for the people of Christchurch. As the Minister of Finance pointed out in his speech today, the earthquake is a big impost on New Zealand. It is probably the most expensive natural disaster as a percentage of GDP that we can find in the developed world. Japan\u2019s earthquake has had half the impact on its GDP that the Christchurch earthquake has had on our GDP. In fact, we are struggling to find another country that has had a natural disaster with such an impact on its economy. It is all paid for in Budget 2011. It is a balanced, fair, affordable Budget with a plan.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000260\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWe are going to be going ahead on a platform of solid economic growth. I will talk for a moment about interest rates. It is a topic one never hears about from Labour. Those members are ashamed of their record with interest rates. They talk about the cost of living, but when they left office interest rates were twice as high as they are today. [Interruption] That is right: they were going up twice as high, I say to Mr Cunliffe. Inflation was 5 percent. What do we find today? If a New Zealander living in Grey Lynn\u2014not living in Greece, or in \u201CFantasy Island\u201D over there, with Mr Goff in charge\u2014owes a mortgage to the bank of $200,000, which many people in Grey Lynn do, their interest rate today is $10,000 a year less. That is $200 a week less. I say to this House and to the people of New Zealand that a National Government will deliver interest rates that are lower than they would be under Labour, and lower than they will be over the cycle. That is what good economic management looks like. That is the dividend of Budget 2011. That is about the young home buyers who today are watching the Budget and saying to themselves that they want to buy a new home, to get into their first home. What is their decision point? \u201CCan I afford to pay the mortgage?\u201D is the question they are asking themselves. I say to that young couple that, yes, they can. They will have real wage growth under National, they will have jobs, and they will actually have lower interest rates, and that makes buying a home affordable.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000261\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003ELet us get to the tax system. The big idea that came from Phil Goff was this: put up the top personal rate. OK, it is about as transparent as the All Blacks winning the Rugby World Cup in a few months\u2019 time. \u201CPut up the top personal rate.\u201D, is Phil Goff\u2019s message to New Zealanders, and probably a capital gains tax is coming, as well. David Cunliffe has hinted at it. Phil Goff is nodding. OK, a nod is as good as a wink. There will be a capital gains tax under Labour and higher personal taxes. Let us look at the little tax package that is in the Budget. It tells us that 51 percent of all personal taxes in this country are paid by 13 percent of New Zealanders\u201413 percent of New Zealanders pay over half of all personal taxes. Phil Goff\u2019s message to them is: \u201CWe do not care about you. See you later; you make no valuable contribution to New Zealand.\u201D Well, I say to the 13 percent thank you for being entrepreneurial, thank you for being in New Zealand, and thank you for paying half of the personal taxes in this country. [Interruption] That is exactly right, I say to Mr Power. This is a Government of aspiration, not an Opposition of envy. This is a Government that says quite clearly through the tax system to New Zealanders that if they want to get ahead, if they want to do better for themselves and their family, if they work hard and if they save hard this Government supports them to do that and they get to keep more of what they earn. They get choice. Labour members do not like choice. They do not like the idea of people spending their own money. They like to leave people with pocket money. Well, pocket money in my household ends when one is about 16. When people get a bit older they can make their own money and they can make their own choices.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000262\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003ELet us turn to some of the capital spending in this Budget. There is $1.3 billion for ultra-fast broadband. National is not planning to be like the Opposition. We are not a ring binder Opposition; we are an iPad Government. That is what we are. We are an iPad Government, wirelessly walking around and making sure that New Zealanders are connected to the world. Do members know what? I remember when David Cunliffe used to believe in ultra-fast broadband. He used to believe in it not so long ago. The message is quite clear to New Zealanders. I say to them tonight: vote National and get ultra-fast broadband\u2014fibre to the home, 100 megabits per second, triple play\u2014vote Labour and make sure they get down to the dairy and buy some more biros so that they can write everything down. I tell members that the media strategy of not being able to get information from the rest of the world works well in Fiji, but it is not so good for New Zealanders, who want to know what is happening in the rest of the world. If they vote National, they will get ultra-fast broadband to the home. And I might say that it is not just the information highway we are building; it is the highway that cars and buses travel along. We are making sure that our main arteries are not clogged.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000263\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003ELet us move to the Budget and the area of skills and education. Let us go to that. There is $1.3 billion going into education\u2014$1.3 billion. I thank the Minister of Education for strongly standing up for young children, those who want to have a tertiary education, and the kiddies going into early childhood education. I thank her for that advocacy, because even in a Budget where there is no spare cash the National Government is delivering. I had to laugh, because when we got to early childhood education, the only people in New Zealand who believe that we are not putting more money into early childhood education are the Labour Party muppets. That is right. The sum of $500 million is going into early childhood education in this Budget, and those members are the only people who do not believe it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000264\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003ELet us go on to job creation. There are 170,000 new jobs being created as a result of this Budget. I tell members who does not like that: the Hobbit haters over there do not like it. That is right. The Hobbit haters do not like it. They would rather cuddle up to some Australian unionist. I say, no, we do not want the Australian unionist; we want the 3,000 jobs. We want The Hobbit. I will tell members the way that the videos are going to go when we are out there on the election campaign stump. We will be on Television One and TV3. I will be there with Mr Goff, if he lasts. I will be there with Mr Goff, and he will look down the camera and say to New Zealanders: \u201CI did not really mean it when it came to not having The Hobbit done here. I would have had it done it, if I was Prime Minister.\u201D No, he would not have. He would have backed the unions over the jobs. Well, we support the jobs.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000265\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EI want to thank the Minister of Health. He has flown from round the world to be here today to shepherd the $1.7 billion more that is going into health. The truth of it is that he is a Minister of Health we can all be proud of. New Zealanders who have cancer wait no more than 4 weeks under a National Government. Under a Labour Government they needed a passport\u2014they had to go to Australia. Under National they wait no more than 4 weeks. There have been 20,000 more elective surgery operations under this Government, there are 1,000 more nurses and 500 more doctors, and for mums and babies $55 million is going into maternity care. We have a lot to be proud of.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000266\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EI take this opportunity to thank our confidence and supply parties, the ACT Party, the M\u0101ori Party, and United Future. We have worked very effectively with them over the last 2\u00BD years. We do not agree on everything, but that is the nature of politics. We have been able to rely on our partners and they have worked constructively with us. I think we have put together a Government for the people of New Zealand, and I want to thank them. Members opposite are waving goodbye only because they are the ones leaving. That is why they are waving. Do not worry about that. Yes, Labour has a plan, and it is to not paint Premier House, to sack a Diplomatic Protection Squad agent, to sell the Beamers that Helen Clark bought, and, by the way, to borrow $45 billion more. That is Labour\u2019s plan.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000267\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022165c7eccbc864b5ba4882783e47031a2\u0022\u003EHon Tony Ryall\u003C/span\u003E: It\u2019s a Ponzi scheme!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000268\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e44cc5adfb2a4499a7a8d287dec543dc\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: It is a Ponzi scheme. I do not have time to go through the mixed-ownership model, but I say to New Zealanders who are watching that, in respect of the debate on mixed-ownership, bring it on during the election campaign. I say to New Zealanders who are watching now that here is their choice: they can invest, under Labour, in schemes and finance companies that fail them, or they can put their money into sound, dependable New Zealand assets, majority-owned by this Government. Yes, we have made some adjustments to KiwiSaver\u2014yes, we have made them\u2014and we will take that to the people of New Zealand. But people with KiwiSaver accounts will, at the end of their time, have more than they had. They will have that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000269\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c699e7c6-53b9-470c-a14a-378cb6fc8a04\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226c3b842cf6e4453fb85d0d075d876548\u0022\u003EHon Phil Goff\u003C/span\u003E: Broken promises.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000270\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002215db82438c7c460abf34bda4e1388826\u0022\u003ERt Hon JOHN KEY\u003C/span\u003E: Well, it is not a broken promise, I say to Mr Goff, if one goes to the electorate with it. [Interruption] Will I go back to 2008 and write the manifesto for five terms of a National Government? I do not think so. The 75 percent of New Zealanders on Working for Families get more money\u2014they get more money. Just 25 percent of them get slightly less\u2014on average, $4 a week less\u2014but 80 percent of that 25 percent will be earning over $80,000.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000271\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EI will conclude with this. We have delivered a Budget today that delivers a tax system that is fair, that trims wasteful expenditure, and that puts KiwiSaver, Working for Families, and interest-free student loans on a sustainable footing. It saves the $45 billion that Labour would have wasted, it pays for Christchurch, and it develops our capital markets. Labour can tell us what it will not do, which is everything that National will do, which is about stable, sensible Government. The people of New Zealand want that brighter future. My advice to them is to vote National come 26 November. To Phil Goff I say that I will see him on the campaign trail.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022 data-id=\u0022c46f85acc88844babe40b6b888a714ee\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000272\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c46f85acc88844babe40b6b888a714ee\u0022\u003EDr RUSSEL NORMAN (Co-Leader\u2014Green):\u003C/span\u003E The Green Party is the only party that has the courage to say we need to increase Government revenue in order to reduce borrowing and avoid making damaging spending cuts. It is responsible to raise revenue, and it is short-sighted just to cut, borrow, and sell. We are the only ones who are prepared to say it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000273\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe Green Party is the only party that has put forward a series of tax-broadening measures that would both raise revenue and begin the smart Green transformation of the New Zealand economy. Broadening our tax base will help guide our economy on to a more sustainable footing, with lower greenhouse emissions and a cleaner, more efficient use of water. Our vision is for clean, green prosperity for all New Zealanders\u2014a smart Green economy operating as part of a fair society. That is the future the Greens stand for. That is the future that this Budget fails to deliver. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000274\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EFaced with a Budget deficit, partly of its own making, this Government has chosen to cut services and increase debt. Faced with an economy staggering under high private debt, the Government has chosen to take us backwards with its attempt to mine minerals and mine water. But there are alternatives. Avoiding making damaging spending cuts and minimising debt by broadening the tax base would have been the most fiscally responsible approach to the 2011 Budget. National\u2019s Budget is fiscally irresponsible. Running the largest fiscal deficit in our history is fiscally irresponsible. Bleeding social support and cutting services to pay for previous tax cuts is irresponsible. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000275\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003ELabour\u2019s response so far is not responsible either. Putting the Government\u2019s historical deficit on the nation\u2019s credit card is the wrong thing to do, and I say to our colleagues in Labour that if they do not like the spending cuts, then they have to identify where the money will come from to keep those services. Broadening our tax base to save services, cut the deficit, and transform the economy is a genuine alternative to National\u2019s \u201Ccut, borrow, and sell\u201D Budget and Labour\u2019s alternative. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000276\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EWe need to address the so-called tax switch and the claim that National\u2019s tax changes were broadly revenue-neutral. There is a massive gap between what the Government says about its tax policy and the reality. It is the old tax switcheroo. National\u2019s tax switcheroo works like this. It introduced two rounds of tax cuts that went mostly to the top end of earners, then it increased GST to pay for it, except it did not cover it, leaving a $3 billion hole in the Budget. So to cover the gap, National has slashed KiwiSaver, Working for Families, and the student loan scheme. The old tax switcheroo means that the chief executive of Westpac is given a $5,000-a-week tax cut, and to pay for it 500 workers lose their $10-a-week Government contribution to KiwiSaver. The old tax switcheroo is old National up to its old tricks. How is it that KiwiSaver and Working for Families, which support ordinary New Zealanders, get cut because they are deemed to be \u201Cnice-to-haves\u201D, but massive tax cuts for banks\u2019 chief executives are essential and must stay in place? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000277\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003ELast year\u2019s tax cuts for those who have the most, and this year\u2019s spending cuts for those who need the most, will lead to increased inequality in Aotearoa New Zealand. New Zealand already has one of the largest gaps between the rich and poor in the OECD. This Budget will make the gap worse. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000278\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003ETwo rounds of personal tax cuts were unaffordable, and have not stimulated the economy. The GST increase did not deliver the additional revenue projected to cover the cost. The old tax switcheroo led to an increase in the deficit. The Government\u2019s tax policy is one of the drivers of the record deficit. The failure of the Government\u2019s tax policy has led to death by a thousand cuts, which the Government has chosen to deliver in this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000279\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003ELet us be clear about who is paying for the Government\u2019s economic mismanagement and poor fiscal choices. The average working family will bear the overwhelming brunt of the cuts. That is not fair. The Government has cut $2.5 billion from KiwiSaver and hard-working New Zealanders. The changes to KiwiSaver announced today will make the scheme less attractive, and undermine our national savings efforts. The Government knows that its changes to KiwiSaver will undermine the scheme; that is why it is allocating $90 million less in this Budget towards start-up grants. We know that workers will end up paying the increase in contributions to KiwiSaver. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000280\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EOver $400 million will be cut from Working for Families. That is money that helps put food on the table for many Kiwi kids. Those kids will be worse off. Over $600 million will be cut from accident compensation, so when Kiwi families get hurt it will be harder for them to get healthy. We know that the Accident Compensation Corporation is already refusing support for many injuries. Starving the accident compensation scheme of revenue through the non-earners account will make life worse for many New Zealanders. Kiwi families will have to retrain, because jobs are hard to come by. That will be harder because of the discriminatory changes that the Government is making to the student loan scheme. Many people will need to retrain later in life. Cutting their access to loans is wrong. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000281\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThere are better and fairer alternatives to the Government\u2019s mismanagement of the Budget and the economy. A comprehensive tax on capital gains, excluding the family home, is a fair way to broaden the tax base. It would send real signals to the property market to make houses more affordable for everyday New Zealanders. It also has the advantage of moving capital away from housing and into the more productive sector of our economy, assisting the transformation of our economy. Over time, a tax on capital gains would raise an additional $4.5 billion a year. To anyone who says the sky would fall if we tax capital gains, I ask them whether the sky has fallen in Australia, Canada, the USA, or China. All of those countries have a capital gains tax. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000282\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe International Monetary Fund, the OECD, and the Government\u2019s own Savings Working Group all support a capital gains tax. In fact, the Savings Working Group said that half the increase in house prices from 2001 to 2007 was due to the preferential treatment of housing. The Prime Minister talked earlier about making housing affordable. Well, a capital gains tax is one of the single best ways that housing could be made more affordable. A similar case can be made for speculation in rural land, which is driving family farmers off the land. The Government\u2019s inaction on capital gains has slammed the door on the Kiwi dream of owning one\u2019s own home or farm. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000283\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EA capital gains tax makes sense and is fiscally responsible. It would fairly increase revenue in order to lower Government borrowing, and it would move capital towards the more productive sector of the economy\u2014towards business. It is the best thing we can do to make housing more affordable and to reignite the dream of young New Zealanders to buy their own home or their own family farm. There are alternatives to this Budget. We say that implementing a tax on capital gains is a smart and responsible alternative, and one that makes family homes and family farms more affordable for the average Kiwi. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000284\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe devastating earthquakes that struck Christchurch have ripped a hole in our country\u2019s heart. The loss of life is unprecedented in our recent history, and our nation\u2019s resilience was tested. Although the ongoing human cost of the quakes is immeasurable, it is our job to meet the quantifiable economic cost to ensure that Christchurch and Cantabrians can rebuild. One-off tragic events like the earthquakes should not be funded through permanent service cuts and permanent debt, which is what the Government is doing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000285\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe Green Party has an alternative way to pay for the cost of rebuilding Christchurch that does not place a permanent mortgage on our children\u2019s future through high debt and borrowing. A small, temporary earthquake levy, shared across those most able to pay, is the fairest and most compassionate way to rebuild our fallen city. It is what our neighbours in Australia have done in response to the devastating floods in Queensland. Australians stepped up and said that a levy was the fair way to spread the costs. We should do the same. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000286\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003ENew Zealanders told us that they preferred a temporary levy to increased debt or spending cuts when we asked them in a UMR Insight poll. A temporary levy set at 1.5 percent on income between $48,000 and $70,000, 3 percent on income above $70,000, and 2 percent on the company tax rate would raise an additional $1 billion per year. Over 5 years that levy would raise the amount that the Government currently projects it will need to pay for the rebuild in Canterbury. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000287\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe Government\u2019s approach\u2014spending cuts and additional debt\u2014carries great risks to our economic recovery. Spending cuts could send the economy back into recession, as we saw in 1991 after the \u201Cmother of all Budgets\u201D. More debt also carries risks and costs. An additional $5 billion in Government borrowing, as proposed, will add $250 million per year in interest payments alone. A credit downgrade, due to increased Government borrowing, could see mortgage interest rates go up for Kiwi mums and dads, making life harder for thousands and delivering no benefit to Christchurch. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000288\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EA temporary levy is a better and more fiscally responsible option that avoids the economic risks of the Government\u2019s slash-and-borrow approach and more fairly apportions the costs of the rebuild to those most willing and able to pay. There are alternatives to this Budget. An earthquake levy is a more balanced way to fund Christchurch\u2019s rebuild without going into debt. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000289\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe biggest opportunity the Government is missing in this Budget is the opportunity to lead our economy in a more sustainable direction. We are doing nothing new to position our economy in a way that maximises our natural advantages and \u201Cclean, green\u201D brand. We could be a world-leading economy that grows green technology and green-collar jobs in a way that is sustainable, prosperous, and fair for all our people. The Green Party is proposing the use of smart solutions that utilise market mechanisms to shift the economy in a sustainable direction and help the Government balance its books at the same time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000290\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003ETake greenhouse emissions, for example. The Government\u2019s emissions trading scheme is so poorly designed that taxpayers are footing a bill of nearly $2 billion over 2 years to subsidise polluters\u2019 carbon emissions. That is an extra $2 billion added to the worst deficit in New Zealand\u2019s history just to subsidise pollution. Setting a proper price on carbon will drive the transition to a low-carbon, clean economy. It will also make those doing the polluting pay their way and it will free up over $1 billion from this deficit and render unnecessary the social service cuts that we heard about today. It is more than fiscal; it is about protecting our kids from out-of-control climate change. This Government is literally subsidising climate change in our country and climate change around the world, and it is an absurd way to spend $2 billion. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000291\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EA charge on the commercial use of water is another market signal we should be sending. This eco-tax would help us restore some of the water to our rivers and ensure a sustainable economy at the same time. The latest OECD country report on New Zealand calls for a price on water for irrigators. A small charge of 10c per cubic metre of water for commercial irrigators would raise the best part of $1 billion per year. There are alternatives to this Budget. Introducing a price on all commercial water use and a price on greenhouse emissions is a responsible way to sustain our natural capital. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000292\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EWe also urgently need to reprioritise the infrastructure investment and expenditure to reflect the clean, green, low-carbon future we all want. Spending $16 billion over 12 years on new motorways, as the Government proposes, at the same time as petrol hits its highest price ever is not a smart way to run an economy. One might argue it is kind of insane to spend $16 billion on new motorways over 12 years. Spending $16 billion on new motorways, when commuters are desperate to go to work in modern and affordable trains and buses, is not a smart way to run an economy. Spending $16 billion on new motorways, which is not as job rich as spending on public transport, is not a smart way to run an economy. Let me be clear. The Greens are not anti roads. The question is: what is the best way to spend the next transport dollar? Sinking such large amounts of money into new motorways that commuters do not want and buses do not drive on is money badly spent. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000293\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThese changes are just the tip of the transformation that is possible. A capital gains tax, a price on commercial water use, a real price on carbon pollution, and a smarter transport spend can set us on a path to clean, green prosperity, but this is only the beginning. I see a future for New Zealand in which Government, industry workers, and experts collaborate to ensure that we are at the forefront of clean, green technology, infrastructure, and business. The policy options for transforming into a sustainable economy are too numerous to detail here but include measures such as tax breaks for research and development into clean, green technology. It is about keeping our power companies publicly owned and using their size and scale to create a revolution in green power generation\u2014a revolution that we can apply at home and export to the rest of the world. That cannot happen if our assets are sold, as the Government proposed today. This Budget does not deliver any of that. There are alternatives to this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000294\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EDespite not being part of the Government, the Greens are part of creating a more sustainable economy. Our memorandum with National has delivered the successful Warm Up New Zealand home insulation scheme. It is an example of smart Green economics at work, and we congratulate the Government on recognising the wisdom of this policy. New Zealand will reap economic benefits in health and energy savings worth over $500 million from the 100,000 homes insulated to date. An additional 2,000 jobs will be created over 4 years. Most important, 300,000 New Zealanders, half of them on low incomes, will be warmer and healthier this winter thanks to this scheme. This is an example of the sorts of Green alternatives that deliver for the economy, for people, and for the environment. Sadly, the Green homes scheme is a shining light in a Budget that is otherwise lacking in imagination. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000295\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe Green Party recognises the challenging fiscal circumstances that surround this Budget and we acknowledge the hard work and sincerity of the Minister of Finance, but we do not believe that this is the right Budget for today or for tomorrow. We cannot endorse a Budget that fails to implement smart Green revenue measures that would reduce Government debt, avoid making damaging spending cuts, and set us on a path to developing a 21st century smart Green economy. We cannot endorse a Budget that increases the gap between those who have the most and those who need the most. We cannot endorse a Budget that undermines our \u201C100% Pure New Zealand\u201D brand and places us firmly on a path of ongoing environmental degradation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000296\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThere will be other Budgets and other opportunities to put our country on a path towards clean, green prosperity for all New Zealanders. The tragedy is that this Budget has missed that opportunity.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022 data-id=\u0022528055ad4d2e4f51a11a508d2e6ba3f5\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000297\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022528055ad4d2e4f51a11a508d2e6ba3f5\u0022\u003EJOHN BOSCAWEN (Leader\u2014ACT):\u003C/span\u003E New Zealand was once the most prosperous country in the world. However, by the 1960s our fortunes had begun to decline, and that decline has accelerated over the last 30 years to the point where we are ranked just 26th in the OECD world rankings. We now have a society with major social problems and intergenerational dependency, and with no immediate solutions to that. As the Hon Tariana Turia often reminds us, welfare dependency has robbed many M\u0101ori of self-reliance and dignity. We have an education system that on the one hand generates our best and brightest so they can be snapped up by the world\u2019s leading employers in Europe, the US, and Australia, but that on the other hand fails many students, with one child in four leaving school without National Certificate of Educational Achievement level 1. We all know the statistics are much worse for M\u0101ori. We have a health system that condemns many people to long waiting lists, with only the affluent or the hardest-working able to put themselves through the health system, with private medical insurance. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000298\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EThe founders of the ACT Party\u2014and two of them are in the House this afternoon\u2014saw these problems 18 years ago when the party was formed, and they foresaw that without significant structural reform these issues would only get worse. Sadly, the fears that they had 18 years ago have come to pass. The last 18 years have been a tragic loss for New Zealand, with little difference between the solutions offered by both Labour and National. The Prime Minister confirmed this just yesterday, when he confirmed that we are actually poorer today than we were in 2004. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000299\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EThe Budget presented an opportunity to finally show some real leadership and some real vision for New Zealand, but, sadly, both are lacking in this Budget. For months the Minister of Finance has been warning New Zealanders that we cannot go on borrowing in excess of $30 million a week, and that we have to get our house in order and exercise tight restraint so that we can get back into surplus by 2015. What has he delivered? He has delivered little more than a commitment to make a few timid reductions in programmes introduced by the last Labour Government, and even then those reductions do not start until 2012. Over the next financial year the Government proposes to borrow over $13,000 for every family in the country, to add to the thousands of dollars that have been borrowed in the last 3 years. Cutting back spending programmes that recipients have come to enjoy would have required real political courage, which, like the last Labour Government, this Government seems to lack. But someday soon people will realise that the goodies that the Government is handing out are charged back to our children and our grandchildren. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000300\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EThis Budget provided an opportunity to make comprehensive changes to the way that we offer our social programmes, whether it was through providing choice in education, greater private sector involvement in the health services, or the adoption of the recommendations of the recent social welfare task force. Instead, the finance Minister has chosen to fiddle. However, whether or not we liked it, comprehensive change would have meant the need to make sacrifices across the board. ACT strongly believes that we need to protect the most vulnerable 25 percent, but that at a time when the Government is borrowing over $200 a week for every family, and will continue to do so for at least the next 12 months, the rest of us need to be prepared to make sacrifices. We need to make both short-term and long-term changes. In the short term we need to get rid of wasteful and unnecessary spending, and in the long term we need to improve productivity in health, education, and welfare. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000301\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EToday the Minister of Finance announced minor changes in student loans\u2014wow! This is the same man who, when in Opposition, called interest-free student loans an election bribe of unprecedented proportions. There is no such thing as a free lunch, but we now incentivise young 17, 18, and 19-year-old students to go out and borrow as much as they can, while leaving their holiday earnings in their bank accounts to earn interest. They would be crazy not to do that, and in fact they can pay those loans back in terms of devalued dollars\u2014if they pay them back at all. Not only is it unfair for the parents of children in \u014Ctara and Porirua to subsidise the children of the better-off, who are more likely to go on to tertiary education, but we have created a system that incentivises young people to take on debt for courses that they neither need nor use, and who are then saddled with debt for the rest of their lives. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000302\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI ask the parents and grandparents of those students whether they really want to see their children and grandchildren permanently emigrate overseas, and be condemned to talking to them by Skype each night, or whether they would prefer to see their children and grandchildren grow up in a prosperous country whose income levels not only equal but exceed those of Australia and are the envy of the world. It would be a country with low marginal tax rates that incentivised work, savings, and personal responsibility, a country that truly delivered a world-class education system\u2014not just for some New Zealanders but for all New Zealanders\u2014and a country that allowed not just the wealthy but all New Zealanders to have access to a proper health system. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000303\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EIn the same way that the poor have subsidised those with student loans\u2014if not through the income tax they pay, then certainly through GST\u2014the poor have also been net contributors to the very generous KiwiSaver subsidies. Although KiwiSaver has been an undoubted success, and the cost blowout is due to that success, the poor and disadvantaged are the least able to make the minimum 2 percent contribution that triggers the various taxpayer subsidies. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000304\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EThe Budget also has forecast a significant increase in the cost of New Zealand superannuation. We would expect that increase to occur, as a result of rising incomes and the growing number of New Zealanders reaching the age of 65. That number is set to balloon over the next 15 years, to a point where it will no longer be sustainable. Most New Zealanders understand and accept that, and certainly those under the age of 55 do. Already, other countries are signalling an increase in the age of entitlement, as people live longer and the baby-boom bubble works its way through. Australia\u2019s Labor Prime Minister, Julia Gillard, recognises that too, and Australia\u2019s pension age is set to increase at the rate of 6 months every 2 years, beginning in 2017 and reaching 67 years in 2023. ACT agrees with that approach. However, we would not change the age of entitlement for those already 65, or close to being so. We would actually be honest and tell those people who are in their 50s about that now, in order to give them the maximum time in which to prepare for that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000305\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EThis Budget is a missed opportunity. It was an opportunity to radically transform our growth prospects, and to show leadership and courage to the nation. The ACT Party has policies that can transform this nation, address our underlying social problems, and return our nation to the world leadership position that it had over 50 years ago. ACT will be going out there and telling the story, and we will be telling it honestly. We heard less than 15 minutes ago from Russel Norman, who talked about a $2 billion subsidy being paid to polluters. But Russel Norman did not tell New Zealanders that we are all paying more for electricity and for petrol, to subsidise those who planted forests\u2014forests that were actually planted, for the great bulk, before 2008. All New Zealanders have to pay for that. We in the ACT Party look forward to taking our policies to the electorate over the next 6 months. I say to the Prime Minister that rather than encouraging people to vote for National or Labour, we will tell them to vote for ACT. We in the ACT Party will look forward to taking on both Mr Key and Mr Goff at the hustings. We welcome the election\u2014bring it on!\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022 data-id=\u002228039d6aec8e43ab82403d8bd6092326\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000306\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002228039d6aec8e43ab82403d8bd6092326\u0022\u003EHon Dr PITA SHARPLES (Co-Leader\u2014M\u0101ori Party):\u003C/span\u003E T\u0113n\u0101 koe, Mr Speaker. T\u0113n\u0101 t\u0101tou e te Whare nei. The much anticipated \u201Czero Budget\u201D was always going to be difficult for the M\u0101ori Party. Our relationship and confidence and supply agreement with National binds us to support Budget measures that we may or may not like or agree with.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000307\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EThis Government came to power as an economic crisis rocked the world, but over the last 3 months the exceptional circumstances of the Canterbury earthquakes and the Pike River disaster have made the sharp edges even more precarious. An economic recession always has the most direct impact on those who are already worst off, so many families who are on low incomes, in casual or unskilled work, or unemployed, and who have dependants, are hit first and hit hardest. On top of that, any Budget cuts to restore the national economy will have the greatest effect on those who are the most dependent on Government support.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000308\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EMany are M\u0101ori, and our philosophy of whanaungatanga requires us to support and advocate for them. But the M\u0101ori Party stands on our kaupapa M\u0101ori for all New Zealanders. Manaakitanga and kotahitanga demand that we give priority to te pani me te rawa kore\u2014the alienated and the dispossessed. These are values handed down by our ancestors that continue to define us as tangata whenua and as M\u0101ori. We also look to our tikanga tuku iho for solutions to entrenched social and economic problems. The challenge for all of us can be expressed this way: whaia te rangatiratanga\u2014seek control of one\u2019s own destiny. That is what drove the M\u0101ori Party to enter Parliament, and that is what the M\u0101ori Party is looking for in this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000309\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EWe see rangatiratanga in the M\u0101ori education budget. Education for M\u0101ori is the way we maintain our language and cultural heritage, and pass it on to future generations. But education is also the critical pathway out of the poverty trap. It enables individuals and families to seize the chance to learn new skills, gain new experiences, support their families, and make greater contributions to their communities. New Zealand\u2019s education system has a responsibility to deliver education that nurtures the identity, language, and culture of M\u0101ori learners. This Budget delivers $60 million over the next 3 years to build more kura kaupapa M\u0101ori. It provides $3 million of new money over 3 years to support development of a new M\u0101ori curriculum and resources. There is $9 million over 4 years to support iwi to develop school and community-based M\u0101ori language learning, and at long last kura kaupapa M\u0101ori get the same support for school transport as other schools, with the allocation of $8 million in this Budget. Yo! There is also $6.5 million so that all\u2014all\u2014decile 1, decile 2, and decile 3 primary schools can run family-based literacy programmes. We have piloted these programmes in South Auckland and west Auckland. They are successful and involve all the family. There is $17 million over 4 years so that another 20 schools can take up the Kotahitanga teacher-training programme. Kotahitanga helps staff to become more aware of how cultural differences influence their effectiveness as teachers. So even in tough times this Government is maintaining an investment in our future as a Treaty-based nation through this education budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000310\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EIn the M\u0101ori Affairs vote, we have given priority to three areas hei whai i te rangatiratanga: Wh\u0101nau Ora, te reo M\u0101ori, and Te Tiriti o Waitangi in the constitution. The sum of $30 million over 4 years for Wh\u0101nau Ora will maintain the momentum of this radical approach to Government service delivery. This has been pioneered and driven forward by my colleague Tariana Turia. Wh\u0101nau-centred services will be expanded into new areas and are to be served by eight new provider collectives. Wh\u0101nau Ora calls for an integrated approach requiring agencies to coordinate and collaborate, and thus it promises efficiencies in service delivery. But the real promise of Wh\u0101nau Ora is that it empowers wh\u0101nau to take control of their destiny by taking responsibility for their situation. So instead of wh\u0101nau being further disempowered by Government agencies telling them how to live their lives, services are tailored to support the family to deal with the key issues as they see them. With wh\u0101nau themselves getting into the driving seat, support services will be more effective. As wh\u0101nau achieve rangatiratanga, the need for ongoing Government support diminishes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000311\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EAlso in the M\u0101ori Affairs budget we have found $2 million to maintain community language initiatives, while we follow through on Te Reo Mauriora\u2014a report that charted a clear direction for revitalising te reo M\u0101ori. Te Paepae Motuhake, the independent panellists who wrote the report, were quite clear that wh\u0101nau themselves must take the primary responsibility for speaking M\u0101ori at home. The role of the Government is to support. With this Budget we continue to do that while we develop a new M\u0101ori language strategy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000312\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EAnother $2 million has been found to engage the nation in a discussion on New Zealand\u2019s constitution. This is of great importance to M\u0101ori because one of the issues on the table will be the place of Te Tiriti o Waitangi in our constitution.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000313\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EFinally, I must mention the settlement of a longstanding land issue near Taumarunui, with an appropriation of $250,000 to Karanga Te Kere trustees. This compensates them for not having been included in earlier settlements of injustices resulting from perpetual leases imposed on M\u0101ori lands.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000314\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EThere were areas we needed to respond to, which were in urgent need of attention. I am thinking of the $12 million my colleague Tariana Turia has secured for addressing the blight of rheumatic fever, and the reallocation of $11 million in the family violence field to focus on those who most need frontline services for families in crisis. Meanwhile this Government is following through on the work of the M\u0101ori Economic Taskforce by establishing an independent panel to develop a M\u0101ori economic strategy. Iwi and M\u0101ori groups are actively involved in infrastructure development, such as Ng\u0101 P\u016B Waea in the Rural Broadband Initiative, and in environmental protection\u2014for example, freshwater rights and management, and the emissions trading scheme. Treaty settlements continue apace. Iwi are looking for opportunities to invest in public-private partnerships and in exporting new products to new markets. So much has happened over the past 3 years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000315\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EThe M\u0101ori Party has been able to secure many gains and to avoid some losses by sitting at the Government table and engaging with the issue through face to face debates. Kanohi ki te kanohi i te t\u0113pu, we have been able to achieve these gains. There will be measures in this Budget that disappoint us and that our supporters will oppose, but we must not lose sight of the significant gains we see here too. The M\u0101ori Party\u2019s manifesto at the last election called for the Government to borrow prudently to protect vulnerable citizens from the worst impacts of the economic recession, and we believe that the Government has done that. Things could have been a lot worse. Looking at this Budget, we remain convinced that maintaining a working relationship within Government is in the long-term interests of our constituents. The M\u0101ori Party will support this Budget.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022 data-id=\u002255b40f8618414850871dfb6706c45bfc\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000316\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002255b40f8618414850871dfb6706c45bfc\u0022\u003EHon JIM ANDERTON (Leader\u2014Progressive):\u003C/span\u003E This Budget signals that National has decided to preside over a dying economy. Why? Because the most important social and economic investment in the future of any country is its investment in education. We just heard the M\u0101ori Party congratulating itself on that. It should look at the facts. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000317\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EThis Budget says that over the 4 financial years coming up from 2011-12 to 2014-15 Government investment in education will increase by $197 million. That is less than $50 million a year in a Budget of $12,000 million. That is a 0.004 percent increase in education in each of the next 4 years. If that is a triumph for the M\u0101ori Party, I would hate to know what a failure might look like. Provision for welfare benefits\u2014that is, unemployment, sickness, and invalids benefits\u2014in the same period is not a $197 million increase; it is a $3,153 million increase. There is $197 million for education and $3,153 million for unemployment, sickness, and invalids benefits. That is why I say that this Government has decided to preside over a dying economy. Twice as much money is provided for welfare benefits than the total provision for health and education combined. These facts would be simply ludicrous in any Budget that offered itself for the future of the country if they were not so tragic. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000318\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003ELet us look at the economy that this Government inherited. In 2008 unemployment was the lowest in the OECD. It was 3.5 percent of the labour force. Because there were jobs, people moved off benefits in record numbers. In April 2008, just 3 years ago, 17 percent of children in New Zealand lived with someone who was reliant on a benefit. Today, after 2\u00BD years of a National Government, unemployment is back up again to the levels last seen the last time National was in office, in the 1990s. Benefit numbers are up again as well, because the real jobs are not there. More than 32,000 more children are reliant on benefit families today than in April 2008. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000319\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EBecause New Zealanders are not in work and earning money, the books have turned to a sea of red. In 2008 the Government had a fiscal surplus of $2.7 billion. In the fiscal update just before the 2008 election the Government accounts were forecast to remain in surplus for the forecast period. The Crown was contributing to the Superannuation Fund and had no net debt whatever\u2014none. Today the Government announced a fiscal deficit of $17 billion. But look where the deficit has come from. The income tax cuts on 1 October last year cost $17.8 billion over 4 years. The top 10 percent of income earners alone got an income tax cut worth $44 million a week. I wonder how many of them were M\u0101ori. The Government is borrowing $2.5 billion a year for tax cuts for the top 10 percent of income earners alone. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000320\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EThis Government likes to blame the state of its books on the previous Government. I am sick of hearing that because it is simply not true. Its problem is that it cannot take personal responsibility. It has been there for 2\u00BD years. When on earth will Government members start to put their hands up and say it is them, not the other guys before them? They have to find someone to blame because they cannot fix the problems. They blame the global crisis; they blame the earthquakes. Those events made things worse, that is true, but bad management has made the economy worse still. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000321\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EThe National Government was going to catch up with Australia. Bill English and John Key were going to close the wage gap with Australia. Yeah, right! Australia went through the global financial crisis, just as we did. Australia has been hit by devastating national disasters too, like floods and the unprecedented hurricane in Queensland. Here is what the Australian Treasurer had to say about his Budget delivered last week: \u201COur economy has been hit in the short term by the recent natural disasters which have devastated families and communities.\u201D But he went on: \u201CGrowth is strengthening \u2026 Unemployment is low and is set to fall even further. We\u2019ve seen over 700,000 jobs created since we came to Government\u201D\u2014National cannot say that; it has lost jobs\u2014\u201Cand we expect to see a further half a million jobs added by mid 2013.\u201D Not all of those jobs will be in the mining industry, I can tell members. He further stated: \u201COur public finances are in relatively good nick. We\u2019ll be back in the black in 2012-13\u201D. So much for New Zealand catching Australia. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000322\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EAll that this Government has to say about why Australia has weathered the storm is that Australia has mining, and that is all there is to it. That claim ignores the fact that we have been enjoying the best commodity prices in our history. We have had the most favourable terms of trade in our history. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000323\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EThe problem is that National has no idea how to fix the economy, and it still has not. It announced that to us in bold terms today. John Key came into office promising tax cuts that everyone would share in, and promising that those tax cuts would help us catch Australia. Yeah, right! His Government has failed on every one of its own targets. Most New Zealanders did not get a net tax cut; they got a small cut that was cancelled out immediately by the rise in GST and the subsequent price rises that soared ahead of their incomes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000324\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EImagine if the National Party had produced an election manifesto in 2008 that said: \u201CIf you vote for us, we will increase GST to 15 percent, cut Working for Families, cut student loans, and give tax cuts costing $44 million to the top 10 percent of income earners.\u201D National would not have dared to set out that plan before the working people of New Zealand, but that is how it has governed. It was elected on promises that it could not keep. Governments in the 1980s and 1990s did exactly that, and they were thrown out. It is interesting that John Key was not here then. He was dealing in the money markets around the world, many of them speculating against the New Zealand dollar, as a matter of fact. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000325\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003ENational did not trust New Zealanders enough before the election to tell them the truth: that tax cuts meant spending cuts and deficits. That is what they mean. Today the Government does not trust New Zealanders enough to tell them the truth about the cause of the deficits now. The sort of Government that is too weak to front up to the truth is a Government that is too weak to make the changes New Zealand needs. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000326\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EThere is a predictable outcome to this failure: people suffer. The more vulnerable they are, the less resilient they are and the more they suffer. A health report on young children in New Zealand was presented recently, and some parliamentarians went to hear it at a morning breakfast. We found that children are being admitted to hospital for diseases that are clearly linked to poverty in greater and greater numbers. There were an extra six hospital admissions for infectious diseases and respiratory diseases every single day in 2009, compared with 2 years before, and the figures are now worse. When families do not have adequate incomes and jobs, their children live in poor housing conditions, they lack nourishment, and they are not warm enough. Their health suffers, and their opportunities suffer even more. How much harder is it for children in the increasing thousands of poor homes this Government has created than for a child in one of the affluent and privileged homes that are already heavily favoured? This Government should be ashamed of itself in that regard. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000327\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EIn 2008 the main breadwinner was unemployed in about 7 percent of M\u0101ori and Pacific families. Today that figure has doubled: 14 percent of M\u0101ori and Pacific families do not have someone to work and bring home a wage or a salary. I heard the Green Party applauding the M\u0101ori Party when it was saying how great it had done. It has not done great at all; it has done appallingly badly. That is the M\u0101ori Party\u2019s legacy for supporting National. Its members are deluding themselves if they think otherwise. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000328\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EWhat does it mean in practice? Half of the kids whose families are living in severe hardship do not have suitable wet-weather gear, because of the cost; one-third do not have a pair of shoes in good condition; they miss out on the experiences of growing up, such as owning a bike or a personal computer; two-thirds miss out on school outings or involvement in sports; and half miss out on school books or a visit to the doctor because of the cost. None of those things are provided for in this Budget. In fact, the health budget is an appalling document, which shows that the health of New Zealanders\u2014in terms of primary health care, in particular\u2014will go to hell in a handcart. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000329\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EThis Budget is a return to the failed policies of the 1990s. Those policies failed people then, and they will fail them again. They will fail to create jobs, to lift incomes, and to create a stronger future for New Zealand. This is a miserable excuse for a Budget, and one of the worst I have ever seen in my experience of politics. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u0022d564ca3f490e4eb5ba62fc2b85d33a4e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000330\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d564ca3f490e4eb5ba62fc2b85d33a4e\u0022\u003EHon PETER DUNNE (Leader\u2014United Future):\u003C/span\u003E In this morning\u2019s newspaper there was an announcement that New Zealand scientists had discovered a series of planets that floated independently through the solar system. I think, in listening to the responses from parties opposite this afternoon, that we have discovered some of those planets. The arguments that members opposite have advanced really bear no relationship at all to contemporary reality. Let us just take a few moments to reflect upon that reality. The first thing is that since 2007 the world has been going through the greatest economic crisis since the Great Depression. It is no coincidence that northern hemisphere economies are deeply in debt, that the American economy is on its knees, and that New Zealand has had its share of shocks. To try to suggest, as members opposite do, that somehow those events have no impact on New Zealand\u2019s situation today is utterly fanciful. Then we add in two major earthquakes in Canterbury in the last few months, both of which, by international standards, have been highly significant in terms of the costs they have imposed physically, emotionally, socially, and financially on the people of Canterbury and the country as a whole, and we also add in the Government\u2019s responsibility to make good that physical damage as best it can. The Government has to pay for those measures, and it does so in this Budget. It is sheer folly, ignorance, and stupidity to say that somehow those figures have no impact on the state of our Budget and our books today. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000331\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI think that what most people looking at this Budget will conclude is simply that most New Zealand households know that when times are tough we make adjustments to our budgets to reflect our circumstances. We do not go looking for the Labour money-tree at the back of the garden, because it is not there; nor do we go and burn everything down in the hope that by destroying the village, in the way Dr Brash would, we can rebuild it. We make prudent, wise adjustments, with a little bit of adjustment here and a little bit of adjustment there, but fundamentally we enable ourselves and our families to get through the difficult circumstances, and to look forward to a positive future. That is exactly what this Budget has done. Before the Budget, there was a huge amount of hue and cry about changes to KiwiSaver and about a return to the days of uncertainty in terms of retirement savings provision. In fact, the changes announced today are minimal. They have a big fiscal impact, but in terms of individual savers and the certainty surrounding the scheme they are minimal. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000332\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EIt is worth reflecting on why the changes have arisen. To put it very simply, KiwiSaver has exceeded everyone\u2019s expectations in terms of its success. It was originally projected to have 700,000 members by 2015; in 2011 it has more than double that number at 1.7 million members. We cannot therefore acknowledge that somehow there is no additional fiscal cost to the Government because of the member tax credit, the kick-start, and the other provisions that the Government provides as part of the scheme. So the Government has had to, quite prudently, say that to secure the sustainability of KiwiSaver for the future, we need to make some adjustments that will have a significant fiscal impact, but will not deter significantly the level of saving that is going on. That is precisely what has happened. To come back to my household analogy, it is exactly what a household would do in similar situations. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000333\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI happen to believe that the Government could go further. I strongly favour KiwiSaver being made a compulsory national savings scheme, and I believe that will happen eventually, because that will lock in absolutely the security and future of the scheme, and it is really what most New Zealanders are looking for. It would then enable us to have a much more balanced approach to the whole question of retirement savings and long-term provision in the future. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000334\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EMuch was made of the projected changes to the Working for Families regime. Again, that was a scheme that far exceeded expectations from the time of its introduction in 2004. It has been successful; it has delivered uplift to a number of families, and that is good. But the reality is that it has also come at a cost. I do not think any of the original authors of that scheme would have acknowledged then that the flavour of the scheme would be as it is today. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000335\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ESo there are issues that need to be addressed. We started in the Budget last year by addressing some of those issues in relation to definitions of income for eligibility for Working for Families tax credits. In this Budget the Minister quite prudently makes some adjustments to the abatement rate and to the question of those people who have children over the age of 16. The time frame for their implementation\u2014over the next 8 years\u2014suggests a very modest impact for most people, but, again, a significant fiscal positive for the Crown. I think when one looks at the overall context in which the Budget is performed, one would have to conclude that this is very much a Budget for the times. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000336\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThat is not to say there were not things that could have been included in the Budget. I welcome the additional spending going into the health sector. I particularly welcome $80 million more going into the provision of medicines. That will see another 32,000 people get access to the medicines they need. On top of the funding advanced in the previous two Budgets, that means that somewhere in the order of 270,000 New Zealanders now will get more access to medicines than they would have at the time this Government came into office. That is a tremendous achievement, and will be beneficial for a significant number of people who rely on medicines to maintain a good quality of life. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000337\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EIn terms of health, though, I think the next big change we need to start to address is in the area of prevention. I believe very strongly that when we are spending about $800 to $900 a day keeping a person in a public hospital, we ought to be moving, over time, to a free annual warrant of fitness health check, initially for over 65s but ultimately for everyone in the population. Prevention, and the level of expenditure up front to achieve that, is far better and far more cost-effective than the cure further down the track. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000338\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EA lot was said in and around the Budget, and in the speeches today, about cracking down on those who do not pay their fair share. I reject the arguments raised implicitly\u2014because he did not say it explicitly\u2014by the Leader of the Opposition about tax increases. I tell the House what the outcome was of the additional funding advanced to the Inland Revenue Department last year to crack down on tax avoidance, tax evasion, and people who were simply failing to pay their tax on time. Last year\u2019s Budget put in place approximately $120 million over a 4-year period to put more effort into that particular area of activity. It has already returned $115 million in additional revenue in just 9 months. We are getting about 13 percent more than we expected; we have somewhere between five and eight times the amount invested being returned in the amount collected. That is sending some very clear signals about tax avoidance and tax evasion in New Zealand, and the Government\u2019s intolerance\u2014and proper intolerance\u2014to that practice continuing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000339\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EFinally, before I finish I acknowledge the additional funding included in this year\u2019s Budget for Wellington urban rail services. By my quick calculation, that brings us up to about $300 million over the last few years. It is great to see the new trains running, but I say to Tranz Rail that the new trains and the new equipment have to be matched by a new attitude in terms of the delivery of service. Tranz Rail\u2019s passengers will increase, but they will leave very quickly if they find surly, sloppy service not matching the quality of the infrastructure now being provided. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000340\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EOverall, I think New Zealanders can feel confident that this Budget is a prudent step towards managing our country\u2019s finances in a very difficult and stressful time. It sets a course for the future. It gives heart and confidence to the people of Canterbury in their hour of need but also gives assurance to New Zealanders of every generation that their circumstances have been protected, and that their circumstances are very much at the forefront of the Government\u2019s attention. Frankly, the lack of alternatives put forward this afternoon by Opposition parties leaves New Zealanders with a very clear sense of the options they face come 26 November, later this year.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022 data-id=\u002252253c7c623b48339485b44f36b0f818\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000341\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002252253c7c623b48339485b44f36b0f818\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=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000342\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=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000343\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u00222fbcf8ed69dd4ada8052901dc790412c\u0022\u003EUrgency\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000345\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00224c9fba0e75f9405a9f5633b0e4b65718\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=\u00222570990ba8f34d5186569eb5a7144958\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000344\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222570990ba8f34d5186569eb5a7144958\u0022\u003EHon GERRY BROWNLEE (Leader of the House):\u003C/span\u003E I move, That urgency be accorded the introduction and passing of the Taxation (Annual Rates and Budget Measures) Bill and the passing through all its stages of the Taxation (Canterbury Earthquake Measures) Bill. The Government has read the Budget today\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000346\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002253fd3312685c490c8ef49f3c34523746\u0022\u003EHon David Cunliffe\u003C/span\u003E: I raise a point of order, Mr Speaker. I cannot yet see the taxation bill on the Table in front of me. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000347\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bbbfdbf94a5d449298ed938d963cfafe\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: I have been advised that it has not yet been introduced.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000348\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002230a75fc75e104caa93d140f5ed6eacea\u0022\u003EHon David Cunliffe\u003C/span\u003E: Can we have notice from the Minister as to how far away that will be?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000349\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d8081a6b38be454da579ffb0dee40182\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: The Minister has to give reasons now for putting the House into urgency. I expect him to do that during his motion, but this is not a debate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000350\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b9c10376c719426897763df8486ff63d\u0022\u003EHon GERRY BROWNLEE\u003C/span\u003E: It is not a debate, but when urgency is taken and the Government is introducing bills, once urgency is agreed to by the House, the bills are introduced and, therefore, are made available. That has been the case for some decades and I would have thought members who had been here for a while would know that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000351\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003EIn introducing the Budget this afternoon, some measures were outlined in it relating to changes to Working for Families and the KiwiSaver scheme. It is important that New Zealanders know exactly what the intentions are of this Government, so that they have an opportunity to make choices. Further, when it comes to the disaster in Canterbury, an extraordinary amount of generosity was extended by a number of firms throughout New Zealand, as well as, of course, many people who live in Canterbury, that could, in fact, put them in an uncertain tax position. The second bill is designed to ensure that that tax status is made very, very clear.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u0022017c530f2467405aafaf5f2e5c07fb14\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 68\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 4; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 54\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 42; Green Party 9; Progressive 1; Independents: Carter C, Harawira.\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=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000352\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u002223146e7db6db435393fda8763109ef3c\u0022\u003ETaxation (Annual Rates and Budget Measures) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000353\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022865102d234344b7f899f392e8d00031b\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=\u0022f895c12c1f2a445bb95ba6882118a47f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000354\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f895c12c1f2a445bb95ba6882118a47f\u0022\u003EHon PETER DUNNE (Minister of Revenue) \u003C/span\u003Eon behalf of the Minister of Finance: I move, That the Taxation (Annual Rates and Budget Measures) Bill be now read a first time. This bill focuses on two main important areas for New Zealand at the present time: building faster economic growth around higher national savings, and setting New Zealand back on the road to surplus in the repayment of debt. As the Budget outlined, the Government will continue to protect the most vulnerable New Zealanders by increasing funding for health and education and maintaining income support programmes. But to achieve those objectives, the Government needs to reduce its spending and its level of debt. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000355\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThis bill addresses two large programmes administered through the tax system, Working for Families and KiwiSaver, to maintain targeted support while eliminating unsustainable spending. The Government recognises that some New Zealand families need assistance. This bill aims to provide those people, on a continuing basis, with the support they really need, while remaining fiscally prudent. The bill achieves that by increasing the abatement rate by 1.25c at every inflation adjustment from 1 April 2012 until it reaches 25c in the dollar, by lowering the current abatement threshold of $36,827 to $36,350 on 1 April 2012 and then by reducing it by $450 at every subsequent inflation adjustment round until it reaches $35,000, and by removing the inflation adjustment for the family tax credit amounts for children aged 16 and over from 1 April 2012 until the amounts for younger children catch up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000356\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ECollectively, these changes will help to ensure that limited resources are directed to where they are most needed. The tax credits will begin reducing earlier on the income scale and they will reduce faster. That will mean that a number of families who are higher up the Working for Families income scale will no longer qualify or will receive lower amounts. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000357\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThere has been much public discussion about possible changes to KiwiSaver. I assure the House that the Government is committed to improving national savings. KiwiSaver has been extremely good at encouraging saving habits amongst New Zealanders, but like any taxpayer-funded programme, the spending associated with it needs to be prudent. Currently, over $1 billion a year of what goes into people\u2019s KiwiSaver accounts comes from the Government through subsidies and tax breaks. Over time the Government has put in nearly half the money that has built up in KiwiSaver accounts. But to continue to be an efficient part of the savings landscape, KiwiSaver needs to be affordable as a retirement savings scheme for its members, for employers, and for taxpayers. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000358\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ETo that end the Government is proposing changes that will ensure that the desired outcome is still achieved and that will ensure the future of KiwiSaver by making the scheme more affordable while continuing to encourage savings. The main changes to KiwiSaver are therefore that all employer contributions to employees\u2019 KiwiSaver accounts will be subject to employer superannuation contribution tax\u2014ESCT\u2014from 1 April 2012. Employer superannuation contribution tax will be applied at a rate equivalent to an employee\u2019s marginal tax rate, meaning that it will have a greater impact on higher-income earners. The member tax credit is to be halved for the next MTC year\u2014that is, the member tax credit year that ends on 30 June 2012. The Government will now contribute 50c for each dollar contributed by the individual KiwiSaver member, up to a maximum of $521.43 per year, which is equivalent to $10 per week. The minimum employee contribution will rise from 2 to 3 percent for all members\u2014new and existing\u2014from 1 April 2013. The default contribution rate for new employees who do not select a rate will also be 3 percent from that date. Compulsory employer contributions will rise from 2 percent to 3 percent from 1 April 2013. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000359\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EOf all these changes, this bill contains the member tax credit and the employer superannuation contribution tax changes. The changes to employee and employer contribution rates will be included in a bill to be introduced later this year. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000360\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThis bill also sets the annual rates of income tax for the 2011 tax year. These are the main features of this bill. When taken together they help ensure that Government spending is both prudent and focused on areas of real need. This bill continues the focus on providing for a fair and equitable tax system for all, supports national savings, and encourages economic growth. It is therefore with great pleasure that I commend this 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=\u00221a9e701bf83446e3a4451d4a52781ba4\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000361\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00221a9e701bf83446e3a4451d4a52781ba4\u0022\u003EHon DAVID CUNLIFFE (Labour\u2014New Lynn):\u003C/span\u003E The Government touted this Budget as the \u201CZero Budget\u201D. The Government was right. It is a \u201CZero Budget\u201D because it is a zero out of 10. It has zero ideas, zero leadership, and a zero chance of making New Zealanders better off, either in the short term or in the longer term. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000362\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThe Taxation (Annual Rates and Budget Measures) Bill contains some of the worst parts of this Budget. It is a great pleasure that we will be addressing it right up front in the House in urgency. I thank the Government for the opportunity to do so. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000363\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThere is absolutely no doubt that the foundation upon which this bill rests is precarious. It is precarious because this Budget is a bridge to nowhere, and the road is paved with fudges and double-talk. It is paved with, for example, a broken promise not to sell State-owned enterprises and other assets, which provide $7 billion of the baseline in this Budget. It is paved with a $1 billion unprecedented fudge that Roger Douglas would never have signed off as Minister of Finance. The unspecified cuts are not even allocated to an individual department. It is a $330 million a year whim, out there somewhere in the cloud, because the Government does not want people to know before the election where the cuts will come from. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000364\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThe road is paved with a $4 billion difference between the revenue estimates from the Inland Revenue Department and those from Treasury. Guess whose numbers were higher! Treasury\u2019s. Guess which numbers the Government is working off! The higher ones. The Inland Revenue Department does not believe the growth numbers in this Budget. It does not believe them. There is no reason why it should. These are rosy glow growth numbers. When one strips away the Christchurch earthquake and the Rugby World Cup sugar rush, the sad truth is that at the end of the 4-year period we are still left with growth of only 2.2 percent. That is below the previous long-term average of 2.5 percent. Even then, the Inland Revenue Department does not believe that the money will actually come in. That is why its numbers are $4 billion below those of the Crown. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000365\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThe road is also paved with a $650 million a year theft from the personal pockets of public servants, partly because their departments have been forced to pay their KiwiSaver contributions out of baselines. But it does not stop there. This Budget raids the superannuation scheme for public servants, as well. It is iniquitous. It is $650 million a year, and that is not even the fine print. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000366\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThe road is also paved with the fudge that the $5 billion Canterbury Earthquake Recovery Fund will not be paid for by the Crown; it will be sucked from the public through these new Canterbury reconstruction bonds. They are much less secure than if the Crown was putting its balance sheet fully behind Canterbury\u2019s recovery. The rhetoric is not matched by the reality. It is yet another fudge and yet another zero out of 10 for this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000367\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EMost of all, sadly, this Budget is paved with the sacrifices of middle New Zealand families and working Kiwis, who will have their KiwiSaver slashed and their Working for Families abated more rapidly. What does that mean in real people\u2019s language? It means 20 bucks a week less for a family with two KiwiSavers\u2014$10 a week less each\u2014because the member tax credit is cut in half. That is if they are contributing 2 percent. The bill changes the default up to 3 percent. Well, is that not heroic of this Government? It has not even reversed its reversal; it has half reversed its reversal. The Government has half reversed the reversal it made last year when it took the contribution from 4 percent to 2 percent. This year it has gone back up from 2 percent to 3 percent. Wow! That is leadership! \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000368\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221fb8d8db-3e96-49c7-ab1c-b7916a50e30e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220563ea790318496584e0596d3fd71d89\u0022\u003EHon Steve Chadwick\u003C/span\u003E: Who pays?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000369\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c122bb479bf14ee8a5a1790081997b89\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: The punter pays. The family pays. The employer tax credit has also gone and employers have to match the 3 percent contribution if that is required. There is a problem with that because it creates an incentive for them to hire people who are not on the higher threshold. It therefore opens up the potential for discrimination between employees. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000370\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EOn Working for Families the numbers are even worse. The abatement threshold and abatement rate have both been changed, and the amount clawed back for a family of four on $80,000 by April 2012 is $12.33, rising to $24.77 in 2014, $37.42 in April 2016, and then $50.30 a week. This is for a family of four on $80,000\u2014that is, two $40,000 incomes\u2014who are struggling to pay the bills, feed the kids, put school uniforms on them, and take them to soccer or rugby. Those families are being penalised up to $50 a week by this Budget from Working for Families alone, let alone the $20 a week they lose in KiwiSaver, which equals $70 a week. Let us not forget that last year they got hit with $30 a week cut per child in early childhood education. It is iniquitous. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000371\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EWhen will these cuts stop? When will middle New Zealand stop having to pay for the tax cuts the Tories gave their rich mates? They have made choices. This is not about the earthquake and this is not about the New York stock market; this is about the choices this Government has made in this House about who gets what and who gets shafted. We know who has been shafted again today: middle New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000372\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThe M\u0101ori Party looks on. Well, this is what the M\u0101ori Party paid for. I wonder whether that party\u2019s people are happy, because most of them get Working for Families. They get Working for Families and they are, I hope, in KiwiSaver\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000373\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220d0ef21de78c435bb0e2d0b55c490367\u0022\u003EHon Tariana Turia\u003C/span\u003E: They don\u2019t earn $80,000.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000374\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228a0ab8fb1bb64e8caf3444db1ae7c54f\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: I tell Tariana Turia that those families are $70 a week worse off. That member has brought a $70-a-week penalty to a M\u0101ori family of four living in Ng\u0101ruaw\u0101hia, New Plymouth, or Te Tai Tonga. That member\u2019s party has penalised those families by $70 a week. Any family with two adults and two children on $80,000 a year loses $50 a week from Working for Families and $20 a week from KiwiSaver. When will it stop? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000375\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EWhat would a good Budget look like? What would this bill look like if it were a good bill? It would contain changes that allowed us to earn more, work more, create more, and export more, but it does not. There are zero new ideas to help New Zealand export, zero new ideas to grow productivity, and zero new ideas to create jobs. There is not a shred of an economic development strategy and not a shred of a real savings plan. KiwiSaver has shrunk, not grown. National said the savings gap was crucial and that it would lead on savings policy. National said that savings would be the centrepiece of the Budget, but what is it? A $20-a-week kick in the guts for a family with two KiwiSavers. That is the centrepiece of National\u2019s Budget. Working for Families is worse. It is all for nothing because it rests on a foundation that Treasury knows in its heart of hearts is as flimsy as a house of cards. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000376\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EIt is paved with broken promises, such as the promise not to sell State assets and to get a mandate to do so. But National has booked the money now, before the election. National promised not to cut KiwiSaver, but it has booked the money now and we are passing this bill under urgency, even though it supposedly does not hit town until April next year. What kind of a mandate is it when we are passing this bill under urgency, 6 months before the election? That is absolute rubbish. That makes a mockery of democracy. Members opposite cannot keep a straight face, because they know it is flimflam. They are clowns and they do not deserve to be taken seriously by the New Zealand public. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000377\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EHere comes the member Hekia Parata, who is smiling like a Cheshire cat. She knows she has taken $20 a week out of KiwiSavers up in the East Cape and she has taken $50 a week from people getting Working for Families who are struggling to make ends meet up in Ruat\u014Dria. Ruat\u014Dria will be \u201CRua-poor-ia\u201D after this bill goes through, because every person on Working for Families will be poorer as a result of this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000378\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThis is a zero Budget with zero ideas, zero leadership, zero compassion, and a zero chance of re-election.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022 data-id=\u00222a744faf592b409cba7cc6b3af882300\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000379\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222a744faf592b409cba7cc6b3af882300\u0022\u003ECRAIG FOSS (National\u2014Tukituki):\u003C/span\u003E I thank the previous speaker, David Cunliffe, for thanking the Government for going into urgency on these bills. His other colleagues may want to note that as they go through the next few hours on this Taxation (Annual Rates and Budget Measures) Bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000380\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EBefore I get into it, I must congratulate our Minister of Finance, Mr Bill English, on his third Budget under this Government, and what a Budget for our time. What a prudent, courageous, and brave Budget for our time. Tempting as it might be in an election year, and as the other party is wont to do, to borrow to spend up, the courage, the fortitude, and the prudence shown by Mr English in this, his third Budget, which builds on the previous two, are truly to be admired.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000381\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI must also note the speech of our Prime Minister, our leader, John Key. What a legendary speech, and what legendary delivery compared with that of the Leader of the Opposition, Mr Phil Goff. I thought Mr Phil Goff was doing some planking or something in the middle of Parliament. He was flat. He did not seem to be doing anything. He was looking around. I do not know what was going on. When we compare him with the honourable Prime Minister, we see it was like watching Richie McCaw play the Golden Oldies team, or something like that. The floor was absolutely wiped with Mr Goff. He resorted to, I think, his 2007-08 speeches. He lost his way very, very early on, and that was obvious from looking at his comrades around the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000382\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003ERegarding the Taxation (Annual Rates and Budget Measures) Bill, I acknowledge the Hon Peter Dunne for what he has pulled together here in bringing this bill to the House. I also acknowledge the key points he noted, particularly that this bill codifies and reconfirms the current tax rates, PAYE rates, etc. Yes, it makes changes to KiwiSaver and, yes, it makes some changes to Working for Families, but the core Budget is a prudent Budget for our time and these are prudent measures for our time. If we go beyond the 40-something members on the other side, if we go out of this Chamber and ask members of the public whether we should borrow money from overseas to put into KiwiSaver accounts\u2014whether that is a good idea\u2014I think all of them would say absolutely not. That is what the other side is promoting.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000383\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EIf that were to continue, KiwiSaver itself would be in danger. Members on the other side constantly go on about one side of the balance sheet. The bit those members often forget is that their Government relied on short-term, ongoing, constant growth in revenue, which was related to the state of the economy\u2014PAYE and GST\u2014but they put in place long-term, committed index spending, such as interest-free student loans, Working for Families, and things in and around KiwiSaver. Essentially, in a financial sense, they borrowed short and lent long, and this Government had to come in and tidy that up, because those members got themselves and this country into huge, huge trouble.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000384\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThis Budget and this bill before us pass four tests. This Budget builds an export economy. It builds the platform for an export economy. I recall that the previous Government\u2019s version of that was to have something called Export Year in 2008, and New Zealand promptly went into recession one year before the rest of the world. This Budget and, of course, this bill help grow savings and bring in capital efficiency. Those members seem to have missed the new investment statement that is before them to help Governments\u2014not only this one but also future Governments\u2014make efficient, fair allocations of scarce capital decisions for New Zealand as we decide what to build, be it infrastructure, tax, or whatever. This Budget and this bill assure and bring in deficit reduction. This Budget passes the third test that someone put up for Budgets. It does, because right there we are bringing down the deficit and we are coming back into surplus one whole year early. Members might recall that when this Government came in, the update to the incoming Government said that this country was heading to debt being about 60 percent of GDP. Right now we are at 28.9 percent. That is not too bad, so I think this Budget passes that test as well. Does it pass the test of helping families deal with living costs? Of course it does. As I said earlier, it confirms existing tax rates. New Zealanders\u2019 after-tax incomes, after only 3 years of this Government, have gone up 6 percent\u2014after-tax incomes\u2014enhancing their affordability to live and to purchase a house, versus, in the 9 years of the previous Government, after-tax real incomes going up only 3 percent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000385\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003ETherefore, this Budget does pass all four of the tests that someone put up as to whether a Budget is successful. This bill confirms part of that Budget, and I look forward to its further stages.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022 data-id=\u0022315135a7ca5b4554b85840b776db2b36\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000386\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022315135a7ca5b4554b85840b776db2b36\u0022\u003EHon DAVID PARKER (Labour):\u003C/span\u003E This Budget was written against the context of the Prime Minister and the Minister of Finance having repeatedly said that New Zealand has a problem with total New Zealand indebtedness, rather then Government indebtedness, and against the background of them having said that we needed to restructure the economy in order to have a fundamental shift in the economy. It fails. The Budget document, on page 70, describes the net international investment position\u2014that is, New Zealand\u2019s net debt as a percentage of GDP. The forecast for the year ended 2011 is 78.6 percent of GDP, having gone down a little over the last year, and for every year hereafter in the projections New Zealand\u2019s net international position gets worse\u2014that is, New Zealand becomes more indebted as a nation, year after year after year, not just in nominal terms but also as a percentage of GDP. It goes up from 78.6 percent forecast for the 2011 year to 85.3 percent forecast in the year ended 2015. That is an indictment on the Government\u2019s policies. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000387\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EThe other really bad figure in this is the current account deficit. The current deficit pops into surplus of 0.5 percent this year, in part because of the moneys coming to New Zealand from reinsurance overseas. Every year after this we have a growing current account deficit as New Zealand gets poorer year by year, which is reflected in that debt position I just referred to. The current account deficit forecast for 2012 is 4.1 percent, rising every year to 6.9 percent in the year 2015. The Government can only pretend it has maintained any one of its pre-election promises. Remember it was going to close the wage gap with Australia\u2014fail. It was going to lead us to a brighter future\u2014fail. It was going to cause a step change in the economy\u2014fail. This Budget lays bare the failure of the Government\u2019s economic policy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000388\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EWe have heard from other contributions that National will go to the electorate for a mandate for its changes, including the sale of State-owned enterprises and cuts to the likes of KiwiSaver tax credits, yet it counts every one of them in the Budget. Every one of those measures is counted in the Budget, yet this year we have a $16.7 billion cash deficit and we have deficits going into the future. Indeed, those debt figures I quoted for the country are after the sale of the energy State-owned enterprise interests and Air New Zealand interests, so those figures I have as to total net debt are after the family silver has been sold. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000389\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EDavid Cunliffe covered some of the effective tax increases that are in this Budget for middle-income New Zealanders as a consequence of changes to KiwiSaver. It is worth noting that the effect of this Budget, and of the Taxation (Annual Rates and Budget Measures) Bill that we are now debating, is to increase the tax burden of middle-income New Zealanders as a consequence of those changes. This same bill reinforces the cuts that were made to income tax rates by stating them again for the forthcoming year, for the highest income groups. So the 10 percent of the population that got 42 percent of the income tax cuts in last year\u2019s Budget keeps them. Middle-income people, who are on lower incomes than them, get their KiwiSaver tax credits cut. Is that fair? No. Does it cause the economy to grow? No. We have had a much-vaunted figure of 4-point-something percent as being the growth outlook for the first year in the Government\u2019s forecast. That includes approximately 1.5 percent of money coming into the economy, mainly from overseas, as a consequence of the Christchurch earthquake, and the insurance money being paid out of New Zealand coffers that is being spent in Christchurch after the earthquake. If that is cut out, the underlying growth rate for New Zealand is a little over 2 percent. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000390\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EWhat New Zealand needs now is a credible plan to grow the economy. The Government has had 3 years to do it. Its outlook is very poor, as shown by the fact that New Zealand\u2019s net debt position in the world gets worse. Even to get to that position, the Government has included asset sales. National sold the family silver once; it cannot sell it again. It has broken its promises to New Zealand in many different ways. The figures I would have reinforced to listeners are not those debt figures that the Minister of Finance has been repeatedly emphasising as being important. The net international debt position of New Zealand as a percentage of GDP is a proxy for whether we are getting richer or poorer as a country, and that number gets worse. Every year from here on in we go backwards. We heard the Prime Minister say in his speech that interest rates are going to be better than they would otherwise be. His own Budget, on page 70, shows the 90-day bill rate going up from 3 percent to 5 percent over the forecast period\u2014a 3 percent to 5 percent increase in interest rates over the forecast period. So that is not quite what the Prime Minister would have people believe, either. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000391\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EThe other point that I find worrisome in this Budget relates to the predictions as to tax revenue. The Inland Revenue Department and Treasury cannot agree as to how much tax revenue will be collected. I will read out what it states: \u201CBoth sets of tax forecasts were based on the Treasury\u2019s economic forecasts.\u201D So it is not related to economic forecasts, but it states: \u201CUsing slightly different assumptions and forecasting models, Inland Revenue has produced a set of tax forecasts that are much lower than the Treasury\u2019s.\u201D\u2014not just lower, but much lower than Treasury\u2019s\u2014\u201CIn this Update, the total difference between the tax forecasts across the five \u2026 years \u2026 is nearly $4 billion, a larger difference than is usually the case \u2026 The bulk [of this is in] corporate tax.\u201D That is what it states. What does the Government do? Does it take the prudent course and use the lower of those figures, because it has got it on the wrong side in every one of its Budgets so far? No. Does it average the two, and take a mid-range figure? No. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000392\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EThe Government is taking the irresponsible course in the face of what is already a $16.7 billion deficit in order to protect those income tax cuts of last year, 42 percent of which went to the top 10 percent. It takes the irresponsible course of taking the highest figure, because that suits its cause. It has taken the Treasury forecast, it has ignored the Inland Revenue Department\u2019s forecast, and it has not even taken the mid-point. As a consequence, even by this Budget document, it is possible that these numbers over that 5-year period are $4 billion out. It is not a trifling amount of money. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000393\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EI will say something about what is heading towards the education sector as a consequence of a change in this Budget. At the moment for teachers in KiwiSaver, the employer contribution matches the teacher contribution and it is paid out of Government revenue. It comes out of Government revenue via the Vote State Services. This Budget changes that and states, effectively, that schools have to pay for that themselves. Effectively, there is a hole in the budget of every school, because they have teachers who are entitled to be in KiwiSaver whose matching contribution from their employers will go up from 2 percent to 3 percent next year\u2014with the Government having reversed the change in employer contribution from 4 percent to 2 percent last year\u2014but the school now has to pay that 3 percent contribution to the teachers\u2019 superannuation. Where is that coming from? How does the magic work in the schools\u2019 budget? I cannot work that one out, and I do not think that schools will be able to, either. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000394\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EI also ask, with regard to this pretence that KiwiSaver contributions are getting better by going from 2 percent to 3 percent, whether people realise that the 3 percent that is coming from employers will have tax deducted from it before it hits their accounts. Tax is deducted at the employee\u2019s tax rate before it hits their KiwiSaver account, presumably at the cost of a future wage increase for the employee\u2014and I am not necessarily criticising all of that, as some of it is unavoidable; I am not saying that the employer can magic it\u2014so the tax payment that will now be deducted from that 3 percent employer contribution effectively comes out of the employee\u2019s superannuation account. Not only are teachers being asked to sacrifice some of their wages, but also they are paying the tax on that 3 percent contribution. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000395\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EThis Budget fails against the test that the Government set for itself of leaving the economy substantially changed. That was its promise, yet we see that the growth forecast is unchanged. New Zealand still wanders along at a pretty modest rate and New Zealanders still have to wait yet again for the promised golden day just round the corner that never seems to arrive under this Government.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022 data-id=\u0022cdb8f06b0e7b4b5eae74205acd38a9df\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000396\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022cdb8f06b0e7b4b5eae74205acd38a9df\u0022\u003EDr RUSSEL NORMAN (Co-Leader\u2014Green):\u003C/span\u003E I rise to speak to the Taxation (Annual Rates and Budget Measures) Bill, which is part of the Government\u2019s Budget that was introduced this afternoon. The framework for the Government\u2019s Budget was what I have called \u201Cborrow, cut, and sell\u201D. The Government has increased borrowings very significantly; it has cut spending on programmes that ordinary New Zealanders like and benefit from, like Working for Families and KiwiSaver; and it is proposing to privatise Government assets in order to get some money from that privatisation to pay for future capital expenditure. It is a \u201Cborrow, cut, and sell\u201D Budget. A \u201Cborrow, cut, and sell\u201D Budget is not exactly an inspirational Budget, and when we look at the numbers in the economic forecast, we see that it shows how much of a failure this Budget will be. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000397\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe previous speaker, Mr Parker, referred to table 1.2 in the Economic and Fiscal Update forecasts, which has the long-term implications of this Budget and, no doubt, others. For those of us who are concerned about the imbalances in the New Zealand economy\u2014clearly the Government is not\u2014it is notable that the 2015 forecast has a current account balance of minus 6.9 percent of GDP. Minus $16.8 billion is the current account deficit forecast for 2015. If the Government has criticised the performance of the economy under previous Governments by saying that it was a borrowing-fuelled consumption boom, which was the critique the Government has made, then it is not changing that. If that is the Government\u2019s critique of the position on how the economy was previously managed, then further down the track our net international investment position\u2014and that is the difference between what we owe the world and what the world owes us\u2014is still minus 85 percent of GDP in 2015, under the magical, transformational Budget that the Government has introduced. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000398\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EIf the Government\u2019s critique has been that there was a debt-fuelled consumption boom\u2014and we see that there was considerable truth to that when we look at what happened in the housing sector\u2014its changes will not do anything about New Zealand\u2019s current account deficit or its net international investment position. The kinds of changes that National is bringing in will take us backwards. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000399\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EOne of the problems we have in New Zealand is our savings record, and the Government is proposing to reduce the incentive to save. The Government is proposing to take $2.6 billion away from KiwiSaver contributions. This was part of the incentive for people to save. The people who are members of KiwiSaver\u2014some of us are members of KiwiSaver\u2014will have the contribution from the Government cut, and that will happen to all KiwiSaver accounts across the country. People will lose $10 a week that previously went into the KiwiSaver account, which was an incentive to encourage people to save. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000400\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe Government has argued that there is no point in borrowing from overseas in order to put money into KiwiSaver accounts; it has asked what the point is of borrowing just to put into savings. The point is that according to Treasury, we get 40 percent additional savings as a result of KiwiSaver\u2014that is, it has a multiplier effect. The incentives that are in KiwiSaver produce a multiplier effect in terms of private savings.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000401\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229a67041c120e405db84b8a7288b74366\u0022\u003EHon David Parker\u003C/span\u003E: And you could say that they are borrowing for their upper-range tax cuts.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000402\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022464ce90e391d40aab86ec295bbd3ddde\u0022\u003EDr RUSSEL NORMAN\u003C/span\u003E: I will come to that. But on the issue of savings, KiwiSaver actually has a multiplier effect in terms of private savings, and that is why it is different from the Cullen fund. I agreed with Bill English when he said that we should take a break from contributions to the Cullen fund while we are running a deficit\u2014I can see the logic of that. However, KiwiSaver has a different logic because of the multiplier effect that we get from those contributions. There is another part of it, which is the culture of savings. KiwiSaver was turning around the culture of savings in New Zealand, but this Government has twice\u2014or is it more\u2014interfered with the basic settings of KiwiSaver. It is undermining the confidence that people have in the savings culture that is building around KiwiSaver. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000403\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe reason why that is important is that a country that does not save will eventually lose control of its assets. It is just a simple matter of fact: if we continue not to save, then sooner or later other people will own the country because, slowly, we flog off assets, or we increase debt, in order to cover the fact that we do not save. Changing the savings culture, which KiwiSaver was designed to do\u2014and there are arguments about the design of KiwiSaver, but it was certainly working\u2014interferes with the change of culture around savings, which is one of the things that we are actually trying to achieve. It is hard to see how the changes to KiwiSaver are consistent with all of the Government\u2019s rhetoric around changing the savings culture in New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000404\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EI think it is also important for people to realise that they will end up paying for this. This is actually a tax increase. The Government does not want to sell it like this, but that is what it is. Although it is going to direct employers to increase their contributions to KiwiSaver, the employers are on the record as saying they intend to take that cost out of wage increases. So instead of getting a wage increase, employees will get an increase in their employer\u2019s contribution to KiwiSaver. Employees will pay for their employer\u2019s contribution to KiwiSaver, as well as the increase in their employee contribution to KiwiSaver. It is effectively an increase in tax. It is a drop in the take-home pay of workers in New Zealand in order to pay for this cut to KiwiSaver. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000405\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EAs was alluded to earlier, why are we in this fiscal deficit position? There are a number of contributors, and, to be fair to the Government, it has been living in a world where there have been some really wild events that have put enormous pressure on its books. But it is also true that some of it is of the Government\u2019s own making. The changes in income tax rates that the Government introduced, the so-called tax switch, was not fiscally neutral. It is funny that the Government talks about the tax switch being broadly fiscally neutral. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000406\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EWhen we look at the Government\u2019s own figures in the 2010 Budget, we see that over 4 years it cost $1 billion\u2014the so-called broadly fiscally neutral tax switch. If I told someone that broadly zero is broadly equivalent to $1 billion, if I said something fiscally neutral is something broadly the same as something costing $1 billion, they might think I was off my rocker. When we look at the Government\u2019s own tables in the Budget from 2010, we see, in black and white\u2014we can show them to members\u2014that the Government\u2019s so-called fiscally neutral tax switch cost, according to the Government, $1 billion over 4 years. It was not broadly fiscally neutral. When we look at the whole balance of the tax shift, we see that it broadly cost a billion dollars in lost revenue. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000407\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EBut that was only in theory. In practice, it has cost a lot more than that, because in practice the GST take has dropped\u2014and for some good reasons; the fact that people are saving more is a good thing. But the Government\u2019s GST increase has not covered the loss in income tax. So not only was it not broadly fiscally neutral at the beginning, in spite of what the Government says\u2014you know, like the Government is only $1 billion wrong; \u201CWhat\u2019s a billion dollars between friends?\u201D\u2014but since then it has actually got worse, because the GST take has dropped. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000408\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe Government had to cover this huge fiscal hole in the Budget, because the Government gave tax cuts, most of which went to people like the people in this room, who earn more than $100,000. The people in this room did really well out of the tax cuts\u2014pretty much everyone sitting in this room was a major beneficiary of the tax cuts\u2014but the cost of them has to be covered somewhere. The way it will be covered is that ordinary workers will effectively have a tax increase because they will have to increase their contribution to KiwiSaver from their own salary, and then from any potential wage increases they may have otherwise got. So that is not a tax shift; that is a tax swindle, and there is no question about that. It is in fact the tax switcheroo, as I have called it. It was poorly designed and poorly timed. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000409\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThe Government has missed the opportunity for transformational change in this economy. It has not had a price on carbon; instead, we are subsidising carbon. This Government is giving $2 billion to greenhouse polluters.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000410\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220b6b3c7066e64d8fb0d799e8558fd967\u0022\u003EDavid Bennett\u003C/span\u003E: Go back to your billabong!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000411\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d65eb950eab94219aa2bdaf9ac041f4b\u0022\u003EDr RUSSEL NORMAN\u003C/span\u003E: I ask Mr Bennett how he is going to explain that to his kids. Is he going to tell them \u201COh yeah, we gave $2 billion to greenhouse polluters, so I am really sorry about the fact that the planet\u2019s up shit creek because we subsidised greenhouse pollution.\u201D What a brilliant Government strategy\u2014not only are we $2 billion further in deficit because it is subsidising pollution but our kids have to live with an out-of-control climate because idiots decided they would subsidise greenhouse pollution. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000412\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EHow about a price to make water use more efficient? How about something that would actually be transformational in the economy instead of business as usual? How about making sure we drive capital into the productive sector by using a capital gains tax excluding the family home, instead of money going back into the housing market, which is where it will go because there are not proper tax signals? The Savings Working Group said half of the increase in house prices from 2001 to 2007 was because of the way that the tax system is structured to encourage people to speculate in housing; so people cannot afford to buy housing, because the tax system encourages this. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000413\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eb49ee66-7ca7-472d-a4a1-b099fd594dfa\u0022\u003EThis Budget is a \u201Cborrow, cut, and sell\u201D Budget; it is not a transformational Budget, and we will live to regret it.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022 data-id=\u00223afdbe67837a46b18c0188faa70ec557\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000414\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00223afdbe67837a46b18c0188faa70ec557\u0022\u003EHon Sir ROGER DOUGLAS (ACT):\u003C/span\u003E This Budget was one that could be described as fiddling while Rome burns. In many ways, I believe that although it may not do much harm it will cause a degree of uncertainty, which we could do without. There is a need, I think, for some comprehensive change, and we certainly have not got it in this Budget. As a result there is not much to this piece of legislation, and we may as well pass it and get on with it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000415\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EOne point I do want to raise is I believe that the assumptions that lie behind this Budget are in some ways quite heroic. They might prove to be accurate, and I am sure that Treasury or whoever advises the Government has done its best. I want to raise three or four points. Since 2008 nominal GDP has risen by $16 billion, from $183 billion to an estimated $199 billion. In the same period, core Crown expenditure has risen by $16 billion, from $56 billion to an estimated $72 billion. In other words, the Government has taken to itself the entire increase in nominal GDP. Nominal GDP went up by $16 billion. Government expenditure went up by $16 billion. What did the Government leave for the private sector? Nothing. The Government crowded the private sector out, and no wonder the country is in some difficulty.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000416\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EI ask the public what they get from that massive increase in expenditure. For a family of four, that increase in Government expenditure is $16,000 a year. I ask the average family out there what they get for that $300 a week extra the Government is spending on their behalf\u2014so-called. Do they feel better off? The families I meet certainly do not feel any better off. Can they buy more groceries as a result of the Government spending an extra $300 a week on their behalf? I do not think so. Can they take their kids to the movie theatre? No, I do not think so. There is no free lunch.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000417\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003ESo what do we make of it? Let us have a look at one point, and this comes back to my reference to heroic assumptions. The estimates of core Crown expenditure by the Government in recent Budgets have systemically underestimated core Crown expenditure by, on average, 6.83 percent a year. What leads us to believe that this year the Government has got it right? In previous years we have seen a massive increase. The Government is talking about it being flat from now on. If we take the case that this year core Crown expenditure increases by 6.83 percent, which is the average over and above estimates of recent years, another $4 billion or thereabouts would be added to the Budget deficit. Also, in terms of GDP growth, recent Budgets have overestimated GDP growth by 1.8 percentage points over the last 6 years. Again, what assurance do we have that the figures, which are quite high in terms of GDP growth, wage growth, etc., are any more accurate than they have been in recent years? Core Crown expenditure, as I said, has hit an all-time high as a percentage of GDP; it has gone up by about 5 percent in 3 years, or by $10.5 billion. I think this House needs to start to question itself. We have increased Government expenditure in the last 3 years, in nominal terms, by $16 billion, which is $4,000 a person and $16,000 per family of four. So $16 billion is the entire increase in nominal GDP. Nominal GDP is up $16 billion and Government expenditure is up $16 billion. Nothing\u2014nothing, not one cent\u2014is left for the private sector, and we wonder why we are in difficulty. I want to know whether the estimates that the Government has made in this Budget will prove any more accurate than the estimates that we have had in the last four or five Budgets. The estimates have been way out in terms of expenditure. Expenditure has always been higher than estimated and GDP growth has been lower.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000418\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EThe final point I want to make is about the Labour Party and the Greens. Although I am critical of National in terms of its estimates, I really wonder about the Labour Party and its attack on high-income earners. That does surprise me. It is over the top. The Labour Party has this strong focus on distributive questions\u2014that is, it tends to think that to help the poor we must hurt the rich. We have heard it in speech after speech from the Labour Party and from the Greens. They are reluctant to face the fact that in New Zealand\u2019s current situation it is almost impossible to help the poor without also helping a section of the rich\u2014those who invest in productive areas. If we do not help that group, we will certainly not be able to help those on lower incomes. If those old colleagues of mine were not so one-eyed, they could, just possibly, construct something really radical\u2014a radical scheme that might just be redistributive and growth orientated. I do not hold my breath. The fact is that in the way they operate at the present time, they are simply unable to formulate sensible attitudes towards any of the basic social issues we face, which are invariably tied to economic ones. Although I know that a lot of those people are highly intelligent and knowledgable on all sorts of things\u2014that is, those things one can put on a lapel badge\u2014they are often intellectually, at least, lopsided.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022 data-id=\u002244f05fb53a1647c3ba4503621133fb3b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000419\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002244f05fb53a1647c3ba4503621133fb3b\u0022\u003EHon TARIANA TURIA (Co-Leader\u2014M\u0101ori Party):\u003C/span\u003E T\u0113n\u0101 koe, Mr Assistant Speaker Roy. T\u0113n\u0101 tatou e te Whare. The Taxation (Annual Rates and Budget Measures) Bill gives effect to tax reforms announced in Budget 2011 to reduce the fiscal costs of the KiwiSaver and Working for Families tax credits programmes. This Budget was never going to be a walk in the park. The astronomical fiscal impacts of the 6,000 earthquakes that have cumulatively taken their toll on Canterbury were unprecedented, and certainly not anticipated. Then, of course, there have been blizzards, droughts, leaky homes, finance company collapses, and the AMI and South Canterbury Finance sagas, to name but a few. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000420\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThe damage caused by the two earthquakes has been estimated as costing around $15 billion, which is about 8 percent of GDP. At even the most minimal budgeting, we require $5.5 billion for expenditure such as temporary housing, repairing roads, and restoring infrastructure, with another $3.3 billion to recognise the costs of both the Earthquake Commission and the Accident Compensation Corporation. So something had to give. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000421\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EI acknowledge that for most New Zealanders there has been an incredible sense of generosity of spirit that recognises that there was simply no room in this year\u2019s Budget for discretionary spending. Of course, there are always those looking for a soapbox from which to project their particular brand of attack. But actually the biggest challenge that faces any of us is how to reprioritise in order to ensure the best value for the limited resources that we have. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000422\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThis concept is particularly well known to tangata w\u2019enua communities. The practice of kaitiakitanga entails an active exercise of responsibility in a manner beneficial to resources and the welfare of the people. Kaitiakitanga is synonymous with the notion of being prudent. The practice of r\u0101hui illustrates how one might have to exercise restraint in order to ensure sustainable management and growth of the economy so as to provide a stable and secure environment for future generations. When we look at both of the key tax reforms articulated in this bill, they remind us of the behaviours and attitudes of our t\u016Bpuna in tightening the belt, curbing excesses, and living within our means. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000423\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThe objective of the changes in the Working for Families scheme is to reduce the fiscal costs of the scheme while protecting amounts of tax credits for lower-income earners and minimising the effects on work incentives. As a result of alignments that will be made as a result of Budget 2011, the scheme will be much better targeted to vulnerable families. A number of the families who are earning higher up the income scale will receive a little less than they currently do. The worst-case scenario for them is that they may no longer qualify. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000424\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003ETen weeks ago the M\u0101ori Party issued a challenge to the Government, asking for support from higher-income New Zealanders to exercise what we might call manaakitanga, or good old-fashioned charity beginning at home. In our statement entitled \u201CTime for those who \u2018have\u2019 to help those who \u2018have not\u2019 \u201D we asked the Government to promote generosity by raising taxes for those on incomes over $70,000. This Taxation (Annual Rates and Budget Measures) Bill is an honourable response to that tono. It better targets Working for Families at lower-income families, who need more help. It will be less generous to higher-income families. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000425\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003ETake as an example the case of Amohia and Hemi on a combined family income of $40,000 per year, with three tamariki. Currently they receive $280 a week in Working for Families tax credit. From 1 April next year this will go up by $4 a week, which is $16 a month. Down the road lives Sonya, on a salary of $90,000, with two children. Her income level is right near the top, so she currently receives only $18 a week from Working for Families. After the changes she will receive only $7 a week, which is $28 a month. When we talk about impacts like this in single dollar terms it is always hard to understand just how effective the changes can be. But the important point is that the changes will be made gradually, in a way that minimises the impact on these families. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000426\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EI think it is really important that each of us starts to cultivate the art of financial literacy in our homes, so that we truly understand the state of the nation and the different levers that impact on our well-being. I have heard a lot of ranting about how the 2 percent lift in GST has brought the country to its knees. Yet missing from that same k\u014Drero is a flabbergasting statistic that under the term of Labour, electricity prices over the 9 years rose 72 percent. That is akin to a jump of 8 percent each year. Although the prices have risen 9.5 percent since this Government took office, the rates of rise have halved to under 4 percent a year. But it is still a hefty rise from one decade to the next. Added to that, the price of petrol has risen by 17.1 percent. Our heavy reliance on oil demands that we look seriously at establishing alternative renewable sources of energy\u2014a cause that the M\u0101ori Party and many hap\u016B, iwi, and marae are actively considering. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000427\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThe other raft of changes in this taxation bill is to do with KiwiSaver. The changes alter the balance of contributions to KiwiSaver accounts away from public financing and towards private saving. This is another approach that the M\u0101ori Party has supported in terms of reducing how much money the Government borrows from overseas to put into KiwiSaver. Our concerns around KiwiSaver are that although savers and employers will have to pay more to make the scheme more affordable over the long term, the Government is lessening its commitment. This may have a backlash effect in terms of discouraging the other two partners in the scheme. In other words, we are mindful that reductions in incentives may end up undermining the confidence in the scheme. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000428\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EIf I take into account what the Hon David Cunliffe said, one would think that the majority of KiwiSavers are M\u0101ori families. I think that if we were to look into that particular issue we may find that they are in the minority in terms of contributing to the scheme. They do not earn the $70,000 that the member talked about, and not many of them earn the $40,000 that he talked about either. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000429\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThe other key concern that we have put forward is whether any increase in the minimum payment by savers could prove unaffordable for lower and middle income constituents, who are already struggling to cope with rising costs. That is why we opposed the introduction of Labour\u2019s KiwiSaver scheme when the individual contribution was 4 percent, as we believed it did not do enough for the less well-off and particularly for the w\u2019\u0101nau of the working poor and the families of beneficiaries. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000430\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EWe certainly are of the view that those people on lower incomes should carry less burden proportionately than those who are on higher incomes. We will be concerned if any disincentive to save, because of increased payments, causes them either to not enter the scheme or to take contribution holidays. But also we do not want to overemphasise KiwiSaver. We all need to return to the old ways of the practice of good saving, and there are many other methods of encouraging this to happen. We have been very supportive of the KiwiSaver initiatives, such as the Whai Rawa programme. This scheme is designed to provide a base level of savings for all registered Ng\u0101i Tahu members, as well as supporting and incentivising a culture of savings and asset building. From all accounts we understand it has been highly successful. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000431\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThe Taxation (Annual Rates and Budget Measures) Bill provides Parliament with the opportunity to make alterations to the generosity of those schemes, particularly Working for Families, where it reaches into very high income levels, where these people have enjoyed reasonably good tax cuts. We support the first reading of the Taxation (Annual Rates and Budget Measures) Bill.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022 data-id=\u00229400524a44314832b6f1649d354b632c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000432\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229400524a44314832b6f1649d354b632c\u0022\u003EAMY ADAMS (National\u2014Selwyn):\u003C/span\u003E I am delighted to stand here on Budget day and take a call in the first reading of the Taxation (Annual Rates and Budget Measures) Bill, which is the bill that delivers the key revenue changes that make up this year\u2019s Budget. In 2008 Michael Cullen stood in this House and told New Zealand that after the best global economic times in living memory, the Labour Government had been so incompetent, such a poor economic manager, and so financially illiterate that he was deserting the ship, leaving a decade of deficit as his legacy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000433\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228e7e23cbe0184dafbe3cff95453c7433\u0022\u003EStuart Nash\u003C/span\u003E: Michael Cullen did not say that at all.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000434\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002231e92986ad57413592db02eabe8dc084\u0022\u003EAMY ADAMS\u003C/span\u003E: It was a decade of deficit. The numbers do not lie. Labour left New Zealand with 10 years of having to borrow from the world to pay the bills because under its stewardship the productive sector had been decimated, businesses and taxpayers had been kicked time and time again, and the only sectors that grew were the public sector and Labour\u2019s good mates in the unions. When it comes to New Zealand, Labour will always look after its union mates before the hard-working people of New Zealand. We have dealt with the mess that Labour left, such as the unfunded commitments, the gaping hole in ACC, and the export sector in massive decline, and we have dealt with the fall-out from the global financial crisis. Now, of course, we have the two earthquakes in Canterbury that are equivalent to 8 percent of our GDP. Yet today, in this House, Bill English delivered a balanced, responsible, and prudent Budget that is right for our times and will set New Zealand further along the path to recovery. This Budget is about reducing debt, it is about supporting growth, and it is about paying for the rebuilding of Canterbury. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000435\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003ELet us have a look at those things\u2014first, reducing debt. At the moment we are borrowing a staggering $380 million a week. I defy anyone to stand here and tell us that that is sustainable. It is not. With what we have heard today, that figure will drop to $100 million a week from next year. We still have work to do, but that is a significant gain. That is money that our children and grandchildren will not have to repay in years to come. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000436\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003EOne of the statistics that jumped out at me was that compared with Labour and the forecast it left, this Government will be borrowing $45 billion less than the top numbers the Labour forecast left\u2014$45 billion less. And that is before we cost in any of the election promises that Labour members are already starting to throw around. This Budget alone, just today\u2019s Budget, has meant that over the next 4 years we will be borrowing more than $10 billion less than we would otherwise have to borrow. That is what these changes mean. They mean $10 billion over 4 years that we do not have to go out and borrow from the Chinese or the rest of the world, and that my children and everyone else\u2019s children will not have to pay back in years to come.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000437\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003EFor Christchurch, this Budget has put $5.5 billion into the Canterbury Earthquake Recovery Fund, on top of the $3.3 billion that we will be paying through the Earthquake Commission and ACC. That is $8.8 billion set aside, funded, and committed that the people of Canterbury know is there to help them through their time of need. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000438\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003EIt is really interesting to me that Labour members stand in this House and talk about exports. I cannot believe that David Cunliffe can stand in this House and have the barefaced cheek to talk about supporting exporters, when it is clear to everyone that Labour\u2019s intention is to get back on its old hobbyhorse of taxing and regulating exporters into extinction. We only have to listen to Stuart Nash\u2019s comments yesterday to know exactly what Labour\u2019s intentions are for the productive sector of New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000439\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003ELet us look at the Greens. I was staggered to hear Russel Norman say that the Government has to lift its revenue, when the Greens have voted against every single proposal for productive economic growth that has come before this House. They have voted against those proposals, yet the Greens stand here and talk about the need to lift revenue. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000440\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003EWell, I challenge both of those parties. If the 13 percent of New Zealanders who pay more than half of the tax in this country went away, who would pay for the handouts? Who would pay for the grants? Who would pay for the bureaucrats that those two parties stand up and support? That is head-in-the-sand, ostrich country, and it is time that those members woke up and stopped threatening this country with the inevitable bankruptcy that their economic mismanagement would bring. They need to wake up and they need to start realising that we have to have a productive engine room in this country, that we have to support growth, and that we have to support skills. We have to get behind our export sector, not bag and kick exporters through capital gains, higher taxes, and continued regulation. That is what this John Key-led Government is about. I for one am so proud to be part of this Government and supporting the Budget that Bill English delivered today. It is a Budget that will rebuild Canterbury and get this country back on a path to growth. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022 data-id=\u00226a87ce1b9fe64ae8804b7f4f770409d5\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000441\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00226a87ce1b9fe64ae8804b7f4f770409d5\u0022\u003EHon CLAYTON COSGROVE (Labour\u2014Waimakariri):\u003C/span\u003E I will start off by addressing, for the record, some of the historical inaccuracies from the member who spoke previously, and who made accusations against the last Government. It is important to say this in the overall context of the Budget, because it was Bill English, of course, who, on taking office, acknowledged that the reason we could get through this recession was\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000442\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cafd020522084f07b86d1e703c5fdb9c\u0022\u003EDavid Bennett\u003C/span\u003E: No, it\u2019s not true. Rubbish!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000443\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222860a5ca54e8462b947870fb3392f0a5\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: The quote is there for \u201COld Cue Ball\u201D over there, because he does not read the historical record, of course. Bill English said that the reason we could get through this recession was that we were in such a good shape as a legacy of the last Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000444\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003ENational members talk about the 9 years of a Labour Government, and I will provide evidence of that by the following: 9 years of low unemployment, 9 years of economic growth, and 9 years of surpluses. I will read out the surpluses. I remember being taunted by Bill English when I was Associate Minister of Finance, because he said that a Labour Government was too tight\u2014too tight to spend any of the money that we had squirreled away on surpluses. Never in my life would I have thought that a Labour Government would be attacked by National for not spending money. But that is what it did. Let us look at the 9-year record, as Ms Adams crawls behind the desk. In the year 2000 there was a surplus of $594 million, in 2001 a surplus of $1.4 billion, in 2002 a surplus of $2.47 billion, in 2003 a surplus of $4.366 billion, in 2004 a surplus of $5.5 billion, in 2005 a surplus of $7 billion, in 2006 a surplus of $7.1 billion, in 2007 a surplus of $5.8 billion, and in 2008 a surplus of $5.6 billion. I am very, very proud to say of those 9 years that we had 9 years\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000445\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002278aeeb44aa654ea0846668c9e448f5af\u0022\u003EDavid Bennett\u003C/span\u003E: What were your interest rates?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000446\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224dfb4d1a02eb4c87b68883ffd7a6e2ba\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: I invite \u201CCue Ball\u201D to read the historical record\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000447\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f9adc2756d0e4bf9981365c6250ab9dd\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: Order!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000448\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227a8b6a2305024114bff0f002001ce0cc\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: He did not take offence.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000449\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220bda5d6c35d34d7ba7d1a8f2c4f46c70\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: I am taking offence. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000450\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002210f3c9dc66cf481b8f9e342278882808\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: You cannot on behalf of another member.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000451\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e83d92ac6b8444d9a08a8062f56f545a\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: I am on my feet; it is not good for the member to start interjecting. I am saying that all members will be referred to by their appropriate titles.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000452\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223e580c51b6554fd2ae61921caee0f061\u0022\u003EHon Rick Barker\u003C/span\u003E: I raise a point of order, Mr Speaker. I respect your decision. I think it is the right decision. I think my colleague was incorrect to say that. But earlier today I did not raise a point of order when Opposition members were referred to as muppets, which is as disrespectful as one can get. I say to you, Mr Assistant Speaker, that all we want is consistency and even-handedness. If the decision is to set a standard like that, then I expect that it will be applied evenly to all of us. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000453\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d492390d8f4e41e6bfedf60f26101135\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: I think the member will know that if offence is taken, the matter should be raised at the time. I cannot rule on that. I will also make the point that there are probably a few subtle differences between a general assertion across a group of people rather than towards an individual. But the standard that I wish to see in here is one of greater respect than we have just had. I think the member nodding appreciates that, so let us move on. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000454\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022840333e242ed484c962897b43b24a689\u0022\u003EHon Rick Barker\u003C/span\u003E: I raise a point of order, Mr Speaker. I do not want to extend this matter, but I will make the point to you that numerous Speakers\u2019 rulings make it clear that if it is offensive to say something to an individual, then it is equally offensive to say it to a party. The reason for those Speakers\u2019 rulings is very clear. If the level of offence is different for a party than for an individual, then of course members will start to use the offensive material collectively as a means of avoiding the Speakers\u2019 rulings. I think it is fair that if something is offensive to a member, it is also offensive to a group of members. They should be treated equally, whether as individuals or as a collective. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000455\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227434a4b495494cc3b970c40d57309f49\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: I have affirmed that I want to see more respect in the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000456\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e5348fe100634fec891fa16e4fe8531f\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: So we had 9 years of surpluses, 9 years of low unemployment, and 9 years of growth, but now we have had a Budget today that has presented us with $16 billion worth of deficit\u2014$16 billion worth of deficit. I say again for the record that on taking office Bill English noted\u2014and I can produce the quote for that honourable member opposite\u2014that we had left this country in good shape. I say that because we have to view this Budget in the context it deserves. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000457\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe Government has now presented a $16 billion deficit. The member who spoke before me spoke about the Canterbury earthquake and the money that has been set aside or put up for that. I say in passing that I am sure the people of Canterbury, to be generous, will welcome the fact that there is money and that money will flow to assist them. I know that all Canterbury members of Parliament, if not all members of this Parliament, will welcome that. The issue now is about how that money will be spent. The issue is also that the Government\u2014thanks to the Budget documents\u2014can no longer keep blaming the Christchurch events for the economic woes of this country. That alibi has been torn asunder in the Budget documents today. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000458\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe question is how that money for the Canterbury earthquake will be spent. Now, of course, Mr Brownlee has all the powers\u2014like extraordinary wartime powers, which Labour supported\u2014his own Government department, and a bucket of cash. So the expectation of the people of Canterbury, now that all the bases are loaded and all the tools are at his disposal, is that there will be no more excuses and no more delays, and that we will see a speedy acceleration of the recovery at a far faster rate than we have seen up to this moment. I welcome that, because I am sure that it is Mr Brownlee\u2019s intention to provide money for businesses\u2014businesses that will be cauterised because of the end of the support package in a couple of weeks, and the end of the money and support for employees who have been depending on that\u2014for the heating programme, which is not as it should be and which has been delayed, for the draughty houses, and so it goes on. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000459\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI look forward to that acceleration, and to having no excuses and no delays in the Canterbury recovery, given the massive resources that this Government has bestowed on itself. But I also say that the people of Canterbury, I suspect, will not take much of an interest in this Budget\u2014and I do not say that in a disrespectful way\u2014because they are interested in the here and now. They are interested in whether they have a dunny, in how they going to get their houses fixed, and in what the future holds for them. But there will come a time, as they move past that, when they will focus on this Budget as they realise that their KiwiSaver has been cut again, their ethos of savings has been kicked in the guts again, and that $20 less will be going to a family where there are two KiwiSavers\u2014they lose 20 bucks a week because of that. Those families in Christchurch are smart and they will focus on the detail as they move past their own personal circumstances. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000460\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EOf course, middle New Zealand is whacked again by this Government and the cuts to Working for Families. Many Canterbury families, the victims of the quakes, who are in dire economic circumstances will be hit in respect of their Working for Families package thanks to this Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000461\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThen we come to the asset sales. It is very, very interesting, because the Government has confirmed in writing in its Budget documents what it intends to do in respect of asset sales, which is what it signalled some months ago. The Kiwi public are told they will be better off and the community will be better off if assets are sold. They were told in the 1990s by the then Bolger Government that all would be fixed, and everybody would be better off, if we flogged off the family silver. They were not better off and people remember that. The economic proposition being put to them in this Budget, aside from the fact\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000462\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002272503d77bab041dc9445ac703b4fdba7\u0022\u003EHon Maurice Williamson\u003C/span\u003E: Wasn\u2019t it Labour that sold a lot more assets\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000463\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fe2304f8173040a6a192a66cbc2398da\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: We sold assets in the 1980s but the difference is, I say to Mr Williamson, that we learnt. And in 9 years\u2014[Interruption] They do not like it. It is like the old Dad\u2019s Army thing. They do not like the old cold steel. The difference is that yes, in the 1980s we sold assets, and when we came back into power for those 9 years of surpluses, we never sold a thing. The difference is that Maurice Williamson, who was a Minister in the Bolger Government, who was party to selling all those assets, and who is now a Minister in the Key Government, has learnt nothing. He never made it through SmartGate at the airport. He has learnt nothing. I say to Mr Williamson \u201CEat that one.\u201D, because he has learnt absolutely nothing\u2014Mr Williamson and the Government go to the New Zealand people and tell them the proposition. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000464\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe Budget documents say that New Zealand investors will be at the front of the queue for shareholdings in these assets. How will National members guarantee that? They could not guarantee it with Contact Energy, which is now owned by foreigners. Yes, a few Kiwis may have grabbed a few shares but the truth is that it is now owned by foreigners. So I ask Mr Williamson, given that he is now selling assets twice, how he will guarantee that Kiwis will be first in the queue to buy, by the way, the assets they already own. They already own them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000465\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThen I ask Mr Williamson, the proponent of SmartGate\u2014maybe he ain\u2019t been through it\u2014where all the cash is that these Kiwis will have to buy the shares and the assets they already own, the cash that is awash in the economy and in the wallets of Kiwis. Where will they get that from? I am sorry. Mr Williamson is a bit silent now. Kiwis do not have the cash, given the cost of living they are facing, to make ends meet, let alone to go and buy the assets that genius, for the second time in a second administration over nearly 20 years, has decided he will flog off again. National members cannot guarantee that Kiwi mums and dads will be first in the queue. They cannot guarantee that those Kiwi mums and dads can buy, if they have the cash, which they do not, assets they already own. That is the proposition the Government has put to them. It has borrowed for tax cuts for the rich, blown all the cash, the credit cards are maxed out, so what it will do is flog off a few assets. I ask Government members what the plan is. Then what? After they have flogged the assets, what do they then do? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000466\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EA group of those assets are power companies. The other thing that Kiwi mums and dads know is that people who invest a dollar in a business want a return. They want a return, otherwise they would not invest. The interesting point is that the foreign interests that grabbed the energy assets will naturally want a return. And how do they get a return? Naturally it is by making a profit. And how do they make a profit? They raise the price of what they are trying to sell. That means for Kiwi mums and dads that if they had the cash to buy back\u2014as old \u201CCurly\u201D in the corner would know, because he was at university and did an economics degree\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000467\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fbe3f87c-849c-4eee-84cc-119edeb1a681\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221907df36299a42c0b651ae6455090c2d\u0022\u003EAaron Gilmore\u003C/span\u003E: I raise a point of order, Mr Speaker. My name is actually Aaron Gilmore, not \u201CCurly\u201D, and I wish the member would use that name properly in the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000468\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022194e483478934321ae3ef6d17a235af1\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: I withdraw and apologise. As Mr Gilmore\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000469\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220840645fefbe4575aeea8b1e1a51c2fd\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: Hang on. I thought we were doing OK. Offence was taken. I ask the member to withdraw the comment. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000470\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225bb16dd0b60f45a8a2df956a2be9740f\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: I withdraw. From someone who is follicly challenged, I was offering a compliment. But I withdraw and apologise. If only I had his style and those follicles and those wonderful locks, akin to Samson. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000471\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EWhat we have here is a proposition that sells a bill of goods to the New Zealand people, and that says that if they have a bit of money they can buy shares they already own. Then the energy companies will be flogged off and the power prices will go up. This is a wonderful Budget for people, is it not! KiwiSaver is cut, Working for Families is kicked in the guts, and now they flog off the assets.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022 data-id=\u0022bbdb7ab8bb7746d299dedf1a00c8c6b4\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000472\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022bbdb7ab8bb7746d299dedf1a00c8c6b4\u0022\u003EDAVID BENNETT (National\u2014Hamilton East):\u003C/span\u003E The last speaker from Labour, Clayton Cosgrove, tried to make out that the Labour generation of the 1990s was holier than thou by saying they had learnt from their mistakes and understood everything, and everything was rosy in the economic environment. Well, let us look back at the economic environment when Labour put New Zealand in recession before the rest of the world. Just remember that: the rest of the world was still ticking along, there were some of the best economic times we have seen, and Labour managed to strangle this economy. It managed to put it in recession. Maybe it is time Labour members learnt the lessons from what they did wrong in the 1990s and the 2000s, because their economic management has been poor many a time, and that was shown in the way that they put this country into recession.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000473\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EThe other thing Labour did in its last period in Government was that it had high interest rates. Those interest rates were much higher than they are now. They were double-figure interest rates. Go to Kiwi families now and ask how much they are saving on interest rates under a National Government. They are saving a lot. A lot of money is being saved by Kiwis at this time because they know they have stable economic management, they know they have leadership that is delivering for them, and they know they have a Government that is looking after those in most need, the people of Christchurch, at this time. They know they have a Government that is also focused on growth. It is investing in infrastructure to lead this country forward. By having solid, stable economic management we have a Government that delivers lower interest rates for New Zealanders. That is the best thing we can do for our people: deliver them an economy that gives them low interest rates, that gives them an education, that gives them a chance to be the best people they can, and that gives them some reward when they do things properly, so that they get the right signals and incentives. That is the difference between National and Labour.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000474\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EThis Budget is a Budget in very difficult times. We have to deal with a world recession that is not over, although the Labour leader thought it was. It is a recession that is still going. He did not make the free-trade agreement with China, either\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000475\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002251d0a753533244e5814e4587ea26ea66\u0022\u003EHon Member\u003C/span\u003E: Yes, he did!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000476\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ec011c73318b4541888ff4b177b23b9d\u0022\u003EDAVID BENNETT\u003C/span\u003E: Oh, he did it by himself, did he? That is great to know. He went and did it himself. I am sure that is how it worked. The reality is that the Leader of the Opposition had a poor speech today. He had no understanding of economics. He had not even read the Budget. He talked about stuff that was not even in the Budget and missed out on the big issues in the Budget. And what are the big issues? We are investing $8.8 billion to rebuild Christchurch. The people of Christchurch have got a Government that delivers to them when they need it. We stood beside Christchurch when they wanted us and we are giving them what they need now to rebuild that city.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000477\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EThe second thing in the Budget is that we are still investing in infrastructure. The people of the Waikato are so happy with that. We are getting broadband first. We are getting the Waikato Expressway. That is happening because this Budget kept on building on the infrastructure of New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000478\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EThe third thing about it is that we are reducing our debt. We are having prudent economic management. If those members on the other side had tracked along, there would have been $45 billion more debt than that proposed by National in this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000479\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EThis is a solid Budget. It delivers to New Zealanders in their time of need, it builds a stronger country, and it represents sound economic management. Labour has still to learn the lessons of what it got wrong in the past two generations. 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=\u002201e9c8a39e7848fca7273527afb3fc28\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000480\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002201e9c8a39e7848fca7273527afb3fc28\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E I am pleased to take a first reading call on the Taxation (Annual Rates and Budget Measures) Bill. I think a couple of points need clarification. Amy Adams stood up and said that Michael Cullen was incompetent. Imagine saying that the man who delivered nine Budgets in surplus is incompetent. If Dr Cullen was so incompetent, why did this Government appoint him to the board of New Zealand Post and Kiwibank? It is a disgrace to say that Michael Cullen is incompetent. As Miss Adams knows, and as Mr Foss knows, the reason why this economy has done OK compared with a lot global economies is that Dr Cullen banked surplus after surplus and put money away for a rainy day. My goodness me, when it poured down during the global financial crisis, thank goodness Michael Cullen had had the foresight to understand how the New Zealand economy worked. That is the reason why Michael Cullen left this country with no sovereign debt. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000481\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EAmy Adams also accused me of economic illiteracy. She should not accuse me of that. I think she needs to talk to the Minister of Revenue. Those were not my facts that were quoted yesterday. Those facts were provided by the Minister of Revenue. All I was doing was outlining to the people of New Zealand the facts that had been given to me. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000482\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cc4b1f7c298a4abeab8b4136b09b072c\u0022\u003EHon Peter Dunne\u003C/span\u003E: You were interpreting them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000483\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c4f09abc87b245e8aefe40f21949da83\u0022\u003ESTUART NASH\u003C/span\u003E: I did interpret them. I looked at the black and white facts and they were as plain as day. We need to have this debate as a nation. The agricultural sector holds itself up as the backbone of this country, and I tend to think it is a very important part of our economy, but it pays no tax, according to the figures provided to me by the Minister of Revenue. It pays no tax\u2014not in my figures. So either the rural sector is in dire straits or there is something inherently wrong with the tax system, whereby farmers are claiming back a whole lot of expenses that, perhaps, they should not be. I do not know what the answer is. All I know is that the dairy industry in the last financial year paid $26 million in tax, and I ask whether that is fair. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000484\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EMr Foss stood up and waxed lyrical for about a minute about what a wonderful speech his Prime Minister had delivered. What a sycophant. It made me sick. In fact, I find it quite insulting that Mr Key simply does not take this House seriously. He treats it with disrespect, and I think it is dreadful. I find it quite insulting, and I think that if a lot of MPs who have spent a significant amount of time in this House had listened to Mr Key\u2019s speech, they would have been insulted. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000485\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EDavid Bennett stood up and said that Kiwis are better off because interest rates are lower. The unemployment rate is now double its level when Michael Cullen wrote his last Budget. How can Mr Bennett say that New Zealanders are better off when 150,000 New Zealanders are on the unemployment benefit? New Zealanders are not better off. Mr Bennett said that New Zealanders are better off because they are saving more. The facts show that if one earns over $1 million one receives over $1,000 worth of tax cuts. We are better off in that respect, but if a New Zealander is on the average wage, they are not better off. We have to keep in mind that 75 percent of New Zealanders earn less than the average wage. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000486\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ESir Roger Douglas criticised Labour for beating up the wealthy. I say to Sir Roger that we do not beat up the wealthy. The Labour Party is a party for equity and fairness. That is all we demand on behalf of the people of New Zealand: fairness and equity. That is all we ask for. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000487\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI will make three more points. Good, hard-working New Zealanders have been let down by this Government. By cutting KiwiSaver and Working for Families the Government disadvantages the whole economy. The third point is that there is no plan behind these figures. All that the people of New Zealand were looking for was a plan. Is that too much to ask? They were looking for a plan for growth, for economic recovery, for our families, and for our future. New Zealanders did not get a plan. They got a whole lot of words that fell through a hole as large as Africa and ended up in China. That is where our jobs are going unless we start investing in research and development, in the productive economy, and in our people. Ten million cubic metres of logs are exported to China each year, while sawmills in New Zealand are closing down. We are becoming more and more of a commodity economy because this Government is not investing in our productive sector. Where are the policies to help our companies, exporters, and workers to drive up productivity? They do not exist, because the Government does not have a plan to drive economic growth. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000488\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe Government crowed last year about how it had invested in early childhood education. Well, the Napier Kindergarten Association had $575,000 cut from its budget, yet Mr Tremain had the nerve to come and tell the association at its annual general meeting how much money the Government had invested in early childhood education. He was told in no uncertain terms that the association had had $575,000 cut from its budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000489\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b712bfebd4c641148182ab78bfe867ea\u0022\u003ECraig Foss\u003C/span\u003E: $1.7 million of financial assets, by the way. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000490\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f18559a211714b7491e3e2a34048e40a\u0022\u003ESTUART NASH\u003C/span\u003E: The Heretaunga Free Kindergarten Association, I say to Mr Foss, had over $500,000 cut from its budget as well. Is that fair? No, it is not. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000491\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWhat do the people of New Zealand get? They get cuts, cuts, and cuts. That is simply not fair. Cutting KiwiSaver: who does that hurt? It hurts hard-working New Zealanders who are saving for their retirement and doing the responsible thing by putting money away\u2014and $10 a week adds up. [Interruption] Mr Gilmore knows that it adds up over time. If someone puts away $10 a week extra into their savings account when they are 25, by the time they retire it will be a substantial amount of money, will it not? These cuts are not what the Savings Working Group suggested. It said that it is time New Zealanders started to save. This Budget does not do that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000492\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ECutting Working for Families: who does that hurt? It hurts families who are already facing dire economic circumstances. In Hawke\u2019s Bay Working for Families pumps about $120 million into the economy. I do not know how much money this cut will have taken out, but cutting Working for Families for Hawke\u2019s Bay families will hurt not only those families who are struggling but also the economy of Hawke\u2019s Bay. Under this Government the people of the Bay are going backwards. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000493\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EAll that the people of New Zealand were looking for was a plan. Was that too much to ask for? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000494\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002250c1428481254fb58e38395946603c56\u0022\u003ECraig Foss\u003C/span\u003E: Single-digit mortgage rates; double-digit mortgage rates under Labour. Do the numbers. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000495\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224b0b1e4bf6dd487286ba959d8d171ad4\u0022\u003ESTUART NASH\u003C/span\u003E: It is interesting that Mr Foss talks about the mortgage rate. Why did he not do something about monetary policy? Why did the Government not give the Reserve Bank the tools to have an influence over the exchange rate, and therefore over the interest rate? The Government did not do a thing. It crows about the interest rates, but the only reason the interest rate is as low as it is is that the economy is tanking, and Mr Foss knows that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000496\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI will say one last thing. There is a discrepancy of $4 billion between the revenue forecast by the Inland Revenue Department and by Treasury over 5 years. Page 81 of the Economic and Fiscal Update shows a discrepancy of $4 billion, and the Government has gone with the Treasury figures. The Government states: \u201CThe lower forecasts of tax revenue from Inland Revenue indicate there may be some downside risk to our tax forecasts.\u201D Well, that is the understatement of the decade. The Government does not listen to the Inland Revenue Department. It listens to Treasury, when Treasury continually gets it wrong. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000497\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThis Budget had absolutely no plan for the people of New Zealand and no vision for this economy, and it is a disgrace. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022fbe3f87c-849c-4eee-84cc-119edeb1a681\u0022 data-id=\u0022e67fce57bfb94350a7adfcbf12dc8a46\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000498\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fbe3f87c-849c-4eee-84cc-119edeb1a681\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e67fce57bfb94350a7adfcbf12dc8a46\u0022\u003EAARON GILMORE (National):\u003C/span\u003E It gives me enormous pleasure to stand and talk about the voodoo we just heard from the Opposition. We actually have a plan; it is called Budget 2011. The big difference between the Opposition and us is that we will spend $45 billion less than it would. We will spend it in a different, better, and cleverer way. What are people saying out there today, as a response to Mr English\u2019s third Budget? The commentator in the New Zealand Herald, Audrey Young, gave the Budget six out of ten. That is not bad; I thought that was not bad. John Armstrong, the great Tory, gave us six out of ten. Fran O\u2019Sullivan, whom the Opposition love to quote time and time again, gave us seven and a half out of ten. I think that is pretty good, given the economic times we are in. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000499\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fbe3f87c-849c-4eee-84cc-119edeb1a681\u0022\u003EThis Budget, for me, puts in $8.8 billion to rebuild Christchurch. I hope most of that money will be spent on my side of town, in the eastern suburbs. A lot of the money will be spent on rebuilding our roads, rebuilding our water supplies, rebuilding our schools, and\u2014this is important\u2014rebuilding homes: the thousands of homes up and down parts of eastern Christchurch that are ruined, including my brother\u2019s, my mother\u2019s, and, in part, my own home. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000500\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fbe3f87c-849c-4eee-84cc-119edeb1a681\u0022\u003EAnother interesting thing in this Budget is the focus on KiwiSaver. KiwiSaver will grow to $60 billion in ten years, due to the subsidies and input going through and the savings that will occur\u2014$60 billion, which is a great thing. The incentives are still in place for people to save. People are saving. They are still joining up to KiwiSaver at a rate of 20,000 people a month. We heard from Mr Nash, who spoke just before me, the ironic idea that we need to invest more in crazy things. An interesting thing is that people are saving more. The whole purpose of the tax switch was to reduce consumption and increase savings. That is what we need to do. That is what the Taxation (Annual Rates and Budget Measures) Bill actually helps to encourage, and that is what the Budget does. The Budget puts in place an increased savings rate. Savings have gone up and debt servicing costs have come down. That has to be a good thing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000501\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fbe3f87c-849c-4eee-84cc-119edeb1a681\u0022\u003EWe heard from Mr Nash that 75 percent of New Zealanders earn below the average wage. Well, that figure includes kids and the retired. The last time that I saw Labour\u2019s policy, it did not have a policy of sending children out to work, but maybe it does now, given that it has a turnover tax policy, as well. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000502\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022483538bc113148f39b88681ec8b9652e\u0022\u003EHon Members\u003C/span\u003E: Down the mines!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000503\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fbe3f87c-849c-4eee-84cc-119edeb1a681\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022823197a9b5784c45b9b46a1229bebc6f\u0022\u003EAARON GILMORE\u003C/span\u003E: Send them off to the mines, in many ways. We heard from Mr Nash that early childhood education in Napier had been cut and had no money. It has $1.7 million floating around in bank accounts, as I have seen. Also, the Canterbury Westland Free Kindergarten Association has even more money than that floating around. We do not think it is appropriate that hard-working taxpayers should pay money in order for kindergarten associations to bolster their bank accounts. We think those associations should use the money that they have first, in the most sensible way that is possible. That is what we do in tough economic times\u2014we look at what is in our bank account, we look at what we have in the cupboard, and we look at spending it in a more sensible and appropriate way. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000504\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fbe3f87c-849c-4eee-84cc-119edeb1a681\u0022\u003EThat is what Budget 2011 does. It reprioritises a whole lot of things. It puts in place a lot of plans to spend our money in a more sensible way. It puts in place a plan to invest tens of billions of dollars in new infrastructure and new assets. Those are exactly the things that we want to do. Budget 2011 reduces our debt levels, puts the economy on a sustainable basis, and grows jobs. What more could we want? Thank you very much.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u0022c15f9fe6c5534ed1b44a95f322efa426\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 (Annual Rates and 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 68\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 4; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 54\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C, Harawira.\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=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000505\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00224d20506ff70e4213b14f1065e20d1bdf\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=\u0022de82250bf1624a039393717d157c0437\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000506\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022de82250bf1624a039393717d157c0437\u0022\u003EHon PETER DUNNE (Minister of Revenue) \u003C/span\u003Eon behalf of the Minister of Finance: I move, That the Taxation (Annual Rates and Budget Measures) Bill be now read a second time. This bill addresses two of the bigger programmes administered through the tax system\u2014Working for Families and KiwiSaver\u2014and the changes foreshadowed in the Budget brought down earlier this afternoon. The changes proposed in this bill are about making those programmes more sustainable by focusing them better to ensure that Government spending is directed to where it is needed most, and eliminating spending that is not.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000507\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EWorking for Families recipients on higher incomes will therefore find that the changes the bill makes will reduce their tax credits at a faster rate, and their reductions will begin at an earlier point in their salary scale. In brief, the changes introduced to Working for Families are an increase in the abatement rate by 1.25 cents at every inflation adjustment from 1 April next year until it reaches 25c in the dollar; a decrease in the abatement threshold at every inflation adjustment from 1 April next year until it reaches $35,000; and the removal of the inflation adjustment for family tax credit amounts for children 16 and over from 1 April 2012 until the amounts for children aged 13 to 15 catch up. Once these amounts equal the family tax credit amounts for the oldest child, the inflation adjustment will apply again. Because these changes take effect from the beginning of next year, they need to be put in place at this point to allow systems changed to cope.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000508\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe changes to KiwiSaver are intended to ensure that the scheme continues to make it easy for people to save and so be better off in retirement, while reducing the cost to taxpayers of the subsidies to individual accounts. All employer contributions to employees\u2019 KiwiSaver accounts will be subject to the employer superannuation contribution tax, and the member tax credit is being halved for the next member tax credit year, which ends on 30 June 2012. The minimum employee contribution rate will rise from 2 percent to 3 percent from April 2013, as will the default contribution rate, and compulsory employer contributions will similarly rise from 2 percent to 3 percent at the same stage. Those changes are not included in this bill. They will come in legislation due later in the year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000509\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThese are the major measures contained in this bill. The bill also confirms the annual tax rates for the 2011-12 tax year, as is the customary process. With those few comments about the measures, which I think are about ensuring a fairer, more balanced tax system that is part of the Government\u2019s overall strategy to return New Zealand to a pathway of economic recovery, I am happy to 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=\u0022aea38d48b0b94c858d60964172a89fa6\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000510\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022aea38d48b0b94c858d60964172a89fa6\u0022\u003EHon DAVID CUNLIFFE (Labour\u2014New Lynn):\u003C/span\u003E The Labour Opposition completely and thoroughly disagrees with and objects to this sham of a bill, the Taxation (Annual Rates and Budget Measures) Bill. The first point we make is to ask why we are here in urgency, debating a bill that does not take effect for 18 months. If it took effect earlier, it would be proof positive that the Government had broken its promises not to cut KiwiSaver and not to touch Working for Families in this term of Government, and its promise to go back to New Zealanders to seek a mandate\u2014just like with asset sales. But the Government has thrown all that aside and is pushing through this bill in urgency on a sham. Those members should be ashamed. The whole Budget is a sham. It is built on flimsy foundations of unspecified cuts and divergent forecasts between different departments. It is built on a very, very flimsy foundation, to the risk and cost of all New Zealanders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000511\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EI tell the Government to talk to New Zealand families who are losing up to $50 a week because of the Working for Families cuts, or couples losing $20 a week because of the KiwiSaver cuts, and tell them why they are bearing the brunt while farmers and high-income individuals keep their tax dodges and keep their 2010 tax cuts. Working New Zealanders are picking up the tab. This bill is unfair, it is ill-timed, and it is unconstitutional because there is no mandate to do it. It is a sham, like the whole Budget is a sham. The Minister of Finance should be ashamed, the Government should be ashamed, and the public should throw them out. That is what they deserve. The public has a final, last chance on 26 November this year to stop these cuts dead in their tracks, but they will have to stop this nasty, greedy, Tory Government dead in its tracks to do so. It is the only way to protect KiwiSaver, it is the only way to protect Working for Families, and, frankly, it is the only way to restore rigour to the Budget process after the pathetic excuse of a sham that has been presented to the New Zealand people today. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000512\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003ESitting suspended from 6 p.m. to 7 p.m.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000513\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002282bf78bc10c74b9bbd1d00187667fc80\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: Before we broke for the dinner break we were asking ourselves why the Taxation (Annual Rates and Budget Measures) Bill is being debated under urgency, because the changes it incorporates apparently do not come into effect until 2012. That is hardly urgent. What is more, Government members have argued that that is an entirely good thing because it shows that they are keeping faith with the electorate, which still has the chance to throw them out on their ears. However, as a matter of fiscal prudence, that argument does not square well with the fact that the proceeds of these cuts are already incorporated into the Budget baseline as of now. They are in Budget 2011, not Budget 2012. That means that next year, if members opposite find themselves rather fewer in number and sitting on the Opposition side of the House, the Government of the day will have to either unpick these changes or find other means of filling in the baseline hole. In other words, the constitutionality of going to the electorate for a change that was already booked in the Budget 6 months before is dubious. It is a sham, it is spin, and it is a victory for the political spin doctors in the Beehive over the substance of good government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000514\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EHow would members opposite know\u2014some Labour members here remember what it is like being a backbencher on the Government side of the House\u2014when no one tells them anything. They know less about what is in the Budget than we do. They get dragged in at lunchtime by the Ministers and told \u201CThis is when you have to clap\u201D, and they all bark like seals. That is how it works, and they are still doing it. But I ask why the Government members are doing that, because I have been debating with myself and colleagues as to whether this Budget is a zero or a one on a scale to 10, depending on where one starts. I will stick with Bill English\u2019s definition. He called it a \u201CZero Budget\u201D, and I think he was right; it really is a zero. Phil Goff called it sub-zero. He might have been a bit harsh, and that is our job, but I think zero is a fair balance point\u2014zero out of 10. I ask members why that is. It is because it had to do three big things. It had to credibly reduce the deficit, and I will go into why that has not occurred, and it had to make structural changes to the economy to lift our growth rate, lower debt, increase savings, and improve the balance between the export sector and the domestic non-tradable sector. It has done none of those things. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000515\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThere is not even the pretence, the sham, or a shadow of an economic development plan anywhere in this Budget. I thumbed through the Budget Economic and Fiscal Update in the lock-up. I thought I had missed a chapter or maybe there was another volume, but there was not. There is no plan in this Budget for growth. That might be why the Inland Revenue Department does not believe Treasury\u2019s growth projections and has run out a revenue track on pages 81 and 82 that is $3.8 billion lower than Treasury\u2019s revenue track over 4 years. Even the Inland Revenue Department does not believe the rosy glow of the growth forecasts that are in this Budget. It about as solid as a tissue. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000516\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EI turn to the third criterion that a good Budget needs to satisfy: it has to be fair to all New Zealanders. We on this side of the House actually agree with the Government that the deficit and the debt mountain are too big. People need to draw in their belts and savings need to be found. That is all true, but the fact remains that there are choices. If there are to be savings, then they had better be fair. They have to be fairly spread around the community so that those who can afford it most pay a little more and those who can afford it least are given a little bit of a hand up. We as Kiwis do what we do well. We look after each other and we try to get through, bringing everyone along. But, oh no, the Budget does not do that. It does not say \u201CThese are tough times. We\u2019re short of money and we gave away too much with those upper income tax cuts, as $23 billion of tax revenue forgone was a bit excessive in light of the way the world has turned. Let\u2019s claw some of that money back and ask upper-income earners to give back a little of the 6-cent tax cut they had on the original rate of 39 cents in the dollar.\u201D The Budget does not do that. It does not close down loopholes for the people writing off income on their businesses or farms, or creating a trust. It does not do any of that tax-avoidance work. It does none of that. There is nothing about broadening the tax base in this Budget. There is none of that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000517\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThrough the changes in this bill, the Budget claws back KiwiSaver investments at the rate of $10 per week for each KiwiSaver, and the employer tax credit will partly be offset against the employee\u2019s accumulated funds. In that way, each KiwiSaver is about $10 to $12 per week worse off. That is not as bad as what is happening with Working for Families. By 2015 a middle-income family with two children and two parents earning $80,000 per year between them will be $50 per week worse off, according to our analysis\u2014$50 per week worse off on Working for Families. That is why we said to members opposite earlier on that Ruat\u014Dria will be \u201CRua-poor-ia\u201D by the time those changes feed through. Te Ururoa Flavell will have to explain to the good people of Waiariki why he supports a Government that is cutting their p\u016Btea and what will go on the table for their wh\u0101nau. He will have to explain why he is backing a conservative Government that makes life harder for ordinary working families in New Zealand. That is what this Budget does. It tightens the belts of those who are already wearing them tight, whereas the belts of the fat cats are loosened even more. That is wrong. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000518\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThere are three things wrong with this Budget. Firstly, it is built on flimsy foundations. There is too much smoke and mirrors. Even the Inland Revenue Department does not believe the numbers. Secondly, there is not a shadow of a plan for growth in jobs. Thirdly, there is no equity. Some belts go out, some come in, and we end up with a divided society that is no better off by the end of the forecast period.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022 data-id=\u0022e5c98a9de3b549e3a2485b465f56c6dc\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000519\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e5c98a9de3b549e3a2485b465f56c6dc\u0022\u003ECRAIG FOSS (National\u2014Tukituki):\u003C/span\u003E I find myself in the very awkward position of agreeing with members on the other side of the House on something. Before the dinner break, Mr Cunliffe and one of his colleagues who spoke earlier said that Dr Cullen would have never delivered a Budget like this one. That is so true. Let us look at some of the differences in this Budget. It is transparent, it has a path to lower debt and a surplus, it is open, and its numbers have integrity. Wherever possible, things have been front-loaded, such as putting into this year this Government\u2019s full commitment to the reconstruction of Canterbury, which is, all up, about $8.8 billion going on to the accounts this year. The previous member started by worrying about why this bill was being debated tonight, because some of the changes do not come in until next year. I think he was asking why it was counted. I say to members that there is a little thing called the forecast period. In the Public Finance Act, I think members will find that for 3 or 4 years the Minister of Finance has to forecast anything and everything that he or she knows will affect the accounts of this country. Anything that the Minister of Finance knows is happening, has happened, or probably will happen is in this Budget. If there is something a bit further that he or she is unsure of, then it is in the various contingencies at the back. It provides certainty in very uncertain times. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000520\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EWe note how the Leader of the Opposition said earlier that he had signed the free-trade agreement with China all on his own, or something like that. After he said that, he also told us that the global financial crisis ended some time in 2009. Our Prime Minister invited him to go around the PIGS\u2014Portugal, Ireland, Greece, and Spain\u2014to suggest to them that the global financial crisis is over, and see what they say. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000521\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThis Budget and this bill will keep interest rates lower for longer. It is as simple as that. Mortgage interest rates and working capital interest rates will stay lower for longer. They have been at record lows under this Government. They will continue to stay low under this Government. Why might that be? There are a couple of reasons. One is that this Government is getting its books and its house in order after inheriting ongoing spending increases from the previous Government, which had no corresponding revenue increases attached to it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000522\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThe second is that under this Government, real inflation is around 2.5 percent. Everyone has been compensated for the GST increase, unlike with the previous administration. Under the previous administration, inflation was running at 5-plus percent, in spite of the Reserve Bank of New Zealand Act, which Labour members now seem so keen to want to change. Yet for at least 3 or 4 years of Labour\u2019s last period in Government, inflation well exceeded the 3 percent cap, as defined in the Reserve Bank of New Zealand Act. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000523\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThis Budget and this bill pass four solid, good tests. They put New Zealand and New Zealand enterprises in a better frame to grow their exports, because this recovery has to be export led. There is only upside, since the last 4 or 5 years prior to the National administration coming through, because there was no real growth. In fact, export\u2014the real tradable sector\u2014went backwards after 2004. The Budget and this bill pass the test of an export growth - led economy. They will grow savings. KiwiSaver contributions are going up. Household savings rates are on the increase. Dr Bollard from the Reserve Bank noted the other day for the first time in living memory that bank deposits are growing. New Zealanders are saving more, borrowing less, and moving from the debt-laden property boom we had in the previous administration. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000524\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThe Budget and this bill pass the test of reducing a deficit and of showing a lower debt track. We will have surplus sooner than was predicted even in last year\u2019s Budget, and much, much sooner than was in the papers to the incoming administration after the election of this National Government, when the decade of deficits was forecast and when the real numbers started to hit home. Members may recall a minor problem with Budget 2008. It did not include all those things around KiwiRail and ACC, but that is for another day. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000525\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThis Budget and this bill also pass the test of higher real after-tax incomes for New Zealanders, New Zealand families, and New Zealand households. Part 1 of this particular bill sets the annual rates of income tax. Therefore, they define the after-tax incomes of New Zealanders, which have grown at 6 percent after only 2\u00BD years of this National Government. After 9 years of the previous administration and the best economic times possible, real incomes grew only 3 percent\u2014after 9 years. There is a bit of a problem there. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000526\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EFinally, I will make just one more point. Members opposite are starting to point to page 81 of the Budget and are talking about some conspiracy theory or something. As they are wont, they are reading half the page. They talked about a discrepancy between the Inland Revenue Department forecasts and Treasury forecasts on tax take. If members read the page they will see that it is all about corporate tax. I will read the first couple of sentences of paragraph 2, which the members opposite seem to keep forgetting. Paragraph 2 states\u2014as the members opposite point out\u2014\u201CThe lower forecasts of tax revenue from Inland Revenue indicate there may be some downside risk to our tax forecasts.\u201D That is fair enough. It is open and honest. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000527\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThe second sentence is the bit the Opposition members keep forgetting to mention: \u201CAt the same time, there are also upside risks.\u201D Basically, that says that on the downside the tax forecasts from the Inland Revenue Department possibly could be wrong, but on the upside they possibly could be right. If Treasury is at one level and the Inland Revenue Department is at another level, they will tend to merge along the way. In fact, I recall Dr Cullen having ongoing problems with this issue, which, from memory, started an inquiry as to why his various forecasts were so discrepant from those of the Inland Revenue Department in many of his Budgets. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000528\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EAs we move through talking about this Budget and the taxation bill in front of us, I agree with members who, interestingly, are starting to justify previous Budgets, at least over 2 years and maybe even 11 years on from Dr Cullen. They are trying somehow to justify what they are saying today but totally forgetting to offer their own alternative plan for this Budget. Going into an election, Labour members are still stuck in the past and talking about Dr Cullen. Interestingly, I find myself agreeing with members on the other side. Dr Cullen would never have delivered a Budget like this one, because, quite simply, this Budget is attempting to fix the problems that the previous administration, under the stewardship of Clark and Cullen, put upon this country. They were quite devastating problems, but this administration, this Minister of Finance, and this Budget will arrest and fix those problems and put New Zealand on a solid and good path for growth and prosperity. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022 data-id=\u00221c66fc6d837c4dabb442a3d271738649\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000529\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00221c66fc6d837c4dabb442a3d271738649\u0022\u003EHon DAVID PARKER (Labour):\u003C/span\u003E I will begin by correcting what I think is a misrepresentation of the real position in respect of wages that the previous speaker, Mr Foss, made in his contribution. He said that real wages after tax had increased by 6 percent since the date of the last election. Of course, these averages can be very deceptive. That figure is only right if we include the top 10 percent of income earners.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000530\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e87d9ff182b84f5fa255bfa01a4c9893\u0022\u003ECraig Foss\u003C/span\u003E: Ha!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000531\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221675c770e56345e69f8453d14892d9e2\u0022\u003EHon DAVID PARKER\u003C/span\u003E: That is true. If we look at the spectrum of wage increases across societal wages we see that more than half of New Zealand wage earners are earning less in real terms than they were at the last election. It is only if we weight that average by including the 10 percent of salary earners and wage earners who profited handsomely under National\u2019s income tax cuts\u2014in fact, got 42 percent of the tax cuts\u2014that the average that Mr Foss gave is correct. For the vast majority of New Zealanders, that is not the position they personally have found themselves in. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000532\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EI will speak more on a topic that Mr Foss agreed was important, which is savings. One of the things I want to emphasise, as I said in an earlier contribution, is what page 70 of the Budget shows being New Zealand\u2019s net international investment position as a percentage of GDP. This is the figure that the Minister of Finance quite rightly has been emphasising in the House. This is the sum of all of New Zealand\u2019s assets overseas\u2014that is, assets owned by the Government, and private\u2014less all of the debts that are owed to overseas and other people\u2019s investments in New Zealand. It is our net investment position. In 2011 it is 78.6 percent of GDP, which is slightly better than it was in 2010. From here on it gets worse every year. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000533\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EThe Minister of Finance has been telling us that the biggest problem in the country is our net investment position, and from here on it gets worse every year. That is the effect of the Budget and this legislation we are passing. How can the Government crow about that? It gets worse every year. In fact, it grows from 78.6 percent of GDP now to 85.3 percent of GDP in 2015. We are told that we are already one of the worst countries in the world, and the effect of this Budget and of the economic management of the Government is that by 2015 that figure gets worse and will be 85.3 percent of GDP. It is a sobering reality. It is a sobering reality in regard to the effectiveness\u2014or ineffectiveness\u2014of the Government\u2019s management.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000534\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EAnother point that I agreed with Russel Norman on in an earlier contribution was when he said \u201CAnd to get there, you\u2019ve got to have a return to, effectively, property-based consumption.\u201D In his view, that is signalled by these Budget documents. Inside that figure is also an assumption that KiwiSaver will grow in the way the Government thinks it will as a consequence of the changes it is making to KiwiSaver. The regulatory impact statement that we provided in Parliament today talks about its assessment of the changes to KiwiSaver. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000535\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EMembers should remember that the Government is predicting that as a consequence of this, savings will still increase, but that does not make common sense to me. If we are going to require people to contribute more to their savings with fewer incentives, how can we credibly conclude that more people will do that voluntarily? How does that work? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000536\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EI am not the only one who is concerned about that. When I read the regulatory impact statement, I see lots of riders in it about how the Government does not really know how this will pan out, and it is not very confident about that. I will read out a couple of sentences. \u201CThe impacts of each option cannot be easily modelled using historical data, given the relative newness of the KiwiSaver savings model, nor is international comparison always appropriate, given many of KiwiSaver\u2019s unique features and New Zealand\u2019s TTE model of taxation. Our analysis of the options is therefore dependent on behavioural assumptions, for which there is minimal empirical evidence, about individuals\u2019 and employers\u2019 responses to changes in savings incentives and other regulatory requirements.\u201D That is the first thing I will read out. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000537\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EThe next thing is: \u201CWe have also recognised that KiwiSaver is less than five years old. Since its launch in July 2007, there have been several significant changes to contribution requirements, which have mostly affected employees and their employers, as well as new providers entering into the KiwiSaver market. The KiwiSaver industry has not experienced any period of stability in which to establish its core products, and this uncertainty and unpredictability is not helpful to either the industry or savers.\u201D It then goes on to say: \u201CThe proposal to increase the compulsory employer contribution rate at the same time as increasing the minimum employee contribution rate will lead to some additional costs on businesses that employ staff,\u201D\u2014 as well as, of course, the employees who are contributing\u2014\u201C\u2026 in the short term this may reduce firm profitability.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000538\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EAgainst that background and all those uncertainties, how can the Government have any confidence that its changes to KiwiSaver will result in the level of savings that it is assuming? Therefore, it is possible, in my submission, that if those people are not saving that money\u2014the savings that this country so desperately needs to improve the productivity of our businesses, so that we have more capital available to our businesses to grow and to invest in more expensive capital plant and other things to improve productivity\u2014then we can have no confidence that the Government\u2019s projections will be met. I tell Mr Foss, in regard to his point about there being an upside and a downside in forecast, that there is always an upside and a downside in revenue forecasts. The point the Opposition was making is that even the Budget documents note that there is a very large discrepancy between the forecast from the Inland Revenue Department and Treasury as to tax forthcoming from the corporate sector\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000539\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ef62305706994e34a4d7d2d2b510209f\u0022\u003ECraig Foss\u003C/span\u003E: Over 4 years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000540\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cba60fa2487e43c59f7f2b4db757fe57\u0022\u003EHon DAVID PARKER\u003C/span\u003E: Correct. In the face of that uncertainty, the Government has not taken the prudent course in taking the lower number. It has not even split the difference between them. It has taken the most optimistic number and plugged it into its forecast. That is another example of wishful thinking on the part of the Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000541\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EAnother area of poor practice according to the Opposition, of which there is no precedent that I am aware, is that the Government has said it will save $330 million per annum in respect of programmes it will cut, but it has not identified them. We are expected to believe what the Government is saying, that it can be relied upon to find those savings, yet we are not told where Government departments are meant to look to find them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000542\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EAnother example of what seems to me to be voodoo economics is that the Government has imposed on every school in New Zealand the requirement to co-fund the superannuation savings of their teachers. The teachers are entitled, as is any other employee, to opt into the superannuation savings scheme called KiwiSaver. If they do that, then under that scheme they will be saving 3 percent of their own salary, plus the employer\u2014in this case the schools\u2014will have to match that with another 3 percent. That 3 percent\u20142 years ago it was 4 percent, then it dropped down to 2 percent, and now it is going to 3 percent, in the middle\u2014has to be funded by the schools now, whereas previously it was funded by the Government. The Government used to fund that contribution to match the teachers\u2019 savings. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000543\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EWhere are the schools going to find that? Where will they magic that money from? There is silence from Government members; their heads are down. They know there is no answer to that. That is effectively a significant decrease in the funding of every school. I have been on a school board of trustees, as have a number of other members of this House. Those schools are constantly fighting to balance their budgets. They are facing inflationary pressures, in any event, from power prices going up, which, by the way, will only get worse if the Government sells off State-owned enterprises. That is also counted in its Budget forecast. Despite the fact that the Government pretends that this is not yet upon New Zealanders and that they have a choice, it has already counted this in the Budget as if they had already been sold.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022 data-id=\u0022c739ca9faa2446cfbf3f0c795051e14c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000544\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c739ca9faa2446cfbf3f0c795051e14c\u0022\u003EDAVID CLENDON (Green):\u003C/span\u003E Kia ora, Mr Assistant Speaker Robertson. Kia ora koutou. I am pleased to take this first opportunity to speak to the Taxation (Annual Rates and Budget Measures) Bill and to the Budget generally. Today we heard the opening salvos in what will be a long debate. We welcome that debate and the opportunity to put up some of our ideas, beliefs, and alternative approaches to this very critical issue of where the money comes from, where we spend it, and in whose interests we undertake those transactions. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000545\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EA lot can be said\u2014and, no doubt, will be said\u2014about this bill and about the Budget more generally, but a great deal more can be said about what has been left out of these documents. We can talk about doing a gap analysis of the series of propositions we heard from the Government today, but we can more properly talk about a chasm. There is a great white space where there could be something resembling a vision. There is a complete absence where we might have hoped to see something that would suggest there is a long-term strategy or plan to establish and create a long-term socially and environmentally sustainable economy in this country that has an absolute and clear capacity to achieve that goal and that state. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000546\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EInstead, we are offered nothing more innovative or visionary than some quite mean-spirited cuts to public spending, cuts to income support, and cuts to the Government\u2019s contribution to individuals\u2019 and families\u2019 long-term savings. These cuts will hurt families and households because they come at a time when incomes are at best flat and in many cases reducing, and when people are struggling to pay their day-to-day expenses and costs and to meet their bills. We see nothing in here that will give those people much hope, or much confidence that they are in good hands, that their future is being well regarded, or that they should have some hope of a better future. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000547\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EWe see the cuts to the Government\u2019s contributions to KiwiSaver. That in itself is a breach of an assurance that this Government gave to the general public, to participants, and to contributors that KiwiSaver would not be meddled with. This has been a remarkably successful mechanism. KiwiSaver has been a success. It has almost been a victim of its own success, to the extent that the take-up has caused some difficulties. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000548\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EAn investment scheme of this sort is one of the last things that Governments should play politics with. Like superannuation funds, people need to have confidence in long-term savings schemes. They need to know there is some security and that the rules will not change arbitrarily year by year, Budget by Budget, or political term by political term. It is not helpful for the investors, who in time will utilise the sums of money that are available to them through these funding programmes and savings programmes. It diminishes the confidence of the saver and the investor, and that is not helpful. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000549\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EThe Government insists that it will seek a mandate for its changes at the next election, which I must say is one of the few innovative aspects of this Budget\u2014to suggest that somehow retrospectively the Government can get a mandate for taking away something that it assured voters it would not take away. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000550\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003ESomething like 110,000 parents will be affected by the cuts to Working for Families as unveiled in the Budget. More than 23,000\u2014about one-quarter of those parents\u2014will be earning less than $60,000 in their combined household incomes. Families with a combined income of some $60,000 are not well-to-do, particularly if they are still supporting mortgages that they may have taken on in happier times, or if they are paying rent on homes that are increasingly poorly maintained and often sub-standard. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000551\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EWe see a lowering of the abatement threshold to $35,000. We can look at what this means in practical terms for a two-parent family, with one partner working full-time for the very meagre minimum wage that this Government allows them, even given the generous 25c per hour increase. Where one partner works full-time on the minimum wage and the other is working 12 hours a week on the minimum wage, the abatement will apply to them. Raising the abatement rate to 25c in the dollar results in an effective marginal tax rate of some 58 percent, which is simply untenable. Where is the incentive for people to improve their position or to try harder? We are constantly hearing from the Government side of the House that people simply need to work harder to better their position. Where is the incentive to do that, when we take away the level of support that people have come to expect and are still reliant on to a large extent? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000552\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EMuch of what we have seen in this Budget, and in the tax bill we are debating here tonight, is an assumption\u2014which can, at best, be termed an optimistic hope\u2014that the economy will come right. The growth forecasts here are extremely optimistic, and already financial commentators are shining a light on what have been termed \u201Cheroic assumptions\u201D about growth in the economy over the next few years. The Government is relying on Treasury estimates, but there is an unfortunate history to that. Treasury, in the last several years\u2014particularly since 2008\u2014has routinely overestimated growth by some 2 to 3 percentage points of GDP. Why would we depend on forecasts that have historically proved to be at best optimistic, and often plain wrong? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000553\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EPerhaps it is a reflection of the Prime Minister\u2019s former profession as a currency trader\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000554\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229b1bb05cee714087a9035cda10a0b9e5\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: A speculator.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000555\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d32a2d016068408abac8ef9ddeb16d33\u0022\u003EDAVID CLENDON\u003C/span\u003E: \u2014a speculator. Essentially that is an activity and a sector that require people to be very good at gambling. We are seeing essentially a gamble\u2014gambling on growth. It is not even gambling on solid, productive, sustainable growth. There seems to be an inbuilt assumption that this meddling\u2014this fiddling around the margins of taxes, spending, and cuts in Government\u2014will somehow return us sooner, rather than later, to economic growth: increased confidence; more consumption, particularly of imported goods; more borrowing; and more debt related to property. In short, we are back on the good old treadmill. It is the treadmill of increased debt\u2014debt-fuelled inflation, which will inevitably lead to the next bubble. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000556\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EWe have heard a lot from the Government tonight that nobody has put up much in the way of an alternative. [Interruption] Some suggestions? I am very happy to do it. If members go to our website, they will find a more comprehensive set. We have a small paper here, the Green Budget Paper 2011. We are putting it out there for people to see what the Green Party thinks the future should look like. This is what we think are the solutions. There are some practical propositions to get us out of the unfortunate situation that there is no doubt we are in. You are most welcome to read it, and I hope you do. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000557\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022994b1d02c6774b57bda2152594d14da6\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: Order!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000558\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022de44e3f2b6204896a9646200fe6f5c68\u0022\u003EDAVID CLENDON\u003C/span\u003E: Excuse me, Mr Assistant Speaker. One hopes that members of the Government will undertake to read that document. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000559\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EWe are told that one of the reasons for spending cuts is to fund the repairs of Christchurch\u2014the very necessary investment in rebuilding that very fine city. We have an alternative proposition. It is, of course, a levy\u2014a fixed-term, probably 5-year, very modest levy\u2014that would provide over 5 years some $5 billion, which would remove the necessity of borrowing. The Government\u2019s proposition of borrowing that $5 billion will lead us to an interest bill per annum of some $250 million. I struggled to comprehend this afternoon. We heard the Minister of Finance and the Prime Minister speak of the problem of rebuilding Christchurch as having been somehow solved because they are going to borrow money to fund it. In what world is borrowing to the hilt a long-term sustainable solution to a natural disaster, when we have a viable option right here? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000560\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e959f20f-3de7-4f54-8577-8ea78d72c3dd\u0022\u003EWe propose a levy of 1.5 percent on incomes from $48,000 to $70,000, a 3 percent levy for those on incomes above $70,000, and reversing the 2 percent cut to corporate tax. That would raise $1.1 billion a year. For the taxpayer earning about $50,000 a year, that levy would amount to the princely sum of some 50c per week\u2014not dollars, but 50c per week. It would not be visible to the average person on $50,000 a year. Those on $70,000 and above would pay about $6 a week\u2014again, not an extravagant figure. People earning above $100,000 would pay about $23 a week, and most of those could well afford it. That levy would enable us to rebuild that city without resort to the unfortunate propositions put forward by the Government. Kia ora. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022 data-id=\u0022a4119c148ee54a64a913d799f8075c92\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000561\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a4119c148ee54a64a913d799f8075c92\u0022\u003EHon HEATHER ROY (ACT):\u003C/span\u003E The ACT Party supports the second reading of the Taxation (Annual Rates and Budget Measures) Bill. First, I have a few comments about the Budget generally. I agree with several of the comments made by the previous speaker, David Clendon from the Greens, about the need for vision and planning, and to grow the economy, but where the ACT Party differs from his ideas is on the means by which we would achieve those goals. The ACT Party has been quite disappointed in many areas of this Budget. There is too much tinkering in many areas, we think, rather than real solutions to the problems that this country faces. When we look at how to tackle the current fiscal situation that we find ourselves in, coupled with the additional burden that the Christchurch earthquakes have added to our economy, we see the need to look at a higher level. That is where I agree with the Green member David Clendon regarding his statements on vision and planning. We need to consider the state of our economy as it pertains domestically, but we also need to look at the international situation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000562\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EI would compliment the Minister of Finance on his statements today and on his actions to tackle the deficit and the debt that we face in this nation, which are far too high. The focus in this Budget, as he has outlined, is on encouraging saving. Those things are all very commendable, but they need to be coupled with actions, the actual things that will make this saving happen and tackle the deficit and the debt in a meaningful way. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000563\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EThe ACT Party was particularly disappointed in the way that student loans have just been tinkered with. If the Government really wanted to make an impact on tackling the more than $12 billion of student debt that is now owed to the country, then we should have taken a long, hard look at re-establishing interest rates on those student loans, so that the incentives were in the right place. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000564\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EThe other area, which pertains directly to the bill that we are speaking about, is Working for Families. We have seen just a skimming-off from the top. Working for Families should never ever have become the middle-class welfare for those on higher incomes that it became under the previous Labour Government. I will give this example. The member for Waimakariri was busy creasing his face and wriggling around in his seat before he stood up just now, but he should remember that people who are capable of earning and of supporting their families should be doing that themselves. When Working for Families was first established in 2004, had I been the sole income earner in my household, as a backbench MP on $122,000 a year with five children, I would have been eligible for $22 per week of Working for Families tax credits. Why on this earth would anyone ever consider it reasonable that a backbench MP could be eligible for welfare? That is nothing more than middle-class welfare, and it should never ever have been on the agenda in the first place. Although I would have liked to see the National Government take a much more responsible look at Working for Families and tackle it in a much more meaningful way, at least it has taken a knife to this area, where doing that is absolutely warranted, and that is why we support this bill. It is absolutely imperative that we grow this economy. That is the way out of this situation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000565\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EI also compliment the Government on the two very thorough regulatory impact statements. I raise this issue because when Working for Families was first put forward in 2004 under the previous Government, we hardly ever saw any sort of regulatory impact statement. Those statements were always in the drafting phase; they were always about to be tabled, but never were. The regulatory impact statements that we have before us, which have been tabled in the House today, are very good, and they clearly outline where we should be going. I would like to take the Government to task, though\u2014having just complimented it\u2014on some of the things that are written here. It should have acted much more strongly to put many of these measures in place. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000566\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EI will pick out one paragraph from the introductory comments in the KiwiSaver regulatory impact statement and quote it here: \u201CAs the quickest way for the Government to improve national saving and reduce economic imbalances would be to improve its own saving position, the identification and development of options quickly narrowed to those most likely to reduce Government spending without undermining the primary purpose of KiwiSaver.\u201D That is very pertinent, and as we put policies in place we should remember those things. I looked at the conclusions for the KiwiSaver changes, and I also want to quote a piece from them: \u201CThe proposed measures could also encourage higher private contributions.\u201D, which is something that we should be very mindful of in this House. The Government is making a bit of a move towards that, but, looking to the future, we should be acting very strongly in this regard. The comments also noted that \u201Ceducation \u2026 about the continuing importance of individual saving, to ensure resources are over and above New Zealand Superannuation in retirement, are highly desirable.\u201D That is quite right. It is the benchmark against which we should always be measuring the policy initiatives put in place. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000567\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EI have already noted our concern about the skimming-off of just the very top level of Working for Families, when much more stringent changes could have been made by the Government. Again, the conclusion statements in Working for Families regulatory impact statement say this: \u201COfficials consider that the majority of the options identified in this RIS, including the preferred option, will generate fiscal savings, broadly protect lower income earners, and better target WFF without\u201D\u2014and this is the important part\u2014\u201Chaving significant impacts on incentives to work, child poverty, or income inequality.\u201D Again, those are very good benchmarks and principles that all policy should be measured against. I compliment the Government on putting those forward. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000568\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EThere has been plenty of detail in the discussion in the House tonight, but I would like to come back to the point I made at the start of my speech, which is that we should look at things at a very high level before putting detail in place. We see plenty of tinkering in this Budget. We see plenty of tinkering in a number of areas where we could have made much harder decisions that would tackle debt and the deficits more quickly than they are being tackled. We are moving in the right direction, and that is why we support this Budget and this bill. But the ACT Party would have liked to see much more regard being given to getting the incentives right in all of those areas, so that we could increase the rate of economic growth much more quickly than we will be able to do. Thank you. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022 data-id=\u0022b02579ab3e724bb9b5136d28d2d67e6a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000569\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b02579ab3e724bb9b5136d28d2d67e6a\u0022\u003ETE URUROA FLAVELL (M\u0101ori Party\u2014Waiariki):\u003C/span\u003E T\u0113n\u0101 koe, Mr Assistant Speaker Robertson. Talofa lava ki a t\u0101tou katoa i t\u0113nei p\u014D. Thank you for the opportunity to speak at the second reading of the Taxation (Annual Rates and Budget Measures) Bill. There has been a key word in this Budget: responsibility. The M\u0101ori Party is conscious of our responsibility to grow a country that takes us all with it by creating a positive future for every citizen in Aotearoa. We must protect our most vulnerable, and no one must be left behind. Our role in Budget 2011 has been to call for a reasonable Budget that takes account of the sharp edges of recession but also invests in our mokopuna.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000570\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EYoung M\u0101ori New Zealanders are particularly critical to the M\u0101ori Party, as 54 percent of M\u0101ori are under 25 years of age. We know that when we get the best deal for M\u0101ori we get the best deal for New Zealand, for Aotearoa, because New Zealand\u2019s future is in the hands of our future workforce. Our youth, who increasingly are M\u0101ori, Pacific, and Asian, need our support now, because their education, their success, will be our support as we grow old. We need to embrace diversity, as it will be through our combined talents and strengths that we can plan for the future.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000571\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EThe M\u0101ori Party\u2019s other key theme in shaping Budget 2011 has been the notion of investing in the future. Our focus in education in this round has been on addressing some fundamental challenges, such as $60 million over 4 years to build new kura kaupapa M\u0101ori and upgrade existing school buildings. I refer to a speech given by the member who tomorrow will be the former member for Te Tai Tokerau, Hone Harawira. He suggested that the Minister of M\u0101ori Affairs and Associate Minister of Education, Dr Pita Sharples, had sold out on kura kaupapa M\u0101ori. I do not think so. An extra $60 million over 4 years is pretty helpful. There is an investment of $3 million over 3 years to support Te R\u016Bnanganui o ng\u0101 Kura Kaupapa M\u0101ori o Aotearoa to develop a curriculum and associated resources based on the philosophy of Te Aho Matua, and another $8 million\u2014I say another $8 million\u2014over 4 years to realign kura transport assistance, which has been capped since 1995, with that of mainstream schools. And there is $6.5 million to expand family-based literacy programmes to all decile 1, 2, and 3 schools, building on the current Reading Together programme. That is awesome\u2014that is awesome\u2014and it could not have come about without the help and assistance of the M\u0101ori Party, and, indeed, its promoting of this programme with the National Government.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000572\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EThese are just a few of the new initiatives that the M\u0101ori Party has achieved in Budget 2011. We say it is about wh\u0101ia te rangatiratanga\u2014taking control of our destiny. If we look at Wh\u0101nau Ora, we see that that best embodies the concept of shaping our future, taking responsibility for our own solutions, and being successful by trusting in a collective model. This, again, is where the M\u0101ori Party comes in, in terms of getting National to change the paradigm. That has been important.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000573\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EI want to return to the key planks in Budget 2011 of protecting the vulnerable and investing in the future in relation to this taxation bill. With KiwiSaver, of course we are concerned about the impact that the proposed changes will have on the vulnerable. But also, and in line with the concept of wh\u0101ia te rangatiratanga\u2014taking control of our destiny\u2014we need to look at the wider issues around creating a savings culture. We accept that New Zealand has a poor savings culture, and we need to address this. High levels of household spending have fuelled inflation pressures over recent years, and New Zealanders have spent more than they earned. Consequently, the pressure on promoting the concept of savings is paramount. We are conscious of the need to plan for what has been called the \u201Csilver tsunami\u201D\u2014caring for the baby boomer generation. While savers and employers will have to pay more, in the move to make this scheme more affordable over the long term the Government is reducing its commitment, and this may have a backlash effect in terms of discouraging savers and employers. Our other concern is whether the changes might prove unaffordable for lower and middle income constituents already struggling to cope with rising costs. We believe that those people on lower incomes should carry less of a burden, proportionately, than those who are on higher income levels, and we would be concerned if any disincentive to save, such as increasing their payments, would cause them either not to enter the scheme or to take contribution holidays. But we are pleased that the changes will not happen overnight. This will give people and businesses more time to adjust.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000574\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EI come back to being responsible. We have heard that KiwiSaver currently costs the Government $1.1 billion. Halving the Government\u2019s KiwiSaver contributions would save the Government around $600 million per annum, we are told. That amount of savings has to be good for the nation.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000575\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EThe other big focus in this taxation bill is related to changes to Working for Families. From this legislation it would appear that Working for Families will be better targeted at low-income families who have a much greater need for assistance, and a little less generous to the families higher up the Working for Families scale. We support this change and we support the intention to do it gradually in a way that minimises the impact on families.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000576\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EOutside the scope of this bill but well within the ambit of our focus is the fact that the Working for Families package as such offers no poverty relief for benefit-dependent families. It does not sufficiently address poverty or, more to the point, child poverty in Aotearoa. Although we support the refocusing of Working for Families to support the most vulnerable participants in the scheme, of course we cannot ignore the situation of so many of our families who are not even eligible for the scheme. We have a commitment to eliminate poverty. Poverty reflects worse on those who have but do not share than on the have-nots. We will continue to advocate for the protection of the vulnerable, the elderly and the young, and the disadvantaged, and we will continue to focus on restoring wh\u0101nau responsibility and on investing in the future. Education is not a cost but an investment in the future prosperity of the nation. But for the purposes of the second reading of this bill, we are prepared to support this second reading. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022 data-id=\u0022ec50c1e827ea4d45a7524acf7ecbd045\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000577\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ec50c1e827ea4d45a7524acf7ecbd045\u0022\u003EPESETA SAM LOTU-IIGA (National\u2014Maungakiekie):\u003C/span\u003E Malo le soifua maua. Thank you. It is certainly my privilege to speak on the second reading of our Taxation (Annual Rates and Budget Measures) Bill. Today is a momentous day. It is a momentous day because this Government has set out a plan to get us on the road to recovery. It has set out a measured plan, a balanced plan, and a prudent plan in order to get this country back on the road to recovery. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000578\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EAs we have all heard tonight, the country is on a precipice in terms of the Budget deficit of $16 billion. It has been shaken by two major earthquakes, and, of course, we had the Pike River disaster. But the country\u2019s future has been set out in a Budget that is prudent and balanced. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000579\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EWhen we came into power 2\u00BD years ago we had to cover the damage of 9 years of Labour. Under Labour there were 5 years of exports contracting and 9 years of some of the highest interest rates that our businesses and our consumers have faced. Inflation rates were well above Reserve Bank requirements. Those are the conditions we inherited. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000580\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EWhere have we been in the last 2\u00BD years? This Government has been about investment: investing in infrastructure, investing in people, and, particularly, investing in our schools and in our health system. I am proud of this Government. In my local electorate our local high schools have received a services academy\u2014an investment in our young people to grow and develop. One Tree Hill College had a music suite put in place. Admittedly, that was started under the last Labour Government, but it was certainly constructed and opened under the National Government. We have an arts centre at Onehunga High School. These are the types of investments in our young people that this Government stands for. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000581\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EIt has also been about investing in our roads and in our infrastructure, in broadband. Investment in State Highway 20, which runs through my electorate and is one of the biggest State highways in the country, demonstrates the Government\u2019s commitment to infrastructure. It was constructed on time, to budget, to scale, and to specification. That is the type of Government that people want to see. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000582\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f37717a34a064df78ae4a7b991789147\u0022\u003EDavid Shearer\u003C/span\u003E: Who put it in place?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000583\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f98e76819bff46078a579ab637c2949a\u0022\u003EPESETA SAM LOTU-IIGA\u003C/span\u003E: I did not negotiate the free-trade agreement with China. Someone did. It might have been the Rt Hon Helen Clark but I do not know what role Mr Goff played in those negotiations. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000584\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EThis Government has also been about delivering front-line services. It has not been about increasing the bloated bureaucracies that are part of a Labour Government. The biggest show in town in the previous Government, the show that actually fuelled inflation, was Government spending\u2014Government departments. We are about delivering more police in South Auckland. We are about delivering more nurses and doctors in our hospitals and our general practitioner clinics. This Government has delivered on those promises. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000585\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EWe have heard tonight about the details around this Budget. Working for Families has been modified. KiwiSaver has certainly been altered. The student loan scheme has been streamlined. But I point out what the Budget really does at a grassroots level. It is about having a go at Government bureaucracies. We have put a figure in our estimates that looks at providing a better Public Service. Efficiency savings will be in the vicinity of $980 million over 3 years, and that is to be admired. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000586\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EIt is also about building the confidence and the trust of our investors in our capital markets. I had the privilege tonight to go to a function that certainly signalled the inauguration, if you like, of the Financial Markets Authority. This Government worked on the legislation that set up the authority, in collaboration with all parties in this Chamber. It is part of the measures that we are undertaking as a Government in order to restore confidence and trust back to financial markets. This Financial Markets Authority, which is part of this Budget, is about dedicating resources and putting in place the people who will actually take a stand in our capital markets. The authority will be well resourced, it will be well run, and it will certainly protect investors\u2014the mum and dad investors who were abandoned under the last Labour Government when finance company failures were not responded to in an adequate or an appropriate way. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000587\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EHow do we know the optimism that is prevalent in our economy? I visit businesses in my electorate like Owens-Illinois, where $600 million has been invested. That was the biggest investment in capital works in this country last year by a private sector business. When I see the investment, the employment opportunities, and the jobs created, I certainly feel buoyed. We also see the Government\u2019s investment in businesses like Compac Sorting Equipment. That company is based in Onehunga. It produces equipment that sorts fruit. The investment of millions of dollars, which are being put in over the next few years, will see that company grow, and will see its markets and its customer base grow from a few countries to a number of countries around the world. That is the type of investment we want to see in terms of science and innovation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000588\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EWe look at the members opposite to see whether a credible Opposition is in place. As we all know, it is important that a democracy delivers a credible Opposition. We hear from members opposite cries of taxing revenue and sales. We hear cries of taking out GST on fruit and veges. They are gimmick-type policies that are uncosted, unfunded, and do not deliver the type of growth that this Government is putting in place. I suggest to members opposite that they need to sort their own house out internally before they will be able to come out and deliver something positive for this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000589\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EI will end as I started. This Budget is about consolidating the road to recovery that was begun 2 years ago. This is about a prudent, measured, and balanced Budget. It is about being positive. It is about growth, jobs, and opportunities, and it is about taking New Zealand into the future. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022 data-id=\u0022f5a717c948ad42f88d0f0a84fb3a8d1a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000590\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f5a717c948ad42f88d0f0a84fb3a8d1a\u0022\u003EHon CLAYTON COSGROVE (Labour\u2014Waimakariri):\u003C/span\u003E We now know the marketing strategy of the National Government. Say a cut is a modification, say a cut is streamlining but do not call a cut a cut. This is the sort of spin that the previous speaker has come up with. \u201CWe modified Working for Families.\u201D [Interruption] No, no. The facts are that 200,000 participants in that scheme are getting a cut. It is a small word of three letters. Everybody, apart from that member, understands what it means. It is not streamlining. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000591\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003ELikewise for KiwiSaver. On the one hand members, and especially the member who has just spoken, say they want to encourage a savings culture. That member said that the Government has modified, or streamlined, KiwiSaver. No, no, the Government has kicked it in the guts. Every participant in KiwiSaver has had a kick in the guts from that member\u2019s Government. They do not feel like they have been streamlined or modified. They know what it is. The people are not stupid. That member thinks his constituents are stupid. They know and smell a cut when they see it. It is not a modification. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000592\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI say to that member that it is very interesting. The National Government, of course, has banked this whole Budget on a series of projections\u2014the creation of 170,000 jobs, and 4 percent wage growth over 3 or 4 years. But that is a very interesting set of projections. I can remember another set of projections nigh on a year-plus ago. The great plan was going to be a Job Summit. That then went west and we had a cycleway, which was to be the nirvana in terms of job creation for this country. I am told that to date the numbers are around 70 people employed on a cycleway to nowhere. Then that went west. Gerry Brownlee, the parliamentary blunderbuss of the Chamber, had a brilliant idea\u2014and the first, I suspect, in his terms, in his life\u2014and it was to mine national parks. That lasted 5 minutes. That was to be the great job creator, the roads would be paved with gold, and other miracles, according to Gerry. Then, of course, we had: \u201CNo, that\u2019s off. We\u2019re going to make New Zealand an international financial hub.\u201D That was a great slogan. It lasted 5 minutes, and we have never heard of it again. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000593\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe plan of Government members, because they know the people know they have no plan, is to say they have a plan, say it often enough, and hopefully people will believe it. They did not get it last time. No member on that side of the House, when they articulated a plan, actually put it into place. So I ask those members whether they really think people will believe them now. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000594\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI also say this. They use the Canterbury earthquake\u2014and I must say I do get a little raw that these members would use the Canterbury earthquake over and over again as some sort of alibi to cover their tracks in terms of what they are doing now. They make a case that says somehow the great contributor to the $16 billion deficit, which they have delivered in this Budget, was the Canterbury earthquake. If they read the Budget documents they will now know that the Canterbury earthquake, according to Treasury\u2019s own figures, contributed a mere 10 percent of accumulated deficit\u201410 percent of that accumulated deficit. Now we have dealt with that load of bunkum and that alibi, I tell members to think carefully before they use the people of Canterbury and the earthquake as an alibi for a $16 billion deficit. We now know, thanks to the Government\u2019s own Budget documents, that that is not the case. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000595\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe previous speaker talked about the record of the last Government. I say this. Here are a couple of facts\u2014low unemployment, high growth, and 9 years of surpluses. Who agreed with us on that? On 19 December 2008, just some days after taking office, the finance Minister Bill English said the following in the New Zealand Herald: \u201CI want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook.\u201D I will say it again slowly for the more challenged members on the other side: \u201CI want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook.\u201D To unbundle that statement, Mr English was saying: \u201CThank God we had 9 years of surpluses, so we can actually try to deal with this global economic meltdown as it impacts on New Zealand, unlike other countries that spent the lot.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000596\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EWhen I was speaking on the first reading, I recalled, as an Associate Minister of Finance, being taunted, as we all were in Government, by Bill English, the then Opposition spokesperson, saying we were mean-spirited because we did not spend the dough. We were squirreling away all these surpluses, day after day, and that we were a mean Government and we should be frittering it away. [Interruption] That member at the back of the Chamber squawking was not in the Chamber at the time, so I forgive him for his lack of historical knowledge. We were told we were being mean because we did not spend the lot. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000597\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI say to members that I have a document from a series of Budgets, starting from 2000, and I will read a couple of figures. These are the surpluses that we had: \u201Cyear 2000, $594 million; year\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000598\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226e1ead03-bf7f-496a-a02f-ce52859c58c1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f63e8d6def6149aeaf5b17740dcce9f0\u0022\u003EHon Hekia Parata\u003C/span\u003E: For God\u2019s sake!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000599\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227b8436568e7f4e499744954e835e9f18\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: The member does not like it. It is not \u201Cfor God\u2019s sake\u201D but for her sake, I say. In 2001 the surplus was $1.4 billion, in 2002 it was $2.4 billion, in 2003 it was $4.3 billion, and it goes on, right up to a high in 2006, to a surplus of $7.1 billion. When Labour left office it was a $5.6 billion surplus. If we are looking at facts about economic track records and what this Government inherited, there it is, in black and white. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000600\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThen we can fast forward to today. The biggest deficit I think in our history, of $16 billion, has been delivered by this Government. Here is the problem when one is in Government. Government members are responsible. I do not think the members over there have quite got it. When they win an election they become accountable. They become responsible for their own performance. At some point they have to stand up and say: \u201CWe\u2019re taking the hit. We\u2019re biting the bullet. We are accountable. We are responsible.\u201D What they have delivered today, apart from all\u2014[Interruption] Here we go. Come on, a bit more life! The blood is pumping through the veins. What they have delivered today is a cut in KiwiSaver, yet they say they want to encourage a savings culture. They have delivered a cut in Working for Families, yet they bleat aloud that they want to look after people\u2014except there are 200,000 participants who will receive a cut. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000601\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe last speaker then had a crack at Opposition members, because we want to provide some GST relief around fresh fruit and vegetables. They say it is all a slogan; it is all hoo-ha. That suggests to me that that member may be like all of us in this Chamber. He may be in the privileged position where he can probably afford a decent feed 7 nights a week\u2014or, in one member\u2019s case, a few more than that, but he is in another place. I say that member can probably afford it. Maybe what I suggest he and others do is go around the food banks. I think it was Mrs King who challenged the Prime Minister to visit a food bank, visit McGehan Close, or visit a few other places where people are battling away, and maybe ask them what they think about the cost of living and their food and grocery bills. Maybe they should do that. That may be instructive for them, as they bleat clich\u00E9s tonight about looking after people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000602\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThen we come to the other plank, of course, that will solve all ills\u2014the sale of assets. That crew presents a proposition to people that says: \u201CYou\u2019ve all got a lot of money out there, New Zealanders, ordinary mums and dads. You can buy back the assets that you already own.\u201D That is the proposition they put up to them. It is a great benevolent Government: \u201CKiwis, buy back the assets you already own, and you have a lot of disposable income to do that with.\u201D What a benevolent Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000603\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThey do not tell people, of course, what happened last time they did that and everybody was promised they would be better off. They do not tell people, of course, that those who will want to invest in our assets will be foreign companies, foreign institutions, and foreign agencies. Of course, quite rightly, those foreign institutions, having invested in our State-owned enterprises, like the power companies and generators, will require, logically, a dividend from them. They will want their pound of flesh, and that pound of flesh will be in the form of higher power prices, delivered to consumers over the cold winter. Then somehow, in a benevolent way, the Government will put the icing on the cake by saying that it will go to the country with this matter, even though it is in the Budget documents that the decision has already been made to do it. But as my Green colleague said, the Government is asking for a mandate in retrospect, or words to that effect. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000604\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003ESo I say to National members that if they want to get up on their hind legs and actually compare economic and political records, then they should do it with facts. \u201COld Sooty\u201D over there will not stand up and compare his record, because that member has delivered a $16 billion deficit, whereas we delivered 9 years of surpluses, and we stand on our record in Government.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022 data-id=\u00222207329a2f844c1aa1e8ca9782dc34f5\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000605\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222207329a2f844c1aa1e8ca9782dc34f5\u0022\u003ECHRIS TREMAIN (National\u2014Napier):\u003C/span\u003E The Hon Clayton Cosgrove is the constituency MP for the seat of Waimakariri. By all accounts, he is a pretty good constituency MP, but not once tonight have I heard him speak about a matter of importance, a cornerstone of this Budget, which is the repair and recovery of Christchurch. At the very least he could have acknowledged that this Government has put together\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000606\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022401c4bb5b6844c0e8d11b5b20733c93f\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: I raise a point of order, Mr Speaker. Most of my first reading speech was acknowledging those issues.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000607\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bf33b4f903e9463ab437e26e3dbdd9b4\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: No, the member will sit down. That is a frivolous interjection, and it leads to disorder.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000608\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224de8d4e2d24f493295561d8608068947\u0022\u003ECHRIS TREMAIN\u003C/span\u003E: At the very least, he could have acknowledged one of the cornerstones of this Budget, which is the renovation and repair of Christchurch. The Government has made the rebuilding of Christchurch a cornerstone of this Budget. The Budget has ring-fenced $8.8 billion to repair Mr Cosgrove\u2019s Waimakariri constituency and the wider Christchurch area. Yet tonight in this House he would not spend a minute talking about his constituents and how this package could lead to the recovery of Christchurch, or about building a new city. He did not acknowledge that, at the very least, this Budget is taking a step forward towards that. Tonight Labour members will vote against this Budget and against the rebuild of his own city. That is unbelievable. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000609\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EI come back to the Taxation (Annual Rates and Budget Measures) Bill. Part 1 is very important, because it reconfirms the annual rates of taxation. That fact was not really alluded to in the Budget speech, but I want to pick it up again tonight in order to reaffirm to New Zealanders the importance of those taxation rates. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000610\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003ELet us cast our minds back to the 2010 Budget, which set in place for this country a change that I was particularly proud of. That change is reaffirmed in this tax bill tonight. For incomes under $14,000, New Zealanders pay 10.5c in the dollar, which is down from 12.5c in the dollar under the previous Government. For incomes between $14,000 and $48,000, New Zealanders now pay 17.5c in the dollar, down from 21c in the dollar. For incomes between $48,000 and $70,000, they pay just 30c in the dollar, down from 33c, and on incomes of $70,000 they pay 33c in the dollar, which is down from 38c. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000611\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EOn any level, that is a reduction in personal income tax\u2014on any level. But I hear from members across the House, constantly, that this side of the House has not delivered help for middle and lower income New Zealanders. Well, in the reaffirmation of those tax rates, the facts are clear. Income tax is lower for New Zealanders across the board\u2014across the board. Seventy percent to 75 percent of Kiwis now pay income tax at a rate of 17.5 percent\u2014in fact, the average is below 17.5 percent. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000612\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EBut that is a double-edged sword. On the one hand, we can say that it is good that people in a big chunk of the country are paying lower income tax rates, but, on the other hand, the fact that 75 percent of Kiwis have incomes of $48,000 and below is not good enough. That is why I am so proud of what we have put together in this Budget. The projections are that real incomes in New Zealand will grow. We can lift the incomes of New Zealanders and continue to grow those incomes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000613\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EI am proud of what we have delivered in this Budget today. I think it is a fantastic step forward. It ring-fences money to help to repair the likes of Mr Cosgrove\u2019s electorate. I think that is a fantastic thing. This Budget provides a real vision, something tangible, that people can have going forward. The Budget brings debt under control and lifts wages in the long term. This is an excellent Budget, and I commend it to the House. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022 data-id=\u002263b677a2443b4e35a2c74fb9b6e82a88\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000614\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002263b677a2443b4e35a2c74fb9b6e82a88\u0022\u003EHon SHANE JONES (Labour):\u003C/span\u003E Kia ora n\u014D t\u0101tou\u2014greetings, Mr Assistant Speaker Robertson. Today we saw a Budget that really has to be called the \u201CTui Budget\u201D\u2014yeah, right! It is so far to the right that there is no way that members on this side of the House will shrink from fighting an election on, firstly, the wholesale privatisation and sell-off of our assets. Those assets are not starved of capital. Those assets are well run, but we are to lose their valuable revenue and valuable dividends. Worse still, the M\u0101ori Party will be there, as an active and consistent helper, to watch the dilution and liquidation of those historical assets of the Crown estate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000615\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EThe Prime Minister got up and delivered one of his trademark Eurotrash contributions. He is a man who has learnt his oratory and his life skills as he has wandered around amongst the super-rich of the world. He has no compassion, no empathy, and no understanding. If I were to go to the senior whip on the Government side of the House, and use his figures, then I would tell members that 75,000 Kiwi workers earn less than $45,000 a year. But there has not been a single bit or sliver of empathy from the Prime Minister towards them. He has also had the cheek to tell New Zealanders, as he puts their assets on the block, that they will be the beneficiaries of that. How many of those people will be actually in a position to purchase shares in those assets? We will watch the inexorable slide towards further foreign ownership of key monopoly assets, etc.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000616\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003ENot only is the Prime Minister presiding over the sell-off of those assets but he has based everything on a heroic assumption that he can trust Treasury\u2019s figures. Well, we trust what the Inland Revenue Department had to say, as the Dominion Post showed us yesterday on page one. Those figures will not let us down. Just as they did not let us down yesterday, neither will they let us down in the future. But Treasury\u2019s heroic assumptions were concocted, unfortunately, when aggressive politics met sterile analysis. Those heroic assumptions are all that the Prime Minister\u2019s vision for the future is written on. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000617\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003ELet us just think about what the Prime Minister is telling Kiwis through his \u201CTui Brewery Budget\u201D. The first thing is that everything is for sale. The second thing is that he wants people to save, but he will not actually incentivise or help them to do so, because encouraging savings is a Labour legacy. Muldoon destroyed the first savings initiative, Jenny Shipley destroyed the second savings initiative, and John Key and Bill English, as a consequence of their narrow partisanship against the legacy of Dr Cullen and the Labour Government, are continuing to tinker with and unravel the savings legacy that we put into place. The man has said to Kiwis that National wants to see savings increased, and that it wants to reduce the country\u2019s reliance on overseas sources of capital, but National has used this Budget to further undermine and gut KiwiSaver. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000618\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EThese are great issues upon which to fight the next election. At least we did not hear simpering from the Prime Minister\u2014but we have heard it from the M\u0101ori Party\u2014when he told Phil Goff that National would meet us in the halls and on the hustings, and would fight the election on these issues. Labour cannot wait for that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000619\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EOK, so we have heard a little from the M\u0101ori Party, which is a brief improvement on the simpering contributions that we have endured over the last couple of days. I have news for those members: the love-in is over. The love-in is over, as the low tide has revealed how unpopular and irrelevant the M\u0101ori members on the Government side of the House have become. They have been able to secure nothing else but what we might call kongakonga, crumbs. That is a simple reprioritisation where Peter pays Paul, or, as we might say, it is a nick-and-tuck contribution for the M\u0101ori Party\u2014a nick-and-tuck contribution. Its legacy is to be the nick and tuck. The assets of hard-working Kiwis, politically speaking, are about to be nicked, and the M\u0101ori Party is tucked up. Those members do not care that ordinary, hard-working Kiwis\u2014or should I say garden-variety Kiwis\u2014will be worse off as a consequence of this asset sell-off. No. The M\u0101ori Party members are focused on constitutional reform, yet they will definitely lose T\u0101maki-makau-rau and Te Tai Tokerau. They have already lost them anyway as a consequence of poor management with regard to Hone Harawira, without a doubt. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000620\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EGiven the importance of jobs, a decent income, and the provision of housing, why have our colleagues on the Government side of the House, whether they are the M\u0101ori in discredited National or in the ebbing M\u0101ori Party, forgotten about those core issues? Why are they running around talking about flags and, now, a constitutional review, which, as a consequence of their mean-spiritedness, they did not invite this side of the House to contribute to? How can they with any sliver\u2014with any measure\u2014of sincerity say they want to change the constitution of New Zealand, then wander off and with W\u012Bremu P\u0101keh\u0101, Bill English, as their handmaiden think they are going to do it on behalf of all iwi? Their views about constitutional review will be revealed on 26 November and they will be in the form of a UB40\u2014that is, an application for an unemployment benefit. That benefit is likely to disappear as a consequence of the very parsimonious approach that we have seen evidence of today in Bill English\u2019s speech. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000621\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EI really need to come back to the Budget in order for the members on the Government side of the House to fully understand the sort of electoral debate that we are about to have. Where are all the contributions about cutting red tape? There is not one single initiative\u2014not one single initiative. Rodney Hide\u2014off he goes, and Don Brash comes in, ceding to those villains the opportunity to cut red tape. Where is the supposed business-friendly party delivering opportunities for both small and medium sized businesses? Those opportunities are somewhere near zero. Although the ACT Party vaunts itself and promotes itself as being a great friend of the world of business, it is not. There is destruction of savings and a sell-out at knock-off prices of State-owned enterprises. There is absolutely no plan in terms of the long-term growth of the key pastoral sector. What have we seen? We have seen ongoing further corporate welfare\u2014ongoing corporate welfare. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000622\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EWe realise that the M\u0101ori Party has not learnt all the acronyms\u2014along with Steven Joyce\u2014nor has it actually understood what the man is doing in terms of the damage to the taxpayers as a consequence of his broadband scheme. No, there is no plan. In fact, although the man boasts about infrastructure, the only infrastructure we are going to see there is a new subsidy that the taxpayer will write out as the much-vaunted infrastructure plan sinks out of sight. The man will not back down. It shows how ill-conceived the plan was that Steven Joyce was outsmarted by Rahui Katene. If there is any evidence that this is not a plan to take this country forward, there it lies. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000623\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EI am sorry, Mr Assistant Speaker Robertson, but please let me explain to M\u0101ori that there are 2 more minutes of this wisdom\u2014of this very judicious contribution. Let me also talk now about Mr Steven Joyce and his contributions via the discredited script that is otherwise known as the Budget. Why is he stinging Aucklanders with a $500 million bill for a transportation system that the super-city mayor has a mandate for? Not only has the Government alienated savers, disappointed the business community, and shown an absolute barrenness of empathy and of compassion through the Eurotrash contribution of the Prime Minister today in what ought to be a prime ministerial speech, but it is now sticking it to Aucklanders. Aucklanders do not want Steven Joyce to continue in that supercilious manner. They do not want that. They are waiting for the opportunity to show him the exit. But it will be a crowded exit, because as he moves to that door, Te Ururoa Flavell, Tariana Turia, Rahui Katene, and, indeed, Dr Pita Sharples will be singing \u201CNow is the Hour\u201D. Kia ora t\u0101tou. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022 data-id=\u0022cb6bf30d0c2a44ffa6adf9d610ed6993\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000624\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022cb6bf30d0c2a44ffa6adf9d610ed6993\u0022\u003ECHESTER BORROWS (National\u2014Whanganui):\u003C/span\u003E I raise a point of order, Mr Speaker. I wish to seek a clarification in respect of language used in the House. I was watching the debate earlier when the Hon Clayton Cosgrove was speaking, and I believe I heard him refer to a member on this side of the House as \u201CSooty\u201D.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000625\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e963babc8f08472e863dfd984a34ba81\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: The member will be seated. Points of order have to be raised at the time. You cannot come down and do it later on.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022 data-id=\u0022fbf40c93667644acad50cfe5428f9606\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000626\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022fbf40c93667644acad50cfe5428f9606\u0022\u003EDr PAUL HUTCHISON (National\u2014Hunua):\u003C/span\u003E It is indeed a pleasure to speak on the second reading of this Taxation (Annual Rates and Budget Measures) Bill. But I must say that perhaps it is a dubious pleasure to be following the Hon Shane Jones, who is the quintessential example of the Labour work ethic. After all, he was the man who on Make the Politician Work went off through the Manukau Heads. But what happened to him? He slept. He was asleep. Out he went, through the Manukau Heads, but, when the crew came looking for him, they could not wake him up. In fact, they had to turn on a fire alarm to wake him. If they had not had the fire alarm, he would have gone out there for 3 days and come back, having achieved nothing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000627\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EI acknowledge firstly the Hon Bill English for delivering a highly intelligent and balanced Budget for the times. It is a Budget that is extraordinarily prudent and responsible, and a Budget that ensures that health, education, and our justice services are well provided for. Indeed, they are the core winners of this Budget, and they are the core concerns of ordinary New Zealanders. The Budget delivered by the Hon Bill English makes a clear setting for our country to come out of deficit by 2014-15.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000628\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003ESecondly, I acknowledge the outstanding Prime Minister, the Rt Hon John Key, for the finest Budget speech I have ever heard. It was the finest Budget speech I have ever heard, and it rebutted the Hon Phil Goff at every single point, and clearly demonstrated the dire position that Labour is in. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000629\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EThirdly, I acknowledge the Hon Peter Dunne, who is responsible for this bill that deals with the fiscal costs of the KiwiSaver scheme and the Working for Families tax credit programme. This bill is one of the reasons why health, education, and our justice services are winners in this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000630\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EI pay tribute, by the way, to the outstanding stewardship of Vote Health by the Hon Tony Ryall, because in health alone we see that $54 million in this Budget will be delivered to maternity services, including Plunket and Well Child checks. Those are hugely important for the potential of our children. There is $44 million in the Budget for dementia care. Again, that area is often left out, but this excellent National Government has put in that extraordinary amount in difficult times. There is $68 million more for elective surgery\u2014and how we remember the days when Annette King grew the waiting lists to over 130,000 and then culled them at the rate of 10,000 at a time. There is $20 million more for medicines at a time when Governments around the world are cutting their budgets for health, and certainly for medicines.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000631\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EThere is a spectacular graph that shows the trajectory of where spending would have gone under a Labour Government from 2008, if its rate of spending had continued in the same way. The graph demonstrates that by 2023 the public debt would have ballooned to 60 percent of GDP. That is the sort of irresponsible trajectory that a Labour Government would have put on the people of New Zealand. Any sensible economist I have come across, when talking about the New Zealand economy, has said that we must curb our spending. We have heard the rhetoric of David Cunliffe, the man of the people, who runs his electorate, downtrodden there in Grey Lynn\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000632\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022698ba88d3e6c4402be29856f1b63c8ec\u0022\u003EHon David Cunliffe\u003C/span\u003E: New Lynn.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000633\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f407b0f9ed814aa19545f0e417877bca\u0022\u003EDr PAUL HUTCHISON\u003C/span\u003E:\u2014oh, it is New Lynn\u2014by remote control from St Mary\u2019s Bay. We have heard him, and the Hon Phil Goff, talk about at least $5 billion worth of more spending, and probably significantly more than that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000634\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EIn stark contrast to the spending promises of David Cunliffe and Phil Goff, this John Key - led National Government will bring New Zealand\u2019s deficits down to nothing by 2014-15, and if the same wise and prudential trajectory is followed, the deficit will be down to 20 percent of GDP by 2020. If it continued on further, it would possibly be down to no debt whatsoever, which would be a huge achievement for New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000635\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EIt appears that Phil Goff is in absolute denial of reality. He claimed that this was a do-nothing Budget. He claimed that there was no plan, yet this Budget is built on National\u2019s 2008 election policy, a six-point plan that clearly showed a sustained pathway to growth. First was changing taxation to ensure that we delivered a world-class taxation system, with clear signals that those who were prepared to work hard would be rewarded. Second was reducing waste in the Public Service, and that has happened palpably, particularly in the health system. Third was reducing red tape and enhancing regulatory reform in the use of the Resource Management Act, and fourth was bringing in legislation for a flexible labour market. The New Zealand Institute of Economic Research has shown that an extra 13,000 jobs were created as a consequence of that legislation being brought in. Introducing standards in education was a further priority, along with making science, research, and development central to Government policy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000636\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EThis Budget is indeed a well-crafted, responsible, and pragmatic Budget. Labour, which opposes it, must be kept out of office for a very, very long time. \u003C/span\u003E\u003C/p\u003E\u003Ca id=\u00226f3b8d6f958a4192b269119e7820f40e\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 (Annual Rates and 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 68\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 4; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 54\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 42; Green Party 9; Progressive 1; Independents: Carter C, Harawira.\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=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000637\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022b3b56b98380b4dbf9f9046cdde07104d\u0022\u003EIn Committee\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022 data-id=\u002280b1ba63178844d581226e5ce41311f8\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000638\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002280b1ba63178844d581226e5ce41311f8\u0022\u003EHon RICK BARKER (Senior Whip\u2014Labour):\u003C/span\u003E I raise a point of order, Mr Chairperson. First, I say that I accept without reservation the Chair\u2019s uncontested right to make a decision on when to put a closure motion. But this is very heavily contested ground, and I want to make a point before we get into the Committee stage\u2014right from the outset\u2014about the rules of engagement. The first point I make is that the Taxation (Annual Rates and Budget Measures) Bill has not been to a select committee. This bill has only just been put on the Table today, and therefore I think the Chair needs\u2014and I am just asking before I come to the matter later\u2014to ensure that the rights of the Opposition are well protected, and that the rights of the Opposition to examine a bill extensively are taken into account. I hope that the Chair is very lenient in consideration of when to put a closure motion, because I have no doubt that the Government members\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000639\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002281b0a8fbd701425e8861cbb3c6f38d27\u0022\u003EHon Sir Roger Douglas\u003C/span\u003E: Oh, there\u2019s nothing in the bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000640\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f7955fe9aa2f4616b119413c74a605ab\u0022\u003EHon RICK BARKER\u003C/span\u003E: I raise a point of order, Mr Chairperson.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000641\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c6becdaee04d4e748e5e93fe8aa402a0\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: Points of order are to be heard in silence, and the member has the floor. There will be no other comment. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000642\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c9553f47b0c446b5a3880b2cc6984af3\u0022\u003EHon RICK BARKER\u003C/span\u003E: This bill has not been to a select committee. The Opposition has had limited time to read the bill. I know it is not extensive. I know it is short, and that there are lots of numbers in it, but I hope that the Chair will give a lot of forbearance in allowing the Opposition to have plenty of calls and to put plenty of questions to the Minister in the chair, recognising the fact that we are in urgency and the bill has not been to select committee. I hope that the Opposition is given plenty of time to examine the bill over time. I just make that point before we start. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000643\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223561299bdda045b99141b5a57a893572\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I thank the member. This is an important debate. It confirms the annual tax rate, and I thank the member for his contribution. The member will be aware that the discretion to accept a closure motion is that of the Chair. The Chair will always be looking at the relevancy. I hear what the member says, and this is an important debate. I am sure that we will have a lively debate, and there will be full participation from all sides of the Chamber. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000644\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022e8f6d7585e774bf38ffe824ae6c8506a\u0022\u003EPart 1  Annual rates of income tax\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022 data-id=\u002223c880195fdb4a72bb6c0c589e160bbe\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000645\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002223c880195fdb4a72bb6c0c589e160bbe\u0022\u003EHon DAVID CUNLIFFE (Labour\u2014New Lynn):\u003C/span\u003E It is appropriate at this point in the debate to come up a level and consider the broad framework of tax policy that stands behind the Taxation (Annual Rates and Budget Measures) Bill. It is appropriate in the Committee stage to repeat what we have said in the first reading debate, and to stake out the ground upon which the Labour Opposition will be fighting this bill. Although it is uncontested that a significant and serious debt problem, with net international liabilities equalling 85 percent of our GDP, confronts this country, and that a deficit of $16.7 billion per annum cannot be sustained, it is also true that in reducing those deficits, the tax system plays a key part, and that the equity and efficiency of any tax rate changes must be carefully considered as a means of deficit reduction. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000646\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EIt is essential that the Committee recalls the changes that have recently been made. When I say recently I mean during Budgets 2008, 2009, and 2010, which formed the basis of the rates that we are being asked to pass today. In 2008 a number of changes were made to tax rates, mainly in the middle and the bottom brackets, which cost the country about $8 billion in forgone tax revenue. That was passed against the background of a somewhat slowing economy, and there was a view that that was an appropriate level of stimulus, based on the information available at the time the Budget went to print in about March 2008\u2014in other words, 6 months before Lehman Brothers collapsed, the global financial crisis, and the terrible deleveraging process that has since ensued affected New Zealand. I think it is a fair bet that had we known how bad that was going to be, there may have been some reconsideration of the depth of those tax remissions. However, that was the information available. Nonetheless, even with those reductions in tax rates, Labour was able to bequeath to the incoming National Government\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000647\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e978865e-57e5-41d6-a7f6-b49daae78630\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f3349211a2834c55829580f585680526\u0022\u003EHon Dr Nick Smith\u003C/span\u003E: Rubbish!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000648\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002207b7bc8716954f83b22e72723ffe4fbf\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: Dr Smith is a man of letters, a man of intelligence, discernment, and an impeccable reputation. He has declared that my sentence is \u201Crubbish\u201D before I have even finished it. He cannot, therefore, know what he is rubbishing\u2014except himself. The Labour Government bequeathed to the incoming National Government a net debt position, including the assets of Crown financial institutions\u2014Treasury numbers\u2014of 7.6 percent of GDP. I have it in front of me on a spreadsheet. That has deteriorated to a net debt position, including financial assets, of minus 15 percent, and is headed for minus 30 percent before the measures taken in this Budget. There could be no clearer deterioration in position than that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000649\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022936046f3f0024ca1810d780d9b707641\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I reminded the member right at the beginning, on two occasions, that we are debating clause 3. Clause 3 is about the annual rates of income tax for the 2011-12 tax year. The member must come back to clause 3.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000650\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221bc9ca75cffe4022b3cfb314eba17937\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: Clause 3. As I said at the start, but I will repeat, the passing of the rates today has to be considered in light of how we got those rates. Three preceding Budgets are essential for us to recall. The first was 2008. I have acknowledged that it may have been somewhat brave in the remissions it offered in those rates. In 2009, as the Chair will remember, National incorporated rate changes into the 2009 Budget that were passed in urgency around Christmas of 2008, so urgent were they. It was the first part of a three-part rate reduction programme by the incoming National Government, which dropped the top rate from 39c to 38c in the dollar. Then, in their wisdom, in the 2009 Budget, those members cancelled the rest of the three-part programme, only to re-instigate them the following year in the 2010 Budget. How is that for leadership? It was a reversing of the reversal, rather like KiwiSaver, for which today they were brave enough to half-reverse the reversal of last year\u2019s Budget change. But in this case, in terms of income tax rates, which is what we are discussing in clause 3, those measures in Budget 2009 cost another $8.5 billion in forgone tax revenue over 4 years. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000651\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EWhen we get to Budget 2010, which was, of course, the doozy, the Government was so concerned about the Crown\u2019s fiscal position and the growing deficit that what did it do? It dropped the top tax rate from 39c to 33c in the dollar, and the company rate from 30c to 28c. That was extraordinary. That cost $14.3 billion in forgone revenue growth over the 4-year forecast period, resulting in an accumulated amount of revenue forgone\u2014wait for it\u2014of $23 billion under the National Government over 4 years, plus Labour\u2019s $8 billion, which equals around $31.5 billion. Why is that relevant? Because today we face a deficit of $16 billion, which is roughly half the quantum of the tax remission in gross terms in the last three Budgets. So, go figure! The Government reduced rates, reduced revenue, and could not manage the economy out of a paper bag; growth fell in a hole, and now we do not have any money to spend. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000652\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThat brings me to the second important point of the argument about tax rates. If we are contracting Crown expenditure to accommodate the size of the deficit, might we not also consider changing some of those rates back up? Why is it that the top tax rate is somehow sacrosanct? Why is it that when middle-income New Zealanders are having KiwiSaver cut and Working for Families cut\u2014and I see that those cuts go way below $70,000 combined family income; $60,000 is caught by these changes\u2014why is the top tax rate sacrosanct? In other words, if the country is being asked to tighten its belt, why are the tight belts the first to be further tightened, and the rather more generously proportioned waistlines of certain other taxpayers allowed to expand further? Are we creating, in short\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000653\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022581b62e08b8345f898badc76344ad8ce\u0022\u003ECraig Foss\u003C/span\u003E: Leave Parekura out of this!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000654\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022078f276521e544f0b53fa7f0aa4d18f7\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: \u2014I am not speaking about the distinguished chairman of the Finance and Expenditure Committee in person; his waistline is no business of mine. But why are some being asked to bear the brunt, and not others? Why are we building two New Zealands? Those who have not, who shall have less, and those who have, who shall have more. This seems wrong to me, but, hey, I am only a social democrat\u2014what would I know? I represent, very proudly, only the electorate of New Lynn. I do not represent some other electorate such as Grey Lynn, those latte-sipping socialists from the inner city. No, no: New Lynn, where good working people live, and I am very proud to be their MP. Does Cam Calder come from the North Shore and commute to South Auckland? The nice thing about New Lynn is that when I look up on a crystal-clear day when the birds are singing, I can actually sometimes see John Key flying over us in his helicopter to get from his mansion in Parnell to his electorate in Helensville. I count that a great privilege\u2014but back to the rate issue. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000655\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EWhat would a sensible moderation of tax rates look like? We have to have regard for international competiveness, and I am sure Mr Dunne in the chair would remind us of that. Therefore, changing the corporate tax rate would not be top of our list of things to do. But in looking at the marginal personal rates, it seems to me that some rebalancing there that brought a stronger sense of social equity to the exercise of reducing the Crown\u2019s deficit would be appropriate in most ordinary Kiwis\u2019 sense of fairness. Of course, we have to balance the growth aspects of this\u2014the building of the strong export-oriented economy that we need. That brings me back to the part of the discussion in the first reading of the bill where we noted\u2014I think, collectively; I think Government members joined with the Opposition on this\u2014that there was no economic development strategy anywhere in this Budget, no pretence of one. That is not what they do; they are conservatives. They are good with a little nip and tuck here and there around the fist, they reckon. Even so, some of them take us backwards. But growing the pie? That is not for them. That is for us. When the public wants the pie grown they will vote them out and vote us in. Is that not right, colleagues? And that is what we do. They are also the party of continuity. They are the Holyoakes of the modern era, there to sit on their well-proportioned bottoms while the country goes to rack and ruin. It is Labour that historically has been the party of change. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000656\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EComing back to the bill: if we want rates changed again, this is unlikely to be the Government that will do it. They seem to think the epitome of courage is to semi-reverse last year\u2019s reversal. That is not strategic; that is not the kind of change this country needs. It will not take us forward. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000657\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThis is a rare opportunity. It happens once a year for Parliament to recall what has happened to tax rates. What has happened to tax rates in three successive Budgets before this one has been massive tax remission to the public, and, proportionately speaking, much of it to the top end. That needs to be rebalanced. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00228cf0fb6b-0b8f-4327-983d-73e1166c220e\u0022 data-id=\u002292aad60874c8483ba3416a1e34576a7c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000658\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228cf0fb6b-0b8f-4327-983d-73e1166c220e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002292aad60874c8483ba3416a1e34576a7c\u0022\u003EDr CAM CALDER (National):\u003C/span\u003E What a pleasure it is to rise to speak on the Taxation (Annual Rates and Budget Measures) Bill. That was a very learned discourse from the member opposite on the relative merits of lattes in Grey Lynn, New Lynn, and possibly St Mary\u2019s Bay. There was a very brief discussion about taxes, but he did mention at one stage that, yes, the default position is that he wants to raise taxes. Can members believe that? He wants to raise taxes. Actually, I can believe that, because that seems to be the default position of his leader, Mr Phil Goff, as well. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000659\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228cf0fb6b-0b8f-4327-983d-73e1166c220e\u0022\u003EIncidentally, we heard Mr Goff make the breathtaking assertion in the House earlier today that the global financial crisis finished in 2009. What, then, is happening in Portugal and Ireland\u2014Mr Goff has completely missed that on the radar\u2014as well as in Greece and Spain? He seems to be completely unaware of the EU bail-out or, in fact, the IMF bail-out masterminded by DSK, before he himself bailed out. There were billions of dollars in quantitative easing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000660\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228cf0fb6b-0b8f-4327-983d-73e1166c220e\u0022\u003ETax, borrow, spend, and hope seems to be, once again, the default position of the Labour Party. We heard Mr Phil Goff confirm that Labour members have not learnt. Punitive, pusillanimous, and pathetic describe Labour\u2019s politics of envy as it once again wants to hit the 13 percent of New Zealanders who pay over 50 percent of tax in this country. Labour members want to wallop the wealth creators, evict the entrepreneurs, and bash the businessmen and businesswomen who are so\u2014[Interruption]\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000661\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f6780be5b5274b629b9609178f6f4460\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: The Hon Pete Hodgson knows he cannot be on his feet while interjecting.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000662\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228cf0fb6b-0b8f-4327-983d-73e1166c220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226a8a77f2560e4bd3bbe60d46fa87e099\u0022\u003EDr CAM CALDER\u003C/span\u003E: \u2014crucial in growing the economic cake for the benefit of the most vulnerable New Zealanders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000663\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228cf0fb6b-0b8f-4327-983d-73e1166c220e\u0022\u003ENational\u2019s tax changes will provide more money for hard-working New Zealanders. We heard from the Prime Minister this afternoon that three-quarters of New Zealanders pay a top marginal tax rate of only 17.5 percent. Despite international pressures on food and petrol, tax reforms have allowed after-tax wages to go up faster than the cost of living. Wages have gone up 7.1 percent in real terms. If my memory serves me well, in the blighted 9 years of the previous administration real wages went up 3 percent. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000664\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228cf0fb6b-0b8f-4327-983d-73e1166c220e\u0022\u003EAs a result of our tax changes, a typical married couple on superannuation has seen their joint income increase by $166 per fortnight. That is almost 20 percent over the last 3 years; 8.5 percent if adjusted for inflation. Interest rates have fallen dramatically to their lowest level since 1964. Our tax rates have put more money in the pockets of hard-working New Zealanders. I commend the Taxation (Annual Rates and Budget Measures) Bill to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022 data-id=\u0022e6c3f36125394c34939a8d369c69aef5\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000665\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e6c3f36125394c34939a8d369c69aef5\u0022\u003EHon DAVID PARKER (Labour):\u003C/span\u003E I will refer to clause 3 of the Taxation (Annual Rates and Budget Measures) Bill. I ask the Minister in the chair, the Minister of Revenue, to take a call in order to advise the Committee on the income tax rates proposed in clause 3. According to this clause, \u201CIncome tax imposed by section BB 1 of the Income Tax Act 2007 must, for the 2011-12 tax year, be paid at the basic rates specified in schedule 1 of that Act.\u201D In my reading of that clause, the rates of income tax are not being adjusted for the losses that most New Zealanders in the KiwiSaver scheme are suffering as a consequence of the decrease in the tax credits applying for KiwiSaver. As I understand it, despite the fact that people are losing the member tax credit, and therefore the effective tax burden they suffer in New Zealand is greater, their income tax is not going down. That is my reading of clause 3. It would be good if the Minister would take a call to confirm that the tax credits are going down\u2014so people do not have the old benefit they had for saving under KiwiSaver\u2014but their income tax rates under clause 3 remain unadjusted, and therefore they are worse off. I ask the Minister to take a call in respect of that point.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000666\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EThe second point I would like the Minister to confirm is that the adjustments that are made to Working for Families are of similar effect; that the middle-class tax bill after the changes to Working for Families in the later part of the bill, which take money off them, is not adjusted in this part of the bill by an amendment to the income tax rates. At the same time, I would be grateful if the Minister could explain why, if I am right, it is fair that there has not been some redistribution of the disproportionate tax cuts that went to higher-income earners in respect of National\u2019s income tax cuts in the last Budget. Remember that the statistic we were given was that 42 percent of the income tax cuts last year went to the top 10 percent of income earners. If I am right in my assessment of what happens overall in this bill, why has there not been some redistribution so as to make that fair, because it does not seem to me to be fair.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000667\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003ESimilarly, why are there no significant changes to the rates of income tax in respect of the farming sector? There was a headline in the paper yesterday on this subject, and I agree with some of the criticisms that were made of what I think were sub-editorial changes to the heading, which suggested that farmers got $500,000 of income but paid only a small amount of tax. The headline did not make clear whether it was gross income or net income, and that should not have been the case. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000668\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022076e9c86e2994067ae82820e98c3c5fe\u0022\u003EAmy Adams\u003C/span\u003E: Yeah, it did, it was just wrong.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000669\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b13a97965731464fbea2c29fb923c9c5\u0022\u003EHon DAVID PARKER\u003C/span\u003E: It did not make it clear whether it was net income or gross income, and some people, like Amy Adams, read it and chose to interpret it as being a reference to net income, which it never was. None the less, it was clear that, effectively, an insufficient rate of income tax was being paid by the rural sector. Why is that not addressed here?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000670\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EI ask the Minister whether it is right that the only change that is signalled in respect of those tax settings is a future review of the livestock valuation schemes that are open to farmers. One of the ways in which those effective income tax rates are low in practice for the farming sector, one of the ways that members of the farming sector can effectively minimise their taxes in New Zealand, is by opting in and out of different livestock valuation schemes. At the moment, if the value of livestock is going up, farmers can opt in to the capital scheme, and the increase in value is not attributable to them for tax purposes, because it falls into a capital scheme. But when the value goes the other way, at the moment farmers can opt out of the capital scheme and go into the revenue-based scheme for the valuation of livestock, the value of their livestock goes in, and they decrease their income for tax purposes on that part of the cycle. So farmers capitalise the upside and put a drop in value into the revenue scheme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000671\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EEven that problem is not fixed in this Budget. The Government knows that it is a problem that decreases the effective rate of tax, and these tax rates are set for the forthcoming year by clause 3 of this bill. The Government could have fixed that problem in this bill this year by saying that it is plainly wrong, but, no, all it has done\u2014as far as I am aware, and I have seen the press release from the Hon Peter Dunne today\u2014is to say that it will look at the situation in the future. I congratulate him on doing that, because it is better than doing nothing, but given how little tax is being paid by this sector, looking at it and maybe doing something tomorrow is actually better summed up as doing nothing in this Budget, because nothing is done in this Budget to remedy it. That is one of a number of areas of unfairness in the tax system relating to farmers, and I thank the Minister for identifying that one, but there is a long list of other things that are not being fixed that I do not have time to go into today.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000672\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003EI come back to my primary point. Will the Minister confirm that notwithstanding the other changes to taxes for individuals that increase the effective tax burden of middle-class people in KiwiSaver and middle-income people who are having their Working for Families abatements made more severe, the income tax rates that clause 3 in Part 1 of this bill sets remain unchanged, so the net effect of both of those things is that the tax payments, in effect, go up, and, notwithstanding that last year 42 percent of income tax cuts went to the top 10 percent, that is not revisited, and, instead, there is an increase in middle-class tax burden.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u0022dadcf2e0736c44be8e0b801072b16e15\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000673\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022dadcf2e0736c44be8e0b801072b16e15\u0022\u003EHon PETER DUNNE (Minister of Revenue):\u003C/span\u003E The member who has just resumed his seat, David Parker, raised a number of points that I want to respond to. I am sure he will forgive me if I do not get them all in order. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000674\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI will start with the last one first: the question about the change in the livestock regime that we foreshadowed in an announcement today. His analysis of the problem is correct. One of the reasons why we are going to have a look at this regime is precisely the situation he described to the House. I remind the House that what we are doing is the normal way of addressing these changes. We will issue an issues paper that will lead to some decisions being made. I imagine there will probably then be either a discussion paper or draft legislation to follow. The member should take it from me as a very clear indication that this area is not being looked at just for the sake of it. An issue needs to be addressed and we are keen to address it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000675\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThat leads me back to the question about the material that was in the media yesterday relating to the amount of tax paid, or not paid, by dairy farmers. As I said at the time, it was a shoddy piece of reporting. I think the member partially acknowledges that. It was a case of apples and pears. I will explain some of the reasons why. We have a self-assessment tax system. When people put in their tax returns they describe their occupation. A number of people describe themselves as dairy farmers. That led to the categorisation of those people and the amount of tax that was attributed to them. From memory it was around $26 million. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000676\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EBut if the member had looked down the table he would have seen that there was another category\u2014effectively, \u201Cother\u201D\u2014that had $1.5 billion of tax assessed for it. A lot of the people in that category would be dairy farmers or other farmers who would simply describe themselves as farmers, agricultural businesses, or whatever. It becomes a classification issue. The issue was also raised about the distinction between taxing on turnover and taxing on income. I do not want to canvass that point any further, because it has been well canvassed today. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000677\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI will come back to the other questions that David Parker raised relating to the status, in effect, of Part 1 of the Taxation (Annual Rates and Budget Measures) Bill in relation to the changes made in Part 2. I see from the wry smile on his face that he knows the answer as well as I do. I am happy to confirm for the member that Part 1 of this bill confirms the rates of taxation that were put in place in the companion measure last year and that they are not being changed in this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000678\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI come to the other point that underpins both his contribution and the contribution of Mr Cunliffe earlier. I say to the Committee that it is now very clear that Labour and, I suspect, the Greens\u2014although, to be fair, the Green Party members have not yet spoken in this debate\u2014will go into the election with a policy of increasing taxes. It is only a matter of by how much. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000679\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ff9f43374c404178a487e569915f1b31\u0022\u003EMichael Woodhouse\u003C/span\u003E: They won\u2019t tell us.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000680\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227bfcdd54bb4941edb56ebc28f44631fc\u0022\u003EHon PETER DUNNE\u003C/span\u003E: They will not tell us. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000681\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cc4577575f8a4543979b2c61c3e031af\u0022\u003EHon David Cunliffe\u003C/span\u003E: We are.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000682\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f6a985c787b34452a03848a136e4ffbe\u0022\u003EHon PETER DUNNE\u003C/span\u003E: I am grateful for that admission. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000683\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c2a60a0719c843f4a81412e7bdea5ccd\u0022\u003EHon David Cunliffe\u003C/span\u003E: Read our lips.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000684\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225bacd2090ce541f9bdd68556062d2c46\u0022\u003EHon PETER DUNNE\u003C/span\u003E: The member says we should read his lips. I place as much credibility on him as I placed on the original George Bush when he made that comment. Let us take the member at his word: Labour will increase at least the top tax rate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000685\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022442717eec35146e2aa4bacd1be87aafb\u0022\u003EHon David Cunliffe\u003C/span\u003E: We said that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000686\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221029409da5a543a29faeaea4fe9cf19e\u0022\u003EHon PETER DUNNE\u003C/span\u003E: He has confirmed it. Let me then work though the consequences of that increase, which is where I come back to the points raised by Mr Parker. The biggest adverse tax change made in this country in the last decade was when Labour put up the top personal rate as its first act in Government in 1999. That triggered the explosion in the growth of loss attributing qualifying companies, the explosion in the growth of family trusts for tax avoidance purposes, and the explosion in a whole raft of people trying to define their income as something else in order to minimise it in respect of their tax obligations. All Labour is doing by signalling that it will go back to that policy is again setting off those massive distortions that we have spent the last few years trying to tidy up. The member may well say\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000687\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221a8e0aa2e21040af901508df57571ea2\u0022\u003EHon David Cunliffe\u003C/span\u003E: We haven\u2019t announced that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000688\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022215cc27a6e7449ed85d831cd7a67fa3f\u0022\u003EHon PETER DUNNE\u003C/span\u003E: That is exactly the point. It is the consequence of his actions. He knows it, because he was part of a Government that started the process of trying to unwind the problem. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000689\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe next issue that arises from that increase relates to differential rates. At the moment we have a top personal rate of 33 percent. The company rate is at 28 percent. There is an argument about whether a 5c gap is too great. In an ideal world it probably is, but it is survivable in these circumstances because we aligned the trust rate with the top personal rate. If Labour wants to put up the top tax rate again\u2014I think I heard Mr Cunliffe say this evening that Labour will not touch the company rate, which will remain at 28 percent\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000690\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002274659b01d9c04e1d810bdcf2b48aeaba\u0022\u003EHon David Cunliffe\u003C/span\u003E: I didn\u2019t say that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000691\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002254b6a55158b94c069b22f6b96b89594e\u0022\u003EHon PETER DUNNE\u003C/span\u003E: He did not say that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000692\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ca5e630b3f454cb292e0d8396e38c321\u0022\u003EHon David Cunliffe\u003C/span\u003E: No, I said we\u2019d be reluctant.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000693\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022af84bd7831a94e6da968a38395874737\u0022\u003EHon PETER DUNNE\u003C/span\u003E: This gets better the more we go on. The company rate would probably go up as well. The question we are then left to answer\u2014and we may get an answer if I push Labour members\u2014is what Labour\u2019s attitude to the trust rate is. Unless the trust rate is aligned to the top personal rate, then it will set off that whole process of avoidance that we spent the last decade trying to get over. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000694\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ESo far we know from the debate this evening that an incoming Labour Government at some theoretical point in the future will put up the top tax rate. It will probably put up the company rate, although by not quite so much. It is bound then to put up the trust rate and\u2014[Interruption] As the member interjects quite correctly, because it will need to in order to get the support of the Greens, it will have a capital gains tax, a carbon tax, a resource tax, and all sorts of other things. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000695\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI am grateful to Mr Parker for raising the question of what is in Part 1 of this bill. It confirms the annual tax rates as they were passed in last year\u2019s Budget. We have no intention of changing those. I am delighted that we have now confirmed that just about everything is on the table to be increased if Labour gets into power.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u0022f6523de3462743818e857dbd2dc938db\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000696\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f6523de3462743818e857dbd2dc938db\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E We are talking about Part 1 of the Taxation (Annual Rates and Budget Measures) Bill, but I feel as though I have to clarify a couple of things that the Minister in the chair, the Hon Peter Dunne, has mentioned. First and foremost, I find it a little rich that we have the Minister of Revenue in the chair talking about the bad things Labour did when it was in power, when that Minister was also the Minister of Revenue under Labour. If the loss attributing qualifying company structure was so poor, then why did the Minister of Revenue in the previous Government not do something about it? If there was such a discrepancy between the trust rate and the company rate, then why did that Minister not do something about that? I find it a little bit rich to have him stand there and lecture Labour members on what they did wrong, when in fact he was the Minister in charge of revenue under Labour. The irony has not escaped any member on this side of the Chamber.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000697\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThere is one thing the Minister said that I think I am allowed to rebut. He talked at length about dairy farms. He said that the figures were a little bit disingenuous, because there was a figure under \u201Cother\u201D that contained $1.5 billion worth of revenue. But I would like to say to the Minister that in the line for dairy farms, over 17,000 entities classified their primary activity as dairy farming. They were companies, trusts, and partnerships. The definition, according to the Inland Revenue Department, was that they had to have tradable activity. There were no shelf companies there, and there were no trusts that hid assets. Instead, these were trading trusts, trading partnerships, and trading companies, as defined by the Inland Revenue Department. I am more than happy to send over to those members the information that I received from the Minister, and that he received from the Inland Revenue Department. These were not shelf companies; these were trading companies. The statistics from the Inland Revenue Department said that dairying was taxed $26 million.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000698\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe statistics also showed that 9,000 of those trading entities declared a loss. I have had a number of calls from farmers, and one was from a very high executive in Federated Farmers. He said to me that I was right, and that the farming industry was in trouble.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000699\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224e123fd5ff6e40179964ae34cc235268\u0022\u003EPeseta Sam Lotu-Iiga\u003C/span\u003E: Name and shame!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000700\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223b0a88f73c0a4061b42d9306c52bcf8d\u0022\u003ESTUART NASH\u003C/span\u003E: The member really wants me to? Conor English called me and said that, yes, the farming industry was in trouble. This is a debate that we need to have as a country, because the farming sector is the backbone of this economy. It is a very important part of this economy. No one on this side of the Chamber would deny that. But the question that was posed, and the question we pose, is whether the sector is in such a dire state that it can afford to pay only $26 million in tax. That is the question we pose.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000701\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe other question we pose, which goes back to Part 1, is whether the integrity of the tax system is in such bad shape that it has allowed farmers to claim expenses for a whole lot of stuff they were able to write off against their incomes. They were allowed to write them off against their incomes to the point where they paid no tax. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000702\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229ce9ba937c464fcf85981bb9ad3677e3\u0022\u003EAmy Adams\u003C/span\u003E: What are you smoking, mate?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000703\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221a0778c783334277838f978c70928944\u0022\u003ESTUART NASH\u003C/span\u003E: I would love Amy Adams to take a call, because she has three farms that are all held in trusts. She is a lawyer, and I would like Amy Adams to stand up and tell us how she did that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000704\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e94f38efabaa4ba59c4021bf48b398fd\u0022\u003EAmy Adams\u003C/span\u003E: I do\u2014sheep farms. You hate them, too?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000705\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220391ccf13c5044b0b5783d96dc2304ac\u0022\u003ESTUART NASH\u003C/span\u003E: It does not matter, because the statistics on dry stock were just the same. In fact, according to the figures from the Minister, which were supplied by the Inland Revenue Department, 75 percent of dry stock farms earned $20,000 or less. Are they really in such a bad shape that they cannot pay tax, or is the integrity of the tax system in such a bad way\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000706\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226bb4c5005a88421db8c05b7de0b2a3f8\u0022\u003EAmy Adams\u003C/span\u003E: You\u2019re a moron.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000707\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224a03d2fbcf384e29844dda9fea897342\u0022\u003ESTUART NASH\u003C/span\u003E: Am I a moron, Amy Adams? Mr Chair, I take personal offence\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000708\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cb1e84ea6385470c94e445ddaf8bef86\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: The member knows that that is not a parliamentary term. I ask the member to withdraw and apologise. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000709\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224b558247a9d840d489701fb3713d2cd1\u0022\u003EAmy Adams\u003C/span\u003E: I withdraw and apologise.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000710\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f934727c661940a382938882027e0b92\u0022\u003ESTUART NASH\u003C/span\u003E: Thank you very much. All I am saying is that I know the difference between income and payout, and I know about expenses. I know how economics works, but I also know that when a sector that describes itself as the backbone of this country pays only $26 million in tax, some serious questions need to be asked.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022 data-id=\u002212da1ca5e4e84935a39b5878d6e6f573\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000711\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002212da1ca5e4e84935a39b5878d6e6f573\u0022\u003EJOHN HAYES (National\u2014Wairarapa):\u003C/span\u003E I would like to say to the listening public that that was the voodoo economist in this Chamber, or possibly the \u201Cmember for misleading information\u201D. I accept that he is not a moron, at all, and I am pleased\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000712\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002210a2585ed9cf4e00946e51a067e3a4c0\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: No. I ruled against the use of that term, and it is not appropriate to bring it into any form of debate following. I tell the member to not do that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000713\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225cf9f253d9ef49799ce8373636c94d58\u0022\u003EJOHN HAYES\u003C/span\u003E: Thank you\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000714\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022075382603877414d8700ee63d3840fce\u0022\u003EHon Rick Barker\u003C/span\u003E: I raise a point of order, Mr Chairperson. The other point I would make\u2014and you have been very good on your rulings to make sure the Committee is in order\u2014is that the member made reference to a member for such-and-such. I thought that was a disrespectful reference to members on this side of the Chamber. Members are either members for an electorate or they are list members, but to call the member the \u201Cmember for misleading information\u201D was, I thought, disrespectful to a member in this Chamber.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000715\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d0a99ebe8ce24ae4a2ddfab08fdec930\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: The intent of that was not directed particularly to a member. These are debating points, and I am sure they will be taken in that light.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000716\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022958ba2e1389b4aae865347ba00ce9ece\u0022\u003EJOHN HAYES\u003C/span\u003E: The point of the issue is that we have had two members speak in this Committee who are both list members of Parliament\u2014unlike myself, who deals with a provincial area of New Zealand, the Wairarapa. I have a great connection with dairy farmers, sheep farmers, and beef farmers. I can tell members that there has been a very important rain event in the northern part of my electorate, which, if members will bear with me, bears on this argument. The reason is that some of the farms in my electorate have lost more than 60 percent of their land area between Porangahau and Cape Kidnappers. For that reason we have tax rules, as I am sure the Minister in the chair, Peter Dunne, understands, that allow farmers to remove their capital stock from their land, sell it, and raise capital from it. That money is treated as capital, not as income, because when the pasture is restored and the grass starts growing in the spring, those farmers will want to bring back capital stock on to their pastures. So it is fundamentally important that we have flexible arrangements, as we have in the legislation, for allowing this sort of transaction. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000717\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003EI have to say to the member Stuart Nash that he is quite wrong, and I do not believe he understands the difference between a person who draws wages or a salary, and a person who pays an employee. All of those people take money from the business entity for which they work, and they pay full tax on that at whatever is the relevant rate. That does not mean that the business, and all dairy farmers, pay no tax. That is absolutely outrageous to suggest\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000718\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222e8fdd636c244f699e2454277df07be1\u0022\u003EStuart Nash\u003C/span\u003E: I\u2019ll send you the figures.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000719\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228b258a299e8240ba8c6ac53abbdd8e3f\u0022\u003EJOHN HAYES\u003C/span\u003E: I think the member needs to look at the issues he was talking about, and it is how he was talking about it. I have to assert again that this is voodoo economics, and the member is just taking headline figures and wrongly interpreting them for the benefit of his argument. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000720\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003EI return to clause 3 of Part 1. I need to say that when the Government took the reins of office in the financial crisis, the economy had gone into recession and had shrunk 3 percent a year, topping off 5 years of historically low growth. Then what happened was that exports flattened out completely, Government spending\u2014which the member David Parker, who spoke earlier, was responsible for\u2014was out of control, and Treasury books showed never-ending budget deficits spiralling out to 60 percent of GDP and beyond. Despite the surprises of the two earthquakes and the global recession, our economy now, under John Key\u2019s leadership, is far stronger than it was 3 years ago. We have improved the tax system so that we are setting up signals for people in my electorate and elsewhere in New Zealand who want to improve their lot by working hard, by saving hard, and by paying tax through GST rather than on income tax. We have done that to improve the efficiency of the economy and to set up signals so that people will respond better. They will put money in their pockets and spend it as they wish. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000721\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003EIf we did not do that, what would the list member across the Chamber do? He would be involved in a Government that would tax businesses on revenue, not on profit. David Cunliffe has already explained that Labour plans to spend $5 billion a year, but it will not tell anyone where the money is coming from. The member opposite has a really good opportunity to do that. It may be a turnover tax. I expect that Labour is going to give people a discount on GST; it has already said that in the House. That discount would cost about $250 million. It would benefit 10 percent of households by a magnificent amount: $1.50 a week. The Labour Party is talking about having a $5,000 tax-free threshold, but David Cunliffe said that the tax-free regime will not happen for 5 years, and even then it would be worth about $10 per week. A month ago Labour had fully costed policies, according to Mr Cunliffe\u2014fully costed policies on a spreadsheet.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022 data-id=\u002266c3e5ac54e94915a74c7248051ddb98\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000722\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002266c3e5ac54e94915a74c7248051ddb98\u0022\u003EBRENDON BURNS (Labour\u2014Christchurch Central):\u003C/span\u003E I take the first opportunity in this debate to acknowledge that the Government is making some effort in respect of the recovery in Christchurch. I acknowledge also that it will, of course, be hard-working New Zealanders who provide the money for that recovery through their taxes, and that is what is provided for in clause 3. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000723\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI also want to pick up on the point made by my colleague Mr Nash about taxes being paid by particular sections in the community. I acknowledge too that we have a situation in respect of the dairy farming community where tax liabilities are also created because of the failure of the Minister for the Environment, who is sitting opposite, to deliver in the national water policy statement of last week any mechanisms for environmental control. So we have taxpayers funding the clean-up of some of the inputs that the dairy industry provides. We need only look at the lakes in Rotorua and at the Waikato River for examples of where taxpayers, through their annual rates set in bills like this one, are paying twice, in effect. Not only is tax not being paid effectively by many across that sector but also we are paying, through taxes, for the clean-up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000724\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EThen, of course, provided for under this Budget will be the irrigation schemes, which the dairying industry will, with others, be a major beneficiary of. That, of course, will also be funded by taxpayers\u2014ordinary hard-working taxpayers who, on about a $50,000 income, are paying 10 times what, at least in one recent financial year, some dairy farmers were paying. That is a matter of fairness and equity, and it is simply not acceptable to have that kind of imbalance in the taxes being paid by two sectors of society. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000725\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EThe Prime Minister commented today that the largest amount of tax is paid by a relatively small part of the community, and that is always the case when we have a progressive tax system. This part of the bill is implementing that progressive tax system, and I for one believe that that is an appropriate tax system for us in New Zealand. Just last night I attended the graduation of my daughter from Victoria University. She graduated as a primary teacher. I was a very, very proud father there last night, amongst many, many others; there were many other parents there. Those students, of course, will have contributed somewhere around 20 percent of the cost of their tertiary education. We as taxpayers will have contributed 80 percent, as provided for under the clause in this bill where we have set the annual rates for our taxes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000726\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EBut I make the point that those students, as they graduate and go into high-earning jobs, will be the beneficiaries of the stable and orderly society that we treasure in New Zealand. How do we provide for that stable, orderly society? We provide for it through our taxes. We provide for it through parts of bills like this one tonight. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000727\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EWe have rules in our society, and those at the top end are generally as much, if not more, the beneficiaries of those rules as those at the bottom end. Things like the courts, things like regulations in business, and things like tenancy requirements are all paid for, overseen, supported, and facilitated through the taxes we pay, and we as taxpayers also get back benefits for those. Those of us on higher incomes tend to get more benefit back because we get the regulations in business and tenancies, and things like that, which lower-income taxpayers may not be receiving, even if they might sometimes be getting more in terms of particular other benefits. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000728\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EWe get a welfare net and we get the provision of health care, and I would rather live in a society where somebody is able to go to a hospital provided for in a health system, funded through our taxes, through clauses like this, than have the system we see in other countries, where, as David Lange once put it: \u201CThey feel for your wallet before they feel for your pulse.\u201D That is part of having a progressive tax system. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000729\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EOf course, the Government makes much play sometimes about the fact that it has cut taxes, and it points to the fact that there have been three tax cuts across the last 3 years. But it usually fails to take account of the fact that the first of those tax cuts took place under the guidance of Dr Michael Cullen, and that those tax cuts were really sheeted home to lower and middle income earners, not to the top end of town. We have seen in the latest two tranches of tax cuts, without any doubt, that the top end of town has been the real beneficiary, and we have seen some of the figures on that provided to the House on numerous occasions. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000730\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI will pick up on some of the commentary in the Economic and Fiscal Update, as tabled today by the Minister of Finance, around tax matters. I say to the Minister that on page 80 it is acknowledged that we are yet to see a full year of GST at the new 15 percent rate. I just wonder whether the Minister can give us any assurance as to whether there is any work consideration going on for any further lift in the GST rate, under the potential of a re-elected National Government, should he still be there as part of that. I think that is an important question to ask. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000731\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI also draw attention to page 82 of the Economic and Fiscal Update, which is reflected, I think, by this bill and the annual setting of the tax rates, and to the differential between Treasury and the Inland Revenue Department in respect of the tax revenue forecasts, and as Treasury\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000732\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002247213f718e58445487144beaf8981dc9\u0022\u003ECraig Foss\u003C/span\u003E: All Budgets always use Treasury forecasts.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000733\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002272aa04cccab441bb888a51728e2a28cb\u0022\u003EBRENDON BURNS\u003C/span\u003E: No, but Treasury notes that the Inland Revenue Department has produced a set of tax forecasts that are much lower than Treasury\u2019s\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000734\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002272b9a2e62526478f907e3991b20b56bf\u0022\u003ECraig Foss\u003C/span\u003E: Read the whole paragraph.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000735\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022067263eb41644058b5a78e9825763024\u0022\u003EBRENDON BURNS\u003C/span\u003E: \u2014much lower than Treasury\u2019s. In this update\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000736\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220f37a264bdd448739425e4af3ee51469\u0022\u003ECraig Foss\u003C/span\u003E: Read the whole thing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000737\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f87eb69407414554bb6e3438dc94b13b\u0022\u003EBRENDON BURNS\u003C/span\u003E: \u2014yes, I will\u2014the total difference between those tax forecasts across the 5 June years, 2011 to 2015\u2014it is on page 8; it will help the member with his own guidance\u2014is nearly $4 billion. That is not an amount to be sneezed at or to be dismissed as just a minor variation between two Government departments. It is an actual $4 billion difference in projections between\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000738\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b0f8f768f0ff42dca3874ef2db7525fe\u0022\u003ECraig Foss\u003C/span\u003E: Four years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000739\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002269a0f20b40c04d70a3620fbc5a029e3c\u0022\u003EBRENDON BURNS\u003C/span\u003E: That is right, and that is a billion dollars a year in anybody\u2019s language. A billion dollars a year is not to be sneezed at. Why has that come about? It has come about because the Inland Revenue Department is less upbeat on the business tax\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000740\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a6db8fdbf37c479da39b6547d664aa09\u0022\u003ECraig Foss\u003C/span\u003E: At the same time they upsized the risk\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000741\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225ca2d74141e648949febc3e2267a497a\u0022\u003EBRENDON BURNS\u003C/span\u003E: That is right. The bulk of the difference\u2014I am again quoting from the papers\u2014is the difference in estimates for corporate tax, because Treasury is upbeat. It is saying the corporate sector is bouncing back. The Inland Revenue Department, which is a less political organisation, if you like, is simply there to make sure that the revenue comes in to meet the needs and objectives of the Government. It is simply there for that reason, and it is simply not prepared to be as upbeat as that on that issue. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000742\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI refer the member opposite and the Minister in the chair, the Minister of Revenue, to the regulatory impact statement for this bill, which refers to the issues of KiwiSaver. That is another issue of analysis by credible officials. It is actually an analysis by both Treasury and the Inland Revenue Department, if my memory serves me right. It has, I think, the Inland Revenue Department\u2019s fingers all over it, because it is talking about the department\u2019s concern that we are making changes to KiwiSaver when it is less than 5 years old. It was launched only in 2007. There have already been several significant changes to contribution requirements. Who made those? Those changes were made in 2008 and 2009 by the National Government, which wanted to fund the first round of its tax cuts. So it took away the 2 percent contribution.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000743\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229508f65e4c9d4dd0bf97326fd4c49810\u0022\u003ECraig Foss\u003C/span\u003E: Half the people are on 4 percent now.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000744\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a370af27a9e843e3992dcc4a78e93c27\u0022\u003EBRENDON BURNS\u003C/span\u003E: Yes, it did. It took it away, and now it is going halfway back to reinstating it because we need a new savings regime. Here is what the department says about that in the regulatory impact statement: \u201CThe KiwiSaver industry has not experienced any period of stability in which to establish its core products, and this uncertainty and unpredictability is not helpful to either the industry or savers.\u201D The National Government\u2019s track record on this issue is appalling, dating back to Muldoon.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022 data-id=\u00221060bf9dd2f149b79f24e9e0ec346e8a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000745\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00221060bf9dd2f149b79f24e9e0ec346e8a\u0022\u003EMICHAEL WOODHOUSE (National):\u003C/span\u003E So now we know that Labour is going to campaign in the general election on a new top tax rate. It was not very clear in what Mr Cunliffe said, but if we take the Leader of the Opposition\u2019s speech, there will be a new top tax rate, because the alternative is that Labour simply puts up the existing top tax rate. Let us analyse why that will be so bad for New Zealanders. I will give members a scenario. It is of a family with two kids under the age of 13 where the gross income is $60,000. I will take another family with exactly the same circumstances, but the gross income is $90,000. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000746\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002255f12bb0ad4547beb14b8f3604fa1b3a\u0022\u003EStuart Nash\u003C/span\u003E: Do you know the difference between income and revenue?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000747\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229ad59cc4ce6a4777887d5b36e39e8d27\u0022\u003EMICHAEL WOODHOUSE\u003C/span\u003E: Yes indeed, absolutely. This chartered accountant knows the difference. That is one-and-a-half times more income. A progressive tax system says that the higher-income family should pay more than one-and-a-half times more tax. How much more? Is it 200 percent or 250 percent? At the moment that family is currently paying 675 percent more in effective income tax than the family on $60,000 pays. That is nearly seven times more income tax. They are looking at each other and saying: \u201CHow can that be?\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000748\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ccf92214e310400d88d12578424862af\u0022\u003EStuart Nash\u003C/span\u003E: It\u2019s called a progressive tax system.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000749\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221f640878d36749a3bf59f4342e2bb903\u0022\u003EMICHAEL WOODHOUSE\u003C/span\u003E: It is the system that the member put in place.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000750\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003EDebate interrupted.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id2011051939d5d637d79c4df78fddf7ebef450118000751\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\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=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000001\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u002285d3b4422e5f445cbe815cbd9e2e81c2\u0022\u003EThursday, 19 May 2011\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000002\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022ef84af4c29d648ceb3e1a417ab5bfe14\u0022\u003E(continued on Friday, 20 May 2011)\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=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000003\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00225cb2b4f907704bb184b3cf34506b341d\u0022\u003ETaxation (Annual Rates and Budget Measures) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000004\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00223a02b20cb7664981bd0dce2c7442f6ce\u0022\u003EIn Committee\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000005\u0022\u003EDebate resumed.\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000006\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022ffa83f05b44349a8a9e987b08ee37ecb\u0022\u003EPart 1  Annual rates of income tax (continued)\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022 data-id=\u002209444d30fd78490ea64251fec455dc5c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000007\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002209444d30fd78490ea64251fec455dc5c\u0022\u003EMICHAEL WOODHOUSE (National):\u003C/span\u003E I thought it was very important to come back and complete my call, given the confused look on the face of Labour\u2019s spokesman on revenue when I tried to explain the answer to the question that Mr Cunliffe posed in his last call in respect of why top tax rates are sacrosanct. Well, I would not say that they are sacrosanct, but they are certainly at the appropriate place. He simply could not believe that the total tax paid by a family earning $90,000 a year with two children under the age of 13 was 676 percent more than the same family earning $60,000. The journey from $60,000 to $90,000 under the present regime is steep. The effective marginal tax rates are somewhere in the region of 56 to 58 percent, depending on the earning trajectory. But it is challenging and it is one of the reasons why many people faced with that hurdle choose to go somewhere else, like Australia, for low effective marginal tax rates. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000008\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003EWe heard yesterday an absolute admission that Mr Cunliffe\u2019s party will campaign this year on increasing the top tax rate or creating a new top tax tier. Labour members denied that when I challenged them on it yesterday. It means that the top tax rate of $70,000 will probably stay at $70,000. Those really big income earners in that earnings bracket, like senior nurses and policemen\u2014you know, the real uber-rich that Labour is calling the rich pricks\u2014will suffer the extra tax that that party would put in place were it to attain the Treasury benches. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000009\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003EI am very grateful to Deloitte for its Budget 2011 perspective report, which was released yesterday afternoon. It firmly confirms that last year\u2019s tax switch was, indeed, fiscally neutral, according to the tax bands. I paraphrase from page 18 of that report. In 2008-09, earners of over $70,000 a year contributed 46 percent of the income tax base. This year, after the tax switch, which Labour members bang on about, those earners of over $70,000 will, according to Deloitte\u2014on reliable information that is better than the information Mr Nash got, I have to say\u2014contribute 51 percent of the income tax base. So rather than tax cuts for the rich, that group is contributing another 5 percent to the total tax base. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000010\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003EAbout 12 or 13 percent of the earning population are paying more than 51 percent of the income tax in this country, and Labour wants to punish that group further. It is punitive. It adds to the confused fiscal and monetary policy that that party is coming out with: raising tax rates, loosening monetary policy so that interest rates go up, and increasing spending, which will plunge our children into more debt by about $45 billion. At some point the rot has to stop. This legislation is really sensible and sound. If we put those top tax rates back, of course, the sorts of things that the Minister in the chair, the Minister of Revenue, talked about yesterday will certainly come back. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022 data-id=\u0022d78c0bf25b74465ab123555775d2d939\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000011\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d78c0bf25b74465ab123555775d2d939\u0022\u003EHon PETE HODGSON (Labour\u2014Dunedin North):\u003C/span\u003E Clause 3 of the Taxation (Annual Rates and Budget Measures) Bill is a piece of law that says that tax rates are not going to change. This side of the Chamber asks why the hell not. When the global economic crisis struck, we all became Keynesians around the world, and we all did two things: we increased expenditure and we reduced taxes. This country increased expenditure and reduced taxes. The April 2009 tax cuts all went to rich people\u2014that is a matter of fact. Now it is time to wind back from that Keynesian impulse and start to get our deficit of $17 billion under control. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000012\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003EThere are two ways of doing it: one is to reduce expenditure, and one is to increase taxes. We did both the first time round, but we are doing only one the second time round. We want to know why when tax cuts came they went to rich people, but when costs are to be increased they are borne by low and middle income earners. That is what we want to know. It is the essence of this Budget and of the past 2 years. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000013\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003EWhen David Cunliffe spoke he laid out the costs of the Labour tax cuts in October 2008, the tax cuts in April 2009, and the tax switch of last year. He laid it out and added up the millions. He told us where that money went and how much was lost to the Government accounts. He made it clear that the amount of tax that had been cut over the past 2\u00BD years under successive Governments had reached the point where it ought to be partially reversed. But we are not doing that in clause 3\u2014we are not doing it. We are leaving tax rates exactly where they were. The net result is that the rich have done better over the past 2 or 3 years and the low and middle income earners will do worse. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000014\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003ETake me: I am on $130-something-thousand. [Interruption] That seems to have caused a whole lot of interjection from a bunch of people on the other side of the Chamber, all of whom are also on $130-something-thousand. My story is the same as theirs. Let us hear what that is. Roughly, I am $100 or so a week better off as a result of the changes that this Government has made over the past 2 years. I am roughly $100 or so a week better off, or a bit over. I have not been hurt by this Budget one iota. I have been asked to give back nothing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000015\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ce34a49a72314999aa919d0799011782\u0022\u003EDavid Bennett\u003C/span\u003E: Put it in your KiwiSaver.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000016\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a744a9a7-a2e8-401b-abfb-aec22a3818c8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221d757bab0c2b4eba8fee58e4d3cb2ff5\u0022\u003EKatrina Shanks\u003C/span\u003E: Give it to charity.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000017\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c9b02c71f57a40b88779c2d0be374771\u0022\u003EHon PETE HODGSON\u003C/span\u003E: People across the way are telling me to save it or give it to charity. They think they are being helpful. I am making a point: I am one of those well-off people who have had a significant increase in income under this Government and have not suffered one little bit from this Budget. That seems to have evoked quite a lot of emotional\u2014almost visceral\u2014reaction from my colleagues opposite. I simply say it as a matter of fact: I am, and people like me are, better off; people on half the income that I am on are worse off. That is not fair. It is not fair and it is to be found in the inaction of clause 3. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000018\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003ESome interesting things have happened in the course of this debate. A couple of things have come from members on the other side of the Chamber that I think are revealing. One is that they all have notes that say something like this: 50 percent of tax is paid by 15 percent of the people, or whatever it is. Those members have a research note and they have been parroting it. That means that the people on the other side of the Chamber think that the tax system as it is now is too progressive. That is what it means. Otherwise they would not bother to start parroting that stuff. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000019\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003EThey parrot something else. They say that they must take care of the wealth creators\u2014they must take care of the wealth creators. That is an awful, ugly, right-wing argument. It basically says that low and middle income earners cannot succeed. That is what it means. It says that low and middle income earners cannot succeed; only the rich people can create more wealth, so we must tax them in an ever-lighter way in order for that to happen. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000020\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003EThen we get on to the silliness about dairy farmers and how much tax they pay. Let me just say that on this side of the Chamber we understand very well that taxes go up and down in business year by year. We know very well that the taxes paid by those farmers of only $1,500 a year, or whatever it was in that year, were low because the milksolids price for the previous year was not very flash, and that tends to carry over into the profits for the following year and the taxes that are paid. We know that the tax paid by dairy farmers the year before would have been higher, and the year after will be higher. We know that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000021\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003EBut when we look at the average tax paid by dairy farmers over years\u2014I have been to DairyNZ to find out\u2014we see that it is a little over $20,000. If one has a business that is paying $20,000 or $30,000 in taxation but is using something like $2 million or $3 million worth of debt\u2014and these days dairy farms in New Zealand are\u2014then that is a very bad use of capital. It is a bad use of capital. Basically, people are capitalising the gains and socialising the losses. We know that; it is known on both sides of the Chamber. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000022\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003EThat has been a pretty interesting debate, but it got more interesting. Mr Dunne, the Minister of Revenue\u2014I do not want to upset him in any way\u2014made a contribution stating that it was to do with classification. Stuart Nash received the answer that some dairy farmers had declared themselves as dairy farmers and were considered in a group, and other people had not. Those others had called themselves Agribusiness, or whatever, so they were classified as \u201Cother\u201D. Mr Dunne went on to make the point that the figure that the dairy farmers paid, whatever it is\u2014$2.5 million or $25 million\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000023\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002219085c18e08d4673a90fbbf22ed1095c\u0022\u003EHon Peter Dunne\u003C/span\u003E: $26 million.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000024\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022dd910de4d7c141fca84f04e2097e66f6\u0022\u003EHon PETE HODGSON\u003C/span\u003E: \u2014$26 million\u2014was too low. I agree with Mr Dunne on that. But the figure of $1,500 per dairy farm did not change. That does not change. There is no way in the world that there will be any correlation where people who describe themselves as dairy farmers pay low tax, as opposed to other dairy farmers who describe themselves as being in Agribusiness and pay high tax. That does not work. Do not run that argument around here; it will not work, I say to Mr Dunne. The point is that there is an unfair incidence of burden in this Budget and it is not a good look. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000025\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003EI will make another couple of points. We have one of the lowest top tax rates in the world\u2014one of the lowest top tax rates in the world\u2014but we never hear that from the other side. We have a whole thesis in this country that says that if there is a gap between a company rate of 28 percent and a trust rate of 33 percent, then that 5 percent gap is tolerable, but if there is a gap between a company rate of 33 percent and income tax rate of 39 percent, then that is intolerable: 5 percent is OK; 6 percent is intolerable. I tell those members to look at other nations. They will see that their trust rates, company rates, and top personal tax rates do not align. Then these members should ask themselves why the growth of loss attributing qualifying companies is exploding in this country, and why the growth of family trusts is exploding in this country. Those members should ask themselves whether it is because our tax law needs fixing, or whether it is something to do with the accounting profession\u2019s culture in this country. But they cannot say that we have to reduce taxation in order to avoid avoidance. That just will not work. It is just not logical by any international comparison. It will be true at the margins somewhere, somehow\u2014I absolutely acknowledge that\u2014but I believe that it has been grossly overstated. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000026\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003EWe heard from the member who has just resumed his seat, Michael Woodhouse, an argument on the effective marginal tax rate. He was wrong on every count.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022 data-id=\u00226d59ef5b9911444eb7feaecc3492586c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000027\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00226d59ef5b9911444eb7feaecc3492586c\u0022\u003ECRAIG FOSS (National\u2014Tukituki):\u003C/span\u003E There is an old adage in politics: \u201CExplaining is losing\u201D. I admire the more senior departing member Pete Hodgson for trying to go to the rescue of his colleague Mr Nash, who found himself on the front page of the paper the other day discussing things related to taxation, and promoting, perhaps, the Labour turnover tax or whatever it may be called. Other members have tried to come to Mr Nash\u2019s rescue. Even his party leader tried to come to his rescue. The sad truth of it in terms of Mr Nash\u2019s career is that he is the Labour Party spokesperson on revenue, and because that is his portfolio I presume that one day he would like to sit where the Hon Peter Dunne sits as the Minister of Revenue. But Mr Nash is now for ever tainted in the sector that he wants to become the Minister in charge of, if you will: the financial sector, or at least part of it. Every time that he gets up to speak we will be asking him, and the public will be asking him, to tell us about the turnover tax he promoted on the front page of the Dominion Post. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000028\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI am sure\u2014and we know that explaining is losing\u2014that in order for that kind of story to get out, it would have gone from Mr Nash to Mr Cunliffe, and then it would have gone to the inner sanctum of Mr Goff, so it would have had the total approval of the Labour Party and its hierarchy. There is a fair bit of back-pedalling and re-explaining going on. That does not matter. Mr Nash got on to the front page, but I think it was for all the wrong reasons. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000029\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EWhat is the obsession that Labour has about increasing taxes? What is the obsession about that? We can recall way back, to when Labour brought in GST. It went from zero to 10 percent and there was no compensation, although Labour had increased taxes. When GST went from 10 percent to 12.5 percent, Labour increased taxes but there was no compensation. The only time that Labour did provide compensation was when Dr Cullen was looking at the polls in 2008 and decided even he could not trust himself, so he legislated to provide for the first tax cuts in about 9 years under the Labour Government. I cannot understand that obsession. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000030\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThe previous speaker talked about fairness. What could be fairer? About 72 percent of New Zealand taxpayers face a highest marginal tax rate of no more than 17.5 percent. How could that be made fairer? That is what is confirmed in Part 1 of the Taxation (Annual Rates and Budget Measures) Bill. How could that rate be made fairer? Although GST is not income tax, GST has been confirmed as staying at the current rate of 15 percent. What could be fairer than providing that those who spend more pay more tax? The gentleman talked about progressive tax. Well, there we go. If someone is on a higher income, that person spends more and pays more GST. I do not understand the Labour members\u2019 obsession. They try to use the word \u201Cfairness\u201D, yet they really get it wrong. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000031\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EInterestingly, to go back to the story on the front page of the Dominion Post, the allegation was that farmers do not pay, or the rural sector does not pay, their fair share of tax. That is an interesting argument, and I will address it, as I am sure others will. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000032\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EYesterday there was a protest outside Parliament. I did not know about it until I read about it somewhere. Just like Mr Cunliffe\u2019s polling on the Budget, which was conducted 2 days before the Budget, a protest against the Budget was apparently held 2 hours before the Budget was delivered. But, most interestingly, I believe that the protest was organised by the Unite union. If we are talking about fairness in terms of tax, and about an organisation that supports the Labour Party and that owes the Inland Revenue Department $200,000 to $300,000 of PAYE from its employees, then I say that is not fair. That was in the newspaper. Next time I will bring to the Chamber the article from Stuff; it was from about a year ago. That is not fair. If members on the other side of the Chamber want to talk about fairness or otherwise, I suggest that they think a bit more carefully. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000033\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EFinally, these income tax rates also have the effect of confirming lower interest rates for longer for New Zealand. The ability to meet the cost of living by lifting after-tax incomes, which is confirmed by Part 1, is enhanced not only by this bill but by the actions of this Government over the past two Budgets and the Budget we are talking about today. Fairness is enhanced, the ability to own a home is enhanced, and the ability to fund a mortgage is enhanced by record low, short-term interest rates. Floating mortgage rates are at a record low, and in some instances are almost half what New Zealanders had to suffer under the previous regime, when those rates hit 10 percent and higher. When Labour members talk about fairness, let us hear them talk about the fairness of the double-digit mortgage rates that we had under the Labour Government, versus the single-figure 5 and 6 percent mortgage rates that we have under this Government, as confirmed by the tax rates in Part 1.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u002250ff0c9978404fb6a0e610b2c4400b8d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000034\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002250ff0c9978404fb6a0e610b2c4400b8d\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E It is very kind of Craig Foss to be concerned about my career. He said that he is concerned about my career, but I say to Mr Foss that he should perhaps worry about his own career. With that sort of attitude, Mr Foss\u2019s chances of holding the Tukituki electorate have just diminished, let alone his chances of sitting in the same chair that the Minister of Revenue is sitting in at the moment. Mr Foss, unfortunately, may never realise his ambition of being a Cabinet Minister, because with this sort of Budget, with that sort of speech, and with that sort of attitude I do not think that this Government has much longer to go. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000035\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EMr Foss asked what Labour\u2019s obsession was about raising taxes. I would turn that round: what is that Government\u2019s obsession with cutting taxes for those who do not really need it? We are talking about Part 1, \u201CAnnual rates of income tax for 2011-12 tax year\u201D, and these are the very same tax rates for someone on a million dollars. The Inland Revenue Department told me that 650 New Zealanders had a declarable income of a million dollars. If a taxpayer earned a million dollars, then that person last year received a tax cut of a thousand dollars a week\u2014a thousand dollars a week\u2014extra, in the hand. A person on the median wage in Napier received about $5 a week extra. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000036\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EMr Foss and other Government members have trumpeted the fact that 72 percent of New Zealanders are on one of our two lowest tax rates. But I have to ask whether it is really a fact to trumpet that we are such a low-wage economy that the vast majority of our taxpayers are on a low tax rate. I actually do not think that it is anything to be proud of, at all. In fact, I think that the fact that so many of our workers are on such a low rate of tax is quite shameful. Goodness me; I would have thought the aim of any Government was to drive wages up, because through increased productivity, increased wages, and increased growth the economy would grow and people would be better off. But, no; it is apparently a point of competitive advantage when we have a low-wage economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000037\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EPete Hodgson nailed a further point, and it was confirmed by John Hayes. Pete Hodgson said that he is better off under these tax cuts\u2014under the rates we are debating in clause 3. But do members know what John Hayes said? He told Mr Hodgson to put the money in KiwiSaver or save it. Do members know the problem we have? The problem we have at the moment is that the tax cuts that were implemented last year, the rates we are debating in clause 3 at the moment, have had absolutely no positive effect on this economy. This is \u201CKeynesian Economics 101\u201D. It says that if tax cuts are given to the very wealthy in times of recession, the very wealthy will save the money from those cuts; they will not spend it. But if tax cuts are given to those who really need it, those who are really struggling, then those people will spend the money from those cuts, and that will help to drive economic growth in this country, which is what we need at the moment. That is what we need\u2014economic growth. We need incomes to rise, and we need people to be spending money in this economy, which is one of the problems we have with the cuts to KiwiSaver, and the cuts to Working for Families. In Napier and in Hawke\u2019s Bay, Working for Families pumps about $120 million into the local economy. If we take that money out of the local economy, it will have a huge impact on the people of Napier, and a huge impact on the people of Hawke\u2019s Bay.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000038\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI would like Mr Dunne to take a call, and I would like Mr Dunne to chastise the first speaker of the day, Michael Woodhouse, because Mr Woodhouse said he would trust the figures from Deloitte much more than he would trust my figures. Do members know where my figures came from? They came from the Inland Revenue Department. They came from that Minister\u2019s department. I tell members I have much more faith in the figures provided by the Inland Revenue Department than I do in the figures provided by Deloitte. In the Finance and Expenditure Committee we hear a lot from the Inland Revenue Department, because a lot of tax laws go through that committee, and my experience of the Inland Revenue Department is that it does a very good job. The figures that the Inland Revenue Department provides are first class. The advice that the Inland Revenue Department gives is normally very, very robust and very, very sound. In fact, I think the Minister presides over what I would say is one of the better ministries\u2014one of the best ministries\u2014of this Government. I congratulate the Inland Revenue Department, and that is why I find it quite insulting that Michael Woodhouse would say that the figures from Deloitte are much better than the figures from the Inland Revenue Department.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000039\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWhen I look at the figures from the Inland Revenue Department with regard to this Budget, I have some grave concerns about the fundamental premise of the figures provided by Mr Key and Mr English yesterday. Why? There was a $4 billion discrepancy between the forecast from the Inland Revenue Department, and the forecast from Treasury on which this Budget is based\u2014a $4 billion discrepancy. As I said, my dealings with the Inland Revenue Department through the Finance and Expenditure Committee have been very, very good. I think it is a very professional organisation. In fact, I was saying to the Minister the other day that of all the written questions I send to all ministries, I think those from the Inland Revenue Department come back in the quickest time and provide the best data. So I ask why the Government would trust Treasury, which has constantly got it wrong, over the figures from the Inland Revenue Department. There is a grave concern when advice from the Government\u2019s tax collectors is ignored. There is a grave concern there; of that there is no doubt.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000040\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EMr Woodhouse and all the members on that side talk about Labour\u2019s obsession with raising tax rates. They talk about our obsession with taxing the very wealthy. Well, I say that our system is called a progressive tax system. How a progressive tax system works is that those who can pay the most tend to carry a little bit more of the burden, because they can. It is exactly the same sort of system that citizens have in Australia, and exactly the same sort of system they have in the United Kingdom, and in the United States. In fact, every single OECD and developed country in the world has a progressive tax system. As Pete Hodgson said, our top tax rate is one of the lowest in the OECD; it is one of the lowest in the world. In fact, Australia\u2019s top tax rate is 45 percent and ours is 33 percent. The Australians have not given $1,000 a week to someone who earns a million dollars; I think that is actually quite reprehensible. When John Key was asked about it, he gave that classic, very wealthy man\u2019s response: \u201CWell, I earn so much, so why should I have to pay so much?\u201D. We asked him to pay only 39 percent; that is all he was paying. He was still getting 61 percent of everything he earned, in his back pocket. Goodness me! Was 39 percent too much to ask?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000041\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224a3067a6fea3421cabeb70ca02104d16\u0022\u003EDavid Bennett\u003C/span\u003E: Is that what you want\u201461 percent? Can we quote you on it?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000042\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228285aa1b8fd04f24ac6dc3ef2564925d\u0022\u003ESTUART NASH\u003C/span\u003E: It is called a progressive tax system, I tell Mr Bennett, and it is the foundation of our tax system.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000043\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EBut I must admit that when I read this Budget I wondered whether the Government was going to put up the business tax rate. The Fiscal Strategy Report on page 55 of the Budget documents states that the tax policy will be \u201Cconsistent with a broad-base, low-rate tax system that raises revenue in the most efficient manner to support the medium-term goal of reducing and aligning personal, trust and company tax rates at a maximum rate of 30%\u201D. Is the Government planning on raising the tax rate? One thing that Mr Cunliffe said was that Labour would not raise the company tax rate. Yet the Government\u2019s Budget document says that it is planning to raise the company tax rate to 30 percent. I ask Mr Dunne whether there will be an announcement on that. Could the Minister perhaps stand up and say whether there is a plan to raise the company tax rate to 30 percent, as it says in the Fiscal Strategy Report on page 55 of the Budget documents. If the Government is going to do that, then I think businesses in New Zealand deserve to know. I must admit that if we look at the commentary from business on this Budget, we see that the sector has come out very strongly against this Budget. In fact business has said that this is not a Budget that will promote growth, and it is not a Budget that will promote efficiency. In fact, Matthew Hooton\u2014and we could hardly call him left-wing\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u002297e4cc72b263478594fde732ce664157\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000044\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002297e4cc72b263478594fde732ce664157\u0022\u003EHon PETER DUNNE (Minister of Revenue):\u003C/span\u003E I am happy to put Mr Nash out of his excitement over the status of the company tax rate. Legislated for in Part 1 of this Taxation (Annual Rates and Budget Measures) Bill is a company tax rate of 28c in the dollar. The Government has no intention of changing that. It is not in our forecast and it is not on our horizon. The reference the member makes, if I recall it correctly, actually relates to provisions in confidence and supply agreements, written after the 2008 election. It is a commitment, really, about the alignment of rates. We have achieved two-thirds of that, in terms of the trust and personal rates being aligned. The outlier is the company rate. Any alignment will be downwards, not upwards. I assure the member of that point.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000045\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b90e1bb6f9484be984ec6f5d49aed08f\u0022\u003EStuart Nash\u003C/span\u003E: I\u2019m just quoting from the Budget documents. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000046\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022986bf1027c68452c817b260f2c470348\u0022\u003EHon PETER DUNNE\u003C/span\u003E: I am simply responding. The member asked a question; I am giving him a response that is accurate in the circumstances. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000047\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI have listened to some of the discussion this morning about the ongoing argument about high tax versus low tax. I will say to the Committee that, frankly, our international competitiveness is important. It is a reality that a small, isolated trading nation has to deal with, every day of the week, every week of the year. Therefore, our tax rates, however they are structured, cannot afford to be too far out of line with those of major competitors. Having said that, I am not particularly interested in international league tables, because really we have to do what we see is best for our own interests in this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000048\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EIf we turn it on its head, the reality is that if we have a high tax-rate system, such as the one that Mr Nash seemed to be advocating, going back to a top tax rate of 39c in the dollar, at a time when there is already an argument that people feel that the grass is greener on the other side of the Tasman, all we will do is fuel that fire. Then the argument about who is the last person to turn out the light becomes that much stronger. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000049\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI will reiterate the point that Mr Foss made, because it is the key here. The Opposition argument about the unfair incidence of tax might have a sliver of merit, were it not for the reality that as a result of the changes we made last year in reducing particularly the bottom two rates, we now have a situation where nearly three-quarters of all taxpayers face a marginal tax rate of no more than 17.5c in the dollar. That is something we should be lauding extremely loudly, because we are well placed in terms of any comparable society\u2014notwithstanding my earlier comments\u2014in terms of the low incidence of personal tax on the bulk of our population. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000050\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EOpposition members seem to be fixated, but not on that. I would have thought, given their concern, they would be out there championing that tax rate, because it is for the constituency they claim to represent. What they seem to be fixated on is not the 17.5c but the fact that a few people\u2014and Mr Nash made the point that they are a few people\u2014have a tax rate of just 33c in the dollar on their income. The reality is that if Opposition members actually looked at where New Zealand\u2019s tax revenue comes from they would see that it falls unevenly on those people at the top. We do not have the wealthy middle class that the United States has, for instance. We have a very long, slow progression to a comparatively small group of people at the top of the income scale. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000051\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe Opposition argument\u2014and I am not sure whether they are talking about tax cuts for people down the scale\u2014certainly seems to be, for some sort of ideological reason and no other, as far as I can see, that the people at the top should pay more and should always be charged more. What we are saying here is that the tax rates in this bill are in balance with the country\u2019s requirements. It is important\u2014and it is great\u2014that we have a marginal rate of 17.5c for three-quarters of our population. The fact that we have not gone into\u2014I think Mr Woodhouse used the comment\u2014uber-taxes for those at the top end of the scale demonstrates a fundamental sense of equity. If we go down the path the Opposition members are talking about, we would be saying that if people earn to a certain point, we will keep a relatively low tax structure in place, but if people earn beyond that, we will penalise them. That approach is not about celebrating achievement; it is about penalising success. That is the fundamental divide. Part 1 puts in place a tax regime that is fair and equitable and will last.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022 data-id=\u0022175716a927064631b6a045f810ebcf4b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000052\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022175716a927064631b6a045f810ebcf4b\u0022\u003EDAVID SHEARER (Labour\u2014Mt Albert):\u003C/span\u003E It is a bit rich for Peter Dunne to stand up and say what he said. The Taxation (Annual Rates and Budget Measures) Bill is not what he talked about. It is simply about ideology. It is about the ideology of bringing down tax rates and rewarding those people at the top of the tax pile. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000053\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EThe reason we are here today talking about this bill is that we will be stripping out provisions on Working for Families and KiwiSaver, and making changes that will affect the middle-income people we do not have enough of, according to the Minister. We are doing that because we have a $16.7 billion deficit. This Government came in on a $5 billion surplus, and we now have a $16.7 billion deficit\u2014in 3 years. That is extraordinary. How can a Government fail so comprehensively in 3 years? The only comparable thing I can think of is when the man who is now the Minister of Finance took over the National Party when it was polling at 30 percent and drove it down to 21 percent in 3 years, between 1999 and 2002. That is the only thing I can think of that is comparable to such a failure as taking a $5 billion surplus and turning it into a $16.7 billion deficit. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000054\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EBecause the Government has restructured the tax rates so inequitably, we are now sitting here debating how we will strip out the KiwiSaver provisions, undermine people\u2019s confidence in KiwiSaver, and hit those people whom Mr Key calls \u201Cricher people\u201D on Working for Families. My God, those people are not rich. They are the people who come into my electorate office. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000055\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002256ad94e1b28f4743beb0c41c36932ac8\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: Changes to KiwiSaver and Working for Families are in Part 2. Although you can mention them now, we are actually on Part 1. If you tie your comments back to Part 1 that is fine, but do not spend the rest of your time on KiwiSaver, otherwise I will have to stand up and pull you up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000056\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cacdc651b8a2429580a0ae5048c8564d\u0022\u003EDAVID SHEARER\u003C/span\u003E: The point is that a tax bill like this one is really looking to try to pull money back to fund a deficit that has blown out to $16.7 billion, which is seven times higher than the projected deficit in 2008. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000057\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EStuart Nash mentioned the projections. When we look at the projections from Treasury we see they have been consistently above the reality. The Inland Revenue Department probably has it much, much closer to the truth. Here is what Standard and Poor\u2019s said: \u201CThe budget foresees an operating deficit \u2026 of NZ$16.7 billion (8.4% of GDP) in fiscal 2010/11 compared to the $11.1 billion deficit (5.5% of GDP) foreshadowed in the Half Year Economic and Fiscal Update announced in December 2010.\u201D Literally 5 months ago we were looking at an $11.1 billion deficit, and now we have a $16.7 billion deficit. I do not understand how on earth Treasury can get it so wrong so consistently for so many years, unless this Government is pushing Treasury to raise the forecast to make it more optimistic. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000058\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EPeople are starting to realise that. They are starting to realise that not only is this Budget gutting the many provisions that middle-class New Zealanders need, but also it is based on a whole bunch of false promises and false projections\u2014false promises and false projections. It means that as we struggle to curb this deficit that seems to be out of control\u2014because those projections will not come true any more in the next 2 or 3 years than they have in the last 2 or 3\u2014we are not funding the very things that are growing this economy. If one thing is absent from this Budget, it is a plan to grow the economy. There is absolutely no plan to grow this economy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000059\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EI looked at some of the provisions in research and development and in tertiary education. There is nothing that would give me any confidence that this Budget will try to grow our economy any more. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022 data-id=\u0022cec898ee0f804e089c0a24ffe60e0a62\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000060\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022cec898ee0f804e089c0a24ffe60e0a62\u0022\u003EPAUL QUINN (National):\u003C/span\u003E This is extraordinary: we are into the third year of this Government\u2019s outstanding stewardship of this country, and for the third year we hear the same rhetoric and the same arguments. I am intrigued as to when Labour members will work out that the arguments they have been running for the last 2\u00BD years have got them only 20 percent\u2014and falling\u2014support from the populace. They need to change their story. If they are going to succeed\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000061\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221fb8d8db-3e96-49c7-ab1c-b7916a50e30e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022dc30bf5ca40943c099b0a82c808bfabe\u0022\u003EHon Steve Chadwick\u003C/span\u003E: Point of order.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000062\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223616997d36b14338a19b0f307a2a0bd5\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: We are on a tax bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000063\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022edfe8e70113443a6ac4174b57aa4b943\u0022\u003EPAUL QUINN\u003C/span\u003E: In terms of the Taxation (Annual Rates and Budget Measures) Bill, Labour members keep going on about the fact that we are hurting the middle-income earners, the fact that we are hurting the low-income earners, and the fact that all the benefits from the tax changes we have made have gone to the rich. They base that on percentages. Well, in the same way that they can regurgitate the record, I want to remind them of something I said last year, and that was this: if my friend Parekura Horomia loses 10 percent of his weight, and I lose 10 percent of my weight\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000064\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221fb8d8db-3e96-49c7-ab1c-b7916a50e30e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022befc225720244e0bb3e9b0822b6fd85b\u0022\u003EHon Steve Chadwick\u003C/span\u003E: I raise a point of order, Mr Chairperson. This seems to be far off Part 1 of this taxation bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000065\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022108190f7e27543d59cf3d4a8b8d79eb3\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: Yes, we are moving into dangerous territory with the comments you are making. Let us keep the focus on the tax bill. It is a very important bill and we should focus our efforts on Part 1, which is about taxation rates.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000066\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c8f642de36a04189bd881b8306c754ba\u0022\u003EPAUL QUINN\u003C/span\u003E: Point of order.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000067\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b5db107c220249638a078be788845584\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: No, I have ruled.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000068\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229085ad29fe4945ff93b34ca5d1bcf8b9\u0022\u003EPAUL QUINN\u003C/span\u003E: I will give an example to the Committee about how percentages work. If I lose 10 percent of my weight, then, clearly, in absolute terms, I lose less in absolute terms than Parekura Horomia if he loses 10 percent of his weight. That is how the tax system works when we make percentage changes versus absolute terms. If the Opposition cannot understand that, then I am afraid that is just another classic example, like the one we had in terms of the headline and the Opposition not understanding the difference between revenue and net income\u2014another classic example of the Opposition not understanding how calculations work and how systems work.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000069\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ddb849b7a01a49eabe07303ca249d305\u0022\u003EHon Pete Hodgson\u003C/span\u003E: Why are all your heads down?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000070\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a21815b571414dfa96b7c9a5fff6c35c\u0022\u003EPAUL QUINN\u003C/span\u003E: Of course, we heard earlier from the grand old man who is about to go out the back door, who talked about the fact that we have the lowest\u2014the lowest\u2014tax rates in the Western World. Well, so what\u2014so what? When we had the emissions trading scheme debate, the Opposition talked about wanting to be a world leader. Those members pick and choose; they want to be world leaders, but when it does not suit them, they want to be \u201Cfast followers\u201D. Well, I say from this side of the Chamber, in terms of tax rates, big deal. If we are the world leaders, then so be it. We are an innovative country, and we are an innovative party. We reward success. We do not penalise success; we reward it. If that means that we are world leaders in terms of our tax rates, then so be it. That will attract more people. That will attract the innovators to come to this country because they know they will be rewarded for success.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000071\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b5f06c7fc8f048fb918c5ec950f97e70\u0022\u003EHon Pete Hodgson\u003C/span\u003E: And are they coming? Where are they?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000072\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f0e081ee95834eac817892378b23ba91\u0022\u003EPAUL QUINN\u003C/span\u003E: They are\u2014they are on the way. The other thing I want to talk about is it would be nice if the members sitting opposite were to tell me what the appropriate tax rate is for middle-income earners. And what is middle income? Let us hear from those members as to what middle income is. In terms of the changes\u2014and I stray into the phrase \u201CWorking for Families\u201D only by way of example, because I am tying it to the tax rate\u2014I want to understand from the Opposition what middle income is. When we get to Part 2 I will point out to the Opposition that the 7,000 people earning more than $100,000 are actually coming off Working for Families. So are we penalising the people who earn $100,000? Is that middle income? What is middle income?\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022 data-id=\u0022980946ea27d04f8c95225aa9ab20fa3b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000073\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022980946ea27d04f8c95225aa9ab20fa3b\u0022\u003EBRENDON BURNS (Labour\u2014Christchurch Central):\u003C/span\u003E I start by expressing some disappointment in the Minister in the chair, Peter Dunne, because he has made it his hallmark to represent the middle classes of New Zealand. That has been his rallying cry. His political rhetoric has been built around assisting middle-income New Zealanders to get ahead. But this Budget, in my view, is doing nothing to assist middle-income New Zealanders to get ahead. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000074\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI think he has bought into the rhetoric that was very much in prominence back in 2008. Basically, the deal from National to the New Zealand electorate was that people could have their cake and eat it as well. The New Zealand electorate could have everything that the Labour Government had provided to it. They could have Working for Families and KiwiSaver, and they would be given tax cuts as well, as picked up by Part 1 of the Taxation (Annual Rates and Budget Measures) Bill, which enshrines the tax cuts that have been put in place by this Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000075\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EBut here is the reality: as we see in this bill, those tax cuts, as enshrined by Part 1, are only part of the equation. They are being eroded\u2014they are being eroded\u2014by all the other measures that are included in this bill, and by other Government measures we have seen in the recent past, such as the cuts in early childhood education and resulting increase in fees, increases in accident compensation levies, and the like. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000076\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI also note that that set of tax cuts, as implemented by Part 1, was affirmed as feasible and realistic by National when in Opposition in 2008, just as the world\u2019s financial markets were falling apart. New Zealanders were told that those tax cuts, as enshrined by Part 1, were affordable, even after Goldman Sachs had collapsed and the US economy was in turmoil, and even after Merrill Lynch had collapsed and had to be bailed out by the taxpayers of America to the tune of $3 billion. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000077\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EWhere do we end up? Part 1 has the tax rates that will apply through part of this year, as set out by this legislation. What is the legislation trying to deal with? It is trying to deal with a deficit of $16.7 billion\u2014$16.7 billion. That is what the tax revenue is attempting to address. As my colleague David Shearer pointed out, when this Government came into office there was a surplus of $5 billion, so that is a turn-round of more than $20 billion. We now have 16 billion tonnes of debt upon our backs, and this part of the bill is attempting to have tax revenues offset some of that debt. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000078\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI ask the Minister in the chair how secure the revenue predictions are that underlie Part 1 and the tax rates that will apply in the financial year ahead. I ask that because already we are hearing through the media today that employers are saying that the other measures in this bill in respect of KiwiSaver will have to be met by their cutting back on the tax they pay and putting increases on to their employees. We have heard Alasdair Thompson of the Northern Employers and Manufacturers Association say that the employers\u2019 KiwiSaver components in Part 2 will be coming out of the wage increases\u2014the wage increases\u2014of employees. How can we set any store by the tax-projected revenues incorporated in Part 1 of this bill, when employers are saying that they will not be meeting the KiwiSaver ramifications included in Part 2? Instead, they will be looking to their employees to meet those costs. I ask the Minister what revenue implications that will have. What revenue implications will it have for Part 1 of this bill? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000079\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI also point out the difference between the Inland Revenue Department\u2019s projections and Treasury\u2019s projections, as outlined in the Budget\u2019s Economic and Fiscal Update. The difference is in the order of $3.5 billion over the next 4 years, which is nearly $1 billion a year. That is a huge component, as we know, in respect of Part 1 of this bill.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022 data-id=\u0022b11de4f6e91f403196c96f39a06d167a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000080\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b11de4f6e91f403196c96f39a06d167a\u0022\u003ECHRIS TREMAIN (National\u2014Napier):\u003C/span\u003E Just before I start my speech on the unfair incidence of taxes, an issue that the Opposition has been raising today, I want to put on the parliamentary record that those of us on this side of the Chamber have been enduring about 80 or 90 decibels\u2014[Interruption] in fact 95 decibels\u2014from Mr Quinn. I was thinking we would quite possibly have to bring in the Occupational Safety and Health Service before I commence my speech.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000081\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f97bc6d59a00487ea8d90425a74e4f12\u0022\u003EHon Tau Henare\u003C/span\u003E: The decibel counter!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000082\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ad92c10a6fba4d1a8a5930f78632c1d8\u0022\u003ECHRIS TREMAIN\u003C/span\u003E: The decibel counter\u2014yes, it was indeed up there.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000083\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EWe are talking about Part 1 of the Taxation (Annual Rates and Budget Measures) Bill. In Part 1 we are talking about the taxation rates that will apply for the coming year. On this side of the Chamber we have been listening to Labour members talk about the unfair incidence of tax, so I thought I would stand up and take a brief call on that. I will talk about the unfair incidence of tax that occurred through the 9 years of the previous Labour Government. If we are talking about people who should not be at the highest marginal tax rates, then I am thinking about nurses, police, teachers, wharfies, and welders. I am thinking about highly qualified blue-collar workers. What happened over the 9 years of the Labour Government? Many, many of those people ended up paying the highest rate of marginal tax. That party on the other side of the Chamber called teachers, welders, wharfies, and nurses \u201Crich\u201D. Now, that shows that a party is starting to lose it\u2014Labour called those guys \u201Crich pricks\u201D. Well, by no way or means were those workers rich. That was an unfair incidence of tax. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000084\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EWhen National became the Government we changed that, so that on any level of the marginal or progressive tax rate, people in New Zealand are paying lower tax rates on their income and earnings. That is a fact. Let me talk members through the particular rates. Right now, people earning under $14,000, based on this tax bill, will pay no more than 10.5c in the dollar. That is down from 12.5c\u2014a 2 percent drop in the tax rate. People earning between $14,000 and $48,000 will pay no more than 17.5c in the dollar. That is down from 21c. That is a big drop for those middle-income earners. On the other side of the Chamber, members are arguing that middle-income New Zealanders did not receive decent tax cuts, but in fact there has been a huge, a massive, drop. In fact, if we take the 10.5 percent on income under $14,000 and the 17.5 percent on income between $14,000 and $48,000, the average tax rate is even lower than 17.5 percent, and that is absolutely fantastic. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000085\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EOn income between $48,000 and $70,000, people now pay only 30c in the dollar, and many people\u2014the nurses, the police, the doctors\u2014in this country sit within that range. We delivered them a lower tax rate. We do not believe they are rich. They are hard-working Kiwis who do not deserve to be on the top tax rate, but they were put on the top tax rate by the Labour Government\u2014not by this Government. But people on the higher tax rates, people earning over $70,000, still pay the highest progressive tax rate in this county. That is down from 38c to 33c. The top 13 percent of people in this country pay 51 percent of the tax. They should pay a higher tax rate\u2014I have no problems with that. But those people are often the entrepreneurs, the people who invest their own hard-earned capital into businesses that employ other people and create jobs. On this side of the Chamber we are not all about endless rinky-dink schemes created by the Government to create jobs. We believe that it is businesses that create jobs. It is people who are prepared to put their money on the line, to mortgage their houses, to invest in their businesses, who create jobs, and actually, yes, if they do that and they make a profit, we believe they deserve to keep a fair bit of it\u2014in fact, a lot of it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000086\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EMany years ago, when my dad was working, Muldoon had set the highest marginal tax rate at\u2014I think it was\u201466c in the dollar. My dad came home one day and he said: \u201CYou know, CJ, it ain\u2019t worth working any more. Every time I earn a dollar I get to keep only about 30c of it.\u201D I rest my case.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022 data-id=\u0022232b8919b3d84de5884a29c75fe457de\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000087\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022232b8919b3d84de5884a29c75fe457de\u0022\u003EHon Sir ROGER DOUGLAS (ACT):\u003C/span\u003E I think it is worth asking the Minister of Revenue to advise the Committee whether he is confident that Treasury has its predictions right. More particularly, if Treasury\u2019s predictions are wrong, what does that do to the Budget and what does it do in terms of New Zealand\u2019s credit rating, etc.?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000088\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EI have had my staff look at recent predictions made by Treasury, and those predictions do not give me a lot of confidence. If we look at Treasury\u2019s predictions of GDP, we see they are all in the band between slightly higher than 1 percent and 4 percent. I have here a graph showing the actual GDP line. We are being told in this Budget that growth will be up near 4 percent initially and then will tail off. That is one side of the ledger, and one has to feel that Treasury predictions of growth, and wage growth in particular, are pretty high. But if we look at Treasury predictions of core Crown expenditure from 2005 through to 2010, we see that the one consistent factor is that every year the predicted expenditure is lower than the actual. It is lower by an average of 6.8 percent, which is about $4 billion. So if the predictions are wrong again this year, we will have a deficit of $20 billion. Treasury is actually saying that over the next 2 or 3 years Government expenditure will not go up by the $4 billion to $5 billion that it has been going up by each year; it will go up by only 1.4 percent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000089\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EThis graph shows us the difficulty we have. It shows the amount of growth consumed by Government spending. The green line shows the increase in nominal expenditure, and another line shows the increase in Government expenditure over 3-year periods. We get to a stage where the Government\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000090\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221271838a14c2445c9125255710317d75\u0022\u003EHon Pete Hodgson\u003C/span\u003E: It is not a zero-based graph.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000091\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ff6425c477dd47768753b208ecd30fb3\u0022\u003EHon Sir ROGER DOUGLAS\u003C/span\u003E: It is the actual nominal. We are talking nominal.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000092\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c5599141a30d44149cd54aa0a7e7a73c\u0022\u003EHon Pete Hodgson\u003C/span\u003E: I am saying that the graph does not start at zero.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000093\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022016f328d7b324349b9792d562e1e620e\u0022\u003EHon Sir ROGER DOUGLAS\u003C/span\u003E: It starts at 1999-2000, and it is in 3-year periods. But members should look at the next 3 years. We are led to believe that nominal GDP growth will be 23 percent, but guess where we have been told Government expenditure will be? At 1 to 2 percent. If someone believes that, I think that person will believe almost anything.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000094\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003EIf I look at the numbers in the back of the book I see that, for example, Vote Corrections expenditure went up over the last 4 years by $350 million. We are told that in the next 4 years it will actually go down by $3 million. Maybe that is right; maybe that is wrong. But some of these estimates seem to be fairly tough. It we look at primary education in the last 4 years, we see that expenditure has gone up by $630 million and student numbers have gone down by 4,000. In the next 4 years, student numbers will go up by 25,000, but expenditure will go up by only $100 million.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000095\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220fc05f1c-47b0-4fb0-8298-2f347adae4e3\u0022\u003ESo all I am asking is how confident the Minister is that he has it right, both in terms of revenue and in terms of expenditure. I am not particularly confident, given that if we look at every year from 2005 through to 2010, we see that Government expenditure every year has averaged 6.8 percent more than the estimate, and that GDP growth has been lower than the estimate by a considerable amount. How confident are we? If we get it wrong both on lower revenue and on higher expenditure, then we have some very real difficulty.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00220e7e8da2-a6a1-41bb-aeb0-a49be255a293\u0022 data-id=\u0022831dc95a254444149c38a861b361ae37\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000096\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220e7e8da2-a6a1-41bb-aeb0-a49be255a293\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022831dc95a254444149c38a861b361ae37\u0022\u003EHon NANAIA MAHUTA (Labour\u2014Hauraki-Waikato):\u003C/span\u003E Kia ora. I am happy to speak to the Taxation (Annual Rates and Budget Measures) Bill, and in particular focus on Part 1, \u201CAnnual rates of income tax\u201D. I listened very carefully to contributions from members of the Government. I came out with three very clear points. First, the member Craig Foss promoted the idea that if one talks about something long enough, maybe people will believe it. He made the point that 13 percent of people pay 51 percent of tax. If we take that tag line alone, it explains exactly why most of the tax cuts go to top income earners. But I do not think people are convinced by Mr Foss\u2019s argument. In fact, I think they are more perplexed with that rationale because it justifies the unfairness of the current tax system and the fact that the Government is prioritising investment that does not benefit a lot of people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000097\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220e7e8da2-a6a1-41bb-aeb0-a49be255a293\u0022\u003EThen I listened to Mr Paul Quinn. He operates by the standard that if he talks loud enough then maybe people will hear him. But we all know that once the decibels start to rise, people turn off. In fact, I could not quite figure out what point he was making with regard to Part 1 of the bill. Then I listened to the member Chris Tremain. He operates by the edict that if he says it often enough then maybe even he will believe it. One of the points he made was just how much middle-income earners are benefiting under this Government\u2019s tax cuts. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000098\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220e7e8da2-a6a1-41bb-aeb0-a49be255a293\u0022\u003EI present a response, particularly in relation to Mr Tremain\u2019s points about income tax for middle-income earners. He highlighted these groups specifically: nurses, policemen, teachers, wharfies, and builders. He made the point that under Labour they were paying a higher marginal tax rate and under National they are not. Let me say this: those same people are parents, those same people have kids, those same people utilize public services, and those same people are saying\u2014we are listening to them\u2014that they did not bet on the rate of GST increasing, on paying more over the counter for their kai, or on rising petrol prices. They say that when they take their kids to the doctor the after-hours costs are as much for them as they are for anyone else, and they are still paying the mortgage. Some of them are paying higher rents, particularly in areas like Auckland. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000099\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220e7e8da2-a6a1-41bb-aeb0-a49be255a293\u0022\u003EThose nurses, policemen, teachers, wharfies, and builders are making the same noises in terms of concerns about where this Government has got its priorities wrong. Even though they are middle-income earners and they have a lower marginal tax rate, they have to pay exorbitant costs at the other end because this Government has its priorities in the wrong place. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000100\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220e7e8da2-a6a1-41bb-aeb0-a49be255a293\u0022\u003EThe Government has ripped out the guts of the public health sector. It says it is moving resources to the front line. It says it is moving resources to the front line, but backroom functions cannot be absorbed by front-line staff. Those members might not like that, but they know it is true. Those middle-income families are parents, they have kids, they are paying the same costs as low-income families, and they have the same concerns: paying more for their kai, paying more for petrol, and paying more for after-hours general practitioner services\u2014paying more and getting less. Their wage is worth less under this Government than it ever was before. Why? Because they are feeling the pay at the other end.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000101\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223b210c6dd13a424ebf26828ac9e70880\u0022\u003ETim Macindoe\u003C/span\u003E: Rubbish.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000102\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220e7e8da2-a6a1-41bb-aeb0-a49be255a293\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228c2aca3f327b44abbc49afd97c224d10\u0022\u003EHon NANAIA MAHUTA\u003C/span\u003E: The member for Hamilton West may say it is rubbish, but we can find middle-income earners in the Hamilton West electorate who are making very clear complaints about after-hours health care because they have to pay more. If they go to Waikato Hospital, albeit to a well-developed accident and emergency service, they have to wait for 8 hours, so rather than wait for 8 hours they pay $69 for after-hours health care. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000103\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220e7e8da2-a6a1-41bb-aeb0-a49be255a293\u0022\u003EI go back to Part 1 of this bill. The Government\u2019s members are saying it long enough, loud enough, and often enough, but they are still not convincing middle and low income earners that their tax cuts are benefiting them in the long run. The concerns we hear day after day show that prices and the cost of living are higher for middle and low income families. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000104\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220e7e8da2-a6a1-41bb-aeb0-a49be255a293\u0022\u003EThose members are very quiet now. Their heads are down now. They know that the cost of living\u2014[Interruption] They know that when they talk about middle-income earners and the tax cuts that have been promoted by this Government, they are not talking about the costs at the other end. I challenge members of the National Government to talk about the costs at the other end. They talk about tax cuts at the front end but not the costs accrued by those same families at the other end. Policemen, nurses, teachers, wharfies, and builders are parents. They have kids and they have mortgages. All those costs are adding up. The price and the cost of living for those same families\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000105\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224e747e99c3034ed392506c21f940ca00\u0022\u003EPaul Quinn\u003C/span\u003E: 20,000 more elective surgeries.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000106\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220e7e8da2-a6a1-41bb-aeb0-a49be255a293\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002299654edd544b411d985fa4b7da31bc9c\u0022\u003EHon NANAIA MAHUTA\u003C/span\u003E: There we go again. That member operates by the edict that if he says it loud enough maybe people will hear him. They actually turn off. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000107\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220e7e8da2-a6a1-41bb-aeb0-a49be255a293\u0022\u003EThose people are parents. They have children and they are paying at the other end. I see the Minister in the chair, the Minister for Building and Construction, smiling, because he knows exactly what I am talking about. Government members might be able to promote the benefits of tax cuts at the one end, but they cannot justify the increased pressure of costs on families at the other end. That is what we are saying. The tax promotion that this Government is making is creating an inherent imbalance and unfairness. National is creating greater inequality between middle and low income families. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000108\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220e7e8da2-a6a1-41bb-aeb0-a49be255a293\u0022\u003EGovernment members say that the top 13 percent pay 51 percent of the taxes. They are trying to justify it so that that 13 percent get most of the benefits. People can see through that. It does not matter whether members opposite talk long enough, loud enough, or often enough; people can see through that. They do not believe that the proposals at one end offering tax cuts are offset by the cost of living pressures at the other end. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000109\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267431f57-e958-4c83-b438-7da8061d479e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e622fb05197d4b0db921254579aa4b90\u0022\u003EPaul Quinn\u003C/span\u003E: You\u2019re still prattling on about the same things you were in the previous 2 years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000110\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220e7e8da2-a6a1-41bb-aeb0-a49be255a293\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224c7afe1b8e734ce7a69bd770fe083452\u0022\u003EHon NANAIA MAHUTA\u003C/span\u003E: I will say it again and again, because members on this side of the Chamber are presenting those issues. We know that the cost of living pressures are not being alleviated by the solutions that the member Paul Quinn is promoting in this Chamber. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000111\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220e7e8da2-a6a1-41bb-aeb0-a49be255a293\u0022\u003EI am happy to speak to Part 1 and to reject the proposition that it is promoting better opportunities for middle-income families. There is just no balance between tax cuts for middle and low income families at one end and the increasing pressure of costs at the other end. There is a greater imbalance, greater unfairness, and greater inequality in the treatment of those groups of people: nurses, policemen, teachers, wharfies, and builders. I am happy to speak to Part 1.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022 data-id=\u0022e0d1a820f2a745278524a99618cdff87\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000112\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e0d1a820f2a745278524a99618cdff87\u0022\u003ETIM MACINDOE (National\u2014Hamilton West):\u003C/span\u003E I am delighted to follow the Hon Nanaia Mahuta. Of course, we represent the same area\u2014her electorate is a little bigger than mine, but we are in the same region. I particularly thank her for acknowledging that under this Government tax rates have come down and that this Government has been focusing particularly on the needs of vulnerable New Zealanders, those on low and fixed incomes, who have needed protection through the worst impacts of the current economic recession. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000113\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221fb8d8db-3e96-49c7-ab1c-b7916a50e30e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d7311d74989040d7a97497fa7b5492d5\u0022\u003EHon Steve Chadwick\u003C/span\u003E: Tell us about cuts to family violence.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000114\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229ca6fe2eca314ae981c8350f3f6fd752\u0022\u003ETIM MACINDOE\u003C/span\u003E: It is about focusing on the things that matter to New Zealanders, I say to Ms Chadwick\u2014things such as the huge improvements that Tony Ryall has secured in the health system, or the fantastic work that Anne Tolley is doing in the education system. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000115\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022\u003EBut I need to come back to tax, because that is what this debate is about. Nanaia Mahuta reminded us of that old political principle that if one repeats a lie often enough, people will start to believe it. That, frankly, is Labour members\u2019 strategy at the moment. That is their entire plank in the current election year, as they go towards 26 November. Those members have nothing positive to say, they do not have a credible plan, and they do not have any ideas of their own, so they will keep misrepresenting what is actually being done in the hope that enough people will believe it to get them over the line. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000116\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022\u003EIn fact, Labour has taken one of the oldest political maxims of all time and slightly adapted it: no taxation without misrepresentation. That is the Labour mantra that we now have to put up with. The really fascinating thing when one listens to Labour members is that they never talk about the figures. They never actually get down to the detail. They hate that. It is always \u201Ccuts\u201D here and \u201CNational\u2019s rich mates\u201D there, but they never give an honest analysis of who pays the tax, how it is used, and what the overall impact of tax policy is on commercial activity, encouraging savings and investment, and Government spending. They love to do the spending, but they just cannot get it right in terms of how to provide for that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000117\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022\u003EThe first thing to remember\u2014and the Minister of Revenue reminded us of this when he took a call about half an hour ago\u2014is that last year\u2019s tax package was essentially fiscally neutral. It was about rebalancing the overall tax imposition on all New Zealanders to create fairness\u2014I repeat that phrase for Ms Chadwick, because she is pretty concerned about it; to create fairness\u2014to give extra support to vulnerable New Zealanders, and to stimulate investment in manufacturing, primary production, small and medium sized enterprises, and so on because, I say to Ms Chadwick, those are the kinds of activities that protect and create jobs, and generate wealth for this country. They generate wealth, and Labour members cannot stand that word. Next I will be saying \u201Cprofits\u201D and I will be hounded out of the Chamber by the Hobbit haters and the muppets, and the envy brigade opposite. But, actually, profits are a pretty important thing to protect and to ensure we can get in an economy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000118\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022\u003EThe tax switch last year is already playing an important role in building the platform for economic growth and putting more money in the pockets of low and middle income New Zealanders. Labour members hate the fact that most of last year\u2019s income tax reductions went to those on modest incomes, whom they profess to represent in this House, but when one listens to what those members are actually saying about this bill, one can tell that they have abandoned that group completely. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000119\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022\u003EAs the Minister of Revenue reminded us when he took a call, Labour members never admit that the bottom two rates were reduced in last year\u2019s Budget to the point where nearly three-quarters of the population pay a marginal tax rate of just 17.5 percent. So I can tell the Hon Nanaia Mahuta, who challenged me a short time ago about how my constituents are faring in the current conditions, that most of the electors in Hamilton West who are on middle incomes or lower incomes were absolutely delighted by that change, and I was pleased to be part of a Government that delivered it for them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000120\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022\u003EWhat a fantastic achievement that was, especially in the challenging economic circumstances that we inherited from the outgoing Labour Government. That Government had the best global conditions of any Government for at least a generation and it squandered the lot\u2014blew it, spent irresponsibly, and made no provision for the bad times that would inevitably come with economic cycles. It just blew the lot. Well, I say that we should celebrate what this National Government and its support partners have been doing and are continuing to achieve. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000121\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228a1cb04e-8a86-44d1-9004-6e158e220339\u0022\u003ELabour avoids the figures, but the figures are quite clear. Let me return to the Deloitte analysis, which Mr Woodhouse talked about a short time ago. In terms of total Government revenue, the 2011-12 forecast is for $64.1 billion. The large majority of this\u2014$47.4 billion\u2014will come from GST, corporate tax, and individual income tax.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022 data-id=\u0022042163f462d142f8a1fdb70d85feedf3\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000122\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022042163f462d142f8a1fdb70d85feedf3\u0022\u003EHon SHANE JONES (Labour):\u003C/span\u003E T\u0113n\u0101 t\u0101tou. Greetings, Mr Chairperson. It is a pleasure to stand and\u2014unlike the previous speaker, Tim Macindoe\u2014to direct our attention to Part 1 of the Taxation (Annual Rates and Budget Measures) Bill, which is to do with the tax rates. Mr Chairperson, given that you have provided a level of latitude to the man who has put to sleep what will remain of the farming community, unless it starts to pay its way in areas such as Matamata, Morrinsville\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000123\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c2266e8e5ec345ae95f025ae74081b27\u0022\u003EJohn Hayes\u003C/span\u003E: Wairarapa.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000124\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002267302e47c8b4411ba7d93816b8e5505a\u0022\u003EHon SHANE JONES\u003C/span\u003E: Actually, I must talk about Wairarapa at the moment. There will be a monumental change in Wairarapa, and it is called the removal of the member. That is about to come as a consequence of our passing the discredited script that is otherwise known as the Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000125\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EAll societies need to contribute, we know, towards meeting the costs of the apparatus of Government. All societies need to contribute towards meeting the costs of any vision, any aspiration, etc., that a Government seeks to implement\u2014although this Government is devoid, despite its rhetoric, of such aspiration or vision. But we have a concern, and we will repeat it. John Key invited members on the Opposition side of the Chamber to meet him on the hustings, and we cannot wait for that to begin. Actually it did begin yesterday, because his speech was not a parliamentary speech but a hustings speech. He was entitled to make it, but it is very difficult for us to be serious when he directs such belligerence to this side of the Chamber and forgets that the vast majority of women, for example, who heard his speech found it to be a very discreditable presentation. It overlooked the actual suffering, discomfort, and fear that many New Zealand families now feel and that will get worse as a consequence of this document. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000126\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EThe tax rates, at one level, are a quantitative reality, but the issue is about their burden. We on this side of the Chamber know that the burden must fall evenly, but, more important, that we actually need the revenue. I am concerned that the tax rates may have been changed, and that it will do damage to the conservation budget for endangered species. We know on this side of the Chamber that that member over there is an endangered species. He will not be back in 2012; he will not beat Trevor Mallard. As National gets to the end of its list, the member will drop off. So I say to Paul: \u201CUB40 for you.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000127\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022308789e1528b4adf8fe0ffa0b41c305c\u0022\u003EThe CHAIRPERSON (H V Ross Robertson)\u003C/span\u003E: The member must use the member\u2019s full name.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000128\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002285e689c154884185977a5b5b71d99d5f\u0022\u003EHon SHANE JONES\u003C/span\u003E: Of course I must. Unfortunately, I was borrowing from the biblical expression of robbing Peter to pay Paul; that is all that I was doing. I was not taking in vain, either, the name of this fearless champion of the vanquished. Unfortunately, when he hopped in the limo he forgot about them. I was just talking about the new status for Paul Quinn, which will be unemployment. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000129\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EBut let me come back to the bill. I will talk about the burden that falls upon society. We genuinely believe that if tax relief is to be offered through the rates, it ought to fall on those people who are under the most pressure. Our belief is based on a different vision that members on the Opposition side of the Chamber have from the vision of Government members, in relation to who ought to pay. They have been telling us over the last 24 hours that there is a small slither of people in New Zealand who are the wealth generators. Those members believe, unfortunately, that they are a proxy for the wealth-generating community. But they are not. The reality is that every single New Zealander whom we know wants to do the right thing by their own family and their community. But if they are not treated fairly through the taxation system, then whatever initiative they have is stifled. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000130\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EOf course we need tax revenue in order to overcome the mountain of debt. I personally think that all New Zealanders, especially those who are living through the misfortune of having used their homes as ATM machines, know at a personal level that we have to bring debt down. Mr Dunne is right in his press statements to challenge all members of Parliament to think seriously and to chart a course forward as to how we can do that. But when we manipulate the taxation system and the spread is grossly uneven, we do not create a system whereby those who have the ability to contribute towards substantially reducing the burden of debt upon us are paying their full share. That is a reasonable, debatable point. We will take it forward and debate it up and down the country during the latter part of November, when, as a consequence of Helen Clark\u2019s having brought the Rugby World Cup competition to New Zealand, we will celebrate the victory of the All Blacks. We will remind people that just as we look for fairness and for aggression in sport, we were hoping to see something fair in the taxation system. OK, we know the Government will not be bold. We know it is vacuous, and that is why the philosophy underlying these rates, etc., favours a narrow caste of economic players in the economy.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u00222af13d1cce6a41a18ee222becadd3eaf\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000131\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222af13d1cce6a41a18ee222becadd3eaf\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E Mr Jones actually nailed it on the head. A Government can use the tax system in a number of ways. What the Labour Government fundamentally believes\u2014it is one of Labour\u2019s basic principles, and what Phil Goff has said many, many times\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000132\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226c0cd87bb0a84aafa934d4f445082fa6\u0022\u003ECraig Foss\u003C/span\u003E: There is no Labour Government.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000133\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225d61aac426704e5c82baca26cf779387\u0022\u003ESTUART NASH\u003C/span\u003E: Sorry, I was looking in the crystal ball and I had a vision 6 months ahead; I apologise. The Labour Party believes that a Labour Government will be the next Government to deliver a Budget. I can promise members it will not have the same level of inequality as this Budget has. [Interruption] There is no doubt about that, I say to Mr Foss. What the Labour Party believes, and has always believed, and what Mr Goff has said time and time again, and what he will continue to tell Mr Key when he meets him on the hustings, is that the tax system should be used for good. The tax system should be used to promote equality. The tax system should be used to promote fairness. That is what the tax system should be used for. The tax system should not be used to reward those who do not need it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000134\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ELet me give one example. When the chief executive officer of Westpac looked at these rates, I think he probably would have been a little embarrassed. I think he would have been a little embarrassed when he received a tax cut of $5,000 a week. I have to ask: is that fair? Is that equitable? Is that the sort of society we want\u2014that there are some at the top who amass huge wealth? He has a salary of about $5.2 million; about $5.2 million. He has had an increase of about $5,000 a week.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000135\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b1b9933a450949a0a54d6823283f60b0\u0022\u003EHon Maurice Williamson\u003C/span\u003E: What does he actually pay in tax already?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000136\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224cf769ed6c9b43219cd5165042d4b01a\u0022\u003ESTUART NASH\u003C/span\u003E: I tell the Minister to ask his Minister of Revenue and ask the Inland Revenue Department, whose figures the Government does not trust. The Government does not trust the figures from the Inland Revenue Department. What the Government does is use Treasury\u2019s figures. I think that Minister should ask the Inland Revenue Department what the chief executive officer of Westpac earns as a salary; ask how much he gets in his hand every week. I think even that Minister, a Minister earning a Cabinet salary, would be slightly disgusted. I do not know of any way to justify a tax cut of $5,000 a week, let alone the amount of money he is receiving in the hand every single month. In fact, I have no doubt it is more than the vast majority of his employees receive in a year; I have no doubt about that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000137\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThis is what Labour stands for: Labour stands for using the tax system to promote equality and fairness. With regard to the rates we are talking about, I have heard from that bloke from Hamilton, Mr Macindoe, and Mr Woodhouse, that the tax cuts have been fiscally neutral. What do they quote? They quote a Deloitte report. But I can inform this Committee that Dr Bollard, for whom I have the utmost respect, has sat in front of the Finance and Expenditure Committee and said, well, the tax cuts are not fiscally neutral. In fact, it has cost us. This is what last year\u2019s Budget told us, that these tax cuts would cost the country about a billion dollars. But it has cost more than that, and I will tell members why it has cost more than that: because Treasury got the figures wrong. Last year GST receipts were down by about $270 million dollars. That is what GST receipts were down by. That equates to a decrease of about $2 billion in spending on goods and services. This Committee was told that these rates were neutral, that an increase in revenue from GST would easily match the amount of money\u2014I think it is about $23 billion over the term of the Government\u2014it would cost to implement these tax cuts. Well, that is wrong, because that has not been the case. In fact, $2 billion has been taken out of the economy since this tax switch. That is shown by the drop in the GST receipts. That is why I have grave concerns when the Government uses the tax revenue forecasts put forward by Treasury and not the Inland Revenue Department. That is why I have grave concerns that it is the forecast\u2014Mr Chair\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000138\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229a7bc3f9114b424d9b55fffd4db92e3f\u0022\u003EThe CHAIRPERSON (H V Ross Robertson)\u003C/span\u003E: I call the honourable member Stuart Nash.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000139\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002232855d96aa93449ca0d35b01d045f7ca\u0022\u003EJo Goodhew\u003C/span\u003E: I raise a point of order, Mr Chairperson. I ask whether you could assure me that that member has not had more than his allowable number of calls in this debate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000140\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224f86b40ba6464f388445571a70c02d84\u0022\u003EThe CHAIRPERSON (H V Ross Robertson)\u003C/span\u003E: I will just check that for you. This is the fourth call now. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000141\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002286a673ef1fbc47d68d4f3580d7c2460f\u0022\u003ESTUART NASH\u003C/span\u003E: I know it seems like we have been talking about the inequality of the tax system for a long time, but it is not just me. I think it is the whole of Labour. Everyone on this side of the Chamber has talked about the inequality of these tax rates for a long, long time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000142\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022257864b902554c3b98ce54b82aecb92f\u0022\u003EJohn Hayes\u003C/span\u003E: It\u2019s boring.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000143\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002233c3182f212144278fc991164a1d7572\u0022\u003ESTUART NASH\u003C/span\u003E: That member may say it is boring, but I think the vast majority of New Zealanders do not find it boring. They find it a little bit shameful. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000144\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EAs I was saying, one of the major concerns I have about the Government using Treasury data and not the Inland Revenue Department data when it promotes its forecasts is the fact that Bill English stood up and said the Government will create 170,000 new jobs. Bill English said the Government will create 170,000 new jobs, and this is what the revenue forecasts are based on. But when he was questioned on television this morning, he was asked where the jobs would come from. Where will those 170,000 new jobs come from? Do members know what he said? He said commodity prices will go up, and he thought there would be a lot of jobs created in the commodity sector. That was a very enlightening comment. The reason I say that is that the opposite is happening. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000145\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI will give members an example. In the forest industry we are exporting a record number of unprocessed logs. That is causing major stress for domestic processes, mills are closing, and people are losing jobs. The prediction of 170,000 new jobs is actually a little bit of a fallacy. I think it is a \u201Clet\u2019s hit it and hope\u201D strategy, in which those members close their eyes, pick a figure out, and hope like hell that if they say it long enough, people will believe it. Government members believe that all they have to do is get to the election, and if they get elected\u2014which they will not\u2014people will believe them. Well, the people are not silly. I think this Government has treated the people of New Zealand with contempt for too long. I think the people of New Zealand deserve to know what the plan is for creating these 170,000 new jobs. We admit there will be more jobs out of the reconstruction of Christchurch, but there will not be 170,000 new jobs. That is just a one-off sort of event; it is not sustainable, long-term economic growth. That is why Michael Cullen delivered nine Budgets of surplus.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000146\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c337f230e2494b219830cde256a95544\u0022\u003ECraig Foss\u003C/span\u003E: Based on Treasury forecasts.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000147\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002245fa39d2d0c046c2a13abab016ccaa07\u0022\u003ESTUART NASH\u003C/span\u003E: That is a very good point that Mr Foss brings up, because never before has there been such a discrepancy between Treasury figures and Inland Revenue Department figures. When the Budget document is being put together, Treasury models it and the Inland Revenue Department models it. Those departments make similar sorts of assumptions, as we would imagine, but usually the models are pretty close. This time there is a discrepancy of $4 billion over 5 years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000148\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221fb8d8db-3e96-49c7-ab1c-b7916a50e30e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022267de6cf50bc4c71a5d5831073be0875\u0022\u003EHon Steve Chadwick\u003C/span\u003E: How much?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000149\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f7dda1c680bf4c6ea4ecd75689476d5f\u0022\u003ESTUART NASH\u003C/span\u003E: There is $4 billion over 5 years. The Government says there may be a little bit of risk in relation to that. That is the understatement of the century. There is huge risk in the Government\u2019s figures, because the Inland Revenue Department has said the Government will be $4 billion short over 5 years. That is a major concern. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000150\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EAs I was saying, Michael Cullen believed that a Government creates economic growth by creating jobs. When a Government creates jobs, people pay tax. When the Government creates jobs, the taxpayers pay tax. When taxpayers pay tax, the Government gets revenue. When the Government gets revenue, it can pay down debt. That is what Michael Cullen did. Michael Cullen left this country in such sound shape that when the global financial crisis hit, the economy was doing OK. Despite the mismanagement of this Government\u2014despite the gross economic mismanagement of this Government\u2014the economy is in not too bad shape, because Michael Cullen had 9 years of Budget surplus based on 3 percent unemployment. We now have double the unemployment, thanks to this Government, that we had when Michael Cullen read his last Budget. We have 150,000 people who are not contributing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000151\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EAll we wanted to see was a plan\u2014a plan for growth, a plan for creating jobs, because when there are jobs, people pay their tax. That is my huge concern. Minister Dunne actually admitted that we do not have a great middle class like the United States has. He said we have a very few up the top, but we do not have that great middle class like the United States has, and this is a major problem.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022 data-id=\u0022f5f9ae73a3ea41b2a97c8fbbecf6cca2\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000152\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f5f9ae73a3ea41b2a97c8fbbecf6cca2\u0022\u003EJO GOODHEW (Junior Whip\u2014National):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022 data-id=\u0022fe6ba58e820f4968a57929d5b893d619\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000153\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022fe6ba58e820f4968a57929d5b893d619\u0022\u003ECAROL BEAUMONT (Labour):\u003C/span\u003E I appreciate being able to speak on the Taxation (Annual Rates and Budget Measures) Bill. I am very pleased to follow my colleague Stuart Nash. He has been making outstanding contributions in this debate and has enlightened a lot of New Zealanders on issues to do with our tax system, and that is very important. Part 1 is about our current tax system, and I want to make some comments following on from Mr Nash\u2019s comments. Perhaps I should seek leave of the Committee to allow Mr Nash to make some more comments. I think he has done an exceptional job in enlightening New Zealand on how unfair our current tax system is.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000154\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003EIt has been a deliberate decision of this National Government to create a less fair tax system. Let us be clear about what we are talking about here. We are talking about tax rates that were changed so that the top 10 percent of earners in New Zealand had significant tax cuts\u2014tax cuts that they do not need, and tax cuts that have not actually benefited our economy. On this side of the Chamber we do not believe in the trickle-down effect that members on the other side of the Chamber seem to be so reliant on. We do not believe that just because those at the top are given more money in their pockets, they will spend it in a productive way that assists the economy. We believe that the people who need assistance from the Government are low and middle income New Zealanders.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000155\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003EAs Mr Nash pointed out to us, the Government tried to sell those tax cuts as being fiscally neutral. It said that they were a tax switch. Members across the other side of the Chamber must think New Zealanders are very silly. I certainly do not, but you must think they are\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000156\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fcb5405d6e0e4b3092de83b18c5bfa6e\u0022\u003EThe CHAIRPERSON (H V Ross Robertson)\u003C/span\u003E: Order!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000157\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229c8ce77abc7049338e715e05e772fad9\u0022\u003ECAROL BEAUMONT\u003C/span\u003E: I am sorry, Mr Chair; you, of course, do not. Members across the other side of the Chamber, however, clearly do think the public are silly if they think the public believe this tax switch nonsense. Out there in the real world, low and middle income New Zealanders know that things cost them more. They know that, through the increase in GST, they have effectively had to bear the cost of tax cuts being given to the wealthy. It has not been fiscally neutral. There is a hole in the Government finances.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000158\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003EI find it bizarre that people across the other side of the Chamber can go out there and talk about the reason for the deficit being the Christchurch earthquake and the global economic crisis. Yes, of course, those are elements in it, but some of it was a deliberate decision of the Government to cut its own revenue\u2014to give tax cuts that were unfairly weighted in favour of those at the top. So take responsibility for the deficit and do not ensure that the costs are all borne by low and middle income New Zealand. That is our message to members opposite. Of course, it is not going to be listened to. Members across the other side of the Chamber are out of touch if they think New Zealanders buy that the deficit is nothing to do with the Government. People do not buy that. They do not buy the tax switch notion.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000159\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223facbb72-b3b0-464b-b24d-e6de0616f323\u0022\u003EI really liked the description my colleague Stuart Nash gave of the importance of the tax system being about taxing to do good. Tax is effectively the income the Government gets to do things. Unfortunately for all of us, this Budget is another do-nothing Budget in terms of rebuilding our economy. If members opposite\u2014if we all\u2014looked at what was needed to grow our economy, we would not see things like cuts in investment in industry training and skills development. It is an absolute outrage that in this country we are not investing in our people so that they have the opportunity to get a job, they have the opportunity to get a better-paid job, and they have the opportunity to keep a job and have greater job security. It is an absolute outrage that we are not investing in our people so that they can be more productive at work and we can transform our workplaces into better, more effective, more productive workplaces that provide the goods and services this country needs. It is an absolute outrage that across the other side of the Chamber there is some view that the Government has no responsibility for growth, for stimulus, and for other things that will lead to jobs.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022 data-id=\u002272eeea576f7d4d40bf4ff14235373ee8\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000160\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002272eeea576f7d4d40bf4ff14235373ee8\u0022\u003EJOHN HAYES (National\u2014Wairarapa):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u0022ff0a8b52788446a782cae245d7230a25\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 68\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 4; 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 42; Green Party 8; 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\u003Ca id=\u002207d1e44c42f247cf8ed0366370922f8b\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 68\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 4; 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 42; Green Party 8; Progressive 1.\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=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000161\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00223102e3eb7e4142aea919f1f6a8ef1eee\u0022\u003EPart 2  Working for Families and KiwiSaver\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022 data-id=\u00223255ca2e9c5843658c60f458228bd16a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000162\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00223255ca2e9c5843658c60f458228bd16a\u0022\u003EGRANT ROBERTSON (Labour\u2014Wellington Central):\u003C/span\u003E This is my first opportunity to participate in the Committee stage of the debate on the Taxation (Annual Rates and Budget Measures) Bill and we come now to Part 2. It is worth noting that the discussion we were just having on Part 1 often impacted on both the specific changes to Working for Families and to KiwiSaver. As we begin the discussion of these changes in Part 2 we need to look at the wider context in which they are set in this Budget. Essentially these are the big changes for National. The big vision for National in this Budget is to cut Working for Families and to cut KiwiSaver. That is it. There is no big vision about growing the economy. There is no big vision about innovation in our economy. There is no attempt to say how we will create the jobs that will keep New Zealanders in New Zealand rather than going to Australia. Instead Part 2 of this bill, which we debate under urgency, cuts in to low and middle income earners\u2019 income; it takes out income from 1.7 million KiwiSavers. That is what Part 2 does because this Budget has no vision and no plan; it is a defensive Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000163\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EMy colleagues on this side of the Chamber know that I am a fan of sport. For me this Budget, from the Government\u2019s point of view, is all about the All Whites going out on the field to play a game of soccer and putting all of their players inside their own penalty area and having no one upfront trying to score any goals. That is what this Budget is about: it is a defensive Budget with no vision. We heard ambition for New Zealand a couple of years ago from John Key and Bill English. But, instead, as I sat and listened to the Budget speech yesterday I kept waiting for the plan, for the things the Government was going to do. Yes, there were going to be cuts. Yes, we are living in tight financial times. Then we expect to hear the plan. But, instead, the plan is the cuts\u2014that is it. There is nothing else. There is no vision for the future. There is, as we see in Part 2 here, simply cuts to Working for Families and to KiwiSaver. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000164\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThe promise that National delivered pre-Budget\u2014and it is surprising that anyone would really believe promises that National delivers any longer, after it increased GST when it said it would not\u2014is that it wanted to get at those people on Working for Families who are earning high income levels. It wanted to get at those people earning over $100,000, because they should not be on Working for Families. National says those people are on a kind of middle-class welfare that we do not need. But the reality of the changes in Part 2 is that it kicks in for people earning as little as $36,000 a year. It kicks in for the security guards who work around this building and other places. The level of pay they are getting means they are too rich to be supported. They are the people who do not deserve support for raising children. That is what this Budget says. That is what Part 2 says. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000165\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThis is not about high-income earners; this is about people who are currently struggling to meet the cost of living, and they are being told that they are the people who have to bear the burden of the financial problems facing New Zealand. It is middle-income earners who have to bear that burden with the cuts to Working for Families. One of the things that are frustrating for people on this side of the House is that when Working for Families is presented, it is presented as being about somebody who is on an income of $70,000. Let us be absolutely clear\u2014this is about family and household income. If a household has an income of $70,000, that can be two earners, each earning $35,000 a year. If they are raising two children in that environment, that is difficult at the moment. They are the people who are struggling to put healthy food on their table. They are the people who need support to ensure that those children get the kinds of opportunities in life that everyone in this House would want them to have. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000166\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EIn Part 2 of this bill, Working for Families has been cut for those people. It has been cut, so the opportunities are simply not there for those people in the future. The problem is that the whole Budget is based upon fiction, figment, and this notion that there will be 170,000 jobs. From where? From where will those jobs come? There are not 170,000 jobs in rebuilding Christchurch. There are some jobs in that, but there are not 170,000. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000167\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThe Rugby World Cup gets a good play in the Budget, in terms of economic growth. I hate to tell Mr Key and Mr English but the Rugby World Cup finishes in October. It will not be there in the future. The Rugby World Cup ends in October and that is it. That is the end of the plan for the growing of jobs. It is a figment. What is more is that jobs and growth projections in this Budget are based on nothing. Not only do we think so but the Inland Revenue Department thinks so and the Ministry of Social Development thinks so. As my colleague Stuart Nash said in the Part 1 debate, there is a $4 billion gap between the forecast of what the people who actually collect the tax think they will get and Treasury, which is making these bold, heroic projections about growth. What is more, the Ministry of Social Development is projecting that it will be paying out more and more in benefits at exactly the same time as Treasury thinks the number of people employed will be going up. There is a problem there. If Treasury\u2019s projections and forecasts were accepted across the Public Service, then the Ministry of Social Development would be forecasting the main benefit costs to go down. It is not forecasting that; it is forecasting benefit costs to go up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000168\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EWe have the Inland Revenue Department and the Ministry of Social Development saying that Treasury\u2019s forecasts do not stand up. They are a figment. They are not real jobs, because there is no plan to create those jobs in this Budget. There is nothing about skills, nothing about increased research and development, nothing about innovation, and nothing about supporting exporters. This Budget is built on a fallacy of hope that there will be jobs in the future, and no plan to get there. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000169\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EWhen we get to Part 2 we see that the big plan is based on cuts. Here is a message for National: cuts do not amount to a plan for the economy. It is a defensive attitude and not one that will help grow the economy. Why is it that time and time again with this Government, when the belts have to be tightened, it is those at the low and middle-income end who have to do the tightening? In the end, that is about\u2014and Part 2 is about\u2014the fact that nothing has changed for National. It is still about trickle-down economics. It is amazing. The idea has been around for 30 years but it has not worked. It is not working, yet we have another Budget presented to this House that is about a belief and a faith in trickle-down economics, rather than a Government that will do something to help create jobs and to grow the economy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000170\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EPart 2 tells us that Working for Families needs to be adjusted because it is not affordable at the moment. I say to National that those people on those low and middle incomes are being affected\u2014for example, the couple I was talking to last night. The husband is a security guard who works full time and the wife is an early childhood education teacher who works part time. They are trying to raise their children. They are losing as a result of these Working for Families changes. They are also KiwiSavers and they are losing out there, as well. They are being hit twice. Their incomes are being hit, while the people on the top tax rate continue to enjoy the benefits of tax cuts that were unaffordable, which is part of the reason we have the deficit in front of us today. Make no mistake; this deficit in this Budget is National\u2019s deficit. It is a deficit that it has created by its lack of an ability to help grow this country and by its short-sighted policies that are not about the long-term future and innovation of the country and that are not about skills. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000171\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003EThis Budget is based on a fallacy. It is based on a hope and a faith that jobs will be created. It is not based on a plan. In Part 2 the core of the Government\u2019s policy is to cut Working for Families and KiwiSaver and to look tough. Where is the gain that goes with the pain? I do not see it. New Zealanders know we are in tight financial times. They all want to pull together and work, but New Zealanders also fundamentally believe in fairness. They believe in fairness and they believe that it is important that we look after each other in times of need. When people are trying to bring up children, who will be the future of this country, they deserve support for that. Instead, Part 2 of this bill delivers cuts to those very people in Working for Families and KiwiSaver. KiwiSaver is one of the things that we on this side of the House are proudest of, because it put in place a regime that got New Zealanders saving. That is compromised by Part 2 of this bill.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022 data-id=\u0022a6425382fde64d1f90bb80351a49d0db\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000172\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a6425382fde64d1f90bb80351a49d0db\u0022\u003EJACINDA ARDERN (Labour):\u003C/span\u003E It is a pleasure to rise and give a contribution on Part 2 of the Taxation (Annual Rates and Budget Measures) Bill, which, as my colleague Grant Robertson has pointed out, focuses on the changes to Working for Families and KiwiSaver. I will home in specifically on KiwiSaver.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000173\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003EIn light of the fact that members on both sides of House acknowledge that we have a significant issue when it comes to Kiwis\u2019 own personal savings rates, it seems phenomenal to me that this is the third change I have seen in this House relating to superannuation schemes and our preparedness for future generations\u2019 retirement. Members will remember that the first change was to the New Zealand Superannuation Fund. For my first Budget I sat in this Chamber and watched as the Government claimed that out of necessity it would suspend payments to the Superannuation Fund. Our preparation for my generation\u2019s retirement would be suspended, not for 1 year or 2 years but for 10 years. For 10 years we were going to look entirely past the issue of our superannuation preparedness, despite knowing that we would be paying for the baby boomers in the very near future. Those on this side of the House have watched as there have been changes to the one thing in the Government books that looked quite good, which was the Superannuation Fund. Members will note that I am no longer calling it the Cullen fund. Michael Cullen has specifically requested that if the Government will not fulfil its obligations to pay into that fund, then it should hereby be known as the English fund. The Cullen fund was about being prepared; the English fund is about suspending responsibilities.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000174\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003EThe second change we have seen to our preparedness for superannuation is a cut to KiwiSaver contributions. Members on this side of the Chamber will remember that Labour specifically legislated that contributions by members of KiwiSaver and by employers would sit at 4 percent. In its first Budget the National Government immediately slashed that to 2 percent, and we protested because we knew New Zealanders needed a high rate of savings if we were to be prepared for our retirement.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000175\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003ENow we come to the third set of changes. I do not know whether the Government thinks it is a sneaky change and perhaps the public will be duped by it, but almost in an attempt to cover up the fact that it has made changes to the Government contributions, the Government has now lifted employer and member contributions by 1 percent. They are now back at 3 percent, but that is still lower than it was when National was elected. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000176\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002292db3b401594463291b83282a879ca71\u0022\u003EGrant Robertson\u003C/span\u003E: A half-reversal. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000177\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228349840bf39a4a6585aa74d8d8f58ced\u0022\u003EJACINDA ARDERN\u003C/span\u003E: That is absolutely right, I say to Grant Robertson. I know that New Zealanders will not be tricked by that. They are much smarter than that, and they will immediately see through it. Why has the Government lifted that rate again, despite saying in the beginning that it needed to be halved? Because it wants to place an extra burden on employers and individual members, in lieu of the Government picking up its responsibilities. That is exactly what has happened. In Part 2 the Government contributions have been halved. They have also been capped. The $1,042 Government contribution amount of the potential tax credit has been replaced by $521. Why does that matter? We know that the three factors we need most if we are to have a stable personal savings scheme for Kiwis are incentive, stability, and income. We have seen three changes from this Government. That is not stability.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000178\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ad0025b259444ea4b2342bd7682fe299\u0022\u003ECraig Foss\u003C/span\u003E: There was a change every year under the Labour Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000179\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b2f07380f7bd435b84693502b1707beb\u0022\u003EJACINDA ARDERN\u003C/span\u003E: I will point out that KiwiSaver was created by a Labour Government, and it is one of the things we did that we are most proud of, I say to Mr Foss. Labour acknowledged that my generation was about to be left high and dry, and all the Government has done, I say to Mr Foss, is to prove that it has a short-term view when it comes to politics and electoral cycles. This measure is about the next election. It is not about my generation. If it was about my generation\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000180\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002228a3377a30f64254be92300f3789d8c5\u0022\u003EThe CHAIRPERSON (H V Ross Robertson)\u003C/span\u003E: I refer members of the Committee who do not have the call and are interjecting on each other to Speaker\u2019s ruling 63/7. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000181\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228bca492fc3de4a039c708c5af857896a\u0022\u003EJACINDA ARDERN\u003C/span\u003E: Speaker\u2019s ruling 63/7 is one of my personal favourites, so thank you, Mr Chairperson. I have already covered the incentive element. I will acknowledge that the Government has kept the $1,000 kick-start, and that was an important element of the scheme in terms of drawing people in to join KiwiSaver, as 1.7 million people have done. I will highlight one extra statistic that has not been shared much in this Chamber, and it is that 500,000 of those members are under-24-year-olds. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000182\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220a33bc54174d4b4bad79e7ebb6ce8579\u0022\u003EHon Ruth Dyson\u003C/span\u003E: 500,000?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000183\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225964c2fae44d4e7894eb063a0e001311\u0022\u003EJACINDA ARDERN\u003C/span\u003E: Five hundred thousand\u2014it is a significant amount. Whether some parents are enrolling their children very young is an interesting point, and we may need to look into that, but I applaud that figure. Ultimately, this scheme was about making sure that young people in this country are preparing for their retirement, so that incentive was important.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000184\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003EWe have covered the stability issue, and the fact that there has been a real lack of acknowledgment on the other side of the Chamber of the importance of stability. I think members would be interested in an interview with a man who is an ex - All Black, I believe, and a national voter, from Eltham. I understand that he said on the radio this morning that in his view the contract he had signed with the Government when he gave his vote to National had been broken. It was his view that the agreement that had existed on what would happen with his superannuation fund, which he had signed up to because he believed that the Government would not honour its promise and ensure that a universal pension scheme would be available when he retired\u2014so he had bought into KiwiSaver\u2014had been broken. I would like to know how many other Kiwis feel exactly the same way. I wager that it will be many. The stability issue is a significant one, and that is, obviously, what we are addressing in Part 2.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000185\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003EBut Part 2 specifically acknowledges the role of the employer\u2019s superannuation cash contributions, so I will talk about the third element of importance to a savings scheme, and that is income. Of course, an individual having an income stream is, by default, one of the most important parts of being able to ensure that we have some personal savings. I am sure that all of us in this Committee would acknowledge that if someone is in a state of unemployment, even if they are drawing down Government support it is nigh on impossible to survive, let alone save for their retirement. So income is important. That means that Part 2 is directly affected by the wider stimulus plan that the Government has presented. I use that term loosely, because I am yet to see any wider stimulus package in this Budget, yet the Government has estimated\u2014it has forecasted\u2014that we will see 170,000 jobs as a consequence of this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000186\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003EI wanted to give the Government the benefit of the doubt, so I searched through the Budget documents, including the Economic and Fiscal Outlook, to try to find the source of those 170,000 jobs\u2014a fair quest, I thought. I came across roughly three things. Higher growth in consumer spending was the first: \u201CHigher growth in consumer spending is expected as households become more comfortable with the state of their own balance sheets \u2026\u201D. I would like to hear a little more background on that. I am not entirely sure how people will become more comfortable with the state of their balance sheets, because I do not hear a lot of comfort now. If we are talking about consumer spending as a proportion of a household\u2019s income, that certainly is increasing as a percentage, because the cost of living is increasing at a ridiculous rate in this country. Beyond that I really have very little other explanation for how people will be finding that extra comfort.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000187\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003ESecondly, the Economic and Fiscal Outlook states that we will see a boost in export volumes, particularly service exports such as tourism. So the Rugby World Cup is one of the answers, but I would have to say that it is unfortunate that it finishes in October. I also point out that that event is in the low-wage sector. I would say that putting all the eggs in the low-wage sector basket again is ill-advised.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000188\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003EThen we come to what I think the Government is pinning all its hopes on, which is the growth coming out of the Christchurch earthquake. It states: \u201CWe have assumed nationwide employment is around 15,000 lower by mid-2011 as a result of the earthquake.\u201D So 15,000 fewer people will be in work. How many jobs has the Government predicted we will see out of the residential rebuild? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000189\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c21cfc14328642559a2e3c99ca79131c\u0022\u003EGrant Robertson\u003C/span\u003E: 12,500.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000190\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022aa2209f1-1889-4c24-b51d-cb2aedc7aa93\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002298736dfd3b7b4c9aa5c878470aff24fd\u0022\u003EJACINDA ARDERN\u003C/span\u003E: It has predicted 12,500, so we will not even come back to the point at which we have been left as a consequence of the earthquake. In fact, that is a deficit of around 500 jobs. I grant that that is only the residential rebuild. If we chuck on an extra couple of thousand jobs as a result of the wider rebuild, we still are left with, I predict, a 168,000 job deficit. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022 data-id=\u00222589fedf8ed048feb3e394b33cd70d3d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000191\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222589fedf8ed048feb3e394b33cd70d3d\u0022\u003EHon DAMIEN O\u2019CONNOR (Labour):\u003C/span\u003E This is the first opportunity I have had to speak in this debate. Part 2 deals with KiwiSaver and savings. I point to the regulatory impact statement, where I believe a mistake has been made. It states: \u201CThe Government has signalled its desire to focus Budget 2011 on measures which will boost national savings \u2026\u201D. No, it should read: \u201Cmeasures which should boost saving National.\u201D, because that is what the Budget is about. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000192\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022\u003ENational claims that this is a savings Budget. I ask what savings are being made. First, will this Budget save opportunities for adults who lost the opportunity to upskill, retrain, and get jobs? In the 2009 Budget the Government slashed adult and community education, and in this Budget it has chopped the opportunity for people aged over 55 to get a student loan. Has the Government saved opportunities for older people in retraining? I say no. Has the Government saved opportunities for middle-income New Zealanders to save with security? I say no, again. What it has done, like Rob Muldoon, is destroy the confidence of middle New Zealanders in the need to save for their retirement\u2014absolutely destroyed it. No, it has not saved the opportunity for those people. Has this Budget saved the opportunity for young families to get affordable early childhood education? No, there are no savings there. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000193\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022\u003ESo where has National made savings? Well, the regulatory impact statement is incorrect\u2014this is a \u201Csaving National Budget\u201D. I asked where the Government saved. Does this Budget save the $1,000 a week tax cut that John Key got? It did, yes, so maybe that is the saving that National refers to. Did it save access to BMWs with heated seats? Yes, it did. This is the \u201Csavings Budget\u201D that we are hearing about. Finally, is this \u201Csavings Budget\u201D about whether we can save NZX and the stock market? Well, I say that the answer is yes, because that is about all it does. The sell off, or the mixed-ownership\u2014or the mixed-up ownership\u2014model that the Government proposes for State-owned enterprises is just outrageous. It is about savings; it is about saving the New Zealand Stock Exchange, which has been a poor performer. It is about saving opportunities for the people who got tax cuts in the first National Budget. It is about saving opportunities for them to invest and to make nice, healthy profits through the buy-up of State-owned enterprises. Those are the only savings we are dealing with in this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000194\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022\u003EPart 2 changes KiwiSaver and undermines people\u2019s security into the future, unless those people had a big tax cut in 2009. The people who got that saving will now have the opportunity to invest in blue-chip Kiwi investments that will deliver them a healthy dividend while the rest of the owners\u2014the present owners, those on lower incomes\u2014will lose ownership to those people. That is an outrage. I say it is immoral. This Budget should be totally rejected. Part 2 is a classic case of injustice, and savings for National, not the national savings that this country could enjoy. It is an outrage, and we should all vote down this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000195\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022\u003EI will do my very best to ensure that the savings we are trying to achieve, which Labour advocates for, are for the people who need them, not for the people who do not. This Budget is about saving National, it is not about saving the nation. That is a huge difference. As people go through the figures\u2014try as the Government might to hide them in these lengthy documents\u2014and as we investigate this Budget, more and more New Zealanders will work out that the regulatory impact statement is worded incorrectly and should read that the Government is determined to have a Budget that will save National.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022 data-id=\u00223599e33c847348e29d65a10b51ae15d7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000196\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00223599e33c847348e29d65a10b51ae15d7\u0022\u003ECRAIG FOSS (National\u2014Tukituki):\u003C/span\u003E I thought the previous speaker, Damien O\u2019Connor, was going to speak on behalf of farmers about the proposed Labour turnover tax, his having a farming background, but I guess we will have to wait for another day.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000197\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI will make a couple of points in respect of Part 2, which addresses some changes and enhancements to KiwiSaver. I will note a fact that members may be interested in. There are about 1.7 million New Zealanders, I think, in KiwiSaver right now. It actually begs the question why every New Zealander is not in KiwiSaver, because of the $1,000 upfront signage fee. It is interesting that when KiwiSaver was first announced, the predictions were for about 500,000 to 600,000 sign-ups. It has been a roaring success; no one denies that, and it has been acknowledged that KiwiSaver was brought in by the previous administration, and good on it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000198\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225faf2cf2851346bb8c5e7019bd7ae3db\u0022\u003EChris Hipkins\u003C/span\u003E: Well done, Michael Cullen.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000199\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220dc998da248f4aa09ab89f47fe9d21e2\u0022\u003ECRAIG FOSS\u003C/span\u003E: I say to the younger member over there who was talking about it earlier\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000200\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002238933d6768a449c5bb9603f0b4575c81\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Oh, you old thing you\u2014you old tumbleweed.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000201\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226bc792f9244a40199792fb1362df591e\u0022\u003ECRAIG FOSS\u003C/span\u003E: Well, I am feeling a bit like that at the moment. KiwiSaver has been changed in every single Budget\u2014and probably in between Budgets, actually\u2014under every Government since it was implemented. About half of those who are in KiwiSaver are locked into the 4 percent rate; half of them are locked into paying 4 percent. Even when the employer contribution went down to 2 percent, they stayed at 4 percent. If members opposite go to the data instead of starting down the conspiracy route, or something, they would note that not as many people may be impacted by this change as they fear. Those who are on 2 percent now will in about a year and a half\u2019s time go up to \u201C3 plus 3\u201D, but those on 4 percent will not, I am quite sure, go down to 3 percent. When we start to look at the data we see that the numbers that members opposite are raising over there do not really stand the test of the true facts.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000202\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003ELet me talk about KiwiSaver and what some of these changes are all about, and, in fact, how they link into other changes in the Budget. Here is a very sad but quite brutal fact. Under the Labour administration, who could members of the public in KiwiSaver invest their long-term savings in? Where did their money go? It went to finance companies. It went to failed finance companies. Under Labour they could invest in now failed finance companies, and lose their capital. Under National, via KiwiSaver, they have the opportunity to invest in New Zealand infrastructure, New Zealand energy companies, and a further stake in Air New Zealand, which are solid, secure, and long-term investments.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000203\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224678ab094da84d05bb156b91d559be0d\u0022\u003EHon Members\u003C/span\u003E: Good grief!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000204\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228722bef249504b858147e9fcd6c6498c\u0022\u003ECRAIG FOSS\u003C/span\u003E: They do not like that. The mixed-ownership model is also addressed in the Budget, and it is all linked into changes in and around KiwiSaver. In fact, another fund that has not been mentioned on the other side of the Chamber that KiwiSaver funds will have access to is the Canterbury Earthquake Recovery Fund. Those members do not seem to be talking about that. Some of these changes will help enhance the ability of New Zealanders to invest in the reconstruction of Christchurch quite directly. I think members, on the whole, think that is a good thing, and I ask members on the other side of the Chamber to excuse me if I am misrepresenting them on that one\u2014I certainly do not mean to. I look forward to their speeches on that during the debate on the Taxation (Canterbury Earthquake Measures) Bill, which is coming up next.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000205\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThere is another way in which this Budget and this bill enhance New Zealanders\u2019 savings. Inflation kills financial assets. Under this Government, and under this Budget, inflation has been well inside the Reserve Bank\u2019s band, enhancing the real value of financial assets and savings. Actually, savings also face a 28 percent tax rate; it no longer is the 33 percent or 39 percent rate that there was under the previous administration. Under the previous administration inflation ran north of 5 percent, eroding and attacking the long-term superannuation savings of New Zealanders.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000206\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003ESo I do not understand how members opposite can get up and talk about what their views on savings are, without addressing and acknowledging what this Budget does to improve, maintain, and enhance savings for retirement, and the general savings of all New Zealanders.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022 data-id=\u00220d89fa90269a4ca2b288a4eae756e730\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000207\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00220d89fa90269a4ca2b288a4eae756e730\u0022\u003EHon PETE HODGSON (Labour\u2014Dunedin North):\u003C/span\u003E The member who has just resumed his seat is the chair of the all-powerful Finance and Expenditure Committee. He said that he is very proud because inflation is low. He also said that under the previous Government inflation ran north of 5 percent. Well, in which year\u2014in which year, I ask the chairperson of the Finance and Expenditure Committee? The only year inflation has been at 5 percent is the year we are in now\u2014under his Government. That is the truth of the matter. I could pick on any part of that member\u2019s speech, but the last part of it will do. It was full of factual inaccuracies, as has been the case, commonly, in this debate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000208\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003EThis country went into deficit 3 years ago. On the change of Government 2\u00BD years ago, the big deal, a few months later in April 2009, was tax cuts for the rich. Let me say that again: our nation, our official books, started running at a loss and the big public policy response was to cut tax for the rich\u2014not smart. That is the first point. Therefore, we had to borrow more to pay for those tax cuts than we would have, had we not made those tax cuts. That is just arithmetic. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000209\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003EWe are borrowing to pay for tax cuts for rich people. That is irresponsible, it is ideological, it is very expensive, and in Part 1 of the Taxation (Annual Rates and Budget Measures) Bill we had a chance to revisit it. We argued it for hours, but the Government said: \u201CNo, tax cuts for rich people will stay where they are, we are not going to reverse them.\u201D Governments are reversing tax cuts in many other jurisdictions, but not here. The Government will not reverse tax cuts for the rich. So the Government will have to find money from somewhere else. Therefore, we go to Part 2 of this legislation and find that that money is coming out of Working for Families and we find that it is coming out of KiwiSaver. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000210\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003ERemember that the Government says that it does not like the idea of having to borrow to then put money into KiwiSaver accounts. I will quote the Minister of Finance from his speech. It is a very short quote: \u201Cit means the Government is borrowing \u2026 to contribute to private savings. This does not lift national savings.\u201D That is what the finance Minister said, and he is correct. If the Government borrows a dollar from offshore and puts it into Clayton Cosgrove\u2019s KiwiSaver account, the national savings are not improved. But nor are they worsened. However, if the Government borrows money and gives it to Clayton Cosgrove as a tax cut, dissaving gets worse. We have a Government whose members say they do not want to borrow to sustain KiwiSaver, in Part 2 of this legislation, but they are really happy to borrow until their eyes water to pay for tax cuts for rich people. That is not fair, that is not just, and that is not right. And I am angry about it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000211\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003EI will tell members something about KiwiSaver. KiwiSaver is not the preserve of rich people; KiwiSaver is something that everyone uses. Labour members, when we got started, were surprised at how popular KiwiSaver was amongst low-income earners and middle-income earners, as well as high-income earners. I agree with Craig Foss when he says that it is not rational not to have a KiwiSaver account, because one gets a thousand bucks for nothing just to get started. I agree with that. So it stands to reason that KiwiSaver is something that can be found across all parts of society, yet all parts of society will now get it in the neck twice. Less money from the Government will go into KiwiSaver\u2014because the Government cannot bear to borrow for that; it will borrow for tax cuts but it will not borrow for that\u2014and then there will be a requirement for half of the contributors to KiwiSaver to lift their savings from 2 percent to 3 percent, because National members are concerned about savings. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000212\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003EIf National members are so concerned about savings, the way to fix that is to lift the minimum contribution rate from 2 percent to 3 percent, or from 2 percent to 4 percent if they wish, and to retain the Government contribution and pay for that by reversing the tax cuts for the rich. It is easy. At that point two things would happen. Our savings would get even better\u2014and, boy, do we know that our savings in this country need to get better, especially in the private sector; we know that. The second thing that would happen, the second leg of the double, is that if the tax cuts for the rich were reversed, the current account and the balance of payments would improve, because rich people spend disproportionately on imports. Why? Because they can\u2014the classic example is an overseas trip. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000213\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003ESo if we wanted to look at what this country needs most of all, we would see that, overall, it is to reduce our debt by improving our savings\u2014savings not in the Government\u2019s accounts but across the entire economy, so we can own more and more of our own country instead of less and less of it\u2014and to improve our exports. Part 1 of this legislation, by not reversing tax cuts for the rich, therefore makes the current account worse. Part 2 of this legislation, by not backing Kiwis to save, makes our savings record worse. It is not OK to take a scheme as popular as KiwiSaver and make changes as large as these, twice in 2\u00BD years. That destroys confidence. KiwiSaver is an opt-out scheme so that is a saving grace. It may be that people will just continue to fall into it. But, my goodness, this is an economically reckless Budget, for those reasons. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000214\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003ELet us leave aside the effect the Budget will have on an imagined family with so many kids on so many dollars and what will happen to the family\u2019s amount of money per week. Leave aside all that and sticking only with macro-economics, only with what is good for the nation, I ask why we in this Chamber are under urgency deciding that we will not reverse tax cuts for rich people, thereby not improving our current account and further damaging our savings record, which is appalling. Why has this Government, when faced with the choices of needing to get money from somewhere\u2014we earnestly agree with that; the deficit must come down\u2014chosen that way to do it? What is good about it, apart from the fact that it is ideologically suitable for the Government? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000215\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003EIt is ideologically suitable for the Government to use the sophistry that tax cuts are fine because they cause people to somehow create jobs instead of spending money on overseas trips\u2014but who believes that\u2014and that cutting the Crown\u2019s contribution to KiwiSaver is also fine because it is mandated that everyone on a 2 percent contribution rate will lose 1 percent of their income because they will have to go to a 3 percent rate, because that is what the Government says. That is not very bright. It is not very fair\u2014but that is another speech. It is economically dumb, and the Government needs to be told off roundly for its economic stupidity. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000216\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003ELet us have Government members get up and defend the Budget. Let us have them get up instead of lowering their heads\u2014every one of them. Look at them. Not one of them is looking me in the eye. Oh, one or two of them are pretending to now. [Interruption] Well, they are now awakened. Even Rodney Hide is awake. Let one of them take the call now and refute my analysis that this country needs to save more, that this country needs to export more, and that both parts of this bill damage both of those goals. That is the essential thesis.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000217\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d65ad20551ff4a50b0f81d363928e9af\u0022\u003EHon Tau Henare\u003C/span\u003E: I saw Clash of the Titans, and he looks like Hades.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000218\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00229c0eba1d-17a6-44e2-a9b3-2e2535339570\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022efcca05139814b53b9a9ca6e5ac1aa70\u0022\u003EHon PETE HODGSON\u003C/span\u003E: I wonder whether Tau Henare would like to get up and refute my analysis. It would be an interesting bit of analysis, from him. Let us just hear what he has to say, or what Rodney Hide has to say\u2014or what anyone else would have to say\u2014about that analysis. It would be far better, given we have a $17 billion deficit, to pay attention to reversing the tax cuts and to retain attention on maintaining savings.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u00229339530ecd894c838df6de68c0021477\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000219\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229339530ecd894c838df6de68c0021477\u0022\u003EHon PETER DUNNE (Minister of Revenue):\u003C/span\u003E That superficially plausible analysis from the member who has just resumed his seat, Pete Hodgson, does not actually stack up when we start to look at it. I will go through the arguments that he raised.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000220\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EFirstly, he said that we should reverse the tax cuts for the rich so that we can pay for what is effectively being reclaimed through KiwiSaver to reduce the deficit. It sounds good on the surface, but it does not work in practice, for this reason: the bulk of the tax cut package was delivered to those who were on the bottom two tax rates. So, in terms of the dollars spent, if his argument has credibility\u2014that that money should not have been spent\u2014in fact the people who would bear the brunt of his policy being implemented would be the very people he is seeking to protect, because in relation to income they benefited most from that tax package in terms of the level of expenditure. He also overlooked the fact that the tax package was revenue-neutral. It was funded by the increase in GST. There was an element between the period from October 2010 to April this year that was covered by some very short-term borrowing, but, fundamentally, it was a revenue-neutral package.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000221\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EHe then turned to KiwiSaver, and talked about\u2014well, I do not think he used the word \u201Cdestruction\u201D, but that was the clear implication of what he said. Let me go through what the situation is prior to the passage of this Taxation (Annual Rates and Budget Measures) Bill, and what it will be after this bill is enacted. As of today, right now, someone joining KiwiSaver joins on the basis of a \u201C2 plus 2\u201D contribution rate\u20142 percent from the employee and 2 percent from the employer. They qualify for a $1,000 kick-start for their savings. They qualify for a member tax credit of $1,040 on an annual basis. There will be no tax on the employer\u2019s contribution to that superannuation contribution. That is the status quo. The destruction that the member talks about sees the person who starts today still starting on \u201C2 plus 2\u201D. When that was brought in as the default position 2 years ago, the Opposition claimed that it was a cut because it should have stayed at \u201C4 plus 4\u201D. Well, we get the chance in 2013 when we go back to \u201C3 plus 3\u201D, and I do not think those members are really opposed to that. So the person who starts today still starts on \u201C2 plus 2\u201D, and still gets the $1,000 kick-start. That has not changed. The only thing that has changed in terms of the impact on the saver is the change to $521 per annum in the member tax credit. Taken over the life of a KiwiSaver contribution, that has minimal impact on their savings. They still get the same benefit at the point that they get their payout at the age of 65. They also will be satisfied, I think, with the fact that the employer will now be paying tax on the contributions they make.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000222\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ESo the point I am making in response to the member who has just resumed his seat, Pete Hodgson\u2014and he normally is someone who gives considered analysis, and I respect him for that\u2014is that his case is factually incorrect, for the reasons I have stated. What the Government is faced with\u2014and I think it is the one point that everyone seems to agree on\u2014is that a deficit of this size in the unusual circumstances we are in is too high. We need to bring it down. We need to look at introducing what the Leader of the Opposition said were \u201Cbold measures\u201D to bring the deficit down. That is what this Budget seeks to do. We have not heard any \u201Cbold measures\u201D from the Opposition, other than to raise taxes on the rich. But the point I make is that, given where the balance of the expenditure in the tax cut package last year went, if raising taxes on the rich was to be a \u201Cbold measure\u201D, we would actually be raising taxes on everyone, and that is not what the Opposition seems to be arguing for. The KiwiSaver changes have a very small impact on the individual saver but taken collectively they save us about $2.6 billion, which is a significant contribution to reduction of the deficit.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000223\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EIf we look at the changes to Working for Families, we see that in fact the picture becomes even more obscure as far as the Opposition\u2019s position is concerned. The changes in the threshold take 4 years to implement, at the rate of $450 of income per year. The changes in the abatement rate in some cases will take as long as 8 years to implement, and in most cases about 4 years. So these are very modest adjustments. There will still be provision for an increase in the rate of payment according to the existing formula, and that will take place next on 1 April next year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000224\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EBut, overall, both these sets of changes secure these social policy initiatives for the future. I go back to the point that Jacinda Ardern made a little earlier\u2014and I cannot remember whether it was during the debate on the previous part of the bill or on this part\u2014about her generation. This bill is really about her generation, because one of the great tragedies is that New Zealand for so long has had very short-term, selfish thinking. What these measures are designed to do is protect and enhance KiwiSaver long into the future, and make sure that the basis of Working for Families remains and is beneficial to the families that need it. The tax package that, if you like, lies behind all of that is ensuring a fairer and better system. I come back to the point I made during the debate on Part 1. A situation where 75 percent of New Zealand taxpayers\u2014about 2 million people\u2014pay a top tax rate of just 17.5c in the dollar has got to be good. It is certainly the lowest tax rate paid by those households in the lifetime of anyone in this House, and that is something we should be celebrating, not criticising. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022 data-id=\u0022e7a39c85704b4adf8f7fa1265f66973c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000225\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e7a39c85704b4adf8f7fa1265f66973c\u0022\u003ECHRIS HIPKINS (Labour\u2014Rimutaka):\u003C/span\u003E I start by complimenting the Minister in the chair, the Minister of Revenue, who has just resumed his seat, on the very polished way he seamlessly transitioned from defending a previous Labour Government to defending the current National Government. I think I will leave my comments simply at that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000226\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EHowever, I want to pick up a point made by Craig Foss. It was ironic for Craig Foss, a National member of Parliament, to stand up in this debate on Part 2 of the Taxation (Annual Rates and Budget Measures) Bill and talk about the failed finance companies and the people who have lost their savings, given that National has had 2\u00BD years to do something about that and has done absolutely nothing. But then, that could have something to do with the fact that half of them used to work for the failed finance companies. It is a bit rich for National members to say they will deal with the failed finance companies by hocking off the State-owned enterprises\u2014that is effectively what Craig Foss argued in this Chamber. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000227\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EI want to pick up the issues around KiwiSaver, and in particular the changes to the member tax credit. This Government will be effectively cutting it in half. But before I do that I want to pick up a comment from the speech made by the Minister of Finance in the House yesterday. People will find the comment on page 27, in the Budget speech\u2014and it also relates to KiwiSaver. He states: \u201CThe Government will require agencies to fund the cost of KiwiSaver, and some State sector retirement schemes for their employees. This will generate savings of $650 million.\u201D We should think very carefully about what that actually means. It means that those State sector agencies that will have to pay their share of the cost of KiwiSaver are effectively having their funding cut by $650 million. So if somebody is working in a large social policy area where the salary costs are high\u2014for example, education or health\u2014their funding, in real terms, will be cut, because they will now have to meet the cost of the employer contribution to KiwiSaver. That is a real-terms funding cut. So when the Government talks about increasing funding for areas like health and education, I point out that a big chunk of it is already taken up by the other changes it is making in the area of superannuation, and it is not being upfront and transparent about that. It is a sort of a triple whammy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000228\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EI come back to the issue of the tax credit. Let us take the example of someone in the education field, a teacher, for example, who signed up for KiwiSaver. They will find that their member tax credit gets cut in half by the Government. Clause 7 addresses this issue. The tax credit will go down from $1,042.86 to $521.43. Basically, the member tax credit is cut in half. Then they find that the funding of the employer\u2019s contribution means that other parts of their work are being cut\u2014suddenly the money to fund the employer contribution has to be found from somewhere else because the Government has hacked away at that, as well. So they are getting a double whammy. If the Government is taking $650 million out of the employer side of the contributions to KiwiSaver, that has to come from somewhere else. I see the Minister of Revenue shaking his head. I simply turn his attention to the Budget statement on page 27 of the Budget documents. If I have interpreted that wrongly, I would welcome him standing up and clarifying it. I think that is the only way it can be clarified. If the Government is requiring agencies to fund the cost of KiwiSaver, saving $650 million, that money has to come from somewhere else, so that money has to be a cut in real terms. If I have interpreted it wrongly, I look forward to the Minister of Revenue\u2019s clarification of it in his contribution to this debate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000229\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003ENational went into the last election promising New Zealanders that it could afford tax cuts and that nothing else would change. There would be no changes to KiwiSaver other than the changes National foreshadowed in its election manifesto. National said it would not cut Working for Families and it would not cut interest-free student loans. National has broken those promises in this year\u2019s Budget. Here we go again, particularly when it comes to retirement savings. National has a very proud history of taking very good savings schemes introduced under a Labour Government and ripping the guts out of them. That is exactly what Rob Muldoon did in the 1970s after a very good savings scheme was put in place by the Norm Kirk Labour Government. Rob Muldoon bribed New Zealanders with their own money in order to win the 1975 election and sabotaged New Zealand\u2019s savings for over two decades after that. The last Labour Government started to deal with that by introducing KiwiSaver, and, once again, we are seeing the National Government ripping the guts out of it. This is National\u2019s pattern when it comes to savings. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000230\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EIt is a bit rich for Bill English to stand up in this House and bemoan our poor savings record when, as the Minister of Finance, he has consistently undermined it. The first thing he did was to cut the minimum contribution to KiwiSaver in half, from 4 percent to 2 percent. He cut funding for the New Zealand Superannuation Fund. He stopped putting away the funding to pay for the baby boomers\u2019 retirement. Then he turned round and said we had a terrible record of saving for retirement. The Government is not leading by example\u2014but then this Government never leads by example. It tells everybody else that they have to stomach cuts but it is never willing to cut the money it spends on itself. The Government is happy to have new BMWs, new carpet, and so on. The Government is not willing to lead by example, particularly when it comes to savings. The Labour Government led by example when it came to savings. We set up the KiwiSaver scheme and we put the member tax credits and the kickstart in it. We led by example when it came to savings by setting up the Cullen fund, the New Zealand Superannuation Fund, to pay for the baby boomers\u2019 retirement. They are both things that this Government is kicking the guts out of and hacking into. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000231\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EThis Budget has no real vision for the future, and no real plan to get New Zealand moving. It has no real plan to make sure New Zealanders can live a comfortable and safe retirement. It is not there; I have read it. I spent the evening last night sitting in the Chamber reading through the documentation. There is no plan. This must be one of the blandest Budgets; all the Government is doing is cutting: cut here, cut there, cut here, cut there. There are lots of cuts and lots of pain but no real gain. New Zealanders at home will be asking about the gain and the plan. The Government is asking New Zealanders to stomach all these cuts, but New Zealanders are not seeing any light at the end of the tunnel. This Government has mismanaged the economy. It has taken it from a surplus of $5 billion to $7 billion every year to one of the biggest deficits ever recorded in New Zealand\u2019s history. That is what we get with Bill English as the Minister of Finance. He failed when he was the Minister of Finance the first time round in the last National Government, and he has failed again in the tenure of this Government. That is one of the reasons why New Zealanders are going to vote out this Government at the coming election. I tell members that the feedback that has been coming overwhelmingly in the last couple of days is that people have changed their minds about National because of what it is doing to KiwiSaver. New Zealanders know how important KiwiSaver is to the future of this country, and this Government is kicking the guts out of it. This Government is kicking the guts out of KiwiSaver, and I think that is totally wrong. It is short-sighted, and that pretty much sums up the Government\u2019s approach. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000232\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221dbd2811-8e58-4ffb-848d-31c0eaa9690a\u0022\u003EThe Government is also getting into Working for Families. What was National\u2019s promise before the last election? What was the absolute promise of John Key? He told New Zealanders that National would not touch Working for Families. Hang on a minute, I think there is even a pledge card with the promise on it not to touch Working for Families. It was on a pledge card, but it is not even worth the paper it was written on. It was headed up with the words \u201CMy key commitments to you\u201D. I think that National, after this Budget, has broken just about every one of those promises. I do not think there is a single commitment left on that pledge card, with John Key\u2019s signature on it, that he has not broken. He has broken almost every one of them, and I think that is absolutely outrageous. That is one of the things New Zealanders will be keeping in mind when it comes to voting at the next election. They can vote for Labour, which keeps its promises and makes promises we know we can afford, or they can vote for National, which promises before an election whatever it needs to in order to get elected, and then does whatever it wants once it gets the Treasury benches. Nothing sums that up more than the two major changes being made in this part of the bill. There are the cuts to KiwiSaver, which kick the guts out of the Government\u2019s contribution to KiwiSaver. The Government says to New Zealanders that it wants them to save, but it is not willing to do its bit. And the Government is cutting Working for Families, even though it promised it would not do that. Working for Families was another initiative introduced during the term of the last Labour Government. That initiative lifted hundreds of thousands of New Zealand children out of poverty, which is something we on this side of the Chamber are incredibly proud of and will continue to defend right the way to the very bitter end. Working for Families is a good policy. It recognises the fact that those families raising kids face higher costs, and that we as a society should help with them.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022 data-id=\u0022ab503933178849ce9463f03a21020229\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000233\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ab503933178849ce9463f03a21020229\u0022\u003ESUE MORONEY (Labour):\u003C/span\u003E The Taxation (Annual Rates and Budget Measures) Bill, which we have in front of us, and Part 2 in particular show just how much of a failure yesterday\u2019s Budget was. We always expect to be debating taxation after a Budget, and this bill allows for that debate. But if yesterday\u2019s Budget was a fair Budget, then we would be debating the $9.1 billion that was given away in tax cuts in the last Budget to the top 10 percent of wage earners in this country. I think everyone believes and knows that, yes, we are in tough fiscal times. The Government has not been able to grow the economy\u2014it has not risen to that challenge\u2014and we have very difficult fiscal times in New Zealand because of the economic mismanagement of the current Government. But we all accept that that is where we are. If that is the case and we all have to tighten our belts, then why is it that this bill asks only hard-working New Zealand families to tighten their belts while the top 10 percent of wage earners continue to have $9.1 billion worth of tax cuts untouched, even in these tough economic times. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000234\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003EThat goes to the basic unfairness of what this Government is doing. It means that the Prime Minister, John Key, gets to keep the additional $1,000 a week that he got in last year\u2019s tax cuts. That figure is more than some people earn a week, but that is how much extra he got in tax cuts from last year\u2019s Budget. He gets to keep that, but hard-working New Zealanders get to pay for that Government\u2019s folly by having their money for KiwiSaver cut in this Budget. Hard-working wage earners are the people who will suffer through this part of this bill, because this part attacks KiwiSaver and Working for Families.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000235\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003EIt is absolutely clear by now that only a Labour-led Government can save KiwiSaver. This Government is not interested in saving KiwiSaver. Ever since this Government took office, it has diminished KiwiSaver from every single angle it possibly can. The Government started off diminishing KiwiSaver by cutting its contributions in half, from a 4 percent contribution down to a 2 percent contribution. Immediately on taking office, this Government cut KiwiSaver in half.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000236\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003EBut not content with that, the very next thing the Government did, with regard to superannuation and the future of savings in this country, was to immediately suspend payments and contributions from the taxpayer into the New Zealand Superannuation Fund, which is the fund on which there was a multiparty agreement that we would continue to put money in, in order to make sure that when we, the baby boomers, got to the age of receiving superannuation, there would be enough money in the Government coffers to pay for that. Forward thinking by Michael Cullen had led to a multiparty accord to forward-fund the scheme, so that there would be money in the scheme for all of us, when, as baby boomers, we needed that money for superannuation. But this Government took the knife to that accord as soon as it took office. In respect of the multiparty agreement, the ink was hardly dry when the new Government came into place, and it broke that accord straight away.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000237\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003EThe Government\u2019s record on superannuation is terrible, and it continues with Part 2. The Government is saying that times are tough, that it has not been able to get its act together, that it has not been able to grow the economy, and that it does not have the lift it has been promising now for 2\u00BD years. The lift in the economy is still not with us, so the Government has had to start taking the knife to Government spending. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000238\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003EWhere are the areas that the Government has chosen to cut? They have not chosen the area of tax cuts for very, very high earners in this country\u2014tax cuts for the wealthy. We will not hear any member of the Government, any member on that side of the Chamber, even mention the word. It is like not mentioning the war, when those members pretend that people did not get those huge tax cuts in the last Budget. Although the Government pretends that everyone has to tighten their belts, that certainly is not the case for all New Zealanders. For the vast majority, New Zealanders are finding the current economic situation very, very tough indeed. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022 data-id=\u00229b601f8c569e48488dc09e9acd2e38d7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000239\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229b601f8c569e48488dc09e9acd2e38d7\u0022\u003EBRENDON BURNS (Labour\u2014Christchurch Central):\u003C/span\u003E I hope that I might get a chance later in this debate to talk about the Working for Families components of Part 2 of the Taxation (Annual Rates and Budget Measures) Bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000240\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022abee2262c92b4629948914d648841c93\u0022\u003EHon Member\u003C/span\u003E: That\u2019ll be a good call.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000241\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002279b416ac0c284d2fb4fd83b20907ebef\u0022\u003EBRENDON BURNS\u003C/span\u003E: I hope so, too. I will focus my first comments on the changes to KiwiSaver. I note the press release from the Minister of Finance and the Minister in the chair, the Minister of Revenue, about how changes to KiwiSaver \u201Cwill encourage a higher level of private savings.\u201D That is the opening line of the media statement accompanying the Budget yesterday, but I will refer to the regulatory impact statement, prepared by Treasury and the Inland Revenue Department, that analyses this bill. I note this comment on the opening page of the regulatory impact statement: \u201COur analysis of the options is therefore dependent on behavioural assumptions, for which there is minimal empirical evidence, about individuals\u2019 and employers\u2019 responses to changes in saving incentives and other regulatory requirements.\u201D In other words, Treasury and the Inland Revenue Department say there is no empirical evidence about the changes made in this bill, or the impact the bill will provide in terms of the overall savings of New Zealanders. I note further their comments that \u201CKiwiSaver is less than five years old. Since its launch \u2026 there have been several significant changes to contribution requirements,\u201D\u2014and I tell members that most of them have been made by this Government\u2014and KiwiSaver has not had the time or \u201Cany period of stability in which to establish its core products, and this uncertainty and unpredictability is not helpful to either the industry or savers.\u201D That was Treasury and the Inland Revenue Department commenting on this bill, and officials never highlight their comments. They do not put them in strong language, but we can read the tone of those comments. They are saying that they have severe doubts about this bill and its impact on national savings.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000242\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI will quote further from the regulatory impact statement. On page 5 it is stated: \u201CThe objectives for any changes to KiwiSaver are: to help return the Crown to surplus sooner by reducing the fiscal costs of KiwiSaver, and; to continue to encourage increased levels of private household savings \u2026 Each of the options for change \u2026 was assessed against a matrix of criteria:\u201D. But then the regulatory impact statement states: \u201CIn making this assessment, the strongest weight was given to measures which reduced fiscal costs,\u201D. So the Government has really put to one side the questions about what impact the cuts to KiwiSaver will have both to KiwiSaver and to overall savings by New Zealanders\u2014not the Crown\u2019s savings, but the savings regime of New Zealanders.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000243\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003ETreasury and the Inland Revenue Department go further. They have analysed the impact of the halving of the minimum tax credit, which until next year New Zealanders enjoy under KiwiSaver. They say that it \u201CWill make KiwiSaver less attractive,\u201D. They say it \u201CMay mean fewer savings directed from other forms of savings,\u201D. They say, in respect of increasing the employer contribution upwards to 3 percent, that an \u201CIncrease in employer costs [is] likely to lead to reduced business profitability in [the] short term, and lower wages over the longer term.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000244\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EIf we want evidence of that, we should look at One News from last night. Alasdair Thompson from the Northern Employers and Manufacturers Association said that employees will meet that increase out of any wage increases. When employees are already facing 5 percent inflation at the moment, they are going to be told: \u201CSorry, the Government has told us that we have to contribute more to KiwiSaver. You are going to pay the cost.\u201D What does that say to people who are living on the margins? What does that say to them about encouraging them to invest in their future by putting something aside? The whole damn basis of this Budget was supposed to be to stimulate savings, but Treasury and the Inland Revenue Department are saying that we will see that come only at the cost of lower wages. Where is the gain in that?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000245\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI will make a final comment from the regulatory impact statement. Treasury and the Inland Revenue Department say that the increase in employee contribution rates to 3 percent may make some people \u201Cstop contributing,\u201D. That is Treasury\u2019s and the Inland Revenue Department\u2019s analysis of this bill. They say, in essence, that there are some high risks the bill will discourage people from saving. We know, and this Government puts at the centre\u2014[Interruption]\u2014Mr Chair, Mr Chair\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000246\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bd5c09d7afb742b481904bcb0cefbd50\u0022\u003EThe CHAIRPERSON (Eric Roy)\u003C/span\u003E: Look, do not yell at me. I am allowed to ponder to make sure I get it right.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000247\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224f79cf3bddb7455ab4f65a7955b780ff\u0022\u003EBRENDON BURNS\u003C/span\u003E: Thank you, Mr Chair. I promise, Mr Chair, I will never shout at you again, because you are a Chair who makes excellent judgments\u2014almost all of the time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000248\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b2ae5c5705e6456aa993acbde82dfa07\u0022\u003EThe CHAIRPERSON (Eric Roy)\u003C/span\u003E: Careful!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000249\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223298372fac174d65b53e5bf013aeb0fd\u0022\u003EBRENDON BURNS\u003C/span\u003E: I make reference to another aspect of this Budget. Supposedly, we are trying to get to a position of better national savings, but the Budget figures show that instead of seeing a decrease in the growth of national debt\u2014that is, the money borrowed by New Zealanders overseas and repatriated by companies making investments here and repatriating profits\u2014this Budget\u2019s figures show an increase, from this year\u2019s minus 78 percent of GDP to minus 85 percent of GDP in 2015. So where is the gain for us?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000250\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI note the comments of Ganesh Nana from Business and Economic Research Ltd this morning. He analysed the Budget. He looked at the fact that in its text there were 19 references to \u201Cdebt\u201D and 2 references to \u201Cexports\u201D\u201419 references to \u201Cdebt\u201D and 2 references to \u201Cexports\u201D. The whole focus of this Budget is on cutting, not growing. It is on cutting, not growing. I refer to the comments just received from the Manufacturers and Exporters Association: \u201CThe Budget has targeted balancing the books but missed out on balancing the economy by sparking growth in the tradables sector. The Budget focused on cutting costs through to cuts to KiwiSaver and Working for Families.\u201D That is what the national organisation said; it is based in Christchurch but represents manufacturers and exporters nationally. It said there are cuts to the costs of KiwiSaver and Working for Families, but little detail on how to increase growth or shift the balance of the economy towards savings and exports, as the Government has talked about.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000251\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EWe are getting the rhetoric about growing the productive sector and growing the economy, but, in fact, the Government is coming back to the traditional Tory method of cutting, and cutting back on those who are least able to contribute. It is cutting back on working families, on people who have been encouraged, supported, and told they needed to save. They have been encouraged to do that through KiwiSaver, yet there is nothing in the Budget to encourage them; in fact, it is absolutely the opposite. We will see, I am sure, a downturn in people joining and contributing to KiwiSaver, which will be to our net cost as a nation.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000252\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI will comment further, and on the sale of State-owned enterprises. I say that not only do I believe that we will see asset sales of State-owned enterprises if a National Government is re-elected but also I note that in the Canterbury Earthquake Recovery Act there is a capacity for the sale of assets that are held currently by the Christchurch City Council. The issue has been aerated publicly over the last couple of weeks. Minister Brownlee confirmed that the capacity is there; it is included in the powers of that Act for the sale of Christchurch\u2019s $2.2 billion worth of assets, including our power company, Orion, our port, and our airport. But I say to the Government that if it starts to look to those assets in terms of sales, it will be doing a disservice that will completely undermine the efforts made on the other side of the ledger in terms of the recovery of Christchurch. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000253\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EWe acknowledge that the Government has stepped up and is putting in place a regime to rebuild Christchurch. That is welcome. But I put this rider on it: if a re-elected National Government starts to use the powers in the Canterbury Earthquake Recovery Act to start selling off the assets of Christchurch, it will have a civil outbreak on its hands that it would not believe. The people of Christchurch know that those assets have delivered over the long term. One of them alone, Orion, has delivered $980 million in dividends\u2014nearly $1 billion in dividends\u2014to the ratepayers of Christchurch over the last 20 years. We know, through this Budget explicitly, that a National Government, if re-elected, will embark on an asset-sales programme next year. It is there in black and white. If members think it is bad enough putting into hock State-owned enterprises like Meridian Energy, Might River Power, and Genesis, they will see nothing in comparison, in terms of public revolt, if the Government tries to sell the assets of Christchurch.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022 data-id=\u00220a236650c3904dc2b68506b208a0b427\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000254\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00220a236650c3904dc2b68506b208a0b427\u0022\u003EPESETA SAM LOTU-IIGA (National\u2014Maungakiekie):\u003C/span\u003E It is a real privilege to speak on Part 2 of the Taxation (Annual Rates and Budget Measures) Bill. We have heard this morning from a number of contributors across the aisle. We have heard the type of negativity that pervades the Labour Party at the moment. We have heard speeches that have not set out any vision for this country, but speeches that appeal to the rabid left\u2014anarchists, communists, socialists, and the lazy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000255\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EThis Budget has confirmed the competent management that Bill English has displayed in the 2\u00BD years since National took power. We know that the Budget is about setting a credible path to a surplus and helping to lift national savings. We have heard about the changes to KiwiSaver and how they will increase private savings through contributions that are, we might add, from employers and employees. What has not been mentioned by members opposite has been the context in which we find ourselves in May 2011. When we took power 2\u00BD years ago there was a global economic recession. It has bitten many countries. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000256\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EWe heard from the Leader of the Opposition yesterday that this recession is over. Yet we look at countries like the United Kingdom that are going through massive changes and upheaval to their social services and their budgets, and we see that this Government has taken a very firm but very fair and balanced approach to our Budget. Although we hear complaints about the types of policies that aim at the fringes, what we really have is a Government committed to boosting investment in our health and education services. That is something we will not resile from. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000257\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EWe have heard questioning regarding facts. The Opposition continues to advocate taxation of revenue and sales, it advocates increasing taxes on high-income earners, and it seems to be focused on those who earn $1 million, but it has not presented any of the facts. The facts are that in the year to March 2009, only 597 people earned over $1 million\u2014597. Labour members stand here whining and moaning about 597 people who earn over $1 million a year. Of those people, only 120 are salary and wage earners\u2014120. There is all that energy over 120 people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000258\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EWhat Labour members do not realise is that there are people who earn high incomes who provide jobs and provide opportunities. Those people are entrepreneurs, who are investing in productive assets. Yes, it is about investing in the productive assets that will earn the export dollars that will push this economy forward. We have not heard anything from that party opposite, which governed during the best years of our economy, yet exports decreased for 5 consecutive years. We have not heard anyone from that party come up with any answers as to why that happened.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000259\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226007dc96-f459-4cdd-9972-4fde2c994088\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002233b757fccdba41d08afb061813bbcd72\u0022\u003EGrant Robertson\u003C/span\u003E: Because it didn\u2019t.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000260\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ebff65685e1147dba504b2b6f31a24e5\u0022\u003EPESETA SAM LOTU-IIGA\u003C/span\u003E: It did happen. The biggest business in town under the Labour Government was Government services\u2014sad but true. Mr Hodgson, who spoke earlier this morning, asked where the innovation is. I am a little bit disappointed in Mr Hodgson, because when he was the Minister for Economic Development he was the biggest cheerleader for exporters, for productive businesses, and for innovators. Now he sits there and asks where the innovation is. I will tell members where it is. If any member opposite wants to see innovation, I ask them to come to Maungakiekie to visit some of the success stories. I ask them to please come and visit Rakon and Compac Sorting Equipment\u2014businesses that are growing into export markets. Grant Robertson would not know that, because the biggest business in his electorate is what? It is Government services. That is right, it is Government services. When we went to the innovation awards with Mr Hodgson, what did we see? We saw the best in innovation from New Zealanders. We saw Phil Keoghan, of the creative industries. We saw Bruce Farr of Farr Yacht Design. We saw diabetes researchers. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000261\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EMembers opposite sit there and ask where the innovation is. I tell them it is out there. I encourage them to leave their electorate offices, visit some businesses and see what makes this economy really grow, see the people who hire others, and see where the jobs are. I encourage members opposite to get their facts straight and stop advocating taxing overseas trips, stop advocating the taxing of sales of businesses, stop advocating a capital gains tax, and actually present something with a vision. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022 data-id=\u0022bac5bb1e32374aa1b5e97e41cc42f5bc\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000262\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022bac5bb1e32374aa1b5e97e41cc42f5bc\u0022\u003EHon MARYAN STREET (Labour):\u003C/span\u003E It is my pleasure to participate for the first time in this debate, in looking at Part 2 of the Taxation (Annual Rates and Budget Measures) Bill. There are a couple of points that I will make, but with reference to the member who has just resumed his seat, Peseta Sam Lotu-Iiga, and some of the other National members who spoke yesterday, I will just remind them that the 9 years of the Labour Government were spent in improving New Zealand\u2019s export opportunities. I ask what those members call the Free Trade Agreement between the Government of New Zealand and the Government of the People\u2019s Republic of China, an agreement that, although some members opposite wish to contest the fact, was signed by the Hon Phil Goff as Minister of Trade. The agreement has resulted, in its first year\u2014no thanks to this Government\u2014in a 62 percent increase in dairy exports alone, not to mention forestry as well. That member opposite needs to get some facts straight about who laid the groundwork for growth. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000263\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003EThis Budget goes in exactly the opposite direction. This is a stifling Budget. It is a stifling Budget that does not promote growth. Members opposite had 9 long years in Opposition\u20149 long years, as they like to say\u2014to come up with a plan for economic growth and for some new, fresh ideas about how to pull this country out of the financial crisis and into growth and recovery. But what did we get? We got the same tired old recipe that we got in the 1990s. We got asset sales and tax cuts. Those members have done the tax cuts, and now in this Budget they are promising to do the asset sales.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000264\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003EIn this Budget, and in the part of the bill that is under consideration at the moment, we have the technical bits about cutting KiwiSaver and Working for Families. In 2008 John Key went around this country saying to the people of New Zealand: \u201CYou like KiwiSaver; we will keep KiwiSaver. You like Working for Families; we will keep Working for Families. You like New Zealand superannuation; we will keep New Zealand superannuation.\u201D But what did the National Government do? From day one it began to gut all three of those great innovations of the previous Labour Government.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000265\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003EThe talk about needing to change our culture to a savings culture, with this bill in front of us, is simply that\u2014it is talk. The cuts to KiwiSaver provide disincentives for people to join the scheme, and disincentives for people to continue their savings. They do not create the kinds of growth and savings that are required if we are to have the investment in jobs and people that is sorely needed for the productive economy in New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000266\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003EI will turn now to something to do with the context in which this bill is set. Towards the back of one of the documents we were issued yesterday, the one that contains the speech made by the Minister of Finance, there are assumptions that underpin his speech and this Budget. They are included in upside and downside scenarios. I would like to accentuate the positive and talk about the upside scenario, but draw to the Committee\u2019s attention how deeply, deeply flawed that scenario is. If the upside scenario is flawed, what hope is there for anything good to be done by this Government for our economy? The upside scenario states that it \u201Cincorporates a stronger economic recovery led by domestic drivers \u2026 with commodity exporters anticipating permanently higher returns and households more confident in house price rises.\u201D It goes on to state: \u201CAt the same time, house prices are slightly stronger, growing 5% by mid-2012, rather than 1.8% as in the main forecasts. Higher house prices in the near term reflect current low interest rates and developing housing \u2026\u201D\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000267\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022992e27a5d3f04ff1bc155685b3ae762b\u0022\u003EThe CHAIRPERSON (Eric Roy)\u003C/span\u003E: I will give the member another call, but I just want to make a comment. Part 2 is about Working for Families and KiwiSaver, but each member has just got a little broader and a little broader again. Although it is very interesting, some of it does not have a lot to do with Part 2. I am not directing these comments specifically at the member who was speaking, although she is perpetrating that as much as some other members have done. I just caution the Committee that I think the debate should be crisply around those issues. Members can make their comparisons, but the issue is Working for Families and KiwiSaver.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000268\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225a126eb4ef984c07ba45522caf689efe\u0022\u003EHon MARYAN STREET\u003C/span\u003E: Thank you, Mr Chair, and I intend absolutely to abide by your advice. The point about referring to this upside scenario is that it is to do with household income, and Working for Families and KiwiSaver are directly related to household incomes. Let me just make the point. The upside scenario states: \u201CHigher house prices in the near term reflect current low interest rates and developing housing shortages, lifting household wealth.\u201D Excuse me! Does anybody else here hear echoes of a couple of old names, like Fannie Mae or Freddie Mac? Does anybody else hear echoes of the 2000s when household wealth was predicated on the high value of houses, which in turn produced its own credit bubble, and which was then the precipitator of the global financial crisis? My point is that if this is the upside scenario, then God protect us from the downside one! This is going back to the future, and the way it relates to this bill is that for many people\u2014and I think of many families in the Nelson electorate\u2014household income has been dependent upon the supplement of Working for Families. When that is eroded, household income is eroded. The chance to buy the first home is whittled away even further, and escapes further from the grasp of first-home owners. So we have a Budget and a tax bill that are predicated on scenarios that are just not sustainable.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000269\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003EThe other thing I want to say about Working for Families and KiwiSaver is that the cuts to the public sector that are represented in the Budget by KiwiSaver contributions having to be found out of baseline in the public service, represent for the foreseeable future no wage increase in the public sector. That pertains to household income. Not only will there be a reduction in household income because State sector bosses will have to find the KiwiSaver contribution from baseline and make $630 million - odd of savings but also there will be cuts to services in order to find the other $320 million\u2014$330 million, or whatever it is\u2014that makes up the nearly $1 billion worth of cuts. This is where KiwiSaver changes impact absolutely on household income. There will have to be trade-offs for no wage increases. If those savings are to be extracted\u2014one might say extorted\u2014from the public sector, then that will make a dramatic impact on what families can earn, and can expect to earn, in the near future.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000270\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003EThis is a Budget, and this is a bill, that cuts at the heart of how people in New Zealand make ends meet. It cuts to the heart of family budgets. It cuts to the heart of services that families might legitimately expect in a country such as ours. One cannot pretend, by any stretch of the imagination, that this Budget and this bill represent a plan for growth or a plan for recovery. This is the same old tired stuff that National trawled out in the 1990s. It is doctored up, because there are some better programmes in place now than there were in the 1990s, but it has the same tired, old, failed policies. These cuts will not produce growth. These cuts will not do what that member opposite said was one of the aims\u2014to stimulate the productive economy. Limiting KiwiSaver does not incentivise people to save. It does not provide us with the capital market and the investment potential that we so need to put into our productive enterprises in this country. This is a cutting Budget. It is not a plan for growth. Any plan for growth has completely escaped this Government.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022 data-id=\u0022100db2fc839843acb5db34e6d68aa7ea\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000271\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022100db2fc839843acb5db34e6d68aa7ea\u0022\u003ECLARE CURRAN (Labour\u2014Dunedin South):\u003C/span\u003E I am pleased to speak on Part 2 of the Taxation (Annual Rates and Budget Measures) Bill, as it relates to the cuts to KiwiSaver and Working for Families. This Government makes stuff up, and that is what this Budget is based on. We have heard so much stuff that has been made up. In the time I have been sitting in the Chamber this morning I have heard a lot of it. Before the Budget was released, a few days ago a headline in one of the newspapers said this Budget would be about higher wages and more jobs. What a load of rubbish; absolutely. We have heard today that this Budget is about protecting the next generation. What a load of rubbish that is. Where are the jobs for that generation? Where are the decent wages? What is to stop them from going overseas? That is one of the major issues this Budget should have addressed. We have heard also from another member, who claims that there is so much innovation happening in New Zealand right now as a result of his Government. What a load of rubbish that is. There is nothing in this Budget that promotes innovation, will promote jobs, and will promote strong export-led industries, which is what this country needs. Instead, we have cuts to KiwiSaver and cuts to Working for Families, which is what Part 2 is about, instead of the Budget providing the things we need most. John Key was on Radio Dunedin this morning, just a few minutes before I was. He was asked where these 170,000 jobs would be coming from. He fudged it. He did not have an answer, because there is no answer from this Government in this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000272\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022\u003EThis Budget should have been about hope. It should have given people hope for the future that things will get better, that they will be able to pay their bills, that they are not going backwards, and, worse still, that they will not end up in financial strife. They should have been given hope that their kids will get jobs when they leave school, and that they will not go to Australia. Unfortunately, the Budget is about cuts\u2014cuts to KiwiSaver. KiwiSaver is growing, and is actually giving people an incentive to save. It will provide certainty for people\u2019s futures. But instead we are seeing cuts, we are seeing the burden placed on employees and employers, and we are not, as members have heard from previous speakers on this side of the Chamber, going to see wage growth. Government members are making stuff up. It is not too much to ask for a Budget to provide hope, for a Budget that gives us hope as nation. A Budget that will set a course for the future will show us where those jobs of the future will come from. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000273\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00222aa0b524-c38d-45aa-bd5b-99c5927085f4\u0022\u003EPeter Dunne earlier in this debate talked about equity. Equity for whom, I thought to myself\u2014equity for whom? It is not equity for all those hundreds of thousands of families across the country who are struggling with their budgets every week\u2014every week. The do not know whether they will be able to afford pay their bills: their telephone bills and electricity bills, their rent or mortgages\u2014the bills they have to pay\u2014let alone petrol and their food bills. They are not bills just for buying new clothes or going on a holiday but the bills they have to pay to get through the week, and through the month. Where does this Budget address that issue? Nowhere; instead it is a Budget that just makes stuff up. It forecast 170,000 jobs\u2014170,000 jobs. Where will they come from? I heard what Stuart Nash said earlier on today about the forestry sector, and that jobs are going in that sector. We heard that John Key talked about commodity prices strengthening, and therefore jobs will come from that. Where will the jobs come from? They will not come from the manufacturing industry, let me tell members. If this Government actually invested some money instead of cutting KiwiSaver and cutting Working for Families, if this Government invested some money in this economy in a way that actually stimulated the economy and stimulated skills in the economy\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u0022393b907b9fd7494798faee41c058e4e8\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000274\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022393b907b9fd7494798faee41c058e4e8\u0022\u003EHon PETER DUNNE (Minister of Revenue):\u003C/span\u003E I am glad the member who has just resumed her seat, Clare Curran, talked about making up stuff, because there has been a lot of that going on from that side of the Chamber during this morning\u2019s debate. Earlier we heard from Sue Moroney, who talked about reversing the $9.1 billion of tax cuts to top-income earners.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000275\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cbecf0e0797947ab927e1dc8ee3b344e\u0022\u003ESue Moroney\u003C/span\u003E: That\u2019s right.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000276\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226125fb7e9ce143769bc840c956e9e015\u0022\u003EHon PETER DUNNE\u003C/span\u003E: She says that is right: $9.1 billion of tax cuts to top earners. Somehow, if we reverse that cut, we can pay off our $17 billion deficit. I was somewhat taken aback by her claims, because, having been intimately involved with the design of the tax package over the last couple of years, the $9.1 billion figure came as a considerable surprise to me. I had never heard it before, let alone in respect of high-income earners. I went back and checked with officials exactly what the cost would be of reversing the tax decrease for those high-income earners, because I thought I might find out where the $9.1 billion figure came from. If the member was right, then maybe there was merit in her argument. But I have to tell her she is slightly wrong. She is wrong by about 1,300 percent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000277\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222ac5d4ca13f748e5b34280121360c24f\u0022\u003EAmy Adams\u003C/span\u003E: That\u2019s quite a lot wrong.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000278\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002208b5bfb1f0894c67ae2acf253ba786a1\u0022\u003EHon PETER DUNNE\u003C/span\u003E: It is a slight error, I know. It is within the margin of error, perhaps. But the fact is that contrary to her claim of $9.1 billion of tax cuts to the top 10 percent, the total cost is $725 million per annum for those people.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000279\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002225ae9ecb786e4251925b22b9c5a71e24\u0022\u003ESue Moroney\u003C/span\u003E: Oh no, it\u2019s not.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000280\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e18e3efd4d4a4c32abefb91215bced10\u0022\u003EHon PETER DUNNE\u003C/span\u003E: Yes, it is. The member talked about a $9.1 billion tax windfall for high-income earners, but it is $725 million. So when her colleague talks about making up stuff, I agree with her. That is the whole basis on which the Opposition\u2019s case has been based this morning. We should roll over the top tax cuts, and therefore we would not need to make the changes to Working for Families or KiwiSaver. The only problem is that those members cannot add up. They are 1,300 percent out in their calculation. I worry what the state of a Budget might be, drawn up with that type of arithmetic. One of the members, I think Mr Hodgson, earlier on actually said it was just a case of plain arithmetic. It is pretty plain arithmetic if it is 1,300 percent out, at least. The member is still sticking to the claim of $9.1 billion. No one can find it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000281\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225229345c0b914a2d9fa130a88ae77c48\u0022\u003ESue Moroney\u003C/span\u003E: Over how many years?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000282\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220557a767ccd6425fb3730ac50cbd2c76\u0022\u003EHon PETER DUNNE\u003C/span\u003E: Well, if we took it over something like 13 years, at least, she might be right. But that is not the context the member claimed it in. She talked about a $9.1 billion tax windfall for the top 10 percent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000283\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002266822e8243f1444fbb526ec9418bea8f\u0022\u003ESue Moroney\u003C/span\u003E: That\u2019s right.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000284\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227baf228910b8467d9f2387c20306bf41\u0022\u003EHon PETER DUNNE\u003C/span\u003E: She still believes it, even though she is 1,300 percent out. When Opposition members want to talk about Part 2 and the changes it makes, they should get the basic facts right. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000285\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223f77b5464ab5438d9f34e597c77fbb94\u0022\u003ESue Moroney\u003C/span\u003E: Oh, we have.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000286\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022078ea15fb0514df18e036f461642a09f\u0022\u003EHon PETER DUNNE\u003C/span\u003E: She has, she says! If the claim is that Part 2 is required only because of the windfall tax gain by top-income earners, then the figures should at least match up. They should not be 1,300 percent out, as under the member\u2019s claims, because that simply destroys any shred of credibility for her argument, and to the worthy cases mounted by all her colleagues this morning.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022 data-id=\u0022a14a6a501dcf434685f294c7a188c2e0\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000287\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a14a6a501dcf434685f294c7a188c2e0\u0022\u003EKRIS FAAFOI (Labour\u2014Mana):\u003C/span\u003E I thank Mr Chair for the opportunity to speak to Part 2 of the Taxation (Annual Rates and Budget Measures) Bill. This is my first contribution. Part 2 deals directly with the major changes the National Government is making to both Working for Families and KiwiSaver. Yesterday when John Key finished his Budget speech, and as the members on the opposite side of the House got up and followed the script, and started smiling and clapping\u2014as opposed to smiling and waving\u2014we could tell, we could guarantee, that a lot of them were doing it through gritted teeth, because they were worried. They were worried because they knew people at home were thinking: \u201CHang on a minute.\u201D The 1.7 million Kiwis who have signed up to KiwiSaver were thinking: \u201CHang on a minute. That is not what I signed up to. Those are not the terms I signed up to. Hang on a minute. John Key said he wouldn\u2019t touch KiwiSaver. What\u2019s going on here? What is going on here with KiwiSaver? I thought this plan was solid. This was a plan to make sure we can save for our retirement, and make sure that people can afford their first homes. But what is going on here? We were told it was safe, and wouldn\u2019t be touched. Hang on a minute. What about Working for Families? Hang on a minute. John Key wasn\u2019t going to touch Working for Families. What is going on here?\u201D.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000288\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E Those are two pretty major broken promises in Part 2. A lot of lower and middle income Kiwis will be saying that in their homes. We have seen plenty in the Dominion Post today; I think pages 5 and 6 are dedicated to families who will be no better off from this Budget. We heard on Morning Report this morning an example, as Jacinda Ardern pointed out earlier, of a person who said that this was not what they signed up to with KiwiSaver. The last thing the Prime Minister said was that he would see us out on the hustings. I say to the Prime Minister to bring it on\u2014bring it on. If members opposite want to go to the people and say they are cutting Working for Families and cutting KiwiSaver, then they can bring it on. I am looking forward to going to Cannons Creek and saying that this Government will cut KiwiSaver and cut Working for Families, but it will keep the 40 percent tax cut for the top 10 percent of tax earners. People in Cannons Creek will love it, and people in Waitangirua will love it. Do members know who else will love it? People in Papakowhai will love it, because they signed up to KiwiSaver. They think it is a great scheme. People in Papakowhai will love it, and they will say: \u201CHang on a minute. Hang on a minute, what is happening here? That is a tax credit I thought I would get from this Government.\u201D But no, the Government is slashing it in half. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000289\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EThis is a Government that promised it would take the sharp edges off the recession. The only sharp edge we have is the one the Government is using to make cuts. That is all we have received from this Government. I am looking forward to going to some of the more marginal areas in my electorate and taking votes from National members, because of what they are doing in this Budget. They are taking money from hard-working families who are struggling to make ends meet. A lot of my colleagues have been talking about the cost of living, and how many families are struggling to make ends meet. With the changes this Government is making to Working for Families, I look forward to getting out on the hustings. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000290\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003EI tell Government members to bring it on, because many families in Mana are struggling to make ends meet. Just last week I went to the St Vincent de Paul food bank, and for the first time in 9 years Kerry, the lovely Australian lady who runs the shop there, said they have run out of food. Even the emergency cupboard is bare. For the first time in her 9 years she has been forced to put a sign on the front of the shop saying: \u201CCan we please have food.\u201D, because not only has the demand increased but the supply has run out. There is real hurt in this community, especially in Mana, and this Budget does nothing for people there. I say to members opposite to bring it on. If they want to take this to the people, they should bring it on. We are going to make 50 percent of the families who have signed up for Working for Families worse off, so bring it on. I am looking forward to getting out there and talking about what you are doing and how you are hurting Kiwi families\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000291\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227335dd281e4c4805a423b9e8a1e2788a\u0022\u003ECraig Foss\u003C/span\u003E: I raise a point of order, Mr Chairperson. I do not think you are hurting Kiwi families. Members have been pulled up for bringing you into the discussions quite often during this debate\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000292\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e5cfb029f2544ed4953599bc9074308a\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I thank the member. Do not bring the Chair into the debate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000293\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228cca3bba31a7497288a373fdd0a57485\u0022\u003EKRIS FAAFOI\u003C/span\u003E: \u2014I should rephrase that\u2014and how you are adversely affecting Kiwi families and making life harder for them. You are making life a lot harder\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000294\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fb0456be7d5d48cba2195254568884a3\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: No, I am not. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000295\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002283ac0df12eaf420e890e4ab06d761673\u0022\u003EKRIS FAAFOI\u003C/span\u003E: I am sorry. Excuse me, Mr Chair. This Government is making life a lot harder for Kiwi families. I was straight on to it this morning. I was waving signs out on State Highway 1 saying \u201CSave KiwiSaver\u201D. There were plenty of beeps, so bring on the election campaign, because I know that the 1.7 million Kiwis who have signed up to KiwiSaver will not be happy with what the Government has done. We have had speeches from many members on the opposite side of the Chamber saying that this is a visionary Budget. I think they should go and get their eyes checked. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022 data-id=\u00223fa02664c33e4fc8953529988727c946\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000296\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00223fa02664c33e4fc8953529988727c946\u0022\u003ECHRIS TREMAIN (Senior Whip\u2014National):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00220ee528dc-7870-4553-95ed-5ec0cab60f07\u0022 data-id=\u0022834ad077fecf420e920774a4cafb5c9b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000297\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ee528dc-7870-4553-95ed-5ec0cab60f07\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022834ad077fecf420e920774a4cafb5c9b\u0022\u003ECATHERINE DELAHUNTY (Green):\u003C/span\u003E I am pleased to take a call on what some of us are calling the \u201CKen Ring Budget\u201D Part 2, because it is based on some fairly interesting random predictions on the future economy. The Government may need advice from Ken Ring. He makes a lot of mistakes but at least he is a colourful character. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000298\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ee528dc-7870-4553-95ed-5ec0cab60f07\u0022\u003EI would like to talk about Part 2 of the Taxation (Annual Rates and Budget Measures) Bill. This morning some of us attended the Child Poverty Action Group breakfast, where the issues we are discussing in Part 2, \u201CKiwiSaver and Working for Families\u201D, were identified as worthy of key analysis in terms of who is ignored. There has been a consistent ability to ignore two crucial parts of our community, and Part 2 continues that trend.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000299\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ee528dc-7870-4553-95ed-5ec0cab60f07\u0022\u003EOne is beneficiaries. Beneficiaries are recognised in this Budget only as non-people\u2014non-workers and their children who do not receive Working for Families now. As the Child Poverty Action Group pointed out this morning we have had increasing poverty for those families for more than two decades. Roger Douglas and the \u201Cmother of all Budgets\u201D is when it started. We do not see that Part 2 does anything for those people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000300\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ee528dc-7870-4553-95ed-5ec0cab60f07\u0022\u003EI heard members of the Government say last week that they are a Government for the vulnerable. I think their definition of \u201Cvulnerable\u201D is the 13 percent of people who got richer, but that is not my idea of the vulnerable. The vulnerable are people who are having trouble surviving right now. There was good discussion at the Child Poverty Action Group breakfast about the vulnerable and about Part 2. We are very concerned that, despite the Government trying to pitch this as not a serious attack on KiwiSaver, I have already in the last 24 hours met people who are saying they think they will pull out. These are people who have never ever saved before.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000301\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022673d5890dfe4421c9e139356c1634828\u0022\u003EHon Member\u003C/span\u003E: Why?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000302\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ee528dc-7870-4553-95ed-5ec0cab60f07\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022538bf240e0c24a92a79e0092d9d97e11\u0022\u003ECATHERINE DELAHUNTY\u003C/span\u003E: Because they find that $500 is not enough. The Government\u2019s $1,000 a year was an incredible incentive to save. But in hard times they might as well keep the money. They are struggling so hard with the basic costs that without that Government incentive it is just not worth it to them any more. I think that is tragic, but it tells us how many people are living in that space where the difference between $500 and $1,000 in terms of the Government contribution is critical to them. Now they are going to give up saving for their future. I think that is because they are forced into survival mode in a time when costs are increasing, by Part 2. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000303\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ee528dc-7870-4553-95ed-5ec0cab60f07\u0022\u003EIt is a shame about KiwiSaver, which has been one of the most breakthrough initiatives in this country for getting ordinary people who do not have the capacity to join fancy schemes, who do not have reliable employment, and who do not have a lot of money\u2014some of them are on benefits\u2014to start saving so they can have some self-sufficiency in old age. That is a really sad thing to hear and it is an indictment, because we actually believed the Government\u2019s promise that it would not cut KiwiSaver. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000304\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ee528dc-7870-4553-95ed-5ec0cab60f07\u0022\u003EI agree with the previous speaker, Kris Faafoi, that KiwiSaver will be an interesting issue during the election. KiwiSaver will be debated hotly. People are not stupid. They will do the maths and look at whether they are better off going into a scheme like KiwiSaver any more. I think that one media person called it paying more to stay the same. That is a really sad thing, because people who struggle to pay all their bills cannot afford to pay more to stay the same in terms of savings. They cannot afford to do that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000305\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ee528dc-7870-4553-95ed-5ec0cab60f07\u0022\u003EWe are so buffered in this Chamber. We are so privileged by our own superannuation schemes, by our own protective devices to make sure we have a pleasant retirement, and we forget at our peril the really vulnerable people. The Budget is supposed to be about them, not us, the already insulated and protected well-off people sitting in this Chamber. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000306\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ee528dc-7870-4553-95ed-5ec0cab60f07\u0022\u003EI return to Part 2 in terms of Working for Families. Reducing the abatement threshold down to $35,000 means that abatement applies to a two-parent family with one partner working full time at the minimum wage and the other working 12 hours a week at the minimum wage. Raising the abatement rate to 25c in the dollar results in an effective marginal tax rate of 58 percent. Losing almost three-fifths of any extra income in tax and in Working for Families abatement is far from an incentive for parents who are earning just around $35,000 or over to\u2014to quote the Government\u2014work harder to better themselves, which is what the Government says they should be doing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000307\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ee528dc-7870-4553-95ed-5ec0cab60f07\u0022\u003EWe are very disappointed that Working for Families is being undermined at that level for those people who are in that marginal area and who really needed Working for Families to stay the same. I think it was Child Poverty Action Group members who said this morning that they do not have a problem with the richest people losing Working for Families because it was never intended for them anyway. It is actually quite appropriate that the Government should cut back on their access to that, but it is not appropriate to cut that down for the people earning about $35,000. It is not an appropriate thing to do. We think Part 2 is carefully calculated\u2014\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022 data-id=\u0022b866bee42e7c48539daa7d656523d17a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000308\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b866bee42e7c48539daa7d656523d17a\u0022\u003EAMY ADAMS (National\u2014Selwyn):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00225db0a23e-1579-44c6-9194-76e34cf5ae99\u0022 data-id=\u0022d99bcadc0ccb4d5a842f7f4b6ac34a8e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000309\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225db0a23e-1579-44c6-9194-76e34cf5ae99\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d99bcadc0ccb4d5a842f7f4b6ac34a8e\u0022\u003EDr RAJEN PRASAD (Labour):\u003C/span\u003E I am happy to take a call on Part 2 of this Taxation (Annual Rates and Budget Measures) Bill. Part 2 is really about KiwiSaver and Working for Families\u2014two of the most successful programmes around. They are two programmes where the majority of New Zealanders actually believe that whoever designed them\u2014and of course, it was the last Government\u2014actually did a good job. KiwiSaver has proved itself by the number of people taking it up. This was a huge surprise when it was first introduced. The belief was that few would take it up, but many, many have. It was a very highly successful programme. Working for Families is the other one. This is really a subsidy for workers provided by the State because we have a low-wage economy. It is another successful programme. So here we have two successful programmes and this bill is cutting them. This Government is a cut-and-hope Government. This is a cut-and-hope Budget. There is plenty of evidence. The papers are full of it today, and there is something about this part of the bill that demonstrates this Government\u2019s real hate\u2014if you like; it is probably not too strong a word\u2014for those successful programmes developed and put in place by the last Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000310\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228315ef84b0954bcba8f835256fe4ec04\u0022\u003EPeseta Sam Lotu-Iiga\u003C/span\u003E: Which ones?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000311\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225db0a23e-1579-44c6-9194-76e34cf5ae99\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d4ea454424224cf5a7a7f0946b6f7d23\u0022\u003EDr RAJEN PRASAD\u003C/span\u003E: The two I have just mentioned, I say to Mr Lotu-Iiga. KiwiSaver and Working for Families are the most successful programmes. That member talks about the companies in Maungakiekie that are doing very well. I tell that member that those companies were there before. Those companies are doing very well under policies of the last 9 years of Labour, not ones that have been developed since that member took on responsibility for that particular electorate. It is all very well to say what the member is saying, but it is not consistent with what has happened. They were policies of the last Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000312\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225db0a23e-1579-44c6-9194-76e34cf5ae99\u0022\u003EThis National Government is cutting very, very successful programmes, and the irony is this: National Governments of any hue have always destroyed good programmes. In 1972 there was the very successful national superannuation programme. Who cut that programme? Do members remember who cut that programme? A National Government came in and destroyed it overnight. There was the Cullen fund, designed to put national superannuation in place. After the Cullen fund started, what did the National Government do with it? Who played around with the Cullen fund? It was that particular Government; because the policy was successful, the National Government\u2019s stock contribution was to play around with it. Again, now, KiwiSaver is a successful programme for savings for this country. Members on that side of the Chamber say they support savings, but they do everything to confound that and to cut back savings. And here we are again. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000313\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225db0a23e-1579-44c6-9194-76e34cf5ae99\u0022\u003EThen there is the little thing about keeping one\u2019s word. The Prime Minister gave his word that this would not be cut and that this would not happen, and with this bill the Government is doing that. The Government has broken its promises at every step of the way. Why would anybody want to trust whatever it is that that Government brings out as policies? All it does is cut the successful programmes and promise something else. It is a matter of trust. When KiwiSaver is being changed in Part 2, it is a betrayal of trust given by the electorate at the last election. There is no way that members opposite cannot resile from that. It is a betrayal of trust. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000314\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225db0a23e-1579-44c6-9194-76e34cf5ae99\u0022\u003ENational members now say that it is not a breach of trust, at all, because the cuts will not come in for some time yet. Why are we debating this bill now? We are debating a cut to KiwiSaver, and members on the other side said they would not do it. Therefore, it is a breach of trust. Let us not play with words here. Let us not make things up. We are discussing it now. It is the Government\u2019s intention to do it. Where are the ethics in this? Where are the ethics of keeping one\u2019s word? National members said they would not do something, then they come here, change it, and pretend they are not changing it. It continues in this Budget as well, which this part of the bill is trying to put into place. It is really about making it up. There is a huge dispute about the figures that this bill is predicated on. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002292824476-4e66-4052-8435-b049833d8b83\u0022 data-id=\u0022fbd36a86f80c4f88b014e7d1caba06f3\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000315\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022fbd36a86f80c4f88b014e7d1caba06f3\u0022\u003ENICKY WAGNER (National):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u0022dbf3c3cd8523407d9920fc9bd6521fca\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 68\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 4; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 54\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 42; Green Party 9; Progressive 1; Independents: Carter C, Harawira.\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=\u0022a871d944c1834e3ba55bdc6ed50c2ca8\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 68\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 4; United Future 1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 54\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 42; Green Party 9; Progressive 1; Independents: Carter C, Harawira.\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=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000316\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00228b20a8a6677b46a18b1824478dee9dd2\u0022\u003EClauses 1 and 2\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022 data-id=\u00227c67a5403cd4409aaec57f43a2d6af34\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000317\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00227c67a5403cd4409aaec57f43a2d6af34\u0022\u003EMOANA MACKEY (Labour):\u003C/span\u003E I am happy to take a call on the title and commencement clauses of this legislation. The legislation is called the Taxation (Annual Rates and Budget Measures) Bill. I would submit that that name is not a particularly good one for this legislation. It makes it seem like something fairly innocuous, when in fact the bill breaks even more election promises that were made by National before the last election. It is dismantling KiwiSaver. It is making life harder for middle and lower income families, because of changes to Working for Families. I do not think the title of the Taxation (Annual Rates and Budget Measures) Bill really accurately sums up exactly how damaging this legislation is. The word \u201CBudget\u201D in the title of the bill may lead people to believe that the measures in the bill are something that will happen after the Budget, but the reality is that we have another 6 months with no plan and another 6 months of treading water while the Government does absolutely nothing to address the dire economic circumstances it has put this country in. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000318\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003EI think an accurate name for this legislation would be the \u201CTaxation (Lower and Middle Income Families Will Pay for the Tax Cuts That Went to High-income Families That National Gave in the Last Two Budgets) Bill\u201D. That is what this legislation does. We have to pass legislation that cuts entitlements to KiwiSaver and Working for Families, both of which National promised it would not cut, because National gave 2 years\u2019 worth of completely unaffordable tax cuts, the overwhelming amount of which went to the top income earners. The tax cuts went to National members\u2019 mates and to them. Cabinet Ministers and MPs did very, very well out of the tax cuts given by the National Government over the last two Budgets. Labour said the tax cuts were unaffordable at the time. Labour said they were unaffordable, National knew they were unaffordable, but it went ahead with them anyway, and guess who is paying for them? Guess who is paying for those tax cuts? Guess who is paying for the economic mismanagement of this Government? It is low and middle income families in New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000319\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003EAnother potential title for this legislation could be the \u201CTaxation (This Will Be Incredibly Bad for Local Economies) Bill\u201D. In my home town of Gisborne, Working for Families puts approximately $40 million into the pockets of those families. In the Bay of Plenty it is approximately $160 million. When we start to cut into that, it is money that these families will not have to spend in local businesses, on local services, or in the local economy. Provincial economies in New Zealand are already doing it tough because this Government has no plan. It has no plan.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000320\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002225f8c78b-f301-4aca-a936-366f00a26bc9\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223ad9f7b84be645d2a7ef0cb9db1b40a5\u0022\u003ESandra Goudie\u003C/span\u003E: No. They get it wrong again!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000321\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022af8d8add59f443efb495e0de007ba072\u0022\u003EMOANA MACKEY\u003C/span\u003E: I am sure Sandra Goudie has a plan. I am sure she does. The reality is that provincial New Zealand is finding it incredibly hard at the moment, and these changes will only make it harder. These changes to Working for Families will take money directly out of provincial economies. I remind the Committee again what these changes are for. They are to pay for completely unaffordable tax cuts, 40 percent of which went to the top 10 percent of New Zealanders. Another name for this bill could be the \u201CTaxation (These Taxation Changes are Simply Not Fair) Bill\u201D, because they are not fair, when the overwhelming majority of tax cuts go to the people who needed them the least and to the people who were not asking for them. Tax cuts are not fair when we have to cut public services back to the bone and we have to cut KiwiSaver, Working for Families, and student loans to pay for them. Nothing in this Budget or this legislation will do anything to promote growth or reduce unemployment. In fact, it will only contract regional economies further and make the existing problems worse\u2014all to pay for tax cuts for National\u2019s rich mates, who did not need them and who still do not need them. National members stand up in this Chamber and defend that. I do not think it is defendable. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000322\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003EAnother title of the bill could be the \u201CKiwiSaver (Forget About It If You Are Self-employed) Bill\u201D, because the self-employed will really suffer under these KiwiSaver changes. The self-employed relied on that Government tax credit. They are their own employer, so with the Government stripping away that Government tax credit, self-employed people\u2019s savings will go down by 25 percent. A gentleman was reported in the New Zealand Herald today as saying that saving was just not worth it any more. It was the Government\u2019s input into KiwiSaver that made it worthwhile saving, whereas the Government would now have us\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000323\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228770ceae1ae840139fd1bc409626d7b3\u0022\u003EChris Tremain\u003C/span\u003E: Oh, come on, Moana.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000324\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223e0842825a0645dcbef6246f4917bf67\u0022\u003EMOANA MACKEY\u003C/span\u003E: Is Mr Tremain saying he is wrong? Is that man not telling the truth? Chris Tremain and National say the self-employed man in the New Zealand Herald today is wrong. He said his savings would go down by 25 percent. They are not offset by an employer contribution. Let us be realistic, even the employer contribution will be offset by wages, so we will see wages decrease as a result of these changes made here. This is the great, grand plan, apparently. This is the bright new future of National. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000325\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003EI put it to the Minister in the chair, the Minister of Revenue, that this Budget is bad for regional economies. It is absolutely bad, and that is why I think it should be reflected in the title of the bill. Those economies will also suffer from cuts that were announced in the Budget yesterday to public services. There was $1 billion worth of cuts, and, guess what? The Government has spent that money already in the Budget. It does not know where those cuts are coming from. It has not told us or the New Zealand public. Those cuts will come from health and education. That means extra costs on families who are receiving Working for Families and have had their entitlements cut, so that will make their lives even harder when it comes to making ends meet. It will mean that even less money will go into local economies, which will make unemployment worse, and make that backwards move in growth in provincial New Zealand even worse. I would welcome the next National member to tell us where that $1 billion worth of cuts will come from in the public sector, because the money has been spent already. That money has already been spent in the Budget so the Government better hope it can find the money, otherwise it will find itself in a whole lot of trouble. The point is that it makes it so much harder for those families on Working for Families to make ends meet, and it will mean less money going into provincial economies and the economy in its entirety. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000326\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003EPerhaps another name for this legislation could be\u2014and I take this from the suggestion of my colleague Damien O\u2019Connor earlier\u2014the \u201CTaxation (Saving National, not National Savings) Bill\u201D. Essentially that is what this is about. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000327\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221fb8d8db-3e96-49c7-ab1c-b7916a50e30e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fc7a5ea28efc493e8df046506fd98a90\u0022\u003EHon Steve Chadwick\u003C/span\u003E: What a gamble. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000328\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222c1e1ec9fce84b56a88b9e59a9692571\u0022\u003EMOANA MACKEY\u003C/span\u003E: It is a gamble. National gave away unaffordable tax cuts, which everyone said it could not afford. The Government has done nothing for 2\u00BD years\u2014nothing to stimulate growth, nothing to bring New Zealand aggressively out of recession, as we were told we would be 2 years ago. What have we had? We have had a Job Summit that created no jobs, a cycleway to nowhere, and that is it. The Government has cut back industry training, cut investment in science and innovation, and cut all the areas that normally create jobs, and now Government members sit there and wonder why unemployment continues to rise. They wonder why more than 25 percent of young people in New Zealand are unemployed. That is a social disaster waiting to happen. Those young people are sitting there, not in training, not learning, and not in employment. Nothing in this bill will do anything to change that; in fact, it will only make it worse. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000329\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003EI suggest again that maybe this could be the \u201CTaxation (Finally Everyone Can See the Government has No Plan, the Emperor has No Clothes, and this Legislation is Nothing More than a Political Smokescreen) Bill\u201D. If members opposite say this is a savings Budget, why would the first piece of legislation introduced under urgency be cutting KiwiSaver? A savings Budget that cuts KiwiSaver! Even the New Zealand Herald has seen through that piece of spin. Even the New Zealand Herald, which is normally very friendly to National, has seen through that piece of spin. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000330\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002225f8c78b-f301-4aca-a936-366f00a26bc9\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220c2eae417ac346e981c491b515504ab2\u0022\u003ESandra Goudie\u003C/span\u003E: They didn\u2019t even understand the way in which dairy farmers do accounting.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000331\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270dd644d-8bcf-40dc-998a-887d62d24a76\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227cce32ddfd854b0abe097426dbdc9c67\u0022\u003EMOANA MACKEY\u003C/span\u003E: Sandra Goudie says the New Zealand Herald does not understand how the economy works. I am sorry that Sandra Goudie is retiring from Parliament because that woman was heading straight for the front bench, I tell members. Mr Hutchison thought that was funny. I can tell Miss Goudie that the reality is that Labour left this National Government with an economy that the IMF and Bill English said was in an excellent position to weather the recession. We had one of the lowest Government debts in the world. We were in a net positive position. We had one of the lowest unemployment rates in the world. What has this Government done? It has frittered it away because it has had no plan and because it gave away all the money in tax cuts to people who did not need it, who did not spend it in our economy, and who did not use it in a way that was productive for New Zealand. That is why we are in the position we are in.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022 data-id=\u00228a35edfe5108414ca50b98a229779ff7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000332\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00228a35edfe5108414ca50b98a229779ff7\u0022\u003EDr PAUL HUTCHISON (National\u2014Hunua):\u003C/span\u003E Thank you, Mr Chairperson, for the opportunity to speak on clauses 1 and 2 of the Taxation (Annual Rates and Budget Measures) Bill, which deal with the title and commencement. Firstly, the title is totally appropriate to ensure the viability of the KiwiSaver and Working for Families schemes. Secondly, the commencement is also totally appropriate and well signalled to the people of New Zealand, who will have their opportunity to vote on these measures on 26 November, and I am sure they will do so resoundingly.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000333\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EI noted that Moana Mackey asked why the first bill we are considering in the Budget legislation is about adjusting KiwiSaver. I just happen to have here a graph that shows the extrapolation of what would happen if the spending that happened under a Labour Government continued in the same way it had done pre-2008. It shows that Government spending as a percentage of GDP would balloon to 60 percent by 2023. That is the reason why this legislation is part of the Government\u2019s wise, pragmatic, and prudential agenda to ensure the long-term sustainability of the KiwiSaver scheme and the Working for Families scheme, both of which are adjusted in a fair, sensible, and intelligent way, particularly Working for Families. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000334\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EHeather Roy made the point the other day when she asked why she should, as a mother of five, be eligible for significant tax credits when she was on a salary of $125,000. If one looks at the Working for Families adjustments, one sees that they do favour those who are less well-off and they curb the generosity to those earning over the $100,000 mark.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000335\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EI noted that Kris Faafoi talked about the campaign to save KiwiSaver, but little does he realise, or have insight into, where the New Zealand economy has gone under the auspices of the failure of the previous Government to be prepared to save at the appropriate time. I was fascinated to read in the New Zealand Herald this morning that people like Owen Glenn, who is a friend of the Labour Party, say that it is about time that Kiwis started to show individual responsibility. Owen Glenn said that adult Kiwis are given opportunities through generous health and education systems and that they must learn to spontaneously look after themselves for their retirement. Here we have a scheme that, despite these minor adjustments, will still allow the Government to assist with billions of dollars per year, providing generous incentives to help Kiwis save.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000336\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003EClare Curran and Dr Rajen Prasad said that the Government was making it up. Well, the Government certainly did not make it up when we realised that under Labour the number of Public Service staff increased from 26,000 to 39,000, with a decrease in productivity. We saw a doubling of spending in health from $6 billion to $12 billion, with a decrease in productivity; up to 130,000 people were on waiting lists, and those lists were being culled. Of course, in the last 3 years we have seen an enormous increase in productivity and an increase of up to 400 extra elective surgeries per week. The Government did not make up the fact that when Labour increased the top tax rate to 39c in the dollar, the number of loss-attributing qualifying companies flourished throughout New Zealand and totally distorted our tax system.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022 data-id=\u0022e8cc109bb89141d79554d1a1e7da9680\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000337\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e8cc109bb89141d79554d1a1e7da9680\u0022\u003ESU\u2019A WILLIAM SIO (Labour\u2014M\u0101ngere):\u003C/span\u003E Thank you, Mr Chairman. I have been here since 11 o\u2019clock, fighting tooth and nail for an opportunity to speak. I have seen off two other Chairs, and you are the first one who has given me the opportunity to speak in such an important debate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000338\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002253d0976a7bc54288b62c1b6bc716e953\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: Here to help.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000339\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ac6cbbecd0f64c3ca4c25c9080eb908f\u0022\u003ESU\u2019A WILLIAM SIO\u003C/span\u003E: I am happy to make my contribution on clauses 1 and 2 now. The first clause is the title clause of this legislation and the second clause refers to the commencement date of the legislation. Clause 2(2) refers to when the family tax credit and family tax abatement changes will take place. Clause 2(6) refers to the tax credit being cut in half, and I will make detailed references to that in the course of my contribution. But I will reflect a bit before I get into the detail. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000340\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022\u003ESome years ago I met a gentleman from Africa. He worked in the national parks, saving animals\u2014very beautiful animals, including elephants and rhinoceroses. He valued the protection of these particularly large animals. The problem was that there was a lot of poaching. I asked him how people could destroy one of these beautiful animals. He said the poachers used one bullet or one slash, but generally a bullet to the head or a bullet to the heart, and they allowed the animal to bleed to death\u2014they allowed the animal to bleed to death. I will use that analogy in terms of what is happening now with KiwiSaver and the Working for Families tax credits. What we are seeing from this Government in the introduction of its Budget is that instead of giving confidence to those who are in KiwiSaver and to those who are not in KiwiSaver, and instead of giving confidence to families who have children and who are struggling to make ends meet, this legislation destroys every shred of confidence that those families have now and will have in the future. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000341\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022\u003EI draw members\u2019 attention to this cartoon from the New Zealand Herald a couple of days ago. I do not know whether they have seen it. It is a caricature of Bill English and John Key, both of them half-naked in a pool of what looks like dirty water. Mr English is saying \u201CThis is by far my favourite economic stimulus policy\u201D. Mr Key responds \u201CMine too\u201D, and then\u2014this is the quote I want to draw members\u2019 attention to\u2014he says \u201CYou can look awful busy doing bugger-all\u201D. That is what this Government is doing: it is looking busy doing bugger all for the economy, and doing bugger all for the families of our nation. I would suggest that instead of being called the Taxation (Annual Rates and Budget Measures) Bill, the bill should be called \u201CNational\u2019s (Bugger All Budget) Bill\u201D.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000342\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cfdabe42-521a-4dca-afab-3e781731a130\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002267b4ee4c25f64e89aca5441db1178936\u0022\u003EDr Paul Hutchison\u003C/span\u003E: I raise a point of order, Mr Chairperson. I just seek your help in terms of describing whether that emanation from the member for M\u0101ngere, which was repeated on many occasions, was actually parliamentary.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000343\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022036934562d3b4cd195da91d074bbb2dc\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I thank the member for his intervention. To use the word that the member used in describing the title of a bill is unacceptable, so I tell him not do it again.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000344\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002226c49c07d5d44bb0815214e82688e86f\u0022\u003ESU\u2019A WILLIAM SIO\u003C/span\u003E: Thank you, Mr Chairperson. I was merely quoting from the New Zealand Herald article here. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000345\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022\u003ELet me take members back a bit. For 9 years when Labour was in Government, we operated in surplus. Why? Because we had a Minister of Finance who knew how to manage the economy and who had a plan. He was not fixated on one particular part of the economy, but had an overall plan. We had a fair tax system. We had a fair tax system in which everybody from those on low incomes to those on high incomes paid their fair share\u2014from 19.5 percent for those on low incomes to 33 percent for those earning between $40,000 and $60,000 and to 39 percent beyond that. We had a targeted approach to ensure that we invested in education, to ensure that we invested in early childhood centres, and to ensure that we invested in health. When the overall high cost of food began to loom, we introduced Working for Families, because that was a way to help working families through the difficult times. When we recognised that there was a need for savings, we introduced KiwiSaver. The point I am making is that both Working for Families and KiwiSaver are so important to this nation. The evidence is the $1.7 million people who have signed up to KiwiSaver.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000346\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002266495ee5d046415ea9d93d9e78d97a22\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: I just remind members that we are on clauses 1 and 2, and this is a peroration about what has happened in the debate. It is not an opportunity to bring new material into the debate. We are talking specifically about a summary of clauses 1 and 2 in relation to the title and the commencement.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022 data-id=\u00229f1adb3c51bc46d3b148bbb23bafbb66\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000347\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229f1adb3c51bc46d3b148bbb23bafbb66\u0022\u003EDAVID SHEARER (Labour\u2014Mt Albert):\u003C/span\u003E I will start by responding to what the Minister in the chair, the Minister of Revenue, was talking about in relation to his response to us saying that we were making it up. I will point out a couple of figures that, of course, we all agree on in this Chamber, and that is that in a matter of 3 years we have gone from a $5 billion surplus to a $16.7 billion deficit. Nobody would disagree with that. The only thing that people would have difficulty with, I think, is understanding how on earth that actually happened. How did we go from a $5 billion surplus to a $16.7 billion deficit in the space of 3 years? People on the other side will say \u201CWell, actually, it\u2019s all about the earthquake.\u201D Well, actually, even by Treasury estimates, less than 10 percent of that deficit is made up by the Christchurch earthquake. The deficit will also be described as being because of the global financial crisis, but that cannot in any way account for the degree of difference between $5 billion and $16.7 billion. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000348\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EA lot of the deficit can be attributed to mismanagement, and the changes that this Government has brought in, and that includes the changes to the taxation system. The changes to the taxation system included borrowing for the latest tax cuts. I would like to hear the Minister comment on that, because that is one of the things that Treasury came up with in the Budget statement last year. That is another point: a lot of the discussion today has been about the Government\u2019s future projections. I wonder, when we talk about making up figures, whether we can actually believe some of those projections. It has been commented on before that the difference between, for example, the forecasts of the Minister\u2019s ministry, which is the Inland Revenue Department, and Treasury forecasts, are grossly different. Who do we believe here? I would be more tempted to believe the Inland Revenue Department\u2019s forecasts, simply because its forecasts seem to be founded on a greater degree of certainty than Treasury\u2019s. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000349\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EI have looked at the Treasury figures that Standard and Poor\u2019s talked about. Why Standard and Poor\u2019s goes along with it I do not know. Certainly, the Prime Minister has led us to believe that this Budget is all about satisfying Standard and Poor\u2019s. But Standard and Poor\u2019s also said that the Budget foresees an operating deficit of $16.7 billion, or 8.4 percent of GDP, yet only 6 months ago the Half Year Economic and Fiscal Update was forecasting an operating deficit of $11 billion, or 5.5 percent of GDP. Yet Treasury forecasts, looking out for the next 3 years, are extraordinarily rosy. My question asks why on earth we are prepared to accept those forecasts on which this Budget is founded. Why are we prepared to accept those figures? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000350\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EThe other thing that I will bring up goes directly to the purpose of this bill, and that is KiwiSaver. We have had many, many speakers talking about KiwiSaver and saying that it has been halved, or gutted, yet the Minister in the chair said just a week or two ago on Q\u002BA that he needed to make sure that \u201CKiwiSaver survives and is sustainable and is politician-proof in the future\u201D. And he is right.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000351\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003ESitting suspended from 1 p.m. to 2 p.m.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000352\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a7f03479afeb483f8031c62a6924e2ce\u0022\u003EDAVID SHEARER\u003C/span\u003E: Before the lunch break we were discussing the certainty of KiwiSaver. On the assumption that at least the return would be equal or better over a period of time, 1.7 million people put their money into KiwiSaver. I made the point that on Television New Zealand\u2019s Q\u002BA programme last week the Minister of Revenue, Peter Dunne, said that making sure that KiwiSaver survives, is sustainable, and is \u201Cpolitician-proof\u201D in the future is necessary, but we have to make some changes now. It seems a bit of a contradiction. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000353\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EI would like to conclude this point because I think it cuts to the heart of what we are trying to say in the Taxation (Annual Rates and Budget Measures) Bill. In the course of the short history of KiwiSaver, we have gone from a situation in which one regime brought it in to one in which the National Government cut the employer contribution. Now that employer contribution has been brought up slightly, but the tax rebate has been slashed by the Government. If that is not political tinkering and meddling, then I am not quite sure what is. I believe it really does make us think and contemplate the future of KiwiSaver, and the confidence New Zealanders should have in putting their money into an account, an investment, or a system of savings when it will be meddled with by politicians for political reasons. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000354\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EI look at Mr Dunne\u2019s statement on Q\u002BA and I wonder\u2014I would like to hear from him on exactly this matter\u2014how he can square that statement that KiwiSaver survives, is sustainable, and is politician proof, but we will have to make some changes now. That seems to be a contradiction, because we have tampered with it twice already in the course of this Government. The Minister, I would imagine, as a member of the previous Government as well probably had something to say on the formation of KiwiSaver, what it should deliver, and how it would impact on savings for New Zealanders. Perhaps he could relate to this Government something of the advice he gave the last Government on the establishment of KiwiSaver and whether he thought that it would need meddling with and changing at that point in order for it to persist throughout its life. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000355\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EWe are looking at a real problem with retirement, and a baby-boom section of the population who are coming to a period when they will be collecting record amounts of superannuation and impacting on the economy in terms of their health and welfare. Other speakers have mentioned other means, but KiwiSaver is one way of ensuring that there will be some security in the economy. For it to now be meddled with means that it will erode the confidence many New Zealanders have in KiwiSaver in the future. I would not be surprised if, as a result of this Budget, we had fewer New Zealanders taking up KiwiSaver, fewer people being involved in it, because their confidence in it and the confidence that politicians will not simply meddle and play around with it has been shattered. They do not have confidence any more that that will not happen. They would rather do the thing we are trying to get away from, and that is put their money, if they have any spare, into the property market, because at least there they can see bricks and mortar\u2014that sort of thing. That is exactly the situation we do not want, but, in effect, it is exactly what we are incentivising those people to do, to put their money into less productive areas of our economy rather than putting it into KiwiSaver. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000356\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dfa851f0-ef7b-4834-bc41-1b3b645a3495\u0022\u003EIf we look at this trend in the long term, I sincerely hope this does not happen because\u2014if members can believe it\u2014the projections out over the next 20 years will put about $60 billion of savings into our economy that could be used for productive enterprises. For the political expediency of the short term we are undermining the ability of KiwiSaver to persist and have the confidence of New Zealanders through time. It is so fundamental. When I look at my kids I would like to think they have an opportunity to save early and reap the rewards later on, not to have those rewards undermined by the political whims of the day. Frankly, this bill is a political whim. It is politicians playing around with our future, and it should not happen.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u002208cc7ddffe854bd59bdbcb994bdb3cfe\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000357\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002208cc7ddffe854bd59bdbcb994bdb3cfe\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E We are debating the title and commencement clauses of the Taxation (Annual Rates and Budget Measures) Bill. I will talk a little about the commencement date. Of course, Mr Key said he would not change KiwiSaver. That was one of the platforms he campaigned on in 2008. He also said he would not increase GST, but he did. At least with this change he said he will go to the public to seek a mandate. He has made that absolutely clear, and he has put his plan for growth on the table. Mr Key has said that his plan for growth includes cutting KiwiSaver. I suppose the thing that annoys me a little bit about that\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000358\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229a8b5453f58944da8aac00a0422cfef1\u0022\u003EHon Member\u003C/span\u003E: A lot.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000359\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220aef4c47c2354b9491d1500a4f8883eb\u0022\u003ESTUART NASH\u003C/span\u003E: Actually, it annoys me a lot. There are 1.7 million people in KiwiSaver, and the reason they invested in KiwiSaver is that we suggested they do so. When I say \u201Cwe\u201D I mean members of Parliament: Michael Cullen; members of the National Government, actually; and the honourable Minister of Revenue himself. We went out and told New Zealanders that they needed to save more, that this country was in trouble because we have huge net debt. We have pumped a lot of money into housing, into the non-productive sector, so we need to save more. We told New Zealanders that we do not know what will happen with superannuation in time. We told New Zealanders that if they really wanted to make sure they could retire with dignity and live with respect in their older years, then they needed to put some money away for a rainy day, for their retirement. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000360\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThis is what New Zealanders were told. This is what we advised them. We set up a scheme that would allow this to happen. It was quite generous. If people invested, they were given a carrot of $1,000, which is not an insignificant amount of money. Most New Zealanders realised this was a good deal. We figured that most New Zealanders needed a sweetener, so we gave them $1,000\u2014there were some nice incentives there\u2014and they took this up, because New Zealanders by and large are pretty well-engaged people. They are intelligent and they know a good deal when they see it, but they also know that their future is important, so 1.7 million New Zealanders invested in KiwiSaver. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000361\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe really disappointing thing with this bill, which we are debating under urgency, is that part of the incentive to invest in KiwiSaver has been taken away. I cannot understand the rationale behind that change, because New Zealanders are doing what we told them to do, which was to save, and we are taking away some of the incentive. In fact, there was a bloke on the television this morning, an ex - All Black, who felt aggrieved by this. He said he was an ex-National voter; he voted for National in 2008, but he felt that John Key and the National Government had broken a contract they had signed with voters. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000362\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThere are a lot of New Zealanders out there who get this\u2014it was a simple message to stop investing in houses, and to stop spending on plasma TVs and other consumables because that, of course, drove up international debt, increased interest rates, and was not good for our economy. It is one of the reasons we are so indebted. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000363\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe Labour Party recognises that New Zealand has issues in terms of debt. We know that the Government\u2014any Government\u2014cannot simply keep borrowing $380 million a week. We accept that, but I tell members that this legislation is not a plan. This legislation does not set out a plan for how to address that. If a plan is cutting KiwiSaver, then God help me. This is not a positive move to drive economic growth; it is a negative move. This is not a positive way forward for this country. It is taking us backwards. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000364\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EAnother point we said was so important about driving economic growth in New Zealand was the depth in our capital markets. KiwiSaver was beginning to achieve that. What we absolutely need\u2014I thought the Prime Minister understood this, and I thought the Minister of Finance understood this\u2014is a pool of money that can be invested in New Zealand, on behalf of New Zealanders, to grow the pie. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000365\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ESomeone was talking before about the scheme that was put in under Norman Kirk. It was put in by Sir Roger Douglas. Sir Roger Douglas understands the need to save, and it does not come more right wing in this Parliament than Roger Douglas\u2014well, it did; Don Brash sits there every now and again. Sir Roger understood the need to save. Even Sir Roger put in a scheme, and if that scheme was still going now our economy would be completely different. But that scheme was axed by National. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000366\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI look at the state of our economy at the moment, with $16 billion worth of debt, and I cannot help but wonder what it would look like if 40 years worth of saving had accrued. As sure as eggs, we would not be facing a $16 billion deficit. I tell members another thing. Mr Key laid it out\u2014he said: \u201COK, we will see you on the campaign trail.\u201D This legislation is about a mandate for asset sales and a mandate for KiwiSaver. This election will be about a mandate for this bill. So this is quite important legislation\u2014it is a small piece of legislation, but it is very important legislation. The fact that it is being rushed through under urgency makes no sense to me, because there is still enough time to take this through before the election. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000367\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EAs I said, all we have to do is look at the commencement date. There is no urgency with this, but the consequences are huge for all New Zealanders. Perhaps we could call it the \u201CTaxation (Stealing Kiwis\u2019 Dreams) Bill\u201D. In a way, that is what is happening. The Government is taking away the dreams that members of Parliament handed out to people. We painted a vision to all New Zealanders that if they invested in KiwiSaver, there would be a nest egg there for them. In a way, we are taking that away. I admit that we are not taking all of that away, but let us be honest. If we take an extra $10 a week for 52 weeks a year for the next 20 to 30 years, that adds up to a significant amount of money. To take it away is, in a way, taking away the dream, stealing a little bit of that dream that New Zealanders thought we had laid out for them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000368\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThat is why I come back to the bloke in Eltham, who said the Government had broken a contract with him. I would also like to remark on the words that Mary Holm said. I very much doubt that Mary is a Labour supporter. She might be; she is certainly sensible. She understands economics and finance. She said that the Government has taken an excellent scheme and made it only very good. This scheme has gone backwards. In fact, I think the vast majority of political commentators who understand the woe that this economy is in have said that this is a step backwards. It not a step forward. It is not a plan for growing this economy. This legislation is not a plan. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000369\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EMr Key said to Phil Goff \u201CI will see you on the hustings, Mr Goff.\u201D I cannot wait for that. I cannot wait to stand in a public meeting with Mr Tremain in Napier as he explains to the people of Napier why this legislation is good, and why it was necessary to take $10 a week off the people of Napier. I am also keen to hear Mr Tremain explain in a public meeting why the Government has taken $120 million out of the Hawke\u2019s Bay economy in terms of Working for Families, because that is what this bill does\u2014it takes $120 million. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000370\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWe have to remember that Working for Families did not go to the wealthy. It went to the people who had been identified as needing a little bit of a hand up\u2014not a hand out, but a hand up. They were people who worked and had children, and the Government has taken away a portion of that from the Hawke\u2019s Bay economy. That will hurt one of our most depressed regions. I would argue\u2014and I would argue with my colleagues on this\u2014that Napier is the best city in the best country in the world, but this steals a little bit out of us, because the people of Napier will lose some money. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000371\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThere are more shops closed in Napier now than there have been for 10 years. This bill takes money out of the Napier economy. Working for Families gave money to people who would spend money. That is one of the reasons why the Labour Government instigated Working for Families. It realised that people who were working and bringing up children needed a little bit of a hand up so they could continue to live a decent lifestyle, which we demand for all New Zealanders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000372\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThis is why I am so disappointed with this legislation, and this is why it is such a shame that it could not go to the Finance and Expenditure Committee. I am on that committee, and Mr Foss is the chair. We could have heard all the arguments for and against this bill and made a reasoned, rational decision, then presented it back to the House. I suspect the reason why it has not gone to the select committee and why we are passing it under urgency is that the Government knows the response. The Government knows that every single Kiwi would say no\u2014every single one of the 1.7 million New Zealanders who have invested in KiwiSaver.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022 data-id=\u0022a8a87907716143b8bcbb8df1ccb63ae6\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000373\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a8a87907716143b8bcbb8df1ccb63ae6\u0022\u003EHon RICK BARKER (Labour):\u003C/span\u003E I will take a call in this debate and say that the National Government should hang its head in shame over this legislation, the Taxation (Annual Rates and Budget Measures) Bill, and that the bill is entirely consistent with the philosophy, the practice, and the orthodoxy of National, which is to cut, chop, and gut. As Mr Nash has reminded us, National chopped into the superannuation savings scheme that was put in place by Labour in the 1970s. National railed then against that national superannuation scheme, put in place by Norman Kirk, on the grounds that it would buy up New Zealand. That is what National said. National said we could not have Kiwis owning New Zealand. National said that such superannuation schemes would get so big their funds could buy up New Zealand\u2014New Zealanders would own their own history, and we could not have that! So Muldoon got rid of it. He got rid of it on the basis of a canard. The canard was that New Zealand could continue to afford, out of taxation, to pay people 80 percent of the ordinary average wage from the age of 60 until they passed on. Every newspaper editor in New Zealand knew that was a lie. Everybody knew that it was a lie, but Muldoon sold it on the basis that he would give back to every person their personal contributions and their employer\u2019s contributions.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000374\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003EI was a worker in those days; I was in the scheme. People at the place I worked at figured out that if they got back their contributions, and the boss\u2019s contributions, they could buy a new stove, a new fridge, or a new something else. They all spent the money. When National was elected in 1975, Muldoon, through his own motion, stopped contributions. Muldoon was taken to the High Court and the Court of Appeal, and he was found to be the only person who, as a Prime Minister, had acted ultra vires. It was a landmark decision that is now read all over the world. Muldoon, of his own hand, both took away and exercised the power of this Parliament. The court found him wrong. The court did not make him change the legislation, because it knew he had the power to change it, but the court said he was wrong. Muldoon was not wrong only constitutionally and legally; he was wrong morally.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000375\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003EIf that superannuation scheme had stood, we would not have had to sell the Bank of New Zealand because the superannuation scheme itself could have bought it. We would not have had to have sold many other assets. because the superannuation scheme could have bought them and owned them. More important, the New Zealand superannuation scheme could have bought assets all over the world to make New Zealand a richer country. Instead, we have the legacy of Sir Robert Muldoon and National\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000376\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228b76d174680045a9b9ec423a02441f08\u0022\u003EMichael Woodhouse\u003C/span\u003E: I raise a point of order, Mr Chairperson. This is all very interesting but it certainly does not go to the title of the bill. I wonder whether the member could be brought back to the title.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000377\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226522bba0e9ca450fbd7a882434ee6ddc\u0022\u003EThe CHAIRPERSON (H V Ross Robertson)\u003C/span\u003E: I thank the member for drawing that to my attention, but the member who was speaking has a right to refute, in debate. I am sure he will come back to the title very shortly. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000378\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002226a6ea84deb8453aa0b72a8786edc920\u0022\u003EHon RICK BARKER\u003C/span\u003E: That is a sign that National members feel very uncomfortable to hear their history told to them. National\u2019s history on superannuation is dismal and grim, and a legacy of shame.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000379\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003EWhat happened because we did not have the superannuation scheme? Australian superannuation schemes came to New Zealand instead. They bought up our banks and bought up all the rest of it, because we did not save. But National, having made such a travesty out of it, then went on and committed a further one on superannuation. National went to the election and said \u201CNo ifs, no buts, no maybes \u2026\u201D\u2014it would not put a surcharge on superannuation funds. What happened? The National Government not only put on a surcharge; it put up taxes. So people said there was a complete and utter disincentive to save for their retirement, because even if they did, the Government would tax if off them. That caused a proliferation of trusts in order for people to hide and shelter their income, and get it away from taxation. That is what happened. The third travesty that will be inflicted upon\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000380\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d4498bf4f96f45a19c966d6acdb9b343\u0022\u003EJo Goodhew\u003C/span\u003E: Mr Barker, the Chair is saying to you\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000381\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223d12256872b842dca5d1571c7ddb296b\u0022\u003EHon RICK BARKER\u003C/span\u003E: If the Chair wants to speak to me, the Chair will speak to me directly by getting to his feet and taking the call.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000382\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003EI was just about to say that in the Taxation (Annual Rates and Budget Measures) Bill we see the third crime by the National Party against superannuation in New Zealand. National is following its philosophy of cut, gut, and chop. Whatever it gets holds of, it says: \u201CCut it, chop it, get rid of it.\u201D That is what it is going to do with the legacy from our grandparents. Our grandparents built dams all over this country as a gift to the next generation. National is going to sell them off so it can go and spend the proceeds. That is what it is going to do. That is a part of National\u2019s plan. It is also going to chop into superannuation again. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022 data-id=\u0022888bbe92bf094bb4a4ddeb92456b2e46\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000383\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022888bbe92bf094bb4a4ddeb92456b2e46\u0022\u003EJO GOODHEW (Junior Whip\u2014National):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022 data-id=\u0022f50414ce224d4ede94b0536fb7fe05d9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000384\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f50414ce224d4ede94b0536fb7fe05d9\u0022\u003EHon DAVID CUNLIFFE (Labour\u2014New Lynn):\u003C/span\u003E It is incumbent on us at this stage of the debate, as we review the title and commencement of the bill, to try to find a phrase or a word that most aptly encompasses the real meaning of the bill for New Zealanders. Though I am never a believer that politicians should be driven by the media, it just so happens that the media have been helpful to us on this occasion, so I thought I might bring forward to the Committee some titles that have been suggested by the ladies and gentlemen of the press. How about the \u201CTaxation (Fairytale of High Hopes on a Frayed Thread) Bill\u201D, courtesy of the New Zealand Herald? That is not a bad start. How about the \u201CAnnual Rates (Budget Lacks Job Creation Plan) Bill\u201D, courtesy of the National Business Review, I believe? How about the \u201CAnnual Rates (Budget Hopes Rest on Shaky Foundations) Bill\u201D, from the editorial in the New Zealand Herald?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000385\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229d7f1db8e54a4d0ca77b89dcb7670c5c\u0022\u003ESue Moroney\u003C/span\u003E: Ouch!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000386\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221826a289019a46f1a028cd802a188b1e\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: Ouch! Or, from the Dominion Post, we have \u201CBudget 2011: Battlers Asked to Give Back Bill\u201D. Or, again from the New Zealand Herald, how about the \u201CShaky Quakey Budget Bill\u201D?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000387\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002233932ad6dbd849b0a54cab5ff4f93143\u0022\u003ESue Moroney\u003C/span\u003E: Ouch!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000388\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221f2cc8e1e9864029a61151943f1dba58\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: The \u201CShaky Quakey Budget Bill\u201D. It seems that the ladies and gentlemen of the press might have cottoned on to the fact that a few of the assumptions or a few of the fiscals upon which these tax rates stand might be just a little bit exaggerated. That might have something to do with the fact that Standard and Poor\u2019s, no less, today announced to the world that they are not removing New Zealand from negative credit watch. Why? It is because they do not believe the numbers, either. They do not believe the numbers, any more than the editorial writer of the New Zealand Herald who said: \u201CThis is a bunch of old codswallop.\u201D Now everyone is scratching their head and wondering what happened at No. 1 The Terrace that this pile of rubbish got printed. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000389\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EBut there is more. How about these headlines in respect of the KiwiSaver components: the \u201CTaxation (Pay More to Save the Same) Bill\u201D, or the \u201CTax Credit Reduction Takes all the Gloss off Savings Bill\u201D, or the \u201CExperts Label KiwiSaver Move a Tax Grab Bill\u201D? Those are a few of the headlines on KiwiSaver. How about these ones for education: the \u201CStudent Loans Cuts Discriminatory Bill\u201D, the \u201CLoans Cuts for Older Students Attack Bill\u201D, the \u201CBooster Doesn\u2019t Cover Inflation Bill\u201D, or the \u201CDog Ate My Early Childhood Education Bill\u201D? They all make a very good set of headlines.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000390\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002290ea1538-43e8-4257-bd80-df3ccd1e5f27\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225286fe55304d4e6ebe35ce9c6641382e\u0022\u003EKris Faafoi\u003C/span\u003E: Even the dogs are hungry!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000391\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220784a939871743768d507dfd42c4853f\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: No, it is not all bad news, colleagues. It would be unfair of us to portray that this is all bad news. There are certain very deserving constituencies that have done extremely well out of the Budget. How about the \u201CTax Breaks for Rugby Bodies Bill\u201D? That is an excellent cause, if ever there was one. We could have the \u201CDo your Bit with the Quake Bond Bill\u201D, or how about the \u201CMiddle Income Families Pushed Over the Edge Bill\u201D from Stuff\u2019s editorial? This is one of my favourite ones: \u201CThe Lack of Courage and Vision Bill\u201D, which is something that is, of course, not a contravention of the Standing Orders, because it is not my own opinion; I am merely quoting from a newspaper headline. I will say it again, from the Dominion Post, the \u201CLack of Courage and Vision Bill\u201D. Ouch! What about the \u201CEconomists Say Surplus Contingent on Recovery Bill\u201D? That was a headline in the National Business Review, which casts certain aspersions in that direction.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000392\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002206751d670357442fa7e136ef07225d39\u0022\u003ESue Moroney\u003C/span\u003E: Ouch!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000393\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022da32bf4f31564502bd3d7186165faca2\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: Ouch! \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000394\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225db0a23e-1579-44c6-9194-76e34cf5ae99\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002214ed251410074e738827a7fd560214fa\u0022\u003EDr Rajen Prasad\u003C/span\u003E: That must hurt.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000395\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220c6314bf93c94ed99518c26ad1d0c70b\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: It does hurt. When even the National Business Review starts kicking holes in a Budget big enough to drive a super-tanker through, one knows one has problems. I ask my colleagues why it might be that certain august denizens of the financial sector are themselves beating the crap out of the Government over this bill. Well, there may be certain assumptions built into these financials that could be, just as they say, a little bit shaky quakey. Here are a few of the shaky quakey assumptions. There is a $3.8 billion difference between the revenue forecast from the esteemed gentlemen at No. 1 The Terrace in Treasury, and the equally esteemed gentlemen at the Inland Revenue Department, who are saying: \u201CNo, no, we do not believe your growth numbers, either. We could not possibly collect that much tax. How about $4 billion less?\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000396\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225db0a23e-1579-44c6-9194-76e34cf5ae99\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e8501d8b613c4ad3a3e7c75c3f0c3620\u0022\u003EDr Rajen Prasad\u003C/span\u003E: Which one did they take?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000397\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226ed195e1d577407fa166090fa6da7270\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: Which one does the member think the Government took? Does he think the Government took the more prudent, the more fiscally responsible lower numbers? No, it took the higher, more exaggerated, pie-in-the-sky numbers from Treasury. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000398\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EWhat about the \u201CMissing Billion (Dog Ate the Department Concerned) Bill\u201D? There is a billion dollars of supposed savings here\u2014$980 million to be precise\u2014that nobody has the faintest idea where they are coming from. The Government has not even narrowed it down to which department. Is it health, is it education, or is it superannuation? It has stopped pre-funding that; maybe it will dig back out of it. We do not know, because they have not ascribed it. For the first time in New Zealand\u2019s history a Government has been able to get away with an unallocated saving. Do members know what Trevor Mallard, a former Associate Minister of Finance in days gone by, would have done to a junior Minister who proffered up savings without saying what output class they came from? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000399\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225db0a23e-1579-44c6-9194-76e34cf5ae99\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002253182252ae2a4afaa306850dd150405a\u0022\u003EDr Rajen Prasad\u003C/span\u003E: Not pretty.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000400\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224aaff10e04c94e5a9164956273f972d0\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: It would not have been pretty. Mr Mallard\u2019s jaws would have been locked around their ankles and they would have been sent scampering to their office to have another think. But this is worse than that; the Government does not even know which Minister it is. Might it be coming out of Mrs Collins\u2019 next prison? A small dent in the supply of sow crates for prisoners, perhaps? Who knows. Might it be the Minister of Agriculture? Might there perhaps be a small reduction in the tax breaks for farmers in future Budgets? Who can tell, because we simply do not know. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000401\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThere is a billion dollars missing, but why did Treasury sign off on this rubbish? That is what is what Standard and Poor\u2019s wants to know. Kyran is going to be back on the hunt for the ladies and gentlemen of Treasury\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000402\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022493aab0eb6c6405096ed6fe837c149dd\u0022\u003EStuart Nash\u003C/span\u003E: Is that why Whitehead is leaving, do you think?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000403\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002250214727bd894406abf41729b8557d6e\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: I do not think that would be the reason; I think it is more likely to be a gutsful of the National Government. But, anyway, here is the doozy. Here is what the commentators are all really concerned about, and it is not the missing billion dollars; it is not the $3.8 billion. A taxi driver said to me on the way to a meeting this morning: \u201CAre they really going to create 177,000 new jobs? How?\u201D. I said: \u201CNo, and no one knows.\u201D They have no idea, because there has been a misprint in this book, the Executive Summary for the Budget documents. There is a whole chapter missing in every one of the ones that has been printed, sadly. It is the chapter on growth strategy. It is the economic development chapter. It has just gone, mysteriously, from every single volume. There is no growth plan. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000404\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EBut, 177,000 new jobs are magically produced by the same Hollywood pixies. Do members know what members on this side of the Chamber think it is? We think that perhaps this title should be the \u201CWarner Bros Wrote the Budget Bill\u201D, because it might be a little fringe benefit for the Hobbit-helpers over there. The Hobbit-helpers got Warner Bros to write the Budget, because it is a work that belongs in the fiction department of the library, not the non-fiction department. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000405\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EI will return to the title of the bill. The title could be any one of the headlines in editorials that we have read out for the delight of you, Mr Chairperson, and for the public\u2019s delight this morning. When the bubbly from the seventh floor of the Beehive ran out late last night and the hangover set in this morning, one could see that the Budget was a bit like the \u201Cbeer-goggles Budget\u201D: she looked great last night, but when one wakes up in the morning, one sees that all it is is a blue hump of cardboard with rubber numbers in it. Go figure.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000406\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022161764016ea642c383f9e991a570471a\u0022\u003EMichael Woodhouse\u003C/span\u003E: Just add a little bit more detail to that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000407\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002230238d7c11de410d95d5cb505e7d49c3\u0022\u003EHon DAVID CUNLIFFE\u003C/span\u003E: I thank Mr Woodhouse. How long did the member stay at the Minister of Finance\u2019s party last night? That is what we want to know. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000408\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EI can tell members that when I was doing the rounds of the press gallery this morning, as part of my constitutional duty to spread the good word, the journalists were none too impressed, because they had started reading the document and, like us, they were wondering how the numbers add up. I say to the Government that whatever it calls the Budget, and perhaps it should be called the \u201CLipstick on the Pig Bill\u201D, it does not matter what colour of lipstick the Government puts on it, at the end of the day it is still a pig.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022 data-id=\u00221526ef1fbb224a5a834c7cfd133654c9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000409\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00221526ef1fbb224a5a834c7cfd133654c9\u0022\u003EMICHAEL WOODHOUSE (National):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022 data-id=\u0022042f4fc5824448a4aad5e5f49d350cc8\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000410\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022042f4fc5824448a4aad5e5f49d350cc8\u0022\u003ESUE MORONEY (Labour):\u003C/span\u003E Here we are on a Friday in Parliament under urgency debating the title and commencement clauses of the Taxation (Annual Rates and Budget Measures) Bill. I know the Government is ashamed of what it is doing in this bill. How do I know that? Because Government members have not even been brave enough to say in the title of the bill what it is doing. The title of the bill does not make any reference to KiwiSaver. Who will save KiwiSaver? It will not be that Government; it could be only a Labour-led Government. The title of the bill does not mention Working for Families. Government members are ashamed of what this bill does. The two things this bill does is cut and gut KiwiSaver and Working for Families, yet would Government members dare mention the name of those two schemes in the title of this bill? No, they have not been able to bring themselves to do that. They have hidden the cuts to those schemes in a title that could mean 101 different things. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000411\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003EIt will be, if passed by this Parliament, the Taxation (Annual Rates and Budget Measures) Act 2011. I challenge members opposite to take a call to explain why they would not even mention KiwiSaver or Working for Families in the title of the bill, because that is what it is all about. It is all about taking the knife to those two initiatives that came from this side of the Chamber. They came from Labour and they have made huge differences in the day-to-day lives of hard-working New Zealanders. Government members are sitting on the other side of the Chamber knowing that the Prime Minister is getting an extra $1,000 every week in his back pocket from the tax cuts in last year\u2019s Budget, and they will not contemplate looking at that, yet here they are having a go at hard-working New Zealand families. Those families have a day-to-day, week-to-week struggle just to make ends meet. This Government comes along with this Budget and the only thing it can think to do is disadvantage those people even more by moving up thresholds for Working for Families payments, meaning fewer families are eligible for those payments. The Government is also giving people a disincentive to save for their retirement. How mean is that? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000412\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003EI will talk about the commencement date of this bill. Much of the bill\u2014in fact, five parts of the bill\u2014does not come into force until 1 April 2012. That will be a pretty interesting day: April Fool\u2019s Day. It is another April fool\u2019s joke from this Government. We should note that the date is next year\u20142012. So what is the urgency for? Why is it that we are in Parliament today pushing through taxation legislation that will not even hit the ground running until 1 April 2012? It is not as if we have to do it quickly so that people cannot adjust the way they have their money structured in order to take advantage of the changes, as they were announced just yesterday in the Budget. None of those things matter when it comes to this bill, so I ask why we are debating it under urgency. The commencement clause makes it quite clear that there is no need for urgency to debate this. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000413\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003EI think my colleague Stuart Nash was onto it. I think the only reason there could be urgency for this bill was so there could be no select committee process. We are in urgency so that there could be no select committee process and Government members would not have to listen to the response they knew would come from hard-working New Zealanders. The Government did not want to hear from ordinary, hard-working New Zealanders about the impacts on them of cuts to Working for Families. Government members do not want to hear\u2014and they are not listening\u2014the impact on people who really do want to save for their retirement. Those people had a helping hand in that from the Labour Government, but they have had it stripped away from them by the National Government. The Government did not want to hear the stories from those people of how this bill will hurt them and their ability to save. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000414\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003EThat is the only reason I can think of in terms of why we are in urgency to consider this bill, when it does not come into being until 1 April 2012, on April Fool\u2019s Day. Here we are on a Friday in Parliament with the Government thinking that it is urgent to strip away people\u2019s rights, without first even listening to what those impacts will be. So there will be no select committee process. There will be no opportunity for New Zealanders to tell that Government about the week-to-week struggle they have and how this Budget will continue to hurt them.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022 data-id=\u0022cfd85ff2ef6a4af1ab160ba0a43a7920\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000415\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00225f1453f8-c44e-4ce6-b699-64d600322276\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022cfd85ff2ef6a4af1ab160ba0a43a7920\u0022\u003ECHESTER BORROWS (National\u2014Whanganui):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022 data-id=\u0022cb0c6c90cf8a45018a03a47ad414e2f9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000416\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022cb0c6c90cf8a45018a03a47ad414e2f9\u0022\u003ESU\u2019A WILLIAM SIO (Labour\u2014M\u0101ngere):\u003C/span\u003E We have noticed that this Government called this session of urgency but has spent all its speaking opportunities trying to close down the debate on the Taxation (Annual Rates and Budget Measures) Bill. That makes no sense whatsoever. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000417\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022\u003EI follow on from my colleague Sue Moroney by saying this debate is about cuts and the removal of opportunities for our country to save. It is about gutting KiwiSaver and gutting Working for Families. I say to members on the other side of the Chamber that I hope they are prepared to stay overnight, because they called this urgency and we will keep holding them to account today. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000418\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022\u003EWe are talking about clauses 1 and 2. The bill should be called the \u201CFamilies Who Are Struggling Are Still Struggling Bill\u201D, because despite the Government\u2019s rhetoric that the Budget is helpful to the general public, the fact remains that those who were struggling are still struggling today. Cuts to KiwiSaver and cuts to Working for Families will not help those people, at all. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000419\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022\u003EWe could call the bill the \u201CFamilies Who Want to Save Will Now Have Second Thoughts Bill\u201D. KiwiSaver was designed to encourage people to save. Incentives were there to promote and encourage people to save. What did we have? We had 1.7 million people saving under the scheme. But what will this legislation do? It will discourage those people, because instead of receiving what they were entitled to under the previous legislation, we are now asking them to have their support cut in half. We could also call this bill, as my colleague David Cunliffe said, the \u201CMaking It Harder for Kiwis to Save Bill\u201D. Is that not what the Government is doing here? It is cutting support for people to save, so the \u201CMaking It Harder for Kiwis to Save Bill\u201D is probably a better name. It could also be called the \u201CPay More to Save the Same Bill\u201D. Is that not what the New Zealand Herald called it? That is a good name for it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000420\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022\u003EIt could be called the \u201CBroken Promises Bill\u201D, because many of the public would recall that prior to the 2008 election Mr Key made promises that no cuts would be made to KiwiSaver and Working for Families. What did we get after National won the election in 2008? Tinkering. What did we get in 2009? More tinkering. What did we get in 2010? Another tinkering. What do we now get in 2011? Two major tinkerings. That is what I meant. The way to destroy something good is to allow it to bleed. This Government is allowing things to bleed by tinkering here, tinkering there, sitting on its hands, and doing nothing about the overall economic plan except focusing people\u2019s attention on the debt we have. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000421\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022\u003EThe other issue is that according to its plan we are supposed to come out of debt a year earlier. Instead of a $16 billion deficit, somehow, miraculously, we will have an $8 billion deficit, one year before the previous estimates. If the estimates were wrong in 2009 and 2010, how the heck can we expect the Government to have it right this time? How the heck can we expect the Government to miraculously create 177,000 jobs? We have 155,000 people still unemployed and the Government\u2019s own projections show there will be a 4.5 percent unemployment rate right until the year 2025. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000422\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022\u003EWhere is the support the Government keeps talking about while it cuts money from initiatives that are there for the sake of this country? I want the Minister of Revenue, to answer. Could he please answer yes or no whether there is a cut of $2.6 million from KiwiSaver\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000423\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b2567d3e-a09c-47b4-bd50-2f5bb4049762\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022606dab38cdfa49f9b26b53a67f67ddc5\u0022\u003ESue Moroney\u003C/span\u003E: Billion.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000424\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b398827c-6bf5-403e-90dc-ff03205302a5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022869c94c3dcca4d89acbd40c009454f72\u0022\u003ESU\u2019A WILLIAM SIO\u003C/span\u003E: Billion. Can he also tell us whether there is a cut of $448 million from Working for Families? The Minister is not saying anything, so we can assume, ladies and gentlemen, that the whole purpose of this bill is to cut, chop, and gut Working for Families and cut, chop, and gut KiwiSaver, which are there for the benefit of this country of ours. That information gives people a little view about what this debate is all about. I note a remark made by one of the other members of the Opposition earlier this week: when we consider this Budget on the whole, it seems that it is a gambler\u2019s Budget. Gamblers do not care whose money they use.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022 data-id=\u002219a8c0178fab4fea83ade1b8a5085f32\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000425\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002219a8c0178fab4fea83ade1b8a5085f32\u0022\u003EAMY ADAMS (National\u2014Selwyn):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u00222874bdc8b4914cf2a3f951709bb880f4\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 53\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 42; Green Party 8; Progressive 1; Independents: Carter C, Harawira.\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=\u00227290bd5b0977404e885ca572b0a93779\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 53\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 42; Green Party 8; Progressive 1; Independents: Carter C, Harawira.\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=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000426\u0022\u003EA party vote was called for on the question that clause 2 be agreed to.\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022 data-id=\u0022068829378d9242c88323f4542089c831\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000427\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022068829378d9242c88323f4542089c831\u0022\u003EJO GOODHEW (Junior Whip\u2014National):\u003C/span\u003E I raise a point of order, Mr Chairperson. I regret that I am raising this point of order in the middle of what is happening, but I refer you to Speaker\u2019s ruling 67/6 and I ask for your clarification. It is my understanding that in fact it is up to the dissenting voice to call for a party vote rather than the presiding officer to offer a party vote. Therefore, I ask that you direct the senior Opposition whip, if he is a dissenting voice, to request the party vote rather than to wait for it to be offered to him.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022 data-id=\u00222cc1ab7aa3fa44459f88453de0251df9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000428\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222cc1ab7aa3fa44459f88453de0251df9\u0022\u003EHon RICK BARKER (Senior Whip\u2014Labour):\u003C/span\u003E The honourable member Jo Goodhew makes a very good point that it is always the dissenting voice that calls for a party vote. But there is sometimes some conjecture about who has won and who has lost it. I am entitled to contest the vote in several ways. I just say that, as the honourable member Jo Goodhew knows, I have said to you on a couple of occasions that the \u201CNoes\u201D had it, because I sincerely believed that if we took it on voices the voices of the \u201CNoes\u201D were much louder than the voices of the \u201CAyes\u201D. What normally happens in the Chair is for the Chairperson to listen to where the weight of the sound and the voices is. Clearly, on voices for that vote there were more \u201CNoes\u201D being recorded than there were \u201CAyes\u201D. And not only was that so, but the voices raised in opposition were both louder than the \u201CAyes\u201D\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000429\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022722955507fe74d749a16e2110d66e9dc\u0022\u003EThe CHAIRPERSON (H V Ross Robertson)\u003C/span\u003E: Thank you.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000430\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022160ae1f664cb45f9b4711dab5a281f56\u0022\u003EHon RICK BARKER\u003C/span\u003E: At that point, Mr Chairman, if you were going to proceed, then I would be perfectly entitled to ask for a party vote, which I know very well. I just took your suggesting a party vote as an act of human kindness and generosity.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000431\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229dbcd9991d7a4d7cba4775c68af07ed6\u0022\u003EThe CHAIRPERSON (H V Ross Robertson)\u003C/span\u003E: Thank you, the member will be seated. We have all been here long enough and we know the procedure. The vote has been called and we will abide by that. I advise the Clerk to take the vote, please. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u0022b1844e6d58164e0db3b3f5d0b3f35215\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000432\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b1844e6d58164e0db3b3f5d0b3f35215\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E I raise a point of order, Mr Chairperson. After the honourable member Jo Goodhew\u2019s point of order I am wondering whether she wants the call nullified, or taken again.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000433\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226e4aca8042b340abbe432919000dfad4\u0022\u003EThe CHAIRPERSON (H V Ross Robertson)\u003C/span\u003E: That is a frivolous point of order. The member will be seated. We will take the vote, Clerk, please.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u002225b1b87994f545aca5916f49fc4ac84f\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 53\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 42; Green Party 8; Progressive 1; Independents: Carter C, Harawira.\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=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000434\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022eb6474fb1eb649a3a16ffe6b9b2247d1\u0022\u003EThe CHAIRPERSON (H V Ross Robertson)\u003C/span\u003E: I say to members that there is to be no discussion at all during the taking of a vote. It can often be seen as intimidation.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022 data-id=\u00224693150839f041038e9e71653c8a4a77\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000435\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00224693150839f041038e9e71653c8a4a77\u0022\u003EHon RICK BARKER (Senior Whip\u2014Labour):\u003C/span\u003E I raise a point of order, Mr Chairperson. I want it to be clear on the record that there was an interchange across the Chamber between the Hon David Carter and myself. I do not want in any way to leave the implication that I was intimidated by his conversations with me. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000436\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222b6ce2cf983e4f10b249d4fe0238d518\u0022\u003EThe CHAIRPERSON (H V Ross Robertson)\u003C/span\u003E: I know that it is getting late on a Friday afternoon, colleagues, and we have all had our fun, but members will be aware that it can be seen as intimidation. In fact it can actually lead to a breach of privilege. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000437\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003EBill reported without amendment.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000438\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003EReport adopted.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000439\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022c6e037f7e68c4697983ed14289e59126\u0022\u003EThird 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=\u00222377ce4da9824fdc9666ad9b6541b74c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000440\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222377ce4da9824fdc9666ad9b6541b74c\u0022\u003EHon PETER DUNNE (Minister of Revenue) \u003C/span\u003Eon behalf of the Minister of Finance: I move, That the Taxation (Annual Rates and Budget Measures) Bill be now read a third time. I need to report to the House that this bill, which gives effect to the Budget\u2019s provisions relating to some of the changes to KiwiSaver and Working for Families, has been thoroughly considered by the Committee, and has emerged without amendment. During the Committee stage of the bill there was a very rigorous set of debates, but in many senses not a great deal of light was shed, particularly from the Opposition, on an alternative package.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000441\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EIt is worth noting, in respect of KiwiSaver, that even after the changes that members opposite have so decried, it is still anticipated that KiwiSaver membership will strike 2 million during the 2012-13 year. One of the points that is relevant to the reason the changes are being made\u2014and I will respond to a point made by Mr Shearer late in the Committee stage\u2014relates to the cost of KiwiSaver\u2019s success. When KiwiSaver was introduced in 2007 the projection was that it would hit 700,000 members by 2015. It now has 1.7 million members, and that number is projected to be 2 million during the 2012-13 year. That is well over twice, or nearly three times, the original projection. Because of both the member kick-start\u2014which is not being touched\u2014and the member tax credit, there is a significant fiscal cost to the Government associated with KiwiSaver, and in order to sustain the scheme into the future these changes have been necessary, given the extraordinary and unprecedented success of the scheme to date. The changes amount to about $2.6 billion in savings.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000442\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe changes being made to Working for Families, which will kick in from 1 April next year, in some cases will take 4 years to be fully implemented, and in other cases will take nearer to 8 years to be implemented. The changes represent a cost saving of approximately $447 million to the Crown over that time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000443\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe legislation gives effect to the Budget measures. The Budget was really about setting a path for returning New Zealand to surplus after some unprecedented experiences in recent years\u2014the global financial crisis, and now the Christchurch earthquakes\u2014yet we are still predicting a return to surplus in 2014-15. The changes contained in this bill are part of achieving those policy objectives.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000444\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI thank the officials who have served the House during the hours of the Committee stage. I thank those members who have participated in the debate. I 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=\u0022a8a420a8e2044fb490459c5a23a035a3\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000445\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a8a420a8e2044fb490459c5a23a035a3\u0022\u003EHon DAVID CUNLIFFE (Labour\u2014New Lynn):\u003C/span\u003E I rise to take a call, but I was engrossed in this incredibly exciting Dominion Post article, which aptly sums up the Budget as \u201CA big fat zero\u201D. Moving on, this speech is about the Taxation (Annual Rates and Budget Measures) Bill. This bill vests part of the Budget in legislation. As we have discussed earlier, and throughout this debate, the first question that must be asked again in the House is why we are being forced to do this under urgency today. Fundamentally, there is a deep paradox at play. The Government has said it will seek a mandate from the public on the changes proposed in this bill. It said it will go to the 2011 election, in which case these changes should have gone into Budget 2012, once a mandate had been obtained. As the Government has not done so, it is either the case that the Government has unmandated legislation, and therefore fiscal consequences, or it has broken an election promise. It can logically be only one of those alternatives. Treasury has signed off on this bill, so I assume that means Treasury\u2019s view is that this is not unconstitutional and not unmandated. It must therefore logically be the case that Treasury believes that the Government has broken a major election promise; if not one, then several. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000446\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThe Government said it would not cut KiwiSaver, and this bill cuts it. It said it would not cut Working for Families, and this bill cuts it. Most people I talk to are struggling. They are struggling as prices rise faster than wages. They are working hard, they are doing everything right, but they just cannot seem to get ahead. Every week I hear stories in my electorate of people who, week after week, are cutting back just to put food on the table or to pay the power bill. National\u2019s third Budget should have addressed this, but unfortunately it makes the struggle that much tougher. It does not help, but it does hurt. It is a tinkering Budget that does not have a plan to get the economy going again. It does not address the problems that are at the core of this moribund economy and that have undermined our chances of putting people back to work. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000447\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThe best way to get a deficit down is to get the economy growing again. We in Labour will be continuing to outline our plan to get the economy going over the next few months. We will present a credible strategy for rebuilding the New Zealand economy, with a fully costed package of measures. There is no doubt that we need to be saving more as a country. There is no doubt that the intention of building up national savings is worthy, but there is also no doubt that reducing the incentives available to New Zealanders to get them into the programme while simultaneously taxing the employer contribution before it benefits the employee is not the best way to do that. One can expect that the Labour Opposition will be bringing to the public a better plan for increasing national savings for the benefit not only of those saving but also of all New Zealanders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000448\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003ESelling assets is just as short-sighted. This bill contains the tax rates, which are predicated on a fiscal balance. That fiscal balance is supported by the illusion of capital flows that should not yet exist. There is no mandate for asset sales. All the polling tells us that New Zealanders hate the idea of the so-called mixed-ownership model, which makes people pay twice for things they already own. Every New Zealander owns Mighty River Power, Meridian Energy, Genesis Energy, and 80 percent of Air New Zealand. New Zealanders own them already. They do not need to buy them twice, and of course what will happen is that most of those shareholdings will pass to the control of foreign multinational corporations, thereby undermining the economic sovereignty of this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000449\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThat might be less awful if it solved the problem, but it does not. It is like taking a teacup full of water and throwing it on a raging bushfire, except in this case there is nothing raging about the New Zealand economy; it is raging nowhere. Just as importantly, this does not, therefore, solve our debt problem. What will the Government do when debt increases further and there are no assets left to sell? This is not a plan that will grow our economy. There is nothing in this bill, nothing in the regulatory impact statement, and nothing in the Budget that shows a plan to create jobs and growth. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000450\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EA rosy glow is forecast of 4 percent growth in 2012-13, which nobody believes. Nobody believes it. The rating agencies patently do not believe it, because this Government has just got a C- or a D from Standard and Poor\u2019s, which means: \u201CWe will believe it when we see it.\u201D Increasingly, that is now the view of the mainstream media, which are questioning the flimsy thread of credibility upon which this Budget hangs. They do not believe that it is right that there should be $1 billion of unspecified cuts. They do not believe that it is right that there should be $4 billion of difference in cash flow between the Inland Revenue Department and Treasury. They do not believe that it is right to raid the piggy bank of public servants by taking $650 million from their retirement fund. They do not believe that it is right to take more out of the KiwiSaver of teachers than we are putting back into early childhood education. None of that is right, none of it shows any vision, none of it shows any boldness, and none of it shows any plan. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000451\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003ENew Zealanders are hungering and thirsting for a way out of the economic wilderness, and they have been waiting for three Budgets now for a credible plan to get them there. It was not the Job Summit. It was not the cycleway. It was not the rolling maul of tinkerers. It was not suspending payments to the Superannuation Fund. It was not huge tax breaks for upper-income earners, and it is not cutting KiwiSaver and Working for Families and flogging off assets, because that is all this Budget does. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000452\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThe crime of this Budget is not only what it does do. It is not only the measures that attack KiwiSaver and Working for Families that are in this bill, but it is what it does not do. This Budget does not provide hope, it does not provide vision, it does not provide a plan, and it does not provide a way out of the fiscal nightmare that this conservative Government has wrought upon New Zealand. Government members will say that it is Labour\u2019s fault, when it is not. Labour left the country in surplus, to the tune of 7.6 percent of GDP. They will tell us that it is the earthquake\u2019s fault, but it is not. The earthquake is responsible for only 10 percent of the accumulated debt, and their economic mismanagement is 90 percent, along with the global financial crisis. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000453\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003EThey will tell us that they are being fiscally responsible, and they are not. There is nothing fiscally responsible about making up numbers. There is nothing responsible about a billion dollars of cuts, when we do not know where they are coming from. There is nothing responsible about imagining 170,000 jobs that do not exist and will not exist, or Standard and Poor\u2019s would have taken them at their word. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000454\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E I have given up waiting for Bill English to have a new idea. I have given up waiting for Bill English to get a vision for this economy. New Zealanders are giving up on this tired, listless, useless National Government. National will be a one-term Government. How do I know that? Because the polling is telling us\u2014wait for it\u2014that 48 percent of New Zealanders believe the country\u2019s economic management is on the wrong track, and 32 percent believe it is on the right track. I have been here for four terms and I can tell members opposite that when the economic right track / wrong track numbers cross over, the Government\u2019s popularity is sure to follow\u2014and they are sure to follow. As quickly and as surely as night follows day, they will be making the pilgrimage to this side of the Chamber after 26 November, when the public is called to vote upon this rubbish Budget and throw it out.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022 data-id=\u002213cf3bab99d247d5ac29aab03542ddcd\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000455\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002213cf3bab99d247d5ac29aab03542ddcd\u0022\u003ECRAIG FOSS (National\u2014Tukituki):\u003C/span\u003E Hopefully there are still a few people listening to the radio. The third reading of the Taxation (Annual Rates and Budget Measures) Bill is associated with the Budget and the reconfirmation of the income tax rates, PAYE rates, changes to KiwiSaver, and some changes to Working for Families. They have been well canvassed by some members of the House, and extrapolated upon and fantasised upon by others. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000456\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThe Budget announced yesterday by the Minister of Finance is about savings. It is about building savings. It is about the integrity of savings. It is not about borrowing to save. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000457\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003ERegardless of what we have heard from the previous speaker, David Cunliffe, and other speakers, we have yet to hear where Labour\u2019s $45 billion - odd of various promises over the forecast period will come from. We have no idea. But one thing I can say to the previous speaker is that if things were so rosy, if the books were so good in the last year of the last Labour Government, then why did New Zealand vote Labour out of office so convincingly? Perhaps it is because New Zealand also looked at the pre-election update, which showed the decade of deficits and showed all those numbers that affected the fiscals, as opposed to the 2008 Budget that members on the other side of the House keep referring to. The key document is the pre-election Budget and the travesty of the decade of deficits that it revealed to the public after 9 years of the previous Government. But the good news is that the decade of deficits is no longer upon us. This Budget showed us we will come very close, hopefully, to surplus in 2015. That is not too bad. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000458\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI note a very interesting and good point that the Hon Peter Dunne made in his third reading speech. If the bill that is before us is so bad, if Opposition members dislike the income tax rates in it so badly and think they should be altered, if they do not like the Working for Families changes, if they truly do not like the KiwiSaver changes, and if they have a plan\u2014maybe a decent spreadsheet, as the member opposite apparently has; fully costed, allegedly\u2014then why did they not table an amendment to any part of the bill? During the Committee stage not one amendment, not their tax tables or suggestions, or an amendment to the KiwiSaver changes was tabled. This is the bill that would enable that. It points to the fact that perhaps Labour members do not have a plan, costed or otherwise. Mr Cunliffe has his spreadsheet, I am quite sure, but I do not think Labour members actually have a plan. We might see it at the Labour congress over the weekend. That may come before or after the singing. Will members opposite be singing at this year\u2019s election-year congress? We are looking forward to it, because we so enjoyed it 3-odd years ago. What did they sing?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000459\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c83012b4-3939-4753-80fc-1956a3e2bd1e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222392fa169e66472abb906e2b15ab3b49\u0022\u003EMichael Woodhouse\u003C/span\u003E: The Gambler.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000460\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b6ccd5626eca49338b24f93171cd43e2\u0022\u003ECRAIG FOSS\u003C/span\u003E: That is right. Funnily enough, that one might get rolled out. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000461\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThis Budget passes the four tests outlined by Mr Cunliffe in his article in the paper the other day. It creates and helps the export economy; it pulls back the State economy to allow room for the private sector to at least grow and at least start to create and hold jobs, the tradable sector having essentially been in recession since 2005; and it shows a true and direct path back to surplus. It passes another one of Mr Cunliffe\u2019s tests. I am interested that he keeps showing the test, but we passed it with flying colours. I enjoyed his piece in the paper. I saw it and thought: \u201CThis is great. We will pass those ones.\u201D Mr English\u2019s Budget, the National Government Budget, passes all of those tests with flying colours. I am surprised that the member still keeps repeating it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000462\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EMr Cunliffe talked about the export market. In 9 years the Labour Government had the chance. Yes, Labour is in Opposition now, but as far as increasing exports goes, the only thing that Labour did to try to compensate for double-digit interest rates for hyperinflation, if you will, for a 50 percent expansion in the State and a 50 percent expansion in the tax take was to declare 2007 as Export Year. That was it. Exports plummeted and New Zealand went straight into recession a year before the rest of the world. So it is interesting that there have been no amendments to this bill from other members during the Committee stage. I was quite surprised about that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000463\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI am also interested to see that 2 million people are still forecast to go into KiwiSaver, up from 1.7 million currently. I think all members in this House hope that is the case. That will be an interesting judgment upon the changes within this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000464\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThe mixed-ownership model has been addressed. Even though it has been discussed a lot in the debate on this bill, it is not in the bill, but perhaps the KiwiSaver changes will help facilitate investments in the mixed-ownership model. Members opposite have positioned themselves so diametrically opposed to that. That is fair enough; that is their policy position. It has moved somewhat since Mr Cunliffe\u2019s speech at Victoria University on 8 November last year. The Labour Party policy was to unleash the balance sheets of the State-owned enterprises and their associates, to leverage up their balance sheets, etc. I notice that in one of Mr Cunliffe\u2019s speeches\u2014I admit that I do read his speeches, although I do not know whether anyone else does\u2014he gave the other day that phrase was interestingly taken out. I do not know whether Labour members want to unleash the power of State-owned enterprises any more. But if they do not like it, then why did they do it with Air New Zealand? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000465\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002239250a9aee6f440f8ac434a5d5a9e69e\u0022\u003EHon David Cunliffe\u003C/span\u003E: Why don\u2019t we own it while we do it?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000466\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002220c8acbe0c1e4f9595f2834b97187ab2\u0022\u003ECRAIG FOSS\u003C/span\u003E: We inherited from the previous Labour Government a mixed-ownership model for Air New Zealand. Air New Zealand diluted it down when it had to go and get some more capital. Did the Crown stump up? No. It was happy for it to be diluted down. It is very interesting. Actually, that same Government at the time allowed Air New Zealand to issue a credit note, which essentially meant that if it defaulted, then the ownership of that entity would have gone offshore. It is very interesting. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000467\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI must pull up the previous speaker on his comments about Standard and Poor\u2019s. It was the member\u2019s judgment of a C or D rating. Fair enough. He can pass those judgments. The key point to New Zealand mortgage holders is that after the Budget was released, Standard and Poor\u2019s confirmed, reaffirmed, New Zealand\u2019s credit rating. That is worth one huge amount of money to the households of New Zealand, to indebted New Zealand. We all acknowledge we are too indebted as a nation, so each and every one of us, be it via the Crown accounts or via our personal accounts, have benefited instantly from this Budget as our mortgage rates and interest rates have stayed lower for longer, as they have under this great Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000468\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI make one final point. Why has the Opposition lost all faith in democracy? Why do those members not like democracy any more? At the election this year the public of New Zealand, who are so wise that they threw out the previous administration, will pass their judgment not only on this bill and this Budget but also on the three Budgets of this Government. They will pass their judgment and we will accept that judgment. They may keep us in; they may give us further seats, or they may throw us out. Let us wait and see. But I have faith that opening the books and putting everything possible before the public of New Zealand shows that we trust them, that we believe in democracy, and that we have faith in their ability to make the right decision. That is why this bill is before us now, taking effect in 18 months\u2019 time. If\u2014horror, horror, horror of all horrors\u2014there was to be a change of Government and if members opposite were take these benches, they would be totally free to change this policy in this Budget, and it would be interesting to see their firm position on these exact points. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000469\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI invite other members, if they are talking, much as they seem to be opposed to this bill and much as they seem to be opposed to this Budget, to tell us which parts of it they will put before New Zealand to vote upon on 26 November. All we can see right now, the only bits of firm information we have from Labour, is that it will increase the top income tax rate. It may increase middle-income tax rates; we are not quite sure. Some Labour members were nodding and some were shaking their heads last night. They will not be changing GST except on cabbages. Mr Nash started to fly something about a turnover tax. I think Labour confirmed that it will not change the business tax. Of those members\u2019 $7 billion or so of committed promises so far, I ask how they will be funded. Will it be done through a capital gains tax? It is a credit to Russel Norman that at least he has a solid policy position, absolutely clouding out the direction of the alternative supposed Opposition over there. I say good on him, because Labour talks about painting Premier House as its solution\u2014or not painting it\u2014and about not having BMWs for Ministers and former Ministers, and those members want to take these benches. I commend this fine bill, based upon this fine Budget, 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=\u00228f2489f5132b41448d57efa051f7079b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000470\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00228f2489f5132b41448d57efa051f7079b\u0022\u003EHon CLAYTON COSGROVE (Labour\u2014Waimakariri):\u003C/span\u003E I noted that speech from Craig Foss with interest, and I took a number of things out of it. The member concluded by giving us a lecture on parliamentary democracy. He gave us a lecture, and said members on this side of the House are somehow against democracy. Then he paraded an argument that basically said those members trust the people, and the judgment will be on 26 November. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000471\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI make this point to the member: if he has so much faith, respect, and trust in the people of New Zealand, then why today do we sit in urgency without the bill going to a select committee? The people who are smart, whom he takes for granted, could come before a select committee and give us a view on how they see this bill. They could tell us whether they are in favour of \u201Cintegrity in savings\u201D, which was the other phrase that that member used. \u201CIntegrity in savings\u201D is an interesting phrase. That must have whipped out of the National public relations unit, because it is an interesting phrase. At the same time as that member talked about integrity in savings, his Government\u2019s legislation before us cuts KiwiSaver\u2014a family with two KiwiSavers loses $20 a week in cuts. Is that integrity in savings? Hang on, the empty tin has not rattled; there is no sound. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000472\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI ask the member again whether that is integrity in savings. No; I suggest he crawls under the desk. I ask that member whether he believes we should have a select committee hearing so that\u2014to use his words\u2014we can trust the people, treat the people with respect, and ask them their view. Oh, he is mute, or deaf; his tongue has gone\u2014somebody has cut it out. I say to that member that there is a word for the speech he gave. On the one hand the member preened and preached to us about democracy, but he does not show the intestinal fortitude in this place to say we should have a select committee hearing. I ask him again whether he believes people should have the right to come to this Parliament, before an election, and test this legislation with a select committee hearing. Silence! \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000473\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe silence is deafening. What a plonker, I say. The people will see that member for what he is, standing up, a lion in this Chamber\u2014an absolute lion. But he does not have the intestinal fortitude to call a Finance and Expenditure Committee meeting and ask the people in the gallery and throughout our towns and cities to come forward and make submissions, and listen to their opinions, because he does not want the answer. He knows what the answer would be. He knows that many of the 200,000 people affected by the cut in Working for Families would rock up to the select committee and say they did not vote in a National Government for this. He knows that many, many thousands of people whom he respects\u2014so he says\u2014would rock up to the select committee and say: \u201CDidn\u2019t John Key say he would not touch KiwiSaver?\u201D. Did John Key say that? Yes, he did. Has John Key broken his word? Yes, he has. Those are the responses Mr Foss and his ilk, and Mr Henare, do not want people to have the opportunity to come in and express. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000474\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EPeople would come to a select committee, if there was one, and they would say: \u201CBy the way, we do not want our assets sold. By the way, we, the people of New Zealand, already own those assets.\u201D So why is the Government pretending it is so benevolent in offering those assets back to the people of New Zealand, offering them the opportunity to buy them, given that they already own them? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000475\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EPeople might also come to a select committee and say that we as a community are not awash with cash to be first in the queue, which the Government cannot guarantee, to purchase back assets that we already own. They would say to Mr Foss, chair of the Finance and Expenditure Committee, that we as a community do not have the money, because of the cost of living, because of the great tax switch that gave those on the bottom of the heap\u201472 percent of my electorate earn under 40 grand a year\u2014very, very little. But it gave his leader a thousand bucks a week. That is what those people might say if they were given the respect and the opportunity to come before a select committee and express their view. But that has been denied to them, and that member had the audacity to get up and preach to this House, and say he respects the views of his community. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000476\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EIf the member has that much guts\u2014and I am sure he has\u2014he will stand up and say, or the next speaker will take a call and say: \u201CHang on. Taihoa. Let\u2019s seek leave to have a Finance and Expenditure Committee and give the people their say.\u201D There is no reason we would not. The member himself said these measures will come in after an election. Therefore, we have months to deal with this legislation. But, oh no, he sits there looking into his fictitious papers, pretending, not willing to look up at anybody, with a guilty look on his face because he knows he has just put his foot in his mouth in respect of that last speech. It is easy to get up here in the Chamber, be very lofty and high and mighty, say one respects democracy, and lecture every other MP. But he has the power, as the chairman of the Finance and Expenditure Committee, to call people in and show some real respect. But no, he keeps staring at the crossword or whatever it is down there, because he cannot look people on this side of the Chamber in the eye, he cannot look the Speaker in the eye, and he will not be able to look his constituents in the eye and explain to them, on Saturday or Sunday when he has his clinic, why he denied them their democratic right to have a go and have their view heard in the select committee. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000477\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EWhen we look at the historic record of the last Government, members opposite talk about the decade of deficits. That member wanted some facts. I suggest maybe he rolls up these facts and chews on a few of them in the next couple of days. I will give members a quote from Bill English that I have used in every speech. Of course, those members do not like it when we quote their own finance Minister. They are all very quiet now. That member keeps doing his crossword, or whatever it is he is doing down there. He will not look us in the eye; we know it is difficult. Here is what Bill English said on 19 December 2008 about the legacy of the last Government. This is a cracker, and I take Bill English at his word. He said this: \u201CI want to stress\u201D\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000478\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b036d35c17374008857b28c215e8b877\u0022\u003EHon Tau Henare\u003C/span\u003E: You keep going, mate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000479\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a78347ba323b4aa2b1ba0f5cb35d203a\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: That member is under a bit of stress, by the sound of it. He said: \u201CI want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook.\u201D That is what he said within days of taking office. That was his economic assessment of the legacy of the Labour Government that had preceded him. However much shellac they put on their line over there, no matter how much whitewash they try to spin through this place, they cannot alter history. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000480\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003ELet us have a look at history. I will read out a couple of other facts for that member who shows a tonne of intestinal fortitude when he is on his feet. I will say this. We had 9 years of surpluses\u20149 long years of surpluses\u2014beginning in 2000 with $594 million. In 2001 there was a surplus of $1.4 billion, in 2002 there was $2.4 billion, in 2003 there was $5.5 billion, in 2005 there was $7 billion, in 2006 there was $7 billion, in 2007 there was $5.8 billion, in 2008 there was $5.6 billion worth of surpluses\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000481\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221c818ce2-6ca3-4c4a-9e6a-2e3a67d070e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223694e23f2ed64a42b6285d095813058a\u0022\u003EShane Ardern\u003C/span\u003E: And the best times we had in a generation!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000482\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226fff4ee45b6340aebd0c6c6b934ffcda\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: They were the best times, absolutely, as that member said. That member\u2019s finance spokesperson at the time, Bill English, day after day, month after month, challenged, criticised, and berated the then Labour Government, saying it should flog the lot\u2014spend the lot. National, for the historical record, was criticising a Labour Government for not spending the surplus and for squirreling it away for the rainy day. The rainy day came when this Government took over and even Bill English was generous enough on 19 December to admit that the legacy the previous Government had left was in good shape. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000483\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EWhat we have in this legislation, what is served up to the public, is a cut in KiwiSaver and a cut in Working for Families. The only plan\u2014if we can call it that\u2014is to flog off the family silver, which does not actually solve the debt problem, because if we look at the debt track, we see that it goes up. Then the Government uses the earthquake as an alibi, even though it knows in terms of accumulated deficit that the earthquake in Canterbury contributes only 10 percent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000484\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002235b22996bfe4430d9a0accf70c866daa\u0022\u003EHon Tau Henare\u003C/span\u003E: Remember David Lange? He sold the Crown jewels.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000485\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226712c6ef971346b882baa8507ade6330\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: I think the member is going to blow, Mr Assistant Speaker Roy. You might want to call the men in white coats or those with the stretchers. I think he is going to blow something. It could get messy in here, I say to colleagues. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000486\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI say to Mr Foss that the people of New Zealand are not silly. His constituents deserve respect. They are intelligent and they will unpick the hem of this Budget inch by inch and they will render a verdict on him. I look forward to the next Government speaker being totally respectful to the people and telling us that they are going to have a select committee. I suggest that if there is any medication available or cold water we direct it over to that side of the House real quick.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002255bb390e-f6c3-498c-bbf6-ea1a8fc993c7\u0022 data-id=\u00220e22a736427d4100bcfa82d06f7e2c07\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000487\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002255bb390e-f6c3-498c-bbf6-ea1a8fc993c7\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00220e22a736427d4100bcfa82d06f7e2c07\u0022\u003EGARETH HUGHES (Green):\u003C/span\u003E Kia ora, Mr Assistant Speaker Roy. Na mihi nui ki a koutou. Kia ora. I feel somewhat that I should not be taking this call, because I would like to hear National\u2019s reply to the Hon Clayton Cosgrove, who was building up quite a slanging match. But I want to take a call on this important bill, the Taxation (Annual Rates and Budget Measures) Bill, at an important time, because we are at a turning point in our nation\u2019s history. We are at a turning point where we are facing huge economic challenges as a nation. At the moment it is only those high international commodity prices that are keeping our heads above water as we continue our slide down the OECD rankings, as we have for the last several decades. This has real impacts on Kiwi families, and real impacts on Kiwi jobs. [Interruption] \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000488\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224feec5ca645e414fb78d84112e23b21d\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: There are too many conversations going across the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000489\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002255bb390e-f6c3-498c-bbf6-ea1a8fc993c7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002271ba601280694dcca744a97b50baefe2\u0022\u003EGARETH HUGHES\u003C/span\u003E: Essentially, we are a nation addicted to growing grass. Most of our income is from tourists coming over here to look at our natural landscape and the other part of that is selling grass in the form of dehydrated milk powder. We are addicted to high commodity prices; we are not masters of our own fortunes in this nation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000490\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002255bb390e-f6c3-498c-bbf6-ea1a8fc993c7\u0022\u003EWe are facing huge environmental challenges. Just this week at the time of the Budget we had esteemed National Aeronautics and Space Administration (NASA) astrophysicist Dr James Hansen in New Zealand, saying that climate change and coal were the single greatest threat to our civilisation on this planet. It is also a week of immense personal challenges and worker challenges. Just before the Budget, I was privileged to stand with a number of other MPs from the Labour and Green Parties at the Council of Trade Unions rally about how people were really feeling the pinch of these Government changes in the Budget and those it had made before. We are facing huge economic challenges, huge environmental challenges, and huge challenges to our workers and our wh\u0101nau in New Zealand. But what did we see in the Budget? Quite frankly, it was a damp squib\u2014an absolute failure. We saw a bit of tinkering. We have seen some hilarious names issued for the Budget. Probably my favourite name was the one given by the member Stuart Nash in the Committee stage: the \u201CSteal-the-Dream Budget\u201D. We have heard the \u201CShaky Quaky Budget\u201D and the \u201CZero Budget\u201D. There has been a whole bunch of names. The journalists have been busy trying to come up with names, because there is not a great deal of substance, and definitely no positive substance, in the Budget for the country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000491\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002255bb390e-f6c3-498c-bbf6-ea1a8fc993c7\u0022\u003EWe are debating this now on a Friday afternoon under urgency. There is absolutely no reason for this to be the case. We have plenty of time for this to go through the proper process, which involves the public having a say in select committee, and it is a disappointment that we have to see this bill under urgency today. The Green Party will be voting against this bill, which basically does only two things. Firstly, it halves the Government rate of matching contributions to KiwiSaver and removes the tax exemption on the contribution by employers. It also makes some significant changes to Working for Families. Let us look at the balance of contributions to KiwiSaver. The Government says this is intended to move public funding towards private saving. It says this will generate fiscal savings by reducing the public cost of the Government\u2019s contribution. Cutting both the Government\u2019s and employers\u2019 contributions to KiwiSaver and saying that that will increase the incentive for personal saving really borders on the disingenuous. Why would anyone be more encouraged to save when the matching contributions are cut? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000492\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002255bb390e-f6c3-498c-bbf6-ea1a8fc993c7\u0022\u003ELet us look at the Working for Families changes. The bill amends Working for Families by reducing the fiscal costs of the scheme while protecting the tax credits for lower-income earners. The threshold is to reduce from $36,827 down to $35,000 and the abatement rate is also rising from 20c to 25c in the dollar. Tax credits for children aged 13 to 16 will be aligned and a two-child family on $61,000 will now receive the same amount. Generally speaking, those earning anything above this will receive less than that. Below it, they will receive more, though the extra amount is tiny. Our analysis suggests that this is less than altruistic, despite what is claimed by the Government benches. Essentially, 110,000 Kiwi homes will be affected by these cuts to Working for Families. With more than 23,000 families earning less than $60,000 a year in combined annual income, reducing the abatement threshold to $35,000 means that the abatement now applies to two-parent families with one partner working at a minimum wage and the other partner working 12 hours at a minimum wage too. So raising that abatement rate to 25c in the dollar\u2014and this is the rub of the changes\u2014results in an effective marginal tax rate of 58 percent. This is put on the people of New Zealand who can least afford to be paying a marginal tax rate of 58 percent. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000493\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002255bb390e-f6c3-498c-bbf6-ea1a8fc993c7\u0022\u003EThe KiwiSaver changes come at a terrible time in New Zealand\u2019s history. We have very low rates of household savings compared with other OECD countries. I have to admit that I have been wrong on one thing. We have heard over the years that this Government has a vision of taking us back to the 1990s. That is definitely the case when it comes to industrial relations legislation. For some environmental legislation, the vision is to go back to the 1990s. When it comes to household saving, the vision is for us to go back to the 1970s\u2014back to the days of Muldoon and scrapping national superannuation. Apparently the Government has dusted off the old play books on how to reduce our nation\u2019s savings. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000494\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002255bb390e-f6c3-498c-bbf6-ea1a8fc993c7\u0022\u003ETwo things this bill deals with are the KiwiSaver changes and the Working for Families changes. The third big element of this bill is the student loan changes, and I am surprised we do not see the changes in legislation in this Chamber today for the entitlement to student loan access for students aged over 55. Clearly, that is discriminatory. At 54 one can get a student loan; at 55 one is not allowed to under this Government\u2019s change. It is clear, blatant ageism. It is distinctly unfair and, I believe, unlawful. The Human Rights Act says it is illegal to discriminate based on age when providing services. Obviously the Government can get around this by legislating it, but the Government has not legislated this. The student loan scheme was established in 1992 under a Cabinet minute. One cannot break the law in a Cabinet minute. Cleary this change is discriminatory, and I believe it is unlawful if the Government intends to continue this crazy policy. It is crazy when we consider that Kiwis are working longer\u2014many past 65. It is crazy when many of us have a number of careers in our lifetime. It is crazy because in a recessionary environment people who have lost their jobs want to get trained up and they want to get skilled. That is a good thing for the economy, but this Government is saying no. I am surprised we do not have legislation in front of us to deal with that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000495\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002255bb390e-f6c3-498c-bbf6-ea1a8fc993c7\u0022\u003ELastly, I want to touch on the context of this bill, which is the Budget. The Budget lays out National\u2019s grand plan, which is essentially that it will sell State assets. It is like an analogy of ordinary Kiwi cafe owners selling their espresso machines to get a little bit of upfront cash. It is like shearers selling their clippers to pay off the monthly bills. It is like hairdressers selling their scissors to pay off some bills. Ultimately, we will see bad long-term effects. I have just discovered in the Budget that it allows the Government to set up a new account of $750 million to help borrow for its roads of significance to National. This is in the context of the nation borrowing more than $300 million a week and of the biggest Budget deficit in our country\u2019s history. Yet somehow Steven Joyce has managed to ring-fence his $11 billion for just seven roads of significance to National. And now, because we are seeing declining road usage across our country as a result of those high oil prices that the Government refuses to prepare us for and plan for, it has to set up a whole separate budget line of $750 million to fund the roads of significance to National. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000496\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002255bb390e-f6c3-498c-bbf6-ea1a8fc993c7\u0022\u003EWe are seeing in this Budget subsidises to polluters of between $800 million and $1 billion. At a time when our country can least afford it, we are subsidising polluters. For me that sums up the Budget, but it also sums up the failure of imagination from both the two big parties in our Parliament. There is still no vision. From the National benches we hear that we will have severe cuts, possibly leading to another recession, and from the Labour benches we hear that it would borrow more, potentially risking a credit downgrade. No other party in this Parliament has the courage to look at the revenue side of the ledger. For any household budget, if the household is facing a pinch then it has to look at revenue. The Green Party has put serious, credible, well-costed proposals on the table that would not impact the economic growth currently projected but would make a serious difference to the Government\u2019s books. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000497\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002255bb390e-f6c3-498c-bbf6-ea1a8fc993c7\u0022\u003ELastly, I say that there is no vision from either party of how we transform in order to deal with these significant economic, environmental, and social challenges facing the nation. We have such advantages and such strategic assets in this country. We have this \u201Cclean, green\u201D brand that will be called into doubt, as seen in the BBC HARDtalk interview. We will have 80,000 people coming to New Zealand to watch the Rugby World Cup, and maybe a billion people watching it on television, and when they are not watching the rugby they will be asking the question: what is the deal with New Zealand? What is the country\u2019s story? They will find we are on the world stage, selling ourselves as being clean and green, yet it is simply a marketing slogan and a marketing line. Instead, we need to be cutting those subsidies to polluters, rebalancing some of that transport budget to sustainable options, and leveraging that \u201Cclean, green\u201D brand into a prosperous future for all of our kids. Kia ora.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022 data-id=\u00223fc2f819d86a4dc190dec76b697d90ae\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000498\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00223fc2f819d86a4dc190dec76b697d90ae\u0022\u003ETE URUROA FLAVELL (M\u0101ori Party\u2014Waiariki):\u003C/span\u003E T\u0113n\u0101 koe, Mr Assistant Speaker Roy. E te Whare kia ora t\u0101tou katoa. I reckon the Taxation (Annual Rates and Budget Measures) Bill is the difference between mince on toast and a gourmet feast. It fills the spot and it sustains us but it is hardly going to excite the masses. I reckon it is the difference between sensible and sensational. It is a slow and steady approach to lifting the national savings, rather than a slash-and-burn approach or, at the other end of the scale, a shop-\u2018til-you-drop approach. These days, when virtual social networks thrive, and instant gratification is the only game in town, it sometimes appears as if there is no end to the levels of sensationalism we have come to expect with any event, including the annual Budget. An economic analyst on AMP Business this morning described it aptly. He said that New Zealand is used to Budgets that are one of three gears: fifth gear, neutral, or in reverse. Simply moving forward at a moderate pace never quite seems to hit the spot. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000499\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EThe latest phenomenon, I tell members who do not know, is a game or activity called planking. Planking is a particularly good example of the trend to be just a bit more shocking and dramatic than the next person in line. Planking is a new obsession. It requires that the subject lies flat and face down\u2014which is what some of these people in the House should do\u2014in an innovative location. The pose is photographed and the photo is uploaded on to the social networking site. Members might have seen it on TV recently. Earlier this week the game took on a bit of a sinister edge. A 20-year-old Brisbane man fell to his death, while planking, from the seventh floor of his dwelling. It is a classic case of a world where people hunger for excitement and a sense of adventure, regardless of the risk. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000500\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EIn such a context, the prospects of people welcoming a Budget that emphasises balancing the books and being responsible, affordable, and measured was always going to be pretty low. Let us face it: steady as she goes will hardly raise an eyebrow, let alone get a standing ovation. But, then again, building a solid platform for growth will not see us catapulting down into the death trap either. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000501\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EThe taxation legislation epitomises a \u201Cbusiness as usual\u201D approach to the economy. That is what we say. It is about enacting various strategies that support and sustain core programmes while at the same time making changes that deliver better value for taxpayers. Of course, no one has ever wanted to reduce any funding to families. Ideally, they should be the first place to look at, in terms of investment. How do we respond to exceptional extenuating circumstances of two massive earthquakes and an ongoing series of shocks to the economy, without some changes that have the potential to create savings? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000502\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EIf one looks at this bill one sees some answers. Slowly but surely the Government intends to reduce the amount of money it has to borrow from overseas in order to subsidise KiwiSaver, and instead increase the amount of genuine savings from the public sector. The M\u0101ori Party supports this approach on two grounds. Firstly, we are pleased we are lessening reliance on foreign funds to prop up our own local economy. Part of our policy approach has been that we look at our opportunities internally for suitable investors. Opposition members are quiet now; it must have been a good idea. I am mindful of the excitement that was evident at the M\u0101ori economic summit conference held earlier this month. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000503\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002201f044a4868546cd81456b4bba8858d2\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: I\u2019d go back to planking if I were you.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000504\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022444b6d0882ea49cb9c9bf9400a7b8a21\u0022\u003ETE URUROA FLAVELL\u003C/span\u003E: The member has already been on the plank. That is why he looks so bad. One of the breaking news reports from the day was from a study from Business and Economic Research that revealed that the value of assets held by M\u0101ori has more than doubled since 2006. M\u0101ori now have a significant asset base, worth $36.9 billion, compared with $16.5 billion 5 years ago. That is what we learnt at the M\u0101ori economic summit conference. At the summit the thriving momentum and buying power of M\u0101ori organisations, businesses, and individuals was clear for all to see. The point that the Ng\u0101i Tahu leader Mark Solomon made in the context of that summit is just as relevant to this taxation debate as it was then. Mark Solomon spoke about the recent meeting he had attended where he challenged an influential Auckland business audience to retarget their approach to iwi. The forum was a meeting hosted\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000505\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e3b67ecad40448e3be6a0be6b898ba1f\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Was Don Brash there? Was Don Brash in the audience?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000506\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c63af28f5c0e484fa676ade5c0dcce22\u0022\u003ETE URUROA FLAVELL\u003C/span\u003E: I tell Mr Cosgrove that it was probably at his meeting. The forum was a meeting hosted by Sir Ron Carter at which 40 major banks and companies were present. On the wall of that hui was a banner that asked \u201CAre iwi ready to invest?\u201D. Mr Solomon said the question should be \u201CAre you ready to invest with iwi, as we have stood in front of you for 150 years and been absolutely invisible?\u201D. It is certainly a good question to consider. Is the Government prepared to consider trusting in the asset base, including M\u0101ori trusts and incorporations, M\u0101ori employers, and self-employed M\u0101ori? That is the question. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000507\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EI will focus on this last group for just a minute. The Government\u2019s contribution to KiwiSaver has been the only incentive for the self-employed to participate in this scheme. As over 90 percent of New Zealand businesses employ fewer than 10 people, having small employers involved in KiwiSaver is very important. They would not divert funds from their business for retirement savings if it was not worth more than $1,000 to do so. We are pleased the $1,000 incentive for new entrants to the scheme has been retained. My colleague Tariana Turia spoke yesterday about the fact that there was not a huge uptake of KiwiSaver by M\u0101ori. For those M\u0101ori who are in the scheme we understand that it can provide higher relative payouts for lower-paid workers, whereas they do not get any value from taxes paid in respect of New Zealand superannuation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000508\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EThe other reason we support the changes to KiwiSaver is that the increased contributions from both individuals and businesses will happen only over time, helping to give the country time to adjust. The biggest risk, of course, is that any dilution of the current benefits of the scheme may undermine the public\u2019s confidence in the complex financial product. Currently, KiwiSaver has 1.7 million New Zealanders saving for their retirement. This provides a stabilised savings vehicle, which is helping to rebuild individual and household balance sheets, and the challenge is on all of us to ensure we maintain future long-term benefits to the country while the adjustment is in place. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000509\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EThe other big set of changes in this bill is around Working for Families. In terms of the broad parameters of the policy change, we support the concept of better targeting Working for Families for lower-income families who need more help. That fits in with the advocacy role we have played in Government, fighting to protect the rights of, and opportunities for, the most vulnerable. We acknowledge that it will hurt higher-income families in terms of the greater good for the nation, but we believe that that is a change we can support in the interests of the longer haul. The M\u0101ori Party will support the third reading of the Taxation (Annual Rates and Budget Measures) Bill.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221c818ce2-6ca3-4c4a-9e6a-2e3a67d070e1\u0022 data-id=\u00220b3c09809c8843548130e738a930ce58\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000510\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221c818ce2-6ca3-4c4a-9e6a-2e3a67d070e1\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00220b3c09809c8843548130e738a930ce58\u0022\u003ESHANE ARDERN (National\u2014Taranaki - King Country):\u003C/span\u003E It is a pleasure to rise in support of the Government\u2019s Taxation (Annual Rates and Budget Measures) Bill. I stand here today representing the Taranaki - King Country electorate, an electorate that starts near Hamilton and finishes in South Taranaki. It is a rural electorate, a farming electorate, with a large number of dairy farmers. It is not a rich electorate. It is made up of 17 small towns up and down the electorate. They support the rural electorate and we support them as part of the farming sector.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000511\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221c818ce2-6ca3-4c4a-9e6a-2e3a67d070e1\u0022\u003EI stand here as a dairy farmer and I say to Labour members over there that I know what my tax is, I know what we pay, and I despise the way that issue has been misrepresented over the last few days. If there is one thing that the rural electorates know how to do, it is to hunker down when there are tough times, look at what works, pay the bills on the areas that are essential, not pay the bills for things that are not essential, and look to where cuts can be made. That is why I am proud to be part of the National Government. I am proud of a Government led by John Key, which has looked at the circumstances New Zealand faces at the moment and what we can do to bring about an increase in economic activity and growth. I will tell members on the other side of the House what does not increase economic activity and growth: taxing the productive sector\u2014that is, taking taxes from the productive sector and spending them on non-productive activity. That is Labour\u2019s answer, that is its solution to the way forward, and that is what the Labour Opposition puts up.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000512\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221c818ce2-6ca3-4c4a-9e6a-2e3a67d070e1\u0022\u003EI have one question to put to the Labour Opposition, and it relates to the fact that I have heard in many speeches in this House that the agriculture sector, and particularly the dairy industry, is supposedly the backbone of this country. What does that mean? What does the word \u201Csupposedly\u201D mean? Does it mean that it may be, or it could be, or it might be? If it is not, what is? I ask members on the other side of the House whether it is the black market that the trade unions support\u2014openly and regularly. Maybe it is the underground, non-taxable income that is so often supported\u2014and turned a blind eye to\u2014by those members on the other side of the House. Maybe it is not; maybe it is something else. Maybe it is the activity of the trade unions, or maybe it is the activity of the Labour Party. If the agriculture sector is not the backbone of this economy, what is? There is no \u201Csupposedly\u201D; it is, in black and white, the backbone of the economy, and there is no doubt about it. Why then would those members use such distorted figures? The only reason I can suggest is that Labour intends to attack the very productive base that this economy depends on. I am a dairy farmer, and I will never back away from that, and I am a shareholder of Fonterra, a small cooperative\u2014a small farmers\u2019 cooperative. It is small by international standards but big in New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000513\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221c818ce2-6ca3-4c4a-9e6a-2e3a67d070e1\u0022\u003EWhen the Christchurch earthquake struck, who was the first one there? Who was the first one there with a tanker load of water? Who was the first one there? And I ask this question: who put the money in? How much money did Mr Little write out for the earthquake? What was the cheque from the trade union movement? Righty-o, they cannot afford it. They will say that they cannot afford it. Where were they when they needed the soldiers on the street cleaning up? Who turned up for that? It was the Farmy Army and the students\u2014not the trade union movement, no. They were the ones sitting in their houses and looking out at the workers. This is a childish, shallow, and vindictive attack on the farming sector, the very sector\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000514\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225723abce906f45ceb93d6a9531479598\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: I raise a point of order, Mr Chairperson. I respect the member and I do not wish to interrupt him, but I simply ask for your advice. I know this is a very wide-ranging debate, and we have roved reasonably wide, but the member speaks of the Farmy Army, the student army, and the earthquake. This is a tax bill, and the member might want to come back to it. I do not think it is healthy to throw accusations about black markets and people being involved in that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000515\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ffcf3d823d9042ceb5d7bd9b32f898b2\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: I take the member\u2019s point, but I think that if I was going to be overly critical on this point, then I would have raised this matter at other times during the succession of debates on this matter. It is probably stretching things a bit, but has he gone further than other members? I am not sure. My preference, certainly, would be for members to debate specifically.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000516\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221c818ce2-6ca3-4c4a-9e6a-2e3a67d070e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b4ca50a4dd964b5bab69b103c55fe8f3\u0022\u003ESHANE ARDERN\u003C/span\u003E: Thank you for that, Mr Assistant Speaker, because the member has given me such a wonderful opportunity that I do not know where to start. In the Budget there is $5.5 billion going to the Christchurch earthquake repair. The member would have missed that, I am sure\u2014he would not have seen that. It is on the second or third page, and he would not have read past the front page that the Labour research unit gave him. The National Government is investing $5.5 billion into a town that was devastated, and so it should. But here is the irony: most of the Christchurch seats are held by Labour. It is a Labour town, and the National Government is putting $5.5 billion into it\u2014so we should\u2014and we do not resent a single cent of it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000517\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221c818ce2-6ca3-4c4a-9e6a-2e3a67d070e1\u0022\u003ELabour members have this notion that we can get this economy back on track by, once again, identifying entrepreneurs and successful people\u2014not the losers on the other side of the House, not the vindictive haters and wreckers on the other side of the House, but people who are successful, work hard, and strive to achieve\u2014and attacking them. Labour\u2019s alternative budget is to tax farmers more, and that will solve the problem. That is the next Tui billboard: \u201CTax farmers more and that will fix the economy!\u201D That is what Labour members have said in the last few days. It is the next Tui billboard. What will they say to that? \u201CYeah, right!\u201D Shame on the Labour colleagues who have decided to shift the limelight from the fact that they have no alternatives, that they have nothing to offer, that they are shallow and completely without any substance, at all, on to a group of hard-working, dedicated individuals who are paying their taxes, are good citizens, and are good community people. Those members should be ashamed of themselves, and that is all I can say.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000518\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221c818ce2-6ca3-4c4a-9e6a-2e3a67d070e1\u0022\u003EThe Green Party has also put up no credible alternative. Dr Russel Norman sails up and down rivers all over the country talking about the state of pollution, and blaming a particular industry. I invite him, actually, to row his canoe down the Avon River\u2014row it down the Avon.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000519\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002241c10b2af3f34e4880b834605269904b\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Oh, a bit difficult. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000520\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221c818ce2-6ca3-4c4a-9e6a-2e3a67d070e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ed04c8ccc2b942db9e79e051a2efb3d4\u0022\u003ESHANE ARDERN\u003C/span\u003E: OK, OK, of course it\u2019s different. There are no cows anywhere around the Avon; it cannot be polluted, because there are no cows there. It is the most toxic waterway in the country, next to the Viaduct Basin in Auckland, of course, where, again, one would have to go a long way to find some cows. Never let the facts get in the way of a good story. The Hon David Carter and the Hon Nick Smith have done more to correct the situation in terms of cleaning up waterways with the recent announcements that this Government has made than any Labour Government has ever done. Labour and the Greens talk about the environment but they do not do anything about it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000521\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221c818ce2-6ca3-4c4a-9e6a-2e3a67d070e1\u0022\u003EIn closing, I say that this is a good Budget, and it is the right position to go to. I am a farmer and I live in an electorate that is made up of farmers. I share the highs and lows. I know when they are hurting, and when they are not paying tax, because they have not made any money and have made a loss. I know that when they make a good profit, they pay their share of tax. I say to members opposite that I know what their vision for the future is. One need go no further than the small community I live in, where there used to be a small school that produced four duxes in four different high schools in the electorate, but now it looks like a Third World derelict. That is the Opposition\u2019s future for the rural community. It closed that school despite the fact that 75 percent of the operational grant went into the curriculum. When one looks at it now, we see that it is a disgrace. That is the legacy and the vision that Labour has for New Zealand. The vision is bankrupt, Labour members are bankrupt. They are losers, haters, wreckers, and muppets. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000522\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002248d52382a9154ecb97570af9b435ddc3\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: I raise a point of order, Mr Speaker. Last night you made a series of rulings, and I was, quite rightly, a victim of one of them. Given the last set of comments by that member, I invite you to be consistent. You were right last night, you should be right today, and I invite you to be consistent in your rulings in respect of that last salvo from the member.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000523\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c0ad56b5b1b34324b0a1a857017bd838\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: I think the member Shane Ardern used some invective that certainly was not necessary. Probably the appropriate thing for me to do would be to ask the member to withdraw and apologise for that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000524\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221c818ce2-6ca3-4c4a-9e6a-2e3a67d070e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fc992a6d0c284c85bc780ed09a0e5bcd\u0022\u003ESHANE ARDERN\u003C/span\u003E: I withdraw and apologise. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022 data-id=\u00222762d927c96a4817bd760f98a9e6bc29\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000525\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222762d927c96a4817bd760f98a9e6bc29\u0022\u003EBRENDON BURNS (Labour\u2014Christchurch Central):\u003C/span\u003E I am a little bemused by the preceding speech by the member from the struggling, poor electorate of Taranaki - King Country, and by his description of the union movement, which, obviously, has not done anything to help the poor people of my electorate, Christchurch Central! I just remind him that, firstly, generous donations were made by various unions to the Christchurch earthquake appeal, and, secondly, as he asked who was there first, I can tell him that people like police, firefighters, nurses, and emergency service workers were there first, most of whom are proud members of unions, and some of whom were outside Parliament yesterday to say they did not want to see a Budget that took the axe to the benefits they have enjoyed from good, sound policies that the Labour Government introduced, like KiwiSaver and others.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000526\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI will start by putting on the record how pleased I am to see that this Budget provides for Canterbury. I am probably the member whose electorate will benefit the most from that provision, the $5.5 billion put into the Canterbury Earthquake Recovery Fund. I am also particularly pleased to see that the Government has picked up the idea of an earthquake bond. I have been working on that myself with a group that I chair, Interests in Conserving the Identity of Christchurch, which brings together building owners and heritage advocates. Jim Anderton has done some work on that, and we have done some work on it. I would hope that as the earthquake bond comes through after the announcement yesterday, we will see that there is some potential for it to at least in part support things like heritage retention in Christchurch. It is important to the rebuild of our city, along with other elements. I would also hope that some of the money might be directed to further support for skills training, which is, of course, essential for our rebuild as well. There it is on the record\u2014we are in support of that measure.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000527\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EThere are now no excuses from here on in terms of how the rebuild proceeds. The Government has the power through the Canterbury Earthquake Recovery Act, it has the money as provided by the Budget, and it has the department in place. We are looking for an acceleration of the recovery from here on. There should be no more of the delays with things like heating, where there has been acknowledgment of the installation of 4,000 new heaters when there are 25,000 people who have asked for them. Let us hit the fast-forward button now in terms of this Budget funding the recovery of Christchurch.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000528\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EHowever, there is for me a deep and fundamental concern about how the quake is portrayed in the Budget. I say to members that, yes, the quake should be the centrepiece of the Budget because it is the nation\u2019s biggest ever natural disaster, and this Government, or any Government, would have had to respond to that situation. But that is no reason whatsoever, in my view, to provide for the sale of assets, be they State assets or Christchurch City assets. I remind members opposite that the basis of the Budget is that the quake accounts for only 10 percent of the accumulated deficit, nearly $17 billion. Let us not see the quake used as some sort of carte blanche for asset sales.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000529\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI will talk first about the assets of my city, Christchurch, where $2.2 billion in assets is held by ratepayers. These assets are essential to the financial integrity of the city. They keep rates down by about 15 percent. They have contributed to many other important projects, such as the building of the Christchurch Art Gallery, which became the base for civil defence, and, more latterly, the Canterbury Earthquake Recovery Authority operation. That was the building that stood up, and it was funded, in large part, by assets such as Orion. Orion has returned nearly $1 billion to the Christchurch City Council and its ratepayers over 20 years. That is nearly $1 billion from one of the assets alone. I challenge the next Government speaker, who might be Amy Adams, to stand up and add to my voice in saying that we will not tolerate any sale of Christchurch City Council, Selwyn, or Waimakariri assets as part of the funding of the recovery.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000530\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI ask members why we should be concerned about that. We are concerned because, firstly, the Canterbury Earthquake Recovery Act provides the capacity for that to happen, and, secondly, the Budget provides for the sell-down of half of some of the major assets currently held by the Crown. We look at Mighty River Power, Meridian Energy, Genesis, Solid Energy, and Air New Zealand as being the principal assets that we hold, and we say it is absolutely essential that those stay in public ownership because of the dividend stream they provide.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000531\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI ask the next member to speak to comment on the issues created by the Supplement to the 2010 Investment Statement of the Government of New Zealand. On page 3, in the Executive Summary, it states that proceeds from asset sales\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000532\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a2bc89a2fc2a4c13b5b8fbd2858c6700\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: Just a short while ago I was asked to rule on relevance. This debate is on the Taxation (Annual Rates and Budget Measures) Bill\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000533\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cbb83aab-9566-44c4-9029-8bda4aaca7f2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221be22f02d1de428f873ea08f0c0d65b1\u0022\u003EHon Phil Heatley\u003C/span\u003E: That\u2019s right.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000534\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e00715f3f8364ef7aeb162132f3ccaa5\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: Who said that? I ask the member to leave. I am on my feet. You are out.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000535\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003EHon Phil Heatley withdrew from the Chamber. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000536\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b9cf0c618e5b4dd4bf1b1352f3b0f95a\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: I ask the member Brendon Burns to contain his comments to matters that are in the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000537\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e444cb79961d486283f32f54da532d47\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: I raise a point of order, Mr Speaker. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000538\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227a0e45e2bc65465195b504c61582e479\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: I have ruled on the matter.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000539\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002241a762c514d447bba30b332e3f56656e\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: I raise a point of order, Mr Speaker. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000540\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228a13e91882f4441095f11d21ab498959\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: Only if you have a separate point of order.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000541\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002264ab8d6adfbb4113b352fb068552f97d\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: I was the person who at one point during Mr Ardern\u2019s speech raised an issue with you. You were generous and correct in your ruling. You stated that the debate had stretched pretty wide of the mark, and that others had stretched it possibly even further or to the same level as Mr Ardern. I argue that in terms of being consistent, what is good for the goose is good for the gander, as it were. I invite you to perhaps have a wee think about the instruction you have given my colleague.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000542\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b606702a07084012bdc585e78b5708a5\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: The member has made a fair point, but I was responding because I had been asked to make a ruling earlier. Maybe I did not make the point as firmly as I should have. I will restate what I said then. We have strayed wide, and I alert the member Brendon Burns to the fact that it is my desire that he approach the debate in the direction of the bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000543\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c7d52b39e434451d9a8f4ea39d1c47de\u0022\u003EBRENDON BURNS\u003C/span\u003E: Thank you, Mr Assistant Speaker. I pledge I will not refer to Farmy Armies, unions, or any other matters from here on. I will talk about the Budget and the fact that in Part 1 of the Taxation (Annual Rates and Budget Measures) Bill it provides for the taxes to be paid this year, and in Part 2 it provides for cuts to Working for Families and KiwiSaver. I am making the point that part of the whole integrity of the Budget is actually including partial asset sales, so how can we have that included as part of the Budget, its papers, and its assessment of forecasts when in fact the Government has said it will not take those issues to the electorate until 26 November and they will not come into play until next year? But here in the Budget papers we have a provision for a stream of income from asset sales of the order of $5 billion to $7 billion.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000544\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI come to a point on KiwiSaver and the changes made to it in Part 2 of the bill. To me, this just continues what has been an appalling record by National in office that dates back to the time of our colleague Sir Roger Douglas, who in 1974 brought in a contributory superannuation scheme\u2014a predecessor, if you like, of KiwiSaver. If it had been left in place, it would have seen us a very wealthy nation today\u2014would have. Unfortunately, the then National leader, Rob Muldoon, campaigned on disembowelling that scheme, and we have paid a price for that ever since. That is not the only legacy of National in respect of superannuation, which has been most recently manifested by yesterday\u2019s announcements on KiwiSaver. In the 1990s there was a cut to the base rate for married couples from 65 percent of the average wage to 60 percent. It was a swingeing cut for those people. Around 70 percent of people are reliant on national superannuation as their base income. We had that change perpetrated on New Zealanders in the 1990s under the Shipley administration.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000545\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003ENow we have KiwiSaver, in about its third permutation\u2014because National came into office saying it would cut back the employer contribution to 2 percent\u2014and now we are seeing under this measure a return to a 3 percent payment from employers. The signals from employers are that that will simply come out of the wage increases of employees. That is certainly not contributing, in my view, to the focus on savings that this Budget is supposed to have at its heart. If we are going to encourage people to save, then we need, as Treasury\u2019s and the Inland Revenue Department\u2019s own regulatory impact statements say explicitly, stability and predictability. People will not put money into schemes if they think Governments will play around with them.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000546\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EHere we have a National Government that should hang its head in shame at its past history on superannuation and on encouraging New Zealanders to save. Yet again, National is playing tricks with a superannuation scheme that was picked up by thousands and thousands of New Zealanders every week\u20141.7 million New Zealanders have come on board. Instead of enhancing the scheme, adding to it, or building it into a scheme that all New Zealanders can rely on into their future retirement, we are seeing the axe taken to it. We are seeing cuts being made to it. We are seeing its value being undermined. New Zealanders will take those signals and ask why they should stay on board and contribute to KiwiSaver if the Government is not staying on board. We are already seeing comments like that in the public domain.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000547\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EMy final comment is that although this Budget is supposedly about growth, we saw two references to exports and 19 references to debt in the text of the Minister of Finance\u2019s speech to the House yesterday\u201419:2. That is the focus of this Budget. It is about debt and it is about cutting; it is not about growing. It is a very poor, shabby, and shameful Budget.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022 data-id=\u002275615af5220c4d9ebacc9737e28a8cda\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000548\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002275615af5220c4d9ebacc9737e28a8cda\u0022\u003EAMY ADAMS (National\u2014Selwyn):\u003C/span\u003E I will take a call in the third reading of the Taxation (Annual Rates and Budget Measures) Bill. Before I talk about some of the specific measures in the bill, I want to make a few introductory comments to set the context within which those changes are being made. As this has been a wide-ranging debate, I am sure I will be indulged for a few moments. I think where we have to start with this stuff is to say that anybody can stand here and talk about perfect-world scenarios. It is very easy to stand here and say that this should be happening, we could do this, and would it not be great if we could do that. But the reality is that the last few years have presented an unprecedented set of challenges. There have been economic challenges, personal challenges, and social challenges that this Government has had to deal with. That has meant we have to make changes to the way things have been if we are going to get this country back on a path to sustainable growth. If we are starting from a position of saying that everything is good, let us just carry on and keep spending money, we are not accepting the fact that we have to do things differently to deal with what has gone before so that we can get this country on a path back to growth. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000549\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003EThis Budget charts a remarkable turn-round from a record deficit of over $16 billion to almost balance in 3 years, and, in the year following that, a surplus of $1.3 billion. That is a turn-round in those 4 years of nearly $18 billion. That is a stunning achievement, and it is an absolute prerequisite to getting this country into the sustainable, strong, prosperous position it deserves to be in. Mr Burns was right about one thing in his contribution: a big part of getting that situation right is about controlling debt. We are not making any excuses about that. We have to get on top of this debt. If we are going to keep borrowing and borrowing, we will never get back to the position of surplus. Surplus means choices and the ability to withstand the sort of shocks we have had in the last few years. We have to control debt. At the moment we are borrowing $380 million every single week. With the changes in this Budget, we can get that down to $100 million a week next year. That is absolutely critical to getting this right. Yes, we are making changes, and, yes, those changes take money out of the Government spend. That is a good thing, because it is what is needed right now in this climate with the issues we are facing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000550\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003EI want to have a look at some of the specific changes this bill delivers to KiwiSaver and Working for Families. Let us have a look at those. I have sat here all day today and the debate has been wide ranging, but few people have actually talked about the specifics of the changes and how small and gradual they are. Let us have a look at them. KiwiSaver costs this Government $1.2 billion every year. It is costing this Government $1.2 billion in subsidies and tax breaks. That money comes from hard-working New Zealanders. What is worse, it is money that is adding to what has to be borrowed from overseas. It all has to be funded and paid for. Yes, we are reducing the tax credits to 50c in the dollar, but we are keeping the kick-start subsidy. That means we will still be committing $650 million as a Government to KiwiSaver in the next year. That is a significant contribution. We will be committing $2.5 billion to KiwiSaver over the next 4 years. That is absolutely important to emphasise. We are committed to it. We will see it remain viable and successful, and all the projections tell us it will continue to grow. But, yes, we are reducing those tax credits to help pay the bills from the years we have had it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000551\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003ELet us look at Working for Families. We are talking about gradual changes over 8 years. Let us get this on the record very clearly. Three-quarters of families on Working for Families will not see a reduction; in fact, they may see more. Twenty-five percent of families will see a reduction, and that reduction is an average of $4 a week\u2014$4 a week. For all the histrionics about gutting, slashing, burning, and everything else, and all the vitriol and hyperbole we have seen, a quarter of families on Working for Families will notice a reduction, gradually introduced over 8 years, of an average of $4 a week. It is not a lot, but it is an important step in getting this country back to surplus. We have to put that on the record. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000552\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003ELet us have a look at student loans, as well. Although the student loans scheme is not part of this bill, it is an important part of this. Here are a couple of interesting things. The cost of student loans has gone up 50 percent in 5 years\u201450 percent. There is $12 billion outstanding in student loans. Of that money, the Government collects an average of 55c in the dollar. It is staggering to find out that 50 borrowers are responsible for $11 million in debt between them. We have to start asking the hard questions about these schemes; we cannot put them in the sacred cow category. That is what this Budget has done, and it has done it in a balanced and responsible way. That is what this bill delivers in respect of KiwiSaver and Working for Families, and I am very pleased to commend it to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022 data-id=\u0022f422b690e5d543dd8844be6913c017e9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000553\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f422b690e5d543dd8844be6913c017e9\u0022\u003EJOHN BOSCAWEN (Leader\u2014ACT):\u003C/span\u003E I have been listening to this debate with a great deal of interest over the last hour or so. I particularly want to comment on the contributions of Gareth Hughes, Shane Ardern, David Cunliffe, and, more recently, Brendon Burns.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000554\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003ELet me start with Gareth Hughes. I always find it very interesting when members of this House refer to the pronouncements of the Human Rights Commission, and particularly when those members come from both Labour and the Green Party. I have a real respect for the Human Rights Commission and, in particular, its Chief Human Rights Commissioner Rosslyn Noonan. I listen to what the Human Rights Commission has to say, and particularly so in view of the courage shown by Rosslyn Noonan, Judy McGregor, and Sylvia Bell in the commission\u2019s submission on the Electoral Finance Bill, which came before the Justice and Electoral Committee in the last Parliament. I remind Mr Gareth Hughes of what the Human Rights Commission said in respect of that bill. The commission said: \u201CThe bill in its current form represents a dramatic assault on two fundamental human rights that New Zealanders cherish,\u201D\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000555\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f8df5c104a7c4dec9f60d81cca1ec5ce\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: This has nothing to do with the taxation bill, and I ask the member to come back to what this bill is about. We are speaking on the third reading, and on the report back from the Committee stage. Those are the points that need to be canvassed in this speech.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000556\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f5f0232ccdd14412a7731fbf77269a72\u0022\u003EJOHN BOSCAWEN\u003C/span\u003E: Thank you, Mr Deputy Speaker, and I understand that. The reason I thought it was important to put Mr Gareth Hughes\u2019 criticism in context is that the Human Rights Commission has come out and spoken out against the proposal to restrict the ability of those over the age of 55 to borrow for living costs when they are studying. Those students will not be restricted to borrow money for their fees, but restrictions will be placed on their ability to borrow for living costs.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000557\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI say that although the Human Rights Commission has come out against that proposal, I would say to the members of the commission that there is a cost for everything. There is no free lunch. As contained in this Budget, some $15 million a year is borrowed for living costs for those over the age of 55, which has to be paid for by someone. As I will point out, it will be paid for by the people who will get the least from this Budget\u2014the most disadvantaged. The people at the bottom of society, the people who actually do not have the money to contribute to KiwiSaver are required to pay taxes\u2014if not income tax, then certainly GST on the food and the clothes they purchase\u2014to subsidise those who can go to university. In the same way, those same people on low incomes, those same disadvantaged people, have to subsidise those who will enjoy unlimited superannuation into their 80s, whereas those who are not as well off usually have a lower life expectancy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000558\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EGareth Hughes also continually refers to the paying of subsidies to polluters. We hear the Green members\u2019 constant refrain about paying subsidies to polluters. They seem to think that the more times they say it, the more it will be true. But the tragedy is that it is not true, and I suspect that most members of this House do not understand that. I would like to explain, because the emissions trading scheme, which is an item in this Budget\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000559\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ca164e4498d0487abd2485296605920c\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: No.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000560\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002266924a87d47c40d8b4c374b474f7bc00\u0022\u003EJOHN BOSCAWEN\u003C/span\u003E: The emissions trading scheme is in the Budget, and Brendon Burns\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000561\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002279d1356fa32047c2a2280b9efbc563c3\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: No, we are talking about taxation matters, which are in the bill. The bill is not about an emissions trading scheme. I ask the member to confine his comments to the contents of the bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000562\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022acaeda8e9d5447f2b6d37a02c36c362e\u0022\u003EJOHN BOSCAWEN\u003C/span\u003E: I suggest to the House that the Government has had to make reductions in the subsidies on KiwiSaver because of what the Government is spending in other areas. Maybe we would not need to be legislating for these cuts in subsidies if the Government was not wasting money in so many other areas. I note that on page 179 of the Budget documents, buried under \u201CHeritage, culture and recreation expenses\u201D\u2014and a previous speaker Brendon Burns would have us believe that heritage, culture, and recreation are about the rebuilding of Christchurch\u2014we find mention of the Kyoto Protocol and the emissions trading scheme. What a great place for the Government to bury the fact that we are spending over $1.2 billion on that scheme, and that we have to cut other Government services.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000563\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI refer now to the comments of Shane Ardern when he was speaking on this Budget. Mr Ardern said that he was very proud to represent a farming electorate that had a very large number of dairy farmers. He said he himself was a dairy farmer. Given that he is a dairy farmer, he will know that dairy farmers pay about $3,000 a year on the emissions trading scheme. I thought it was particularly interesting when Mr Ardern said that the solution was to tax the productive sector, and that to tax farmers more would fix the economy. National seems to think that is true, because that is exactly what the emissions trading scheme does. That is why we are discussing the cuts to KiwiSaver contained in this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000564\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003ELet us look at the contribution made by David Cunliffe. That member, like so many in this House, thinks that this is a debate between National and Labour. There is no alternative, they think, so the member waxed lyrical about the fact that some pollster is showing that 48 percent of people believe that this Government is going down the wrong track, and only 32 percent believe that it is going down the right track. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000565\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c0450403dfb2421ab11b426d3ac71999\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Relevance?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000566\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002211c5328fcce2499ba00ff6f11960db5c\u0022\u003EJOHN BOSCAWEN\u003C/span\u003E: That is what he said. He said that as sure as night followed day, when a greater number of people believed that this Government was going down the wrong track\u2014and he said that more people believed that it was going down the wrong track than the right track\u2014there would be a change of Government. Well, the ACT Party believes that this Government is going down the wrong track. The ACT Party, although it will be supporting the changes in this bill\u2014the changes in the KiwiSaver subsidies, and the other taxation changes in this bill\u2014is supporting it because we have a confidence and supply agreement with the Government. But we do not believe that these changes go far enough. We absolutely do not. We think this is a lost opportunity. Mr Cunliffe said he had been waiting 3 years for a Budget from National that would give some vision and some courage. But the members of the ACT Party have not been waiting 3 years; they have been waiting 18 years. We have been waiting 18 years for a Budget that can lay down some foundations for making some significant increases in the productivity of New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000567\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EThere are a number of things to commend in this Budget. Yes, we are returning to surplus by 2014, or should I say we are projected to return to surplus. Those projections, of course, are based on\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000568\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226584a6e4d3834c0ab52e4ffbc7b489fa\u0022\u003EHon Rick Barker\u003C/span\u003E: Hope.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000569\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002201fc38c68b4a4e9c8f1a9787ec2dbbef\u0022\u003EJOHN BOSCAWEN\u003C/span\u003E: Hope is exactly what it is. Those projections are based on rising incomes and growth of some 3 or 4 percent in that 2014 year. Media commentators have said this morning that Treasury has been forecasting growth of much higher levels than we currently have. It is forecasting growth at a time when there is massive world uncertainty; the US dollar has massively devalued. So this is very much a \u201Chope\u201D Budget, in the same way that it is another lost opportunity, just like the previous 17 Budgets that have been brought down by both Labour and National Governments since the ACT Party was formed in 1994.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000570\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EWe have been talking about the cuts in the subsidies to KiwiSaver. One of the fundamental points of this bill\u2014and Amy Adams made the point\u2014is that the cuts are gradual. Certainly, the changes in Working for Families are gradual changes. But who can actually save the money? Who are the people who can put together and save, currently, the 2 percent contribution, which is now to be 3 percent? Are many people on low incomes or working for the minimum wage in a position to save 2 or 3 percent? I suspect not, but they are the people who will be paying the taxes to subsidise those who can. One of the reasons that ACT opposes the bill is that we do not think we need to have those incentives. We do not think that those earning low incomes and paying GST should be subsidising those in a position to save.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000571\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EI find it very interesting that Brendon Burns referred to the fact that Sir Roger Douglas, as Minister of Finance back in the then Labour Government of 1975, introduced the Labour superannuation scheme in that year, and Brendon Burns waxed lyrical about how big that pot of money could have been. Mr Burns is absolutely right: that would have been a big pot of money 35 years ago. But Mr Burns did not say that there was actually no subsidy for it. It was based on a 4 percent employer contribution and a 4 percent employee contribution. There was no $1,040 one-off payment. There were no ongoing subsidies that the poor had to pay for.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000572\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002277ec6495-df45-43ac-aaa1-a03b5dd4c128\u0022\u003EWe are supporting this bill. But it is a lost opportunity, and we look forward to playing a much bigger role in Government following the election.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u00225930b8e42f1645d3899c1c511722d5f6\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000573\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225930b8e42f1645d3899c1c511722d5f6\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E Is it not interesting\u2014John Boscawen said the ACT Party was formed 18 years ago. Well, it held its breath for 18 years and it turned blue. That is what happened; it turned blue. The party has given up on everything it once stood for, and John Boscawen even admitted that he does not agree with anything in the Taxation (Annual Rates and Budget Measures) Bill, but he will vote for it. What does that say? Well, maybe I should say that blue is the wrong colour. Maybe yellow is the right colour. After 15 years of not even getting close to power, ACT had to pull back Sir Roger Douglas. He had to come out of retirement to save the ACT Party. I feel a little bit sorry for Sir Roger. He was enjoying his retirement. He had put the old version of KiwiSaver in place. It would have been a fantastic scheme. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000574\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EBut I must admit there are a couple of points\u2014and members will not hear me say this very often in this House\u2014on which I agree with John Boscawen. The first point is that this Budget is a hope Budget. The figures behind this Budget do not stack up. Why do I say that? Because I am the Labour spokesperson on revenue. I have dealt with the Inland Revenue Department on a number of issues, and I have found it to be absolutely brilliant in its statistics and its advice. The advice the Inland Revenue Department gave to the Government on tax in this Budget differed, by $4 billion less, from the advice the Government received from Treasury. The Inland Revenue Department advice differed from the advice from Treasury by $4 billion over 5 years. That is a lot of money, in anyone\u2019s language. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000575\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI do not know what the Treasury figures were based on, but, goodness me, we should be very concerned. Amy Adams stood up and I agreed with her on one thing: things need to be done differently. Labour agrees with that. Labour knows that the country cannot afford to keep borrowing $380 million a week. That is not sustainable. A $16 billion deficit is simply not sustainable, and something has to be done about that. Amy Adams said that it is about giving choices. This Government had choices, but it spent $25 billion on tax cuts. That was the wrong choice. This Government also cut KiwiSaver. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000576\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI will give the House a quote from John Key. He refused to rule out further cuts to KiwiSaver. When he was asked whether it was the end of the cuts to KiwiSaver, he would not rule out further cuts. In Auckland today after addressing a business audience, he said \u201CYou learn in life, I guess, to rule nothing out.\u201D When he was asked whether he could rule out further cuts to KiwiSaver, he said that he would not rule them out. He said \u201CYou learn in life, I guess, to rule nothing out.\u201D Well, I think Mr Key needs to come straight. He needs to tell the people of New Zealand exactly what he wants to do with KiwiSaver. At the moment, he has cut $10. How much more? He says he will not rule anything out. Well, how much more? What is not ruled out? Will it be $20? Will he take away the $1,000 head start? What will he do? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000577\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThere are a couple of points I would like to make in rebuttal to a couple of Government members. Craig Foss stood up in this House and had the nerve to tell New Zealanders that they were better off because of low interest rates. Well I can inform him and this House that New Zealand has the highest business lending rates of any country in the OECD. How is that helping business? Those figures are from the IMF; those are not Labour figures. New Zealand has the highest figures for business lending in the OECD. What has that Government done about it? Absolutely nothing. There is absolutely no plan whatsoever. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000578\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI will tell the House where the Treasury forecasts came from\u2014that is, the forecasts that differed from the advice of the Inland Revenue Department by $4 billion. They were based on the creation of 170,000 new jobs. That is what that forecast was based on. When Mr English was asked today where the jobs were going to come from, he could not tell the people of New Zealand\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000579\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e18692ae4abc43388b89c8fbee4f2571\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Cycleway?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000580\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022761bcd6bd8424b5fbda0d2a767ac48ef\u0022\u003ESTUART NASH\u003C/span\u003E: What did that create? Was it 60 or 100 jobs? It was certainly not 170,000. The tax revenues based in this Budget, based on these rates, are not achievable. They are simply not achievable. Mr English said that commodity prices are booming\u2014they are going to come in the sectors that sell commodities. Well, I can tell this House that the opposite happens, and I will give members an example. In the forest industry, there are record commodity prices. What is happening? We are selling unprocessed logs offshore. Domestic processors simply could not afford to buy those logs. They are closing down. Jobs are lost. Let us talk about the farming sector. It is crippled, under $42 billion worth of debt. Thank goodness for record payouts! We may see a little bit of tax coming from that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000581\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003ENo one wants to see a more profitable farming sector than I do. Mr Ardern stood up in this House and he told us the boundaries of his electorate. He said that he came from a poor electorate, a rural electorate. That is true. That was our point. The fact is that the industry that describes itself as the backbone of this country is in serious financial trouble to the point where the dairy industry pays only $26 million in tax, and where 75 percent of dry stock farms earned $20,000 or less. Over half of those farms made a loss. That is a debate that we need to have as a country. It is also a very, very powerful argument for investing in the productive economy. Do we see any of that in this Budget? No. Was there any investment or tax incentives for research and development? No, none whatsoever. The plan is in this bill, and what is that plan? Cutting KiwiSaver. That is the plan to drive this country out of economic woes. Well, it does not work. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000582\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe other plan is to cut the Working for Families entitlements for about 110,000 Kiwis\u2014no, not Kiwis, 110,000 New Zealand families. Those families are struggling, and that is why Working for Families gave them a little bit of a lift-up. In the Hawke\u2019s Bay economy, $120 million worth of Working for Families entitlements goes towards helping those who need a lift-up. Mr Dunne was the Minister of Revenue when the Working for Families scheme was put in place. Mr Dunne knows how important it is to New Zealand families that they can have a little bit of a lift-up, a little bit of a hand. Those are the families that will spend money in our communities, in our shops, but now that money will not be spent, because it is being cut. Amy Adams has the nerve to stand up in this House and say that the average reduction in Working for Families entitlements is only $4 a week, and that it is not much. It may not be much to Amy Adams, but $4 a week\u2014I know this is dreadful\u2014is actually a bit of money to a lot of New Zealand families. It buys bread. It can buy some milk. It buys the necessities. For someone like Amy Adams, who is out of touch, $4 does not matter. But it does matter to a lot of Kiwi families. To say that it does not matter shows just how out of touch she is. I find that quite insulting. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000583\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI will give a quote from Bill English about Michael Cullen. Bill English said: \u201CI want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook.\u201D Dr Cullen left this country in fantastic shape\u2014nine Budgets, all in surplus. This bill is not good for New Zealanders.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022 data-id=\u0022e6842d87a6314bc0ade220b11c54b860\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000584\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e6842d87a6314bc0ade220b11c54b860\u0022\u003EHon TAU HENARE (National):\u003C/span\u003E The Taxation (Annual Rates and Budget Measures) Bill gives effect to some of the changes set out in the Budget yesterday. We heard a lot of noise from Labour. What we did not hear was an alternative plan. There was not a word, not a whisper, of an alternative plan. There was nothing\u2014naught, zilch\u2014in any of those speeches, right from when the Hon Clayton Cosgrove came in here with his bully-boy tactics. He stood up and tried to stand over everybody, but, no, it did not work. [Interruption] It did not work. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000585\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003EThe Prime Minister the other day laid out for everybody what the plan is. Come 26 November we will see who supports the plan, and we will see who supports Labour\u2019s plan\u2014apparently Labour\u2019s support is only 27.3 percent. The taxation measures set out in this bill are about one thing and one thing only: back in black by 2014. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000586\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022285b838906484a1f9ad2d32a4d7a2d37\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Ha, ha!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000587\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226e7b9d99ea4545969978d9ae1e46c4a9\u0022\u003EHon TAU HENARE\u003C/span\u003E: I know the member for one of the areas in Canterbury thinks that \u201Cback in black\u201D is an AC/DC song\u2014and it is a good song\u2014but this is about being back in the black by 2014. As Amy Adams said, that will be an absolutely remarkable turn-round. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000588\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003EI will tell members across the way a funny thing. Back in 1993 I was a young lad with four children. I had a mortgage. I was paid, before tax, $28,900. I did not get Working for Families, and I did not get the accommodation supplement. I am damn proud of the fact that I was able to work my way to having a home and a family without the help of the Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000589\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003EHere is the other thing: I am also glad that a person on $100,000 today should not get any assistance whatsoever. That is my personal belief. When we put into perspective what this Budget has done, we see that Amy Adams was absolutely right. Amy Adams was absolutely right that there are families that do not need Working for Families or the accommodation supplement. But, yes, on the other hand, some families do need assistance through the accommodation supplement, Working for Families, and tax credits. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000590\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003EI absolutely commend this bill to the House. It is a step in the right direction. It is the only thing that we can do. Opposition members hold up the front page of the Dominion Post with a big zero on it. I am proud that in an election year the Minister of Finance and the Government have brought to this House a Budget that will see us back in the black by 2014. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000591\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003EThe other thing that I must say I really love about this Budget is that we are not putting this measure in place for the next 3 years. We are saying to the electorate that on 26 November people have a choice: go with a Government that is a good manager of the economy, or pick the other guys who squandered away billions and billions of dollars\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000592\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221c818ce2-6ca3-4c4a-9e6a-2e3a67d070e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002280bbbb9ea64b4c4c8aea3580f141d13f\u0022\u003EShane Ardern\u003C/span\u003E: In the best times.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000593\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022aa57eb46356f49659dcf164ce0836cb5\u0022\u003EHon TAU HENARE\u003C/span\u003E:\u2014in the best times that this country has ever seen. They did not put anything away for a rainy day.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000594\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e0192ed9-5715-4f6c-bd52-8db4f3466087\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cbf5876c38fb43c9ae3c7552cb5aeecb\u0022\u003EHon David Cunliffe\u003C/span\u003E: Yes, we did. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000595\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ed3c8a166fd84043b44f5b972b7afc6f\u0022\u003EHon TAU HENARE\u003C/span\u003E: Oh no, they did not. It was all gone. It was all gone by the time we got here. That is the real story of this Budget and the real story of the economy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000596\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003EHow did we end up where we are? I can tell members that we ended up where we are because of the likes of Parekura Horomia, David Cunliffe, Phil Goff, and Annette King. They have been around for too long, in the days where we had the best of times, and they squandered the surplus every year. That is where they left us. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000597\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003EIn the debate on this bill, Opposition members have also had a go at Sir Roger Douglas. I bring the honourable member into the debate because I want to say that if it had not been for Sir Roger Douglas and the Labour Government of the mid and late 1980s, we would have been in the you-know-where. That Government\u2019s programme was kept by the National Government of the 1990s. I have something to say to the Labour members who get up and rail against selling State assets. I had a look at the old register the other day, and out of the 27 State assets that this country owned, half of them were sold by those who say that they do not like the sale of State assets.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000598\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b36cbb3f997a45579d38acb6c270c019\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: We learnt; you didn\u2019t.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000599\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c9680378958c4281b82901532c5cd891\u0022\u003EHon TAU HENARE\u003C/span\u003E: Oh, that is all right! Now they say that they are opposed to any State asset sales. I am proud of the fact that our Prime Minister and our Minister of Finance have both said that we will put up for sale 49 percent of certain State assets. We will see a return on that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000600\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fe957f313e254587bba9475f820008e3\u0022\u003EHon Rick Barker\u003C/span\u003E: How about the member\u2019s house?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000601\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002251dfea20-2244-4fc7-bd7d-ebf7a98580e1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c59c96b184084bd0b1d032d0da877b70\u0022\u003EHon TAU HENARE\u003C/span\u003E: How about my house? Why would the member want my nice little weatherboard house up in Te Atat\u016B? Why would he want to do that? I tell him that what we should do is sell the assets of Stuart Nash. That would get us quite a few dollars. But I digress. This bill is about putting in place some measures so that we can get back in the black by 2014. That will be the catchcry of the election this year: \u201CBack in black by 2014.\u201D\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u00228e9118b6e26341da9e5aeb9b07c71694\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 (Annual Rates and Budget Measures) Bill 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 42; Green Party 6; Progressive 1; Independents: Carter C, Harawira.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EBill read a third time.\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=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000602\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00229cf4d1e46efe46c59bdd2e314d3ed713\u0022\u003ETaxation (Canterbury Earthquake Measures) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000603\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022bdf419c8da16484b885d8009cfabadd3\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=\u0022f3118d10ed2b4928a63b8b9804062506\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000604\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f3118d10ed2b4928a63b8b9804062506\u0022\u003EHon PETER DUNNE (Minister of Revenue):\u003C/span\u003E I move, That the Taxation (Canterbury Earthquake Measures) Bill be now read a first time. This bill is necessary, because our tax laws were never designed to cover such extraordinary circumstances as have befallen the people of Canterbury in the last few months. The bill provides relief and support through the tax system to both the people and the businesses of Canterbury as they seek to recover from the earthquakes. This bill will provide income tax and gift duty relief on trading stock that a business has donated from 4 September 2010 up to 31 March 2012 for the purpose of relief from the adverse effect of the Canterbury earthquakes. This relates to those situations where a number of businesses have provided trading stock from their own businesses to assist those affected by the earthquake and to help with the necessary recovery efforts. Ordinarily, such donated trading stock would attract tax, as a person disposing of trading stock for less than market value is deemed to have disposed of that stock at market value. This is an anti-avoidance measure, and although there are good reasons for its existence in normal circumstances, this bill provides for tax relief for such donations in relation to the earthquakes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000605\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ESimilarly, the bill proposes making tax-free certain welfare contributions provided by employers to their employees within 8 weeks of either the original 4 September 2010 earthquake or the 22 February 2011 earthquake. Many employers have responded with praiseworthy charitable instincts to provide their employees who are affected by the earthquakes with a range of welfare benefits, including cash, goods, and accommodation. Current tax law often treats such benefits as income, and therefore tax would be payable on those benefits at this time. Imposing such tax, however, on welfare payments to these people in these extraordinary circumstances seems quite inappropriate, and it would result in arbitrary outcomes, depending on the nature of the benefits provided. The Government is proposing several parallel tax exemptions, using the Ministry of Social Development\u2019s job loss cover payment, which was at the rate of $400 a week tax-free for 8 weeks, as a basis. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000606\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EAnother measure the bill proposes is a practical one to extend the availability of the redundancy tax credit, which had been due to end on 31 March, to 30 September this year. Members will recall that the redundancy tax credit was repealed following Budget 2010, but had been extended following the September 2010 Canterbury earthquake. The tax credit was designed to ensure that people were not moved into a higher tax bracket due to their receiving a redundancy payment. This extension is not limited to redundancy payments resulting from the Canterbury earthquakes; the provision is being generally extended. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000607\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe bill also provides reassurance to families who rely on Working for Families tax credits. The definition of \u201Cincome\u201D for Working for Families was broadened from 1 April this year to include cash gifts, the payment of expenses, and certain other payments. This could also include donations of cash or provisions to support a relative who had been affected by the earthquakes. The amendment proposed in this bill would apply in relation to an event that meets the criteria for an emergency event, including the Canterbury earthquakes. Under the amendment, the Commissioner of Inland Revenue will be authorised to recognise the emergency event and to ignore the support provided by relatives to affected families when determining Working for Families tax credits. I point out\u2014because I know that at least one party in the House has raised this as an issue of concern already\u2014that the definition of an emergency will be that contained in the Civil Defence Emergency Management Act 2002, and the discretion being applied to the Commissioner of Inland Revenue will be in relation only to the particular event, not to whether a particular payment made in response to that event qualifies. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000608\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EBy removing unnecessary obstacles and tax compliance burdens at this challenging time, the changes the bill introduces are designed to help the people and the economy of Canterbury recover. The Government has been committed from the outset to providing assistance to the people of Canterbury, and this bill follows measures already in place. Members will recall, for instance, that on 28 March this year the Commissioner of Inland Revenue was granted, through Order in Council, the discretion to extend statutory tax dates, so that businesses are not unfairly penalised for failing to meet tax obligations. In addition, further earthquake-related depreciation changes will be brought to the House for consideration later this year. Those measures and the measures contained in this bill are practical ones. They are designed to provide much-needed help through the tax system and a measure of certainty to the people of Christchurch and Canterbury generally, as they recover from the appalling events that they have been subject to in recent months. The aim, fundamentally, has to be to help those earthquake-stricken residents and businesses of Canterbury get back on to their feet, and to help the people of Canterbury and the region as a whole play again in the future, before too long, the dominant role they have played in large areas of national life in the past. With a great deal of pleasure, I commend this 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=\u00228beb883c7e2c489f848847fe9218e65b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000609\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00228beb883c7e2c489f848847fe9218e65b\u0022\u003EHon CLAYTON COSGROVE (Labour\u2014Waimakariri):\u003C/span\u003E The Opposition of course supports the Taxation (Canterbury Earthquake Measures) Bill. Those of us who are from Canterbury, and those members of Parliament\u2014there have been many\u2014who have visited the province in recent days, weeks, and months will know of the devastation that still exists in many parts of the province. We should acknowledge again the tragedies that occurred more recently, on 22 February, and leading from that the devastation that has occurred in the Christchurch central business district, in the outer suburbs in the east, in the electorate of the member for Port Hills, and through Lyttelton, Sumner, and that area, and in my own electorate, specifically in Kaiapoi. And latterly in my patch, in a superficial way, there has been damage throughout not only many parts of the rural area but also the northern part of Christchurch, and equally in the Selwyn district, which was at one point the epicentre, as it were, of the original quake. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000610\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EKiwis across New Zealand, and in Canterbury specifically, have shown a huge generosity of spirit. It was inspiring to those of us who were there and had been working in that area to find just how generous folk were. It was amazing. As a member of Parliament, a city councillor, or anybody else in a position of influence, in these times of crisis one realises how generous people actually are, and one realises the privileged position one is in, because it gives one an ability to ring up all sorts of strange individuals, entities, and corporates and ask for help. I know personally that when I approached\u2014as other colleagues have done in their patches\u2014companies and individuals for food, shelter, and all sorts of commodities and assistance, in the vast majority of cases the folks who were asked to assist did so immediately. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000611\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI recall a chap called Dave Pilkington, who runs a vegetable pack-house in Belfast. In the days after the initial quake I rang him. He is a packer of vegetables; he is not a producer of vegetables, so he does not own them. The call had gone out from the Kaiapoi rugby clubrooms that there was a need for vegetables for the food bank. I recall ringing Dave, who is the president of the Belfast Rugby Football Club\u2014a great humanitarian and sporting aficionado\u2014saying that the folks needed some help, and asking whether he could provide anything. He said: \u201CWell\u201D\u2014I could hear him scratching his head\u2014\u201CI do not actually own the vegetables; I pack them. They are owned by others. Give me 5 minutes.\u201D He rang back and used some interesting and colourful language that, when translated, meant \u201CTo hell with it. I\u2019ll sort it out.\u201D Within a couple of hours a couple of truckloads of potatoes, carrots, and goodness knows what else turned up. I just raise that from personal experience as an illustration of how generous people are. I do not know how Mr Pilkington organised payment for that. I have a strong suspicion that it came out of his own pocket, because he is a generous guy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000612\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI return to the bill. We support the bill. It would be a tragedy, I think, if somehow the generosity of employers\u2014and many and most employers were very generous in providing goods and services, a bit of top-up money, time off, and all sorts of other assistance to employees\u2014fell within the net and was penalised through the tax system. I am pleased to see that the bill looks to future-proof, as it were, for future events. We hope they will not happen. We hoped that after the 4 September earthquake we would not experience a further major event, but tragically we did. Certainly, for those of us who live in Canterbury, we are now all quite used to the aftershocks and the shakes that occur. People are under an extensive amount of stress. I think it is noteworthy, as we proceed through this bill, that this measure will take away a wee bit of stress. It is another little brick in the wall, if you like, to take another worry or another bit of stress off the shoulders of people. As I say, it cuts down a bit of red tape, as well. It cuts through that. It takes a weight off the mind of those people who, especially in respect of their employees, went the extra mile and were generous. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000613\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EIt is worth noting, as we reflect on this bill, that all of us probably through our respective electorate offices, from talking with Government agencies and non-governmental organisations dealing in the social sector, and dealing with the welfare and care of people, are aware that for folks the battle is not over. In fact, for many it has just started. Thousands of people in Canterbury are living in difficult conditions. I know that my colleague Lianne Dalziel, who is not here at this point\u2014and I say that out of respect for her\u2014would want it noted that in her area of the eastern suburbs of Christchurch there are people who are racked and stacked, if you like, six or 10 deep, within their houses, and who are without lavatories and without some of the necessities of life. I think it is worth, within the context of this bill, noting that for the record. The battle, for these folks, will be a long one. This bill goes some way, as a contributing factor, towards easing their struggle. They seek a pathway to get their lives back, their jobs back, their kids back into a routine, and their houses back. They face a winter, as we do in Christchurch and Canterbury, that will be cold. There have been some difficulties with home heating. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000614\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI note in passing, given the lack of contention about this bill, as opposed to the previous one, that the money that has been put aside, or committed to, by the Government is $5.5 billion to assist Canterbury in its recovery from the earthquake. We welcome that, as the people of Canterbury would welcome it. We do not know whether it is enough. Possibly none of us know whether it is enough. It has to be a case of whatever it takes to get our problems resolved. Christchurch is an engine room for this economy. It is our second-biggest city and Canterbury our second-biggest province. Given that the Government now has its own department, it has wartime powers, effectively, to cut through all sorts of red tape and get on with it, as the Minister for Canterbury Earthquake Recovery is fond of noting, and given that it now has a bucket load of cash, we look forward to the hastening of the recovery. There should be no excuses. The people of Canterbury would expect that, and this bill is part of it. There should be no more delays. There should be an increased pace in respect of the recovery process, leading to people getting back to a normal and fruitful life. This is critical. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000615\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI suspect that the folks in Canterbury who are listening to this debate may not, as with the previous bill, take a lot of notice. Again I say that not out of any disrespect. They are focused on the here and now. It is difficult for people who are in grave difficulty within their homes, and who face a high degree of uncertainty in terms of their livelihoods. We know that by 31 May the business support package comes off. We know that there are 67,000 - odd employees who are depending on that, and that businesses are in dire straits and on their knees. We do not know what will be put in place to replace that package. If people are sitting in a house that has no heating and no toilet, have kids whose lives and education have been disrupted, and have lost their job or have the uncertainty and inability to predict whether their job or business will be there, then life ain\u2019t too great for them at this point or for our communities. This bill will go some way towards easing that. People should not have to be looking over their shoulder, saying: \u201CHang on. Do I have tax liability because I was generous?\u201D. I am pleased, as I say, that the Minister for Canterbury Earthquake Recovery has put in a future-proofing provision so that if we find ourselves in difficult circumstances, whether it be the difficulties in Hawke\u2019s Bay or caused by the tornado on the North Shore, if it is warranted and if the circumstances fit within the definition, then the Commissioner of Inland Revenue can move and, if you like, with the flick of a switch can put these mechanisms in place. I think this will encourage people, not that they need it, because they are Kiwis and Kiwis are always generous, to continue with their generosity and look after their fellow man or woman. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000616\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EWe support this legislation. It is common sense. It will reduce the burden, the worry, and some stress on our people. But I just say in passing, and I am sure the media somewhere are listening, that the battle for Cantabrians goes on and the focus on that for the rest of the country should not be forgotten. We support the bill.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022 data-id=\u002276af2f8dfc944341985c22739e43f51d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000617\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002276af2f8dfc944341985c22739e43f51d\u0022\u003ECRAIG FOSS (National\u2014Tukituki):\u003C/span\u003E I fully and totally acknowledge the sentiments and the tone of the previous speaker, Clayton Cosgrove, and of the Minister of Revenue, who moved the first reading motion on this bill. It is interesting that there can be such a response to all things taxation, which is generally somewhat boring. I know it has made us all excited over the last day or so. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000618\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThe previous speaker noted that New Zealanders are generous, and when we listen to the radio or to those in this House, it is interesting to note the change in tone as we all focus on what is a human tragedy, an economic disaster, and a very, very high mountain that has been put in front of our country for us to climb. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000619\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI note, sadly, that the bill is future-proofed, but we note that that is quite prudent. Let us hope we do not have to use the key items in the bill\u2014the taxation parts of it, and the friendliness of them. Let us hope we do not have to use those in the foreseeable future. I think we may find that the entire House is getting behind this bill. I fully acknowledge all members of the House, and the Minister of Revenue for putting this bill together in a rapid response to help our friends, our wh\u0101nau, our family, and our fellow New Zealanders in Canterbury.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022 data-id=\u0022128f2bb9aad44270b9d460470a7342a8\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000620\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022128f2bb9aad44270b9d460470a7342a8\u0022\u003EHon RUTH DYSON (Labour\u2014Port Hills):\u003C/span\u003E It is unusual, having had such heated debate over the Government\u2019s slashing of KiwiSaver, to now move into a bill on which, I guess, the entire Parliament will agree. It is a better way in terms of our stress levels, and in terms of our ability to have a good and productive weekend. It does not reduce, of course, the anger, frustration, and literal pain that so many people will now go through, though, as a result of the Government slashing KiwiSaver in the Budget yesterday. But I add my support to the support already expressed by my colleague the member of Parliament for Waimakariri, Clayton Cosgrove, for the Taxation (Canterbury Earthquake Measures) Bill 2011. I commend the Minister of Revenue, the Hon Peter Dunne, who is part Cantabrian and part Wellingtonian. He resides in Wellington at the moment, but I guess by the end of November he might be returning to his home base in Christchurch for some well-earned retirement time. I commend him, though, for introducing this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000621\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EIt is a bit of a shame that the bill is so late in coming to this Parliament. The first major earthquake in Christchurch was in September last year. That was 8\u00BD months ago, so we now have legislation that not only is quite late, and therefore for a lot of people will be past the time when it would have most benefited them, but, very unusually, contains retrospective taxation provisions. It is pretty unusual for this House to have introduced such legislation, let alone for the entire Parliament to have agreed on it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000622\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EOne of the questions I will be asking the Hon Peter Dunne, when we move to the Committee stage later on tonight, is exactly what data the Inland Revenue Department provided to him during the preparation of this legislation, and what understanding he has gained about the size of the issue the Inland Revenue Department is facing in terms of people who, between 4 September and now, would have committed actions that will now be covered by this different taxation provision. I will be asking those questions. The officials can start preparing the answers now to advise the Minister; I am giving the officials a bit of an advance shot on those ones, but I have some other questions I will be asking the Minister, too.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000623\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EThis bill is supported, and its passage will be unusual in that not only will it be supported but it will go through all stages of the House in one go\u2014we will do the first reading, the second reading, the Committee stage, and the third reading sometime between now and tomorrow or whenever the House rises. That is unusual, but it still does not mean that we should not give the specific provisions quite a lot of detailed attention in the Committee stage. I know that people are keen to get home, but I hope that people like Craig Foss, who has a lot of experience in taxation legislation by virtue of being the chair of the Finance and Expenditure Committee, will take seriously a situation when we have retrospective tax legislation, and when we should pay as much attention to the detail as is possible and sensible. I certainly hope the Minister takes those issues seriously, as well, during the Committee stage.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000624\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EThere are four primary points in this legislation. They all relate to tax issues, and they are all specifically tied to actions that have occurred as a result of the Canterbury earthquakes. As I said earlier, the legislation is retrospective; it dates right back to 4 September 2010. The bill exempts from tax the gifts given by employers to employees in the first 8 weeks after either the 4 September 2010 quake or the 22 February 2011 quake. I do not know why the Boxing Day quake is not counted as a separate event; that is another issue. The dates are obviously different in that regard, but it was actually a separate and significant event. During the Committee stage I will ask why we did not count that earthquake, as well. People who were in Christchurch on Boxing Day will share their experiences for anyone who doubts that it was anything other than a significant event.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000625\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EThe second point is that the legislation allows the Commissioner of Inland Revenue to declare an emergency event, during which time contributions to aid families will be excluded from a personal family income scheme. As Craig Foss noted in his contribution, this legislation is future-proofed. I share his view: we do not want to have another such incident, but it is really good that the Hon Peter Dunne thought of that in advance and said we should not have to put through such legislation again in the future. Instead, we should say that this legislation can be triggered if any comparable event occurs in the future.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000626\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EThe bill delays the removal of tax credits, for people receiving redundancy payments, from 1 April 2011 to 1 October 2011. I certainly support that provision; it is a good one. But, again, during the Committee stage I will be stating that if it is good enough for people who lost their jobs as a result of the earthquake to have fairness accorded to them\u2014and I welcome that\u2014I do not understand why it is not good enough for workers who have lost their jobs in other circumstances to have fairness accorded to them, as well. We should not have unfair provisions on our statute book, at all, so it will be an opportunity for the Minister to extend that provision much more broadly.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000627\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EThe fourth point covered in this legislation is that it creates tax exemptions for businesses donating trading stock to people affected by the earthquakes. Those are substantial changes, and on behalf of my constituents I join the other Canterbury electorate MPs in welcoming that support for Cantabrians. Many people whom I know saw the events of both September and February on the news, watched it for a few days, and felt horrified. Then they watched what happened in Japan and thought that that was worse, and it was. Then they forgot about Canterbury. In fact, quite a lot of people are surprised when I tell them that it is not all fixed. People in our city have lost family members, have suffered significant injury, and have lost friends and colleagues. Many have lost their jobs and their homes, and many people are looking towards winter with a great deal of despondency, because it will be, for many, a long, cold, hard winter. This package will give those people the feeling that Parliament is a little more relevant to their lives than sometimes they would think, and that people in Parliament do give a toss about how things are going in Canterbury. I hope it is with a totally united voice that we can welcome the support that the Hon Peter Dunne has introduced into this legislation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000628\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EBut this bill cannot be the end of the support. We know that in the Budget yesterday a packet of money was given to Canterbury. The specificity\u2014or lack of it\u2014was quite frustrating, and many people are saying they do not know whether it is enough; we do not even really know what it will be used for. The scale of the gap in support is not yet determined. I certainly welcome the amount of funding in the Budget. I am not in total agreement with the way it has been given, and I hope the fact that Canterbury\u2019s support is so significant does not cause resentment from other people around the country.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000629\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EWe know that since both major incidents, since 4 September and 22 February\u2014and the Boxing Day earthquake\u2014Cantabrians have been overwhelmed by offers of support not just from people in their own city who were not as badly affected, and who were in a position to help, but also from people around the country and, indeed, around the world. This legislation formally recognises that the gifts given and the support offered were a huge help, not only in practical terms but also in emotional terms, for people in Canterbury, and it recognises that the Government can do its bit by removing the tax burden that may have been attracted as a result of that generosity. It is entirely appropriate that the Government looks at that generosity and says it is fantastic. That is how Kiwis around the world, people from other countries, and people from within Canterbury itself have responded to other people\u2019s need\u2014with support, generosity, and offers of help. The Government has said that that is a fine thing, and now the Government, as a result of that generosity, wants to do its bit, as well, to make sure we do not slice off a bit as tax take. It is a good bill, and I support its progress.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022eaaad191-62cf-43e8-a772-63a71dbf4d4a\u0022 data-id=\u0022bab549fcf9044390b8925e5eb79bc4b3\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000630\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaaad191-62cf-43e8-a772-63a71dbf4d4a\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022bab549fcf9044390b8925e5eb79bc4b3\u0022\u003ESUE KEDGLEY (Green):\u003C/span\u003E The Green Party is very happy to join all parties in this House in supporting the Taxation (Canterbury Earthquake Measures) Bill, which will give a degree of relief in varying ways to the people of Canterbury. It is, of course, sorely needed. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000631\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaaad191-62cf-43e8-a772-63a71dbf4d4a\u0022\u003EUnder the bill, welfare contributions by employers to employees will not be subject to income or fringe benefit tax for the 8 weeks after the earthquake. It would be perverse in the extreme to consider putting a tax on the goodwill of Canterbury employers, on those who unselfishly contributed to the well-being of their employees at a time when there was acute hardship and suffering. The contributions that employers made to their employees were in varying forms: in cash, in accommodation, and in goods. None of these wonderfully generous contributions ought to be subject to penalty, given the circumstances of that giving. That is why we support the rather unusually retrospective tax provisions in this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000632\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaaad191-62cf-43e8-a772-63a71dbf4d4a\u0022\u003EHowever, we record our concern, yet again, at the circumventing of the democratic process in getting this bill through Parliament. Because the bill was actually tabled on 4 May, there would have been ample time to have a select committee hearing. People asked that there be a select committee process and there would have been ample time, since 4 May, to have allowed a select committee process even of a week or two. But yet again it seems as though we have just got into the habit of circumventing the democratic process, by rushing through the House this sort of bill\u2014everything to do with Canterbury\u2014circumventing a select committee, and putting the House under urgency when, as in this case, there was no need. The bill was tabled on 4 May and it is now 19 May, so there would have been time to allow the people of Canterbury to have some say and to make some submissions on this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000633\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaaad191-62cf-43e8-a772-63a71dbf4d4a\u0022\u003EI would also like to record our concern that in the regulatory impact statement that accompanies this bill the Inland Revenue Department talks about the fact that the very constrained time frame the department said it had, had \u201Cseverely limited the depth of research and analysis that had been able to be undertaken.\u201D The department goes on to acknowledge that a significant degree of uncertainty is involved where fiscal cost estimates have been made. That is a little bit of a concern. The whole thing has been rushed. The department also goes on to say that there have been difficulties in accurately estimating the amount of employer welfare support, the proportion of that support that would be treated correctly for tax purposes, and so on and so forth. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000634\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaaad191-62cf-43e8-a772-63a71dbf4d4a\u0022\u003EI just want to record a bit of concern there, but principally we want to express our concern that every bill in respect of Canterbury has been introduced under urgency, without a select committee process. In fact, ironically, it goes right back to the first Canterbury legislation that circumvented democracy, which was the legislation before this House to get rid of Environment Canterbury. That democratically elected regional council was wiped out under urgency\u2014well, the democratically elected representatives were removed, under urgency, in 24 hours. Once again, there was no ability for a select committee and no ability for the people of Canterbury to have their input. Then we have had a succession of bills relating to the Canterbury earthquake that have, once again, circumvented the democratic process and given what can be described only as Draconian powers to the Minister for Canterbury Earthquake Recovery, namely Gerry Brownlee. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000635\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaaad191-62cf-43e8-a772-63a71dbf4d4a\u0022\u003EThe other thing I want to mention is that we are delighted to support the bill, which does, as I say, provide some relief to the people of Canterbury in varying ways. But the bigger question remains about the rebuild of Canterbury. We still cannot understand, 1 day out from the Budget, why this Government refused to introduce an earthquake levy. The people of New Zealand have made it clear in polls and in many ways that they are only too happy to contribute to an earthquake levy\u2014a tax to help with the rebuild of Christchurch. But the Government refused to introduce a levy and instead, effectively, we will be borrowing to enable the Canterbury rebuild. We think this is extremely unfortunate. I suspect the reason is that the Government likes the idea that we are financially stretched, because then that gives its members the excuse to go out, wring their hands, and say that they simply have to sell off all the remaining assets of New Zealand\u2014our State-owned assets, etc. It gives them that excuse. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000636\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaaad191-62cf-43e8-a772-63a71dbf4d4a\u0022\u003EThe other option is to increase revenue through things such as having a Canterbury earthquake levy and other suggestions we have made, such as a capital gains tax other than on the family home. But no, the Government wants to get rid of debt without increasing revenue at all. We see it also here in Canterbury. That is a fundamental problem that will come back to haunt us. Yes, it is all very well that we have these inflated Treasury estimates of growth in the economy, but most people are saying that they are completely unrealistic, so what will happen then? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000637\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaaad191-62cf-43e8-a772-63a71dbf4d4a\u0022\u003EI come back to this bill. We are very pleased to support it. We want to put on record our regret that yet again it has been introduced under urgency. Yet again, we are not allowing the people of Canterbury to have a say on this bill, which will affect them in varying ways. Yet again, we have abandoned the select committee process and we are ramming this bill through the House. This seems to be becoming a pattern in this term of Parliament. It is an extremely worrying pattern. It is almost like we are abandoning the habit of democracy, the habit of having a select committee process, and the habit of allowing people to be heard. I hope we do not get into the habit of just constantly ramming things through, when it comes to Canterbury, without respecting the democratic process. 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=\u0022b1cbcaef4c26443b89291890dab32e44\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000638\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b1cbcaef4c26443b89291890dab32e44\u0022\u003ERAHUI KATENE (M\u0101ori Party\u2014Te Tai Tonga):\u003C/span\u003E I am pleased to stand and speak to the Taxation (Canterbury Earthquake Measures) Bill to discuss the proposed measures to deal with taxation issues arising from the earthquakes that occurred on 4 September 2010 and 22 February 2011 and affected the entire Canterbury region. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000639\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EThis bill is absolutely necessary to enable the communities of Christchurch to respond to, and recover from, the impacts of the Canterbury earthquakes. There are dual purposes: the restoration and rehabilitation of communities left shattered by the natural disasters, and the rebuilding of the Greater Christchurch area. The M\u0101ori Party has actively supported the rebuilding of the M\u0101ori community in \u014Ctautahi. In doing so, we have been very aware of the impressive iwi contribution to the recovery effort of this scale. Iwi organisations sent donations and people to support relief efforts, including r\u014Dp\u016B from Te Arawa, Tainui, Ng\u0101ti R\u0101rua, and Ng\u0101ti Wh\u0101tua. Enormous containers of supplies were distributed from Pipitea marae here in Wellington. In short, there has been a systematic effort by iwi to support relief and reconstruction. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000640\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EIn the immediate aftermath of the quake, marae opened their doors to all people in search of refuge, food, and accommodation. The marae in \u014Ctautahi became command centres for different agencies: M\u0101ori sectors of the police, the Fire Service, health providers, Te Puni K\u014Dkiri, M\u0101ori media, Ng\u0101i Tahu, and so on. Seventy W\u0101tene M\u0101ori assisted police and non-governmental organisations with checking on people in the hot spots. In other rohe, Takitimu, Te Arawa, Tai Tokerau, wh\u0101nau arrived either in transit or returning home to an uncertain future. And of course this weekend we are gearing up for the global telethon being led by M\u0101ori Television: Rise Up Christchurch\u2014Te Kotahitanga. I was really moved by the words of M\u0101ori Television chief executive, Jim Mather: \u201CRise Up Christchurch\u2014Te Kotahitanga will inspire and unite New Zealanders across the globe to support the people of Christchurch as they \u2018Rise Up Christchurch\u2019 from this challenge that Papat\u016B\u0101nuku has presented,\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000641\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EThis bill, then, the Taxation (Canterbury Earthquake Measures) Bill, falls well within the context of the leadership that M\u0101ori communities and wh\u0101nau have already shown leading up to this point. We must ensure that the Canterbury Earthquake Recovery Authority learns from this lesson and leans on this leadership. And we can apply that same thinking to the proposed measures to deal with taxation issues arising from the earthquakes. A focused and timely recovery of Greater Christchurch and its communities will be assisted by all of us pitching in. So we support the intention of this bill to exempt from fringe tax and fringe benefit tax certain welfare contributions made by some employers to their employees in the 2 months after each of the two big earthquakes; provide income tax and gift duty relief to businesses that donated trading stock, with the intention of helping alleviate the impact of the Canterbury earthquakes and their aftershocks from 4 September 2010 to 31 March 2012; provide a discretion to exclude from the \u201Cother payments\u201D category of income for Working for Families certain payments made to people adversely affected by the Canterbury earthquakes and similar events; and extend the redundancy tax credit by 6 months, to 30 September 2011.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000642\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EThese proposals will work in a number of ways. It is proposed that a tax exemption applies where targeted welfare in the form of cash, including pro rata payments to Canterbury staff, and/or goods and services have been provided to known staff. Some employers have provided emergency accommodation for their staff. It is also proposed that this be tax-exempt. Some employers have made welfare contributions that fall into sundry benefits available to all staff, and targeted welfare to known recipients. It is proposed that these welfare-type benefits be tax-exempt for compliance and equity reasons, where they are unclassified benefits that are generally available to all staff and provided in the 8 weeks after both the Canterbury earthquake and the Christchurch one. These benefits have an obvious welfare intention. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000643\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EIn essence, this bill is both pragmatic and technical in its application. Having said so, however, I would be very interested to learn from the Minister what the response of mana whenua has been to the provisions included within the bill. In a recent submission to Parliament, Te R\u016Bnanga o Ng\u0101i Tahu stated: \u201CLike the Crown and local government, we are a perpetual presence with histories, aspirations, and accountabilities to contribute to the recovery and rebuilding of Christchurch.\u201D The M\u0101ori Party has therefore been very pleased that Te R\u016Bnanga o Ng\u0101i Tahu is explicitly stated as one of the entities that the Canterbury Earthquake Recovery Authority must work alongside, and that Ng\u0101i Tahu and other M\u0101ori will be included in the community forum. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000644\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EMana whenua must remain an essential part of the recovery strategy and have help to lead development of the central business district recovery plan and other statutory plans. To this end, whether it be about employer welfare contributions, targeted welfare, tax relief for donated trading stock, tax relief for other categories of income for Working for Families, or a redundancy tax credit, such details should still benefit from ample consideration with Ng\u0101i Tahu as to their application. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000645\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003EWe support the measures included in this bill, and we believe that they represent a commitment to doing whatever it takes to give the people of Canterbury every opportunity to respond to, and recover from, the impacts of the Canterbury earthquakes. We are happy to support this bill.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022 data-id=\u0022b57393f778e6421db5039f6c8b81bfe6\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000646\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b57393f778e6421db5039f6c8b81bfe6\u0022\u003EAMY ADAMS (National\u2014Selwyn):\u003C/span\u003E I am very happy to take a call on the first reading of the Taxation (Canterbury Earthquake Measures) Bill. It really is quite heart-warming and humbling to stand in the House and hear support from all parties, and to hear the kind words of members from all around the country expressing their support for the people of Canterbury. As my Cantabrian colleague the Hon Ruth Dyson mentioned in her contribution, all of the Canterbury MPs are certainly very grateful for what this House and the Government have done to support them. This bill is another example of that support.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000647\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003EThe context in which we have to look at this bill, and measures like it\u2014although obviously it sounds trite to say\u2014is that these were an extraordinary set of events. They were like nothing else we have ever experienced. Proportional to the size of our country, the earthquakes were one of the biggest events of this type that any of us can remember. Normal rules just cannot apply. We cannot look to address and deal with this issue by using our normal parameters. The flavour of all of the legislative response we have made to the Canterbury earthquakes was that they are too big and too serious, and we have to look at them through a new, one-off purpose-built lens. Really, this bill is the taxation continuation of that line of thought.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000648\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003EIt simply would not be right to penalise people, or to apply a financial cost to people, who simply have reacted to need as they saw it. That is what happened in Canterbury after both of these earthquakes. There was tremendous need, and people just reacted. They just did what they saw they could do to help. That is an amazing thing to watch and to be part of. It really gives me incredible hope for the future of our country. It gives me incredible pride in our people. When something like this happens, there is no distinction, division, race, age, or barrier. It is simply a case of people helping people. This bill is about saying that where people have helped each other in this time of need, there is no way that we as a Government will now say we will assess them for gift duty on that help, or look at the tax implications of the stock that they put aside for welfare.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000649\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022dc6c0f88-e781-476d-bca1-d1bf9b69302b\u0022\u003EThis is the sort of thing that everybody can see the wisdom in. Across the House we have certainly heard that widespread support. It is just another way we are working to help Canterbury in every way we can. I thank the people from all over New Zealand who continue to understand that we need special circumstances at this time, and I thank them for their willingness to do what they can to continue to support Canterbury as it goes through this terribly difficult period of rebuilding. I commend the bill to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u00222fff44bc96104193abfb4c1bd77311a9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000650\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222fff44bc96104193abfb4c1bd77311a9\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E We are certainly having an afternoon of two halves. Anyone who has been following the debate on television will know that we have debated in urgency one piece of tax legislation that has been vigorously opposed by the Opposition and the Greens, and that we are now debating another piece of tax legislation\u2014the Taxation (Canterbury Earthquake Measures) Bill\u2014that we absolutely support. So we have chalk and cheese here. I suppose this is a classic example of how all parties in this Parliament work together when New Zealanders, in a time of need, expect Parliament to work together, to not be churlish, and to stand up for their rights and for what is right. That is what the Taxation (Canterbury Earthquake Measures) Bill represents. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000651\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EAs we know, tax legislation can be very complex. It can also be very complicated. Tax legislation can be used in a number of ways, but as this legislation stands it is being used to provide short-term relief and respite in a time of need. As Amy Adams said, and as both Clayton Cosgrove and Ruth Dyson have outlined, these are unusual times. The last time there was an earthquake of this size and magnitude in this country it happened in Napier, the city I come from. Over 250 people died in that earthquake. It was an event of enormous magnitude. It was not until the earthquake in Christchurch that we saw the same level of devastation in this country that we saw in 1931. I said to one of my colleagues that the irony is that probably 3 weeks before the Christchurch earthquake I was sitting on stage commemorating the 80th anniversary of the Hawke\u2019s Bay earthquake. Two weeks later we had the Christchurch earthquake. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000652\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EWhen my colleague Brendon Burns came to Napier he spoke to the people of Napier. There is a guy there called Robert McGregor, who is in charge of our Art Deco Trust. Robert McGregor is acknowledged not just in Napier and New Zealand but globally as a real expert on how to reconstruct a city, on how to build it up again, and on what needs to be done. He is also an expert on the history of Napier. Brendon and Robert had a great talk about how Napier did it. We are talking about an event 80 years ago, of course, and society has changed. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000653\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022876b652b2aa242cf83f3a3cf3f7810a6\u0022\u003EBrendon Burns\u003C/span\u003E: Hardly yesterday for some of us.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000654\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222977b70796a3482f96362f7df5c46327\u0022\u003ESTUART NASH\u003C/span\u003E: Yes, it is hardly yesterday. We can still learn lessons from the past. There is no doubt about that, and I think Brendon took some of those lessons back.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000655\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228800bd4cf93c406ab70bf76bcbf6dbdc\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: Use the member\u2019s full name.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000656\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d3bd1fd74f794f76bb27b4333471a28b\u0022\u003ESTUART NASH\u003C/span\u003E: Brendon Burns took some of those messages back. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000657\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bfdacee82ce143009177c492b6cb6cbd\u0022\u003EBrendon Burns\u003C/span\u003E: A very good member.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000658\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224ad591af870941208c4ec0d08bf7ef66\u0022\u003ESTUART NASH\u003C/span\u003E: Brendon Burns is a very good member. In fact, I think the people of Christchurch Central are very lucky to have an MP like Brendon Burns, someone with a cool head and nerves of steel, who can assess a situation and work incredibly hard in the most trying of circumstances. I know that when Brendon Burns and his wife, Philippa Burns, came up to Napier for a bit of a rest and to talk to Robert and look at what Napier had done, he said it was the first time in months that he had been able to get away and have a decent sleep. Having not lived in Christchurch I cannot understand the stress that the earthquake placed on the people of Christchurch, but from talking to my colleagues I realise that that stress was absolutely enormous. The way Brendon, Ruth, Clayton, and Lianne have dealt with the stress\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000659\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228b95e8427252466ea74a508bc44ed416\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: You must use members\u2019 full names or titles in the Chamber.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000660\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228c0d190246494b3ea1a051da15472a1f\u0022\u003ESTUART NASH\u003C/span\u003E: The way that Brendon Burns, Ruth Dyson, Clayton Cosgrove, and Lianne Dalziel have coped with the stress and have really advocated incredibly hard for constituents in very trying times has been admirable. There is no doubt about that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000661\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThis legislation, I think\u2014and I am happy to be corrected\u2014sets a precedent in terms of getting legislation through in a hurry to alleviate the stress and suffering of New Zealand citizens. I am not too sure whether I am right there, but I believe I am right. Just a small note of caution here: we must ensure that this precedent is not abused. I do not think it would be, but when one sets a precedent, there are flow-on effects. We need to make sure that it is not abused, and I doubt that it will be. I say that constructively; I am not saying that negatively. I am just saying that we all know that the magnitude of this has been significant, so if this type of legislation is ever considered again, then we must be sure it is for an event that actually warrants it. That is all I will say on that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000662\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThere are a couple of questions. I think my colleague the Hon Ruth Dyson has raised a couple of those questions, and I will mention them as I go through the bill, or maybe even in the Committee stage. Although we support this bill wholeheartedly, we would like a couple of these questions answered, just so that in our minds we know that this is robust legislation, and that it really does serve the people of Christchurch, because that is the most important thing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000663\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022100b217913394fba84cd75e36d031f23\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Canterbury.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000664\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228ad1e9acb9d94b048aaff3da5b7e6010\u0022\u003ESTUART NASH\u003C/span\u003E: Sorry, Canterbury. How this legislation came about is that after the earthquake on 22 February many individuals and businesses donated money or goods, or supplied them at less than market value\u2014and I think Clayton Cosgrove gave a classic case of that\u2014to those affected by the Christchurch earthquake. Normally, under law those people who supplied the goods would have to pay gift duty, or, maybe, fringe benefit tax, or other forms of taxation that go with the giving of gifts to people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000665\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EAs I think Ruth Dyson mentioned, this is retrospective legislation\u2014well, of course it is retrospective, because the earthquakes have happened. One of the important reasons that this legislation is going through is, I am assuming, that a lot of people\u2014Clayton Cosgrove talked about some of them\u2014forgot about process and did not understand gift duty rules. They just got up and helped. They went into their warehouses, they went into their stores, and they asked themselves what they needed to do to help the people of Christchurch. They did not give any consideration to gift duty or that sort of carry-on. They might not have even accounted for that stock; I am not too sure\u2014and that is one of the questions we will ask. They might not have accounted for that stock. They might have just lifted the stock, given it out, and helped people who were in need. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000666\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EAt what level do those people have to account for their stock? That is one of the questions we will ask. They are not liable for gift duty, but I know, for example, that there are goods that are zero rated for GST, and we will have to account for those. I am keen to know\u2014and, hopefully, the Minister of Revenue will be able to tell us\u2014at what level people who have given items will have to account for them. Will they have to put a return in, even though there were no fiscal implications for the people themselves? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000667\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe other thing that is most important\u2014and it is most important with any tax legislation\u2014is the integrity of the tax system. The integrity of the tax system is something that Labour has been talking about in the House for probably most of this week, actually, and just because this is a bill that helps with the relief of citizens in need, that does not mean it does not have to meet that integrity test. That integrity test is vital. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000668\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EOne thing I would like to point out is that if an employer has given an employee money or goods, it does not mean that the employee is exempt from their own income tax. The employee still has to pay income tax, as does everyone else around the country if they are getting paid income. Again, I hope the Minister of Revenue will take some calls on this during the Committee stage, and we can bring up questions then. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000669\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThere are a couple of other outcomes that are most important, and one of them is to ensure that the tax treatment of goods donated as part of the Christchurch earthquake relief is appropriate. I would never suggest that someone would donate inappropriate goods, or that it would be done in an inappropriate manner. What I am saying is that it must be considered to be appropriate, and this is what this legislation covers, and, again, it comes down to the integrity of the tax system. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000670\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EAlso, the revenue base must remain sufficiently intact. So, for example, this legislation does not exempt employees from paying income tax. It does not do that. Of course, one of the most important things this legislation does, and one of the most important things that any piece of legislation does, is provide a level of certainty. I suspect that what happened a day or two, a week or two, or a month after the earthquake is that people got up and just gave a whole lot of stuff. Then at some point they probably went to their accountant, or they were having a couple of beers with their lawyer, or their next-door neighbour\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000671\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225ed741694b014e3e8429ba590aa33e91\u0022\u003EHon Ruth Dyson\u003C/span\u003E: No, wine with their lawyer.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000672\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022175858ac5814421b87df3446fd4da036\u0022\u003ESTUART NASH\u003C/span\u003E: OK, wine\u2014whatever. They were having a drink\u2014it was probably a stiff whisky\u2014and they were told: \u201CGoodness me, do you know the tax implication of what has happened?\u201D, and they said: \u201COh, shivers! That\u2019s the last thing I was thinking about.\u201D That is why the Inland Revenue Department received a lot of calls. We think this is a very good legislation, and we commend it to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022 data-id=\u0022154fe340ecc34c6d8ea31d41efde9ac5\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000673\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022154fe340ecc34c6d8ea31d41efde9ac5\u0022\u003EDAVID BENNETT (National\u2014Hamilton East):\u003C/span\u003E I thank all members of the House for the way in which they have approached the Taxation (Canterbury Earthquake Measures) Bill. First of all, I thank my National colleagues who have dealt with the issues on the ground in Christchurch. We have a number of members in the House who have led the way for their region, and, through the leadership of the Hon Gerry Brownlee, the National Party, and the Government, have delivered for the people of Christchurch. On the other side of the House we have a number of members also from Christchurch who have been very diligent in advocating for their issues in their areas, as well. The way that they are contributing to this bill tonight shows their interest and their desire to make sure that we get the best result for Christchurch that we can. In the end, I think that everybody around the country has seen the need and desire to support Christchurch at this time, and we wish everyone the best on Sunday in the fund-raising effort to help to do that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000674\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EThis bill is something that should not take long to go through this House, but that does not take away the magnitude of what we are doing here. This bill represents a time when New Zealanders came together to support fellow New Zealanders in their time of need, and it is something that we need to do in this House from time to time. It represents the role of the Government. The bill has some technical taxation elements to it, relating to areas such as effective contributions for the family scheme income, the redundancy payment tax credit, the donated trading stock, and welfare contributions by employers to employees. In the end, this is a bill that is in the best interests of Cantabrians. It shows the support that this Parliament can provide for all New Zealanders at this time through the Budget, and we support this bill going through the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022 data-id=\u0022fd9f70aec49c465bbc9a88fa222c1805\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000675\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022fd9f70aec49c465bbc9a88fa222c1805\u0022\u003EBRENDON BURNS (Labour\u2014Christchurch Central):\u003C/span\u003E I will continue in the bipartisan spirit that has been displayed by this House; I think it is truly appropriate. I thank my colleague Stuart Nash for his fulsome acknowledgment of the role that I played, but I also acknowledge all of the Canterbury MPs on both sides of the House and our Green colleague Kennedy Graham for the work that they have done, and Rahui Katene too for her work on behalf of the Te Tai Tonga electorate and the M\u0101ori community in Christchurch. I think we have served our communities well through what has been the most extraordinarily difficult time. Of course, we are not out of the woods yet. Obviously, the winter is upon us and that will present its own challenges to us as a city, but Parliament has shown that at times like this we can come together in the best interests of our communities. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000676\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003ETo give an example\u2014picking up on the comments of the member for Hamilton East\u2014on Monday night a exhibition opened in Hamilton of photographs taken by Fairfax photographers, including some from the Waikato Times photographers who came down to cover the enormous event of 22 February and its aftermath. One of those photographers is a chap called Chris Hillock, a very fine and award-winning photographer for the Waikato Times. His mother, Maggie Hillock, who happens to be my campaign manager, suggested the idea of having a photo exhibition, which was backed by the Waikato Times\u2014by Fairfax. Again, in a bipartisan spirit, I note that even though the exhibition was suggested by a Labour member and organised by the former MP for Hamilton East, when the photograph from the exhibition appeared, it was of the current MP for Hamilton West. It is a good example of the bipartisan spirit that is serving Canterbury well at this time. Of course, over the weekend we will also see a huge global telethon supported by M\u0101ori Television in order to raise funds for our city and region in the wake of the enormous disaster of 22 February. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000677\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EThe Taxation (Canterbury Earthquake Measures) Bill is a measure that assists in respect of donations that have been made by employers to their employees in the wake of the quake, so that those donations do not affect the employees\u2019 eligibility for Working for Families and other benefits. The amount that Working for Families pays in the Canterbury region is in the order of $300 million a year. Those payments are very welcome, and they are enormously important to the more beleaguered communities, although the payments were spread across the income spectrum. Some of those who have benefited most from Working for Families are in the hard-hit eastern suburbs of Christchurch, including in parts of my electorate in Avonside and Richmond. This bill means that those employees will not have their eligibility for Working for Families payments affected by payments that employers might have given them in the wake of 22 February. That is very welcome. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000678\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI also acknowledge the extraordinary outpouring of donations from the business community in the wake of the 22 February earthquake. I made it a practice on an almost daily basis, from about day three or four, in to go to the civil defence headquarters, open the boot of my red beetle, and fill it with goods that had been donated by companies from the length and breadth of New Zealand and, in fact, from further afield. I know that amongst the consignments I put into my boot was Australian-made Banana Boat sun cream, and it was very welcome. The weather was still hot, and people obviously were sometimes choosing to spend a lot a time outdoors because of the damage to their homes and businesses, so that sunscreen was amongst the goods I took on a daily basis to the community groups, trusts, and organisations that were helping people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000679\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003ETorches had been donated, there were batteries, and there was water by the pallet-load, because large parts of the city lost potable water for some days after the quake. There was flyspray, which was quite useful for some households, and a great quantity of rubber gloves and face masks. I have to confess that I still have some rubber gloves and face masks in the garage at home, and I hope that they might be useful at some other point. I did not know quite who to give them back to once the need had passed, but I guess they might be of some use later in the year if we have an outbreak of flu or anything similar. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000680\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EThose things were donated generously by businesses across New Zealand. This bill is, in part, making sure that those businesses will not have to pay tax on the goods they have donated to people affected by the quake. It is another indication of the national response. We have felt enormously heartened. It goes on. As I mentioned, there was the photo exhibition opened as recently as Monday night of this week, and an appeal to raise funds for the people of Canterbury will be launched this weekend on M\u0101ori Television, with global support. Thinking of the comments made by a colleague from the Taranaki - King Country electorate earlier in the House during the debate on a previous bill, I acknowledge the role Fonterra is playing in supporting that enormous fund-raising initiative. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000681\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EThe only disquiet I would express about this bill is its timing. As we have seen, a regulatory impact statement was prepared by Inland Revenue Department officials. I note that they concluded the statement and submitted it to Cabinet on 17 March\u2014St Patrick\u2019s Day, if you like\u20143 weeks after the quake, yet the bill was introduced on 4 May, some 7 weeks later. I suggest that the lead time indicates that it might have provided the opportunity for us to scrutinise the legislation, which is what we in this House would have preferred. With all due respect to the officials, issues can often be picked up by the combined intelligence that comes through having the select committee process and having public input into it. It is really the best way through. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000682\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EA pattern is emerging here. I note that a Canterbury ram should be a sheep or a sports team; it should not be a Government habit in respect of legislation introduced to the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000683\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022030cb9490a4a44e68fe857de5fc918f5\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: There\u2019s a few old wethers over there; a few two-tooths.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000684\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bcdde96e92cd4746a0ad2c27c9af6ef4\u0022\u003EBRENDON BURNS\u003C/span\u003E: Despite the temptation and the presence of some members opposite from rural electorates, I will not pick up on the sheep analogies that my colleague the member for Waimakariri is starting to develop. I make the point again to the Government, while trying to respect the bipartisan nature of the bill, that where it is at all possible, there should only be compelling circumstances in which legislation is not subject to the scrutiny of a select committee. The select committee process truly adds to our knowledge and to the rigour of the bill. It also means that we avoid two things. Firstly, it avoids the prospect of Parliament having to come back to legislation because it was pushed through under urgency, without any consideration. That is the process; that is what we should be following. Secondly, it also means that the fish-hooks in the legislation can be picked up there and then. Those are the benefits of the select committee process. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000685\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EAs Labour members have made clear, we are keen to see the Taxation (Canterbury Earthquake Measures) Bill progressed. We will support it through all its stages. We have some concerns about the urgency that is being applied, but this bill makes absolute sense for Canterbury at this time. Canterbury is still very much a community in need. We acknowledge that other Budget measures have provided the funding to pay for 60 percent of the restoration of Canterbury\u2019s infrastructure. That has come through in earlier legislation than the Budget. This bill is an accompanying measure, if you like. We are still nowhere near to being out of the woods in respect of the challenges we face as a community and as a city and a province, and we will need every ongoing effort. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000686\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EOne of the things that I think we need to do, if we are to use urgency, is to connect it to the rebuild of Christchurch. My colleague Stuart Nash mentioned the Napier example. On a final comment and note, Napier rebuilt its central business district in 2 years flat\u20142 years flat\u2014from absolute desolation. Everything was razed by the fire that followed the quake. Napier had an interim \u201Ctin town\u201D, where the commercial businesses were able to operate. That was a fantastic initiative. More building was done in Napier in those 2 years than in the whole of the rest of New Zealand. We need a sense of urgency, not in the sense of a bill being pushed through the House under urgency, but in the sense of the rebuild of Christchurch. I ask members to give their support to that urgency in respect of Christchurch\u2019s future.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022 data-id=\u0022366e1d75a45a4b7594f9c644eed9fcf4\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000687\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022366e1d75a45a4b7594f9c644eed9fcf4\u0022\u003EPESETA SAM LOTU-IIGA (National\u2014Maungakiekie):\u003C/span\u003E Malo, Mr Assistant Speaker Robertson. I thank you for the opportunity to take a short call on the Taxation (Canterbury Earthquake Measures) Bill. In other speeches this afternoon, we have heard widespread support for the bill. I do not wish to dwell too much on it. I will say that it receives support not just from our Canterbury MPs but also from those across the country. As was witnessed in the aftermath of both earthquakes affecting the Canterbury region, the country and, indeed, the world responded in a compassionate and caring way. It is really about supporting and rebuilding Canterbury. Christchurch is New Zealand\u2019s second-largest city. It is an important part of the economy and our country. Certainly, it will not just be the Government\u2019s role to rebuild Christchurch and Canterbury.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000688\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EThe private sector has played a major part in the rebuild. I acknowledge the speaker opposite, Brendon Burns, who conceded that point, because we do not often hear positive things about the private sector from members opposite. So I thank Mr Burns for at least conceding that point.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000689\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EThere is a telethon on this Sunday, and, again, people will be asked to dig deep to support that. There are also a number of fund-raising measures across the country. I will be attending one in my local electorate of Maungakiekie. The Royal Oak Racquets Club will hold a breakfast, with a number of auction items. I know that there is a nice bottle of wine from the Prime Minister for auction next Friday morning, and we will be doing our part in Maungakiekie to support the people of Canterbury. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000690\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EThis bill is part of a number of measures that this Government has taken to respond to the catastrophe that occurred in Canterbury and Christchurch. It supports the Budget measures that were announced yesterday. This Government is committing $5.5 billion over the next 4 years to the reconstruction and rebuilding of our second-largest city. I support this bill, and I am happy that members all around this Chamber are supporting this very good cause. Thank you.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000691\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219bcf2ff-a193-4361-9072-813a4e36683c\u0022\u003EBill read a first time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000692\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022a230cd47351d407ab7d1f1fc86f34034\u0022\u003ESecond Reading\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022cbb83aab-9566-44c4-9029-8bda4aaca7f2\u0022 data-id=\u00227857eb89a8d2417d9ccf9030a36bb1d7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000693\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cbb83aab-9566-44c4-9029-8bda4aaca7f2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00227857eb89a8d2417d9ccf9030a36bb1d7\u0022\u003EHon PHIL HEATLEY (Minister of Fisheries and Aquaculture) \u003C/span\u003Eon behalf of the Minister of Revenue: I move, That the Taxation (Canterbury Earthquake Measures) Bill be now read a second time. To recap briefly, the bill introduces a range of tax measures to assist people affected and help with the recovery efforts in Canterbury following the earthquakes there. The changes proposed include income tax and gift duty relief on trading stock businesses that have donated to the earthquake relief fund, making certain welfare contributions made by employers to their employees tax-free, extending the redundancy tax credit from its current end date of 31 March to 30 September 2011, and ensuring certain payments do not count as income where families receive Working for Families tax credits. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000694\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022cbb83aab-9566-44c4-9029-8bda4aaca7f2\u0022\u003EThe objectives of these changes in the bill are, of course, to help people. I am confident that the proposals in this bill will be helpful and practical. In March this year the original proposals for this bill were publicised. These attracted comment and suggestions from taxpayers and tax professionals, which resulted in the eligible period for donated trading stock being changed from the original 4-month period for either earthquake. The bill proposes that trading stock donated in the period from 4 September 2010 up to 31 March 2012 will be eligible for the exemption. This change to support the realities people are facing in Canterbury gives me confidence that the measures this bill proposes will provide the help and support that people there really, really need. I commend this 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=\u0022c928b821baa24df2b50ead899e4cd9e0\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000695\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c928b821baa24df2b50ead899e4cd9e0\u0022\u003EHon CLAYTON COSGROVE (Labour\u2014Waimakariri):\u003C/span\u003E As we said in the first reading of the Taxation (Canterbury Earthquake Measures) Bill, and as it appears from the vote in its first reading, there is unanimity on this bill. It is one of those unique times in this House when we all agree. As the Minister of Fisheries and Aquaculture on behalf of the Minister of Revenue said, the bill ensures that people do not have to pay tax on donations they received from employers to help them in the wake of the earthquakes. My colleague Ruth Dyson raised an interesting question, which we will be pursuing in the Committee stage. Under the law in respect of the Earthquake Commission, there are now, I think, four\u2014although I may be incorrect\u2014registered or recognised earthquake events. There was 4 September, obviously; Boxing Day; 22 February; and amongst those, there was\u2014and I recall it, because it was a jolt\u2014a 5.3 magnitude earthquake on a Saturday evening that I think is also recognised as an official earthquake event, although I could be wrong. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000696\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe question that arises out of this\u2014and we do not inquire out of any malice or disrespect; we want this legislation to be as robust and effective as possible\u2014that my colleague Ruth Dyson raised is it seems to encompass only the two major events, which are the 8 weeks post - 4 September and the 8 weeks post - 22 February. I am sure the Minister will want to get his officials to rapidly provide him with an explanation in the Committee stage. It seems to us to present a slight anomaly. It is appropriate that this bill exempts employers and others who have been generous and have perhaps paid over the odds in terms of some income or have made some in-kind donations or given support to employees and others in respect of the two major events. However, I am sure there are employees and others who may well have been impacted or have suffered as a result of the third or possibly fourth\u2014if it is recognised\u2014earthquake events. It seems to me in terms of consistency and also logic that this bill applies to those events. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000697\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThere is, as I understand it, a future-proofing clause in the legislation to allow for the Commissioner of Inland Revenue to trigger these provisions for future events\u2014such as, perhaps, for example, the Napier floods had they been of a significant proportion; or, indeed, as I said before, the tornado in the North Shore had it been of a significant proportion. The question is why those other official events are not contained within the bill\u2014or is there some other provision? If the intent was to do that, and that has been missed through misadventure or a slight oversight, will the provisions be amended by the Minister to ensure that those other events are catered for? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000698\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003ELikewise, it could be the case before this legislation is passed\u2014and we do not wish this on anybody\u2014that there is another official event. The jolts we get in Canterbury seem to be quite regular. We just want some assurance as to why those other historical events have not been included. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000699\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThere are some other issues in this legislation in respect of some of the technical points that will be raised in the Committee stage. I am interested to know the number of people\u2014a likely projection, if there is such; if we know or we can make a projection\u2014who will be positively affected by it. I am also interested to know what level of declaration is required by businesses. I can give an analogy that may assist the Minister, who I am sure is listening. In Rangiora we had a group called the Rangiora Express that materialised. Rangiora is their patch; it was like Rangiora\u2019s own air force. A couple of fantastic chopper pilots emerged out of the ether under the stewardship of one Jayne Rattray and a number of other people. Jane is a local in that area. They decided they wanted to help people after that 22 February quake. A large number of donations were made by a number of organisations, and I also know that a number of companies made a significant number of in-kind donations to their own employees. We would like to know what sorts of accounting processes have to be put in place in order for those issues to be addressed to satisfy the requirements of this bill. Whilst I note that this is an attempt to cut down red tape, businesses may be in a position where they do not have\u2014possibly through the effects of a natural disaster\u2014the ability to account for those goods and services in respect of GST, income, etc. I think that needs to be addressed, perhaps more properly in the Committee stage. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000700\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThere are also issues in respect of advertising and promotion to make commercial organisations aware that this exemption, if you will, or this facility, will exist. What guidance will be provided to organisations, given that we are not in a \u201Cbusiness as usual\u201D period?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000701\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003ESitting suspended from 6 p.m. to 7 p.m.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000702\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226c352290f30d43f1bf619dc222a27c2e\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Before the dinner break I was in the process of raising a number of questions. As Canterbury members on this side of the Chamber have spent the dinner break diligently researching a number of issues in respect of this bill, there is one thing I and colleagues would be interested to ask the Minister, or to get some background from the Minister about. The purpose of the bill is stated as being to create tax exemptions for businesses donating trading stock to people affected by the earthquakes. A question arises as to what level of accountability, paperwork, declaration, and administrative activity will be required, presumably, to account for that. I was in the process of using as an example the Rangiora Express. For the uninitiated, I will explain that the Rangiora Express started its own, as it were, air force. Helicopter pilots were engaged to fly hot meals to the eastern suburbs of Christchurch in the Hon Lianne Dalziel\u2019s electorate. As part of that initiative I recall that the local McDonald\u2019s shop, or whatever\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000703\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cf848c3e1da943ec8efa021110960003\u0022\u003EStuart Nash\u003C/span\u003E: Restaurant. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000704\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d28e634b896f4c2b87bbc2d10dc2bfde\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E:\u2014restaurant donated a large amount of its product. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000705\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002206f64873500241b9a6ff57efc735b479\u0022\u003EHon Ruth Dyson\u003C/span\u003E: This was before the Double Down burger. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000706\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002264f124a5fd8548b5b39be9bfe3d6cc59\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: No, it was not the Double Down burger. I am told that there is another member of this House who is more proficient in takeaway food than I am, I say to my colleague, but I do not believe that he is within the precinct. Anyway, that food was donated, and the question then arises, say for that business, as a lot of material and food was donated by other providers and businesses, as to what level of accountability is required to account for that product so as to gain this bill\u2019s tax exemption. I am assuming that the intent of this bill is actually to cut down any red tape and to make it administratively easy for those businesses to get through this. As a colleague said, and I think it might have been Brendon Burns, in the hours and days after the 22 February quake, especially, businesses moved very swiftly to donate. We would ring them, and Heller Tasty donated smallgoods, Verkerks, in my patch, donated smallgoods, and other businesses, when we rang and asked, simply donated products and services. Frucor, the local bottled water manufacturer in Kaiapoi donated hundreds and hundreds\u2014thousands, probably\u2014of bottles of water, just to get it done and to assist people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000707\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EAn issue arises about what the technical mechanics are for accounting for that. It may be that, due to the nature of the quake, businesses did not, through loss of records or whatever, have an ability to account for it. I ask whether there is any flexibility within this legislation to deal with it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000708\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe other point we raised was one of promotion. What sort of advertising, promotion, and material will be provided to educate businesses and others so that they can take advantage of this exemption? I would be grateful if the Minister, in due course, could address those issues. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022136da8c4-afc7-483e-a39c-c66812f71774\u0022 data-id=\u0022c7ea99cd631142e1b37ce6313ced4ae2\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000709\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022136da8c4-afc7-483e-a39c-c66812f71774\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c7ea99cd631142e1b37ce6313ced4ae2\u0022\u003EHon KATE WILKINSON (Minister of Conservation):\u003C/span\u003E I am pleased to stand and speak in support of the Taxation (Canterbury Earthquake Measures) Bill at its second reading. This bill is one of a number of actions the Government is taking to support Cantabrians and help rebuild Christchurch and, indeed, Canterbury. Yesterday\u2019s Budget revealed even more the extent of that support, to the tune of $5.5 billion. This bill is practical. Many words have been spoken in this House about the September and February earthquakes. They are certainly events that will never be forgotten. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000710\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022136da8c4-afc7-483e-a39c-c66812f71774\u0022\u003EThis bill represents another concrete action to provide help where people could be negatively affected by current tax law. As we have heard, the main features of the bill include an exemption so that businesses will not have to pay tax and gift duty on trading stock they have donated up to 31 March 2012 for relief from the effects of both Canterbury earthquakes. Also exempted from tax will be certain welfare contributions provided by employers within 8 weeks of either the September or February earthquakes. The other two matters in the bill extend the redundancy tax credit to 30 September 2011 and provide the Commissioner of Inland Revenue with the power in emergency situations to exclude certain income from counting for Working for Families entitlement purposes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000711\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022136da8c4-afc7-483e-a39c-c66812f71774\u0022\u003EThis Government continues to work hard to rebuild Canterbury and provide all the assistance necessary to the local communities. The $5.5 billion for the new Canterbury Earthquake Recovery Fund announced yesterday is obviously a big part of that too. We are talking about spending on local infrastructure and social services. We are talking about roads, water, schools, hospitals, welfare support, and wage subsidies. This is $5.5 billion that will go directly into the Canterbury region. As for jobs, this money will bring with it employment. It will see tradespeople and support services flowing into the region, with locals to be the first to pick up the jobs they need. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000712\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022136da8c4-afc7-483e-a39c-c66812f71774\u0022\u003ERebuilding Canterbury after two particularly nasty earthquakes will be a long and difficult task. For many the grief remains very real and personal, but we have to move forward and rebuild our lives and our region, and this Government is committed to providing the resources to do that. To break down that $5.5 billion a little more, we have $1.1 billion already allocated to local infrastructure, $85 million on assets such as schools and hospitals, $521 million on welfare and emergency support, and $3.2 billion in the back pocket for future decisions such as land remediation and as needed for further infrastructure. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000713\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022136da8c4-afc7-483e-a39c-c66812f71774\u0022\u003EIt goes without saying that everyone would prefer we never had to endure either of the September or February earthquakes, or the aftershocks. We would love to spend a nice, sunny autumn day walking down Cashel Mall and eating at a local cafe, but our reality has changed and now we get on with what needs to be done. This Government is working hard for Canterbury. This bill forms part of the overall picture as we continue to respond to the circumstances people are facing. There is quite some way to go yet, but piece by piece this Government is providing the necessary tools and resources to help Cantabrians reclaim their lives and move forward. This bill is part of that toolkit, and I support the bill. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022 data-id=\u00226b82d2d57d36422880c3ccad9ffd6071\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000714\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00226b82d2d57d36422880c3ccad9ffd6071\u0022\u003EHon RUTH DYSON (Labour\u2014Port Hills):\u003C/span\u003E Thank you very much for the opportunity to take a call in further support of the progress of the Taxation (Canterbury Earthquake Measures) Bill. I was interested in the comments that the member who has just resumed her seat, the Hon Kate Wilkinson, made in respect of business payments. She was not referring to the bill that we are discussing, but that is all right. She was really drawing other related matters into the debate, and I am not criticising her for that, but she did talk about the huge amount of money in the Budget that was going towards business support. That is quite a revelation for the House, because to the best of the public understanding, the business support is finishing in just 2 weeks\u2019 time. I am sure that her words about how much extra financial support is going into business support will be warmly welcomed. I urge her to give us proper details of that package during the Committee stage, because the business people who have finished their day and are at home listening to this debate\u2014if they have the power on, and if they have nothing else to do with their lives, which is quite possible at the moment in Christchurch\u2014will be very interested to know the details of that support. So I urge the member who has just resumed her seat to get to the details of the package that she has announced, and share it with us during the Committee stage or the third reading debate tomorrow morning.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000715\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EAs I said earlier in this debate, Labour supports the progress of this bill. We have had a series of earthquakes, which have caused widespread devastation and trauma to people. I am still concerned\u2014and I hope the Minister of Revenue is able to comment on this matter during the Committee stage\u2014that this bill is restricted to two earthquakes, one on 4 September and one on 22 February, because we had a third and quite substantial one on Boxing Day. That earthquake had a large impact on many people, and it will fall outside the 8-week time gap that this bill imposes. That would be a mistake. I am sure that that is not deliberate, because this bill is intended to help Canterbury people. It is meant to recognise the huge generosity that we have been overwhelmed with from people within our region who have not been affected directly by the earthquake, and from people up and down the country. We have had Aucklanders and Wellingtonians supporting us, as well as, of course, people from all the parts in between, and from the rest of the South Island. We have had people, internationally, supporting us. We even had people from Japan offer financial support to Canterbury, after the devastation in their own country. It was more than a little moving; it was truly humbling to be supported in that way. So for the Government to now come to the party\u2014it is the middle of May, 8\u00BD months after the September quake, but that is OK; I am sure it has been busy\u2014and say it is prepared to back the people who have donated goods and have supported the people of Canterbury and exclude them from tax duty from other taxes is a really good move. So we certainly support that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000716\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EI have some other concerns, and I briefly mentioned some of them earlier, but I want to put on the record the fact that I am also concerned about the redundancy tax credits. It is great to see that people who have been made redundant as a result of the earthquake will have their tax credit for redundancy payment pushed out by a few months. It is not great, actually; I used the wrong word. It is just fair. What I do not understand is that if it is fair for Canterbury workers who have been made redundant as a result of the earthquake to have their tax credit payment on redundancy payments pushed out by a few months, why is it not fair for every other New Zealand worker who is made redundant up and down the country? We see redundancies literally every day under this Government. Why is it not fair that those redundant workers have their tax credits pushed out altogether? It is an outrageous imposition on people who are going through a very bad time in their lives. They have just lost their jobs, not because of anything they did wrong but because the business they have been employed in\u2014perhaps they worked very hard for very many years\u2014is not able to employ them any longer. This is an opportunity, and I challenge the Minister of Revenue, the Hon Peter Dunne, to put forward a Supplementary Order Paper during the Committee stage\u2014it would be supported by Labour\u2014to eliminate those tax credits altogether. It is hard not to compare how long it has taken the Government to advance this very straightforward and relatively inexpensive bill with how long it took for three tax packages worth $23 billion to be pushed through the House under urgency since the Budget. It really shows that National has different priorities compared with Labour.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000717\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EWhen people are in a state of trauma and in critical need, it is really good to be able to step up quickly and help them rather than wait for such a long period of time. Certainly, the focus should always be on the people who are trying hard and working hard but not getting much financial support. They are the people who should be better supported by the Government, not the people who in last year\u2019s tax cuts\u2014people like the Prime Minister and the Deputy Prime Minister\u2014received an additional $1,000 a week. That is more than many people in Canterbury are earning. They got not $1,000 a week but an additional $1,000 a week on top of their salary as a result of last year\u2019s tax cuts.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000718\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EAs I mentioned earlier, we will raise some questions during the Committee stage, and I hope that the Minister in the chair is competent to answer them or at least take the opportunity to do so. Although we support this legislation, and we are not opposing any of the intentions, we note that this tax legislation has quite a lot of detail in it. Members will notice the level of detail when they start looking at new sections CZ 23 and CZ 24, or GZ 3, or MB 13(2)(q), which is a really interesting new section that the bill inserts into the Income Tax Act 2007. When we start talking about that level of detail, we should try to get it right. It will be beholden on the Minister in the chair during the Committee stage to pay attention to the debate and make sure that we do get it right. This is not just tax legislation; it is retrospective tax legislation. There is no indication in the bill as to how many people it will apply to. If the officials know that, it would be good for the Minister to take a call and give us that information. We do not know how the measures will be applied or whether people have already paid tax for some of the goods that are covered by this legislation. Will they get a refund or will they just have an abatement on their next tax bill? What if people have not put in a tax return? Do they have to file one? What are the forms like? How much bureaucracy are we putting Cantabrians through in order to get this great gift from the Government? Is it worth it? We do not want a lot of red tape, and we do not want a lot of forms. As Amy Adams said earlier in this debate, we have new rules now. We do not like people delaying progress. We do not like people putting barriers in our way to getting help and support and getting on the path to full recovery.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000719\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EThe final point I want to make is in relation to another major concern we have in Canterbury, and it was highlighted during the passing of the Canterbury Earthquake Recovery Authority legislation, which, again, was rammed through Parliament with very limited time for consultation. Only invited submitters were able to have their say, and that was only after a lot of battling with the Minister for Canterbury Earthquake Recovery. The other concern we have, which the Minister might like to allude to during the Committee stage, is the power of the Minister, Gerry Brownlee, to instruct our three local authorities to sell some of the assets they hold. No amount of tax concession, abolition of tax credits on redundancies, or reduction of tax duty in any regard of donations in this legislation would make up for the anger that Cantabrians would feel if their assets were ordered to be sold by the Minister for Canterbury Earthquake Recovery.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000720\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EI am pleased to be part of this bill. I am sorry that it has come so late, but it is a good bill. I hope it is easy to administer. I hope it adds to the support we have received from around the country, and I put on record my appreciation to the Minister for introducing it.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002281e8ca24-8b1d-4558-9ef9-c9418df2b3c0\u0022 data-id=\u002246a8c52789634d33bf34f4d4ccdbc454\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000721\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002281e8ca24-8b1d-4558-9ef9-c9418df2b3c0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002246a8c52789634d33bf34f4d4ccdbc454\u0022\u003EKEVIN HAGUE (Green):\u003C/span\u003E I begin by quoting my colleague Kennedy Graham from his general debate speech on 11 May: \u201CWe do not yet know precisely the nature of the land in our brave new world. We have had two massive earthquakes and half a dozen major aftershocks. We have had 6,989 ripples\u201D\u2014I think we are over the 7,000 mark now\u2014\u201Clarge and small, as the land reconfigures and settles down to the new tectonic era. We know that the peninsula has jerked up by a metre, the estuary has gone sideways a bit, and the flat land has sunk by perhaps one-quarter of a metre. But is that the end of it? We do not know. We do not know how many more aftershocks we must endure, or whether they will flatten out within a year, a decade, or more.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000722\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002281e8ca24-8b1d-4558-9ef9-c9418df2b3c0\u0022\u003EThe series of earthquakes, in fact, over this extended period has been a crisis without parallel in New Zealand\u2019s history. The Green Party has been doing its bit on the ground from day one, with efforts towards fund-raising. We have been shovelling silt, delivering food, going door to door assessing people\u2019s needs and helping them, and now Dr Graham is holding a series of public meetings to look at what the future of Christchurch will be. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000723\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002281e8ca24-8b1d-4558-9ef9-c9418df2b3c0\u0022\u003EThroughout that time one of the things we have appreciated is the opportunity to work with other parties, and we would like to express to Mr Brownlee our appreciation for the times that it has been possible. We think, though, that that cross-party work has been patchy, and we would like to see it improved. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000724\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002281e8ca24-8b1d-4558-9ef9-c9418df2b3c0\u0022\u003ESimilarly, we think one of the crucial elements in the rebuild of Christchurch and in the relief work for people in Christchurch and Canterbury more generally has to be democratic participation. Again, we thought it was great when that was able to occur, but we note that it has been patchy and that decisions have been made about Canterbury and for Canterbury people without involving those people, and we think that is poor process. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000725\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002281e8ca24-8b1d-4558-9ef9-c9418df2b3c0\u0022\u003EThe Green Party, as my colleague Sue Kedgley indicated in the first reading, supports the objectives of the Taxation (Canterbury Earthquake Measures) Bill and certainly will be voting for it. We think there are some improvements that can be made, and I think one of them would be around the restricted scope of the tax relief measures that the bill sets out in terms of the duration of just those two particular earthquakes against the context of a series of very many earthquakes, each of which has caused damage, and each of which has caused trauma, pain and suffering, and loss to the people of Christchurch and of Canterbury.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000726\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002281e8ca24-8b1d-4558-9ef9-c9418df2b3c0\u0022\u003EThe task of coping with this earthquake and its aftermath is, as I say, an unprecedented one. It is interesting that the Government itself invites a comparison with this year\u2019s Budget, which we have just heard. The Green Party has proposed what we believe is a fiscally prudent approach to some of the costs associated with the Christchurch rebuild and some of the costs associated with the recovery of Christchurch people. Although the tax measures that are set out in this bill will provide some value, and will actually assist people in getting on with their lives, other things could also have been done. In particular, we have proposed a suite of three measures: a temporary, modest levy; some additional borrowing; and reprioritisation of Government expenditure to assist with some of the costs associated with the earthquake. We think it is a shame that the Government, so far, has chosen not to take up that approach. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000727\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002281e8ca24-8b1d-4558-9ef9-c9418df2b3c0\u0022\u003EIn this abbreviated second reading speech I will come to some of my concerns about the democratic process in relation to this bill. As I indicated, when people are traumatised, when they have already been damaged by the events caused by the earthquakes themselves, their exclusion from processes and decisions that will affect them in their recovery from those earthquakes is actually a double victimisation. One of the concerns that the Green Party has about this bill, although we support its objectives, is that the Government has not taken the opportunity to have even an abbreviated select committee process in which the people of Christchurch and the people of Canterbury could have had their say about it. We think that is a major concern. There is no reason why the Government could not have done it. The bill was tabled on 4 May, so there was plenty of time for such a process in the intervening period. It is a shame that that opportunity was not taken. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000728\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002281e8ca24-8b1d-4558-9ef9-c9418df2b3c0\u0022\u003EThat comes hard on the heels of a bit of a history from this Government of poor process that has excluded people in Canterbury. I guess the Canterbury Earthquake Response and Recovery Bill was the most recent predecessor. Once again, Canterbury people were excluded from that process, very largely, with the exception of a cursory select committee process in that case. Once again, there was absolutely no need for that to have occurred. The other example that I want to draw to the House\u2019s attention is the termination of the Environment Canterbury councillors and the Government\u2019s summary intervention in water conservation orders. Actually, some really fundamental changes to democracy and to conservation in the Canterbury region have been undertaken absolutely without due process, and absolutely without the involvement of the people who are affected by those decisions. Again, that was entirely unnecessary. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000729\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002281e8ca24-8b1d-4558-9ef9-c9418df2b3c0\u0022\u003EI will conclude by repeating that the Green Party will vote for this bill, but we extend our hope that the Government will change its tradition in relation to Christchurch and Canterbury to ensure that in the steps that follow in the rebuild of Christchurch and in the rebuild of Christchurch people\u2019s lives\u2014in which this bill plays a small but significant part\u2014the Government will begin the process of inclusion of the people affected by its decisions, and begin the process of democratic engagement with the people of Christchurch over the decisions that affect them. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022 data-id=\u0022c2a34dd89ba9428d862bdd709b3a8c8e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000730\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c2a34dd89ba9428d862bdd709b3a8c8e\u0022\u003EBRENDON BURNS (Labour\u2014Christchurch Central):\u003C/span\u003E I will pick up a couple of the points made by our Green colleague Kevin Hague in relation to this Taxation (Canterbury Earthquake Measures) Bill. It is, and has been, a bipartisan bill, and appropriately so. When I talked about Canterbury in my past address on this bill to this House, I did not acknowledge that Canterbury extends north to the Kaik\u014Dura electorate and south to the Rangitata electorate, and that people as far afield as those electorates have been affected, as well as those of us who live in Christchurch or on its periphery.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000731\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EBut I will pick up on a point, particularly with Minister Kate Wilkinson in the House. I know that it does not pertain to her particular portfolio area, but it is a concern that has come through to me just this week in a parliamentary question. It relates to the earthquake subsidy. Of course, this bill will support those who have suffered through the quake, so that their eligibility for Working for Families is not affected and so that they do not have to pay tax on donations received from employers. But obviously the big element of Government support to those in employment has been the earthquake support subsidy, which I acknowledge the Government commenced quickly. I think it was an initiative driven by both the Canterbury Employers\u2019 Chamber of Commerce and the Canterbury trade unions, and it kicked in quickly and generously. Figures back to me this week from Minister Bennett say that in the first phase of the subsidy, which began on 22 February and went through to 4 April, 46,607 employees and 8,020 employers were represented and supported by that subsidy. There was an interim period of a 2-week extension from 4 April, which brought in a smaller number, but we now have what appears to be\u2014unless there are announcements pending\u2014the final phase of that. At this point, as of 9 May, 660 employers\u2014from that peak of 8,020\u2014and 3,300 employees have been granted a second round of subsidy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000732\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EThe point I will make is that one of the conditions of that second or third phase of subsidy, in effect, is that an employer needs to show that his or her business is viable before employees can receive the subsidy, and the business needs to be shown to be viable beyond 6 weeks. I guess the concern for me, as the MP representing Christchurch Central, with all of the central business district, is that I would expect that many of the affected businesses, and those most likely to benefit from the subsidy, would be businesses within the red zone. Of course, for some of them it is not just a question of needing to be viable beyond 6 weeks; some of them will not get access to their businesses for 6 months, or more. I just wanted to see whether a Minister might pick up on that, and give us any assurance about whether anything further is coming, and whether that is just a technicality that might be able to be overcome in individual circumstances. I have, for instance, a bar owner in the central business district who is very keen to keep his key staff employed. He wants a little bit of help to keep that going, but does not know when the bar will be able to reopen. It is my view that if the Government can step up on an individual basis to assist a business like that, it will help to keep people in jobs and the cost will be met in a way other than through unemployment benefits. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000733\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EI will take members through a kind of audio tour, if you like, of the red zone of Christchurch, because on Monday a number of MPs from Christchurch went for their first visit, for several weeks at least, into the red zone. We went down through Armagh Street, past buildings that even some non-Christchurch members would recognise, which now have major question marks about their future, including high-rise buildings such as the Forsyth Barr building, which is a 20-storey building. It has a big question over its future. The PricewaterhouseCoopers building, I think, from the indications, probably will come through. We went through to Cathedral Square, where there is the Regent Building, known to some members who have visited Christchurch as the building that housed the aquarium, and also the Holy Grail Sports Bar at one point; it might be known to some other members for that purpose. There is a major question mark about that building.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000734\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022076482d9bb39472b88f7539cd2a42174\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Name them.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000735\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cbd85ba56f2f44e6a262119869ae333d\u0022\u003EBRENDON BURNS\u003C/span\u003E: No, I do not want to name members at this point, but they will know that bar, I am sure. The BNZ building on the corner of Hereford Street has major question marks upon it. Interestingly, two heritage buildings that have had been earthquake strengthened came through well. The first is the Heritage Christchurch Hotel, which used to be opposite my former electorate office. That office was one of a number of electorate offices I have lost\u2014[Interruption] I have lost only two electorate offices. The third one, I am very pleased to say, is now on the corner of Fitzgerald Avenue and Bealey Avenue, which is a very prominent site. The hotel, which used to be the Government Buildings, had been earthquake strengthened and has come through with very little damage. I think it is a signal, in the rebuild of Christchurch, that heritage buildings where strengthened should be able to play that part. The second building is the former Chief Post Office and that has come through very, very well. Clearly, buildings without that amount of strengthening\u2014as, indeed, our dear cathedral\u2014have not come through so well. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000736\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EWe went down to the Cashel Mall area. The Ballantynes building had come through pretty well. Ballantynes is going to be at the heart of the Cashel Mall Re:Start programme, which is the initiative to get a part of our city reopened by Canterbury A and P show weekend, by the end of October into the first week of November. It is being driven by the Central City Business Association, headed by Antony Gough and Paul Lonsdale, who are doing a fantastic job on behalf of the inner-city business groups. They were working with the Canterbury Earthquake Recovery Authority to get that going, as an early symbol of the rebuild of Christchurch. But we actually went left rather than right on Cashel Mall and up past some of the shops towards the Hotel Grand Chancellor. The Hotel Grand Chancellor, again about a 20-storey building, is definitely coming down. Although the options were still being weighed up, the signals are that they will be taking a more traditional route to bring it down. We may be looking at a 12-month period to bring down that major building at the heart of our central business district\u201412 months. High Street and Lichfield Street, one of the cultural precincts of our city, had extensive damage. A number of buildings had already gone. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000737\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EOne of the sombre impacts for me, of the tour, was to see cleared sites where buildings had been felled and the rubble has gone. It is getting to the point where at times one has to look and think what on earth was there. The point about that is that the schedule of buildings to come down already extends to 900 buildings in the central business district, and I think we can expect well in excess of a thousand to come down. That, if one thinks of the size of our city centre is a huge, huge tally, and underlines the importance of that Budget earthquake recovery funding of $5.5 billion for the rebuild of our city. Just concluding my audio tour, other members may know the Holy Trinity Church, a base for the Pasifika community, in particular. That has already gone. It was identified as probably the most damaged building. It had already experienced earthquake damage and a fire, prior to February. That has totally gone, apart from the foundations. Dorothy\u2019s Boutique Hotel will be an institution known to many members of this House, now known as Beaufort House. It has sustained moderate damage, and there is a question mark on whether it will be rebuilt. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000738\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c0bf9a6846f447d883af41a31d3f79a4\u0022\u003EHon Ruth Dyson\u003C/span\u003E: We want to keep Dorothy\u2019s!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000739\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220e4c17cb1ce44d919a3be3af4ea8659e\u0022\u003EBRENDON BURNS\u003C/span\u003E: We want to keep Dorothy\u2019s. I am absolutely with my colleague the member for Port Hills on that, but it has sustained considerable damage. We went around the corner of Latimer Square through to the Harcourts Grenadier building\u2014a modern building. That has been earmarked for demolition. The Council of Trade Unions building also has a major question mark on it. It has slumped about half a metre in one corner. We came back down through Gloucester Street and saw that the TVNZ building had already been completely felled and demolished. So that sort of completes the picture as part of the central business district. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000740\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EThat leads me to the Earthquake Kiwi Bonds put in place in the Budget. I acknowledge and applaud that contribution. It will be important for the rebuild of our city. I had an email tonight from one of the members of the Interests in Conserving the Identity of Christchurch group, which I chair. Nicky Wagner is another member of that group. One of the members noted there is nothing in the bonding structure to assist the private sector with its rebuild programme. I think there is an assumption that the private sector insurance will be sufficient. The word is that that is not likely. So maybe that issue needs to be given some further consideration, as we move towards the rebuild of Christchurch.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022 data-id=\u0022de88733ba47f439589706324c9af014a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000741\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e2e2ee61-b3b9-4a89-bcc3-5b7be76c5825\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022de88733ba47f439589706324c9af014a\u0022\u003ERAHUI KATENE (M\u0101ori Party\u2014Te Tai Tonga):\u003C/span\u003E The M\u0101ori Party is committed as part of the Government, along with mana whenua, Ng\u0101i T\u016Bahuriri and Ng\u0101i Tahu, to rebuild \u014Ctautahi in all its dimensions. As such we welcome these amendments to the tax law in order to support recovery and rebuilding of \u014Ctautahi. We commend this bill to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002292824476-4e66-4052-8435-b049833d8b83\u0022 data-id=\u0022f474e1bf7580492d86e15e1fb8fce2c8\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000742\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f474e1bf7580492d86e15e1fb8fce2c8\u0022\u003ENICKY WAGNER (National):\u003C/span\u003E I rise to support the Taxation (Canterbury Earthquake Measures) Bill. As a one-eyed Cantabrian and someone who has lived in Christchurch all my life, I am delighted that the Budget put the recovery and rebuild of Canterbury right at its centre. The Prime Minister had promised us that the rebuild of our city and our province would be one of the Government\u2019s most high priorities, and through Budget 2011 he has delivered on that promise. He said the Government would do what was needed to make the rebuild happen over the coming weeks, months, and years. He is doing that. He said he knew that it was a huge task and that we need to have ongoing patience and tolerance from all Cantabrians, but together we will get it done. And we will. It is going to be a long, hard slog but we will get there, especially now that thanks to Budget 2011 we have $8.8 billion in the kitty. That is 8.8 billion reasons to feel secure about the future of our province. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000743\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003EThis bill is needed to amend tax legislation so that people who so generously donated goods and services to the people of Canterbury do not create a tax liability. In the days and weeks following the earthquakes, so many people donated so generously to Canterbury. They donated to the people they knew, and they donated to the people they did not know. They donated to their neighbourhoods; they donated to their employees. I do not think even one of them thought about a tax liability coming out of that. The Canterbury earthquake of 22 February was the first national civil defence disaster in our country. The people of New Zealand, and also people internationally, responded magnificently. This bill will make sure that the people of Canterbury get the full benefit of that generosity. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000744\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003EThe main features of this bill include an exemption so businesses will not have to pay tax or gift duty on trading stock that they donated. It also exempts from tax, welfare contributions provided by employers to their employees. There are numerous stories of what employers supplied; things like washing machines, food, and places to have showers, and generally supporting each other. But the bill also covers two further matters. It extends the redundancy tax credit to 30 September 2011 and provides the Commissioner of Inland Revenue with the power in emergency situations to exclude certain income from counting for Working for Families entitlements purposes. They are all good common-sense amendments, and I believe that every New Zealander will support them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000745\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003EOver the weeks and months since the earthquake, enormous amounts of goods and services have poured in to our city. Just last weekend I visited a New Brighton hall where volunteers from the Buddhist Compassion Relief Tzu Chi Foundation delivered hundreds of welfare packages. These packages consisted of blankets and personal necessities, such as shampoos and soaps, and the package also included a blessing from Master Cheng Yen. They were also given a debit card with $200 credited to it. It was fantastic. The volunteers gave out hundreds of these packages. The changes in this legislation will mean that very, very generous gifts like these will be tax free. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000746\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003EThe cost of the Canterbury earthquakes is enormous. It is estimated at about $15 billion, which is about 8 percent of our GDP. It will probably be one of the most expensive disasters the world has ever seen, and a huge commitment for a country the size of New Zealand. Putting that into context, the recent devastating earthquake in Japan is equivalent to about 3 to 5 percent of Japan\u2019s GDP. The cost of the earthquakes is too big for Christchurch residents to manage alone, but it is manageable within the Government\u2019s nationwide fiscal programme. The people of Canterbury really appreciate the support of all New Zealanders who have given so generously to us through the Budget and understand that this bill is just another way of them showing their support. I commend the bill to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u0022689f23cbf4b1493099daf402b649a937\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000747\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022689f23cbf4b1493099daf402b649a937\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E I suppose that over the next 4\u00BD hours we will hear in the House how good the Taxation (Canterbury Earthquake Measures) Bill is, and what a magnificent job our Christchurch MPs are doing. We will also hear that this is important legislation. In a way it is ground-breaking legislation, certainly from a tax perspective. [Interruption] Thank you very much. It took about 2 seconds. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000748\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI know we cannot refer to someone not being here, but perhaps during the Committee stage the Minister could let us know whether this bill is the first piece of tax legislation to be brought in for this sort of event. I suspect it is, because, as the last speaker alluded to, the earthquakes are, in fact, the first national disaster we have had in the country\u2019s history. I suspect that back when the Napier earthquake occurred, there was no such thing as a national disaster. It is good to see the House rallying around this legislation. It could have been here a little bit earlier. Certainly, Labour and National\u2014in fact, every party\u2014wanted it here a little bit earlier, except the Greens, I think, who may have blocked it at the Business Committee, but that is OK, because it is here now. Better late than never, I suppose. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000749\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThere are a couple of things I will talk about. I will not take a long call on this; there is plenty of time for that. I want to talk about the policy problem. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000750\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThere is no doubt that the immediate provision of goods to those in need was of vital importance, and we talked about that before. I think most speakers have alluded to the fact that it just had to happen. People did not sit down, and they did not consult a tax accountant or a lawyer. They knew they had to get out there and make it happen for the people of Christchurch as soon as possible. But the problem we have is that the existing laws do not support that sort of behaviour. They do not encourage a donation or supply of goods for less than market value\u2014but let us say a donation\u2014to assist people in Christchurch who have been affected by the earthquake. In fact, existing laws are designed to deal with manipulation by business, not the goodwill of business. That is one of the great things to come out of the Christchurch earthquake, and, again, many speakers have talked about it. People rallied together in a way that not only brought a city together but brought a nation together for a small time. As a result of the existing law dealing with the bad side, with manipulation, it does not adequately deal with the donation of trading stock, particularly in circumstances such as the Christchurch earthquake. I suppose it is an unintended policy outcome due simply to the fact that when tax legislation was designed, the drafters did not contemplate the fact that people would be giving away stock to victims of such an extreme national disaster. So that is part of the policy problem. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000751\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EAs has been mentioned, currently, under the law that exists at this point in time, goods donated to victims of the Christchurch earthquake are not eligible for the donations tax credit, or the company donation deduction. The effect of the section in the Income Tax Act that governs this issue is that people donating in response to the Christchurch earthquake will have to file a tax return for income tax purposes for the full market value of that trading stock. We are posing some questions about that, and it will be very interesting to get the answers to those questions in the Committee stage. The sorts of questions this issue brings up include whether those businesses will have to file a tax return, or any form of return, that deals with the stock that has been given away\u2014how they will have to account for it, I suppose. The gift of trading stock, or selling it down at less than market value, constitutes a gift under the Estate and Gift Duties Act. Even though we are getting rid of gift duty\u2014probably before the election, I suspect\u2014under this Act, during this time, one will still be liable for gift duty.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000752\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThis was what we were talking about before. There was just not the time to consult a tax accountant and to get one\u2019s affairs in order. I do not know at what point the businessmen and businesswomen suddenly said: \u201CHell\u2019s teeth! What am I going to do about this?\u201D, but at some point it did happen, and the Inland Revenue Department received a number of calls about it. In a way, this bill is cutting out a whole lot of red tape, because if the Inland Revenue Department had insisted on those business people accounting for every single bean, then there would have been problems, because I suspect that a lot of businesses had no idea. I understand that a lot of businesses have lost a lot of their records, so to go back and stocktake would have been close to impossible. In fact, there was no realistic way to deal with this issue. So that is a question we will pose in Committee. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000753\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThis is very good legislation because it deals with an extreme event in a way that I think the vast majority of businesses would like it to be dealt with, and, I think, every New Zealander would expect it to be dealt with. We absolutely support it and we commend it to the House. Thank you. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00220bfa5b74-8933-458a-99d4-bbd75d9898d0\u0022 data-id=\u0022210a375b705241f28410e28abbe77efd\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000754\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220bfa5b74-8933-458a-99d4-bbd75d9898d0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022210a375b705241f28410e28abbe77efd\u0022\u003ECHRIS AUCHINVOLE (National\u2014West Coast - Tasman):\u003C/span\u003E It is a pleasure to rise in support of the Taxation (Canterbury Earthquake Measures) Bill. Yesterday the Minister of Finance, the Hon Bill English, delivered a responsible Budget. It is a growth Budget, a Budget towards better times, and a rational National Budget. This is a Budget that has been prepared in some of the most challenging economic circumstances New Zealand has ever faced. One of the key components in this Budget is the need to get Christchurch back on its feet, and that is what this bill is all about. Rebuilding Christchurch is one of the Government\u2019s top priorities, and that is why we have found $5.5 billion in a Budget where little extra expenditure\u2014other than for education and health\u2014is possible. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000755\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220bfa5b74-8933-458a-99d4-bbd75d9898d0\u0022\u003EThe Taxation (Canterbury Earthquake Measures) Bill is one of the things this Government is doing to support the people of Canterbury to rebuild their city. This bill looks at a range of situations where the people of Christchurch could be negatively affected by our current tax laws. Our current tax laws, though robust, were never designed to cope with a disaster on this scale. This is a sensitive, compassionate, and considerate bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000756\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220bfa5b74-8933-458a-99d4-bbd75d9898d0\u0022\u003EMy colleague Nicky Wagner, the next MP for Christchurch Central, has been working tirelessly with the people of Christchurch throughout their recovery from this devastating earthquake. Nicky often tells me of the extraordinary resilience of the people she has been supporting, and the remarkable examples of people helping each other out. The same can be said of the Hon Kate Wilkinson and Amy Adams, and, indeed, the Hon Ruth Dyson, the Hon Clayton Cosgrove, the Hon Lianne Dalziel, and Brendon Burns. This is not a time to be cute or partisan. Just as on the West Coast we subsumed our political differences at the time of the Pike River disaster, so it is time to do so now in Christchurch and for everyone to work together. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000757\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220bfa5b74-8933-458a-99d4-bbd75d9898d0\u0022\u003EThat is what this bill is all about. Let us work together and bring about the best for Christchurch. I will be there tomorrow, for the weekend. The West Coast helped build Christchurch originally and will do so again. I support this bill and all those who are working for the betterment of Christchurch. Thank you.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000758\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220bfa5b74-8933-458a-99d4-bbd75d9898d0\u0022\u003EBill read a second time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000759\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022ae6fa05b0b4e44469da6fe9b37d5c383\u0022\u003EIn Committee\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022 data-id=\u0022ddd07d56370e4a2d982f520647279120\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000760\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002260200136-9d63-4a82-b4f5-c00411adb1fd\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ddd07d56370e4a2d982f520647279120\u0022\u003EJO GOODHEW (Junior Whip\u2014National):\u003C/span\u003E I seek leave for all provisions to be taken as one question.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000761\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002200283391847d4610bf39ca8bdb59457a\u0022\u003EThe CHAIRPERSON (Lindsay Tisch)\u003C/span\u003E: Leave is sought for that purpose. Is there any objection? There is no objection.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000762\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022879e6f80cc5f4cec93bd970c78332c18\u0022\u003EParts 1 and 2 and clauses 1 and 2\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022 data-id=\u0022fa956def4f984ce59f89afc0c76fa08b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000763\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022fa956def4f984ce59f89afc0c76fa08b\u0022\u003EHon CLAYTON COSGROVE (Labour\u2014Waimakariri):\u003C/span\u003E I note that Mr Ryall is the Minister in the chair. Having no problem with that at all, I would assume, given the non-partisan nature of the Taxation (Canterbury Earthquake Measures) Bill, that his officials will have provided him with some advice that he will be able to offer us in good faith on a number of critical questions. I ask the Minister to indicate whether that is a possibility.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000764\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022224040363cd44f1791e2b6eb476d459b\u0022\u003EHon Tony Ryall\u003C/span\u003E: I can\u2019t see why not.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000765\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022435d6f570bac4ff693bc042241a97ad9\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: I thank the Minister. Excellent; that is wonderful. That is brilliant; I am glad we have that on the record. Issues that a number of colleagues raised, and that I particularly raised, were in respect of the purposes of the bill where it creates taxation exemptions for businesses donating trade stock to people affected by the earthquakes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000766\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe question I ask the Minister is simple. We have heard examples in the first reading and the second reading of large-scale and small-scale businesses that have done just that\u2014donated, in the heat of the quake, as it were, goods and services. We are seeking advice on the technical requirements that will be needed to ensure that these businesses meet the requirements of this legislation and can gain the exemption, and on whether there is any unintended consequence. For instance, as a result of the quake records provision may not have been maintained, and adequate records might not have been put in place and cannot be retrievable now because, to be blunt, businesses just gave on request. They did not seek any assistance in respect of tax liability, and I suspect most of them did not even give any consideration to whether there would be a liability. It was simply an act of generosity. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000767\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe second issue is the number of employees or businesses that may well be affected by this and will be able to participate in this, and, again, I ask what sort of requirements will be placed on them. Thirdly, and more important, colleagues have raised the issue that there are a number of legal events: 4 September, 22 February, Boxing Day prior to that, and\u2014I have tried to find it in the short time we have had\u2014I believe, a fourth recognised official quake that event happened some weeks ago. Regardless of that, we know there are three official events, but only two of them are mentioned and recognised within the legislation itself, even though there is a future-proofing provision that allows for future disasters or scenarios. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000768\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe Commissioner of Inland Revenue can activate these provisions in the future if the disaster meets the requirements, and we think that is a very good thing. But at least one official earthquake event is not recognised in the bill. People could be subject to the same difficulties from that unrecognised event and they are not catered for in this legislation. If the lack of this provision is an oversight\u2014again, we do not say that with any malice\u2014Labour Opposition members would be well prepared to facilitate an amendment to deal with that if it was deemed appropriate. If it has been catered for, then we seek some assurance on that point. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000769\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EEqually, we would want to know the level of administrative red tape that businesses may have to go through to meet the requirements of this legislation, and if a business cannot produce appropriate records of stock that was handed out because of the nature of the disaster, we want to know whether there is flexibility within the legislation, or a discretion within the Inland Revenue Department, to deal with that issue. Again, one cannot think of everything, but an unintended consequence may occur with some businesses or some entities that donated goods, money, or services without any sort of acknowledgment that there may have been a liability and without any anticipation that Parliament might deal with it and provide some sort of exemption. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000770\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe other issue is around promotion, if there is any, and what sort of materials will be provided to businesses, employees, and others who may be affected and who may be able to take advantage of this to assist them in terms of dealing with the legislation when it comes into force. As has been mentioned, there was a large amount of generosity out there. This legislation, given that it is future-proofed, presumably has the ability to facilitate further generosity for future events. If that is the case, then we will support that. So there are a number of questions, and I am sure colleagues will have others. If the Minister is in a position to provide us with some advice, we would appreciate it.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022 data-id=\u00225809a2c514e04e199f9bd006b3124b11\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000771\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225809a2c514e04e199f9bd006b3124b11\u0022\u003ESTUART NASH (Labour):\u003C/span\u003E I am just taking a very short call on the Taxation (Canterbury Earthquake Measures) Bill. I have a couple of questions. Normally what happens with tax bills is that they go to the Finance and Expenditure Committee. We have talked about the very good reason why this bill is not going the Finance and Expenditure Committee, but the reason I mention that is that at select committees, as members will be well aware, members have a chance to talk to officials about why certain things have been drafted and are there, or why they are not. In this circumstance I just have a couple of questions. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000772\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EIf we look at clause 4 in Part 1, which inserts new section CZ 23 into the Income Tax Act, we see that it is an amendment to the Income Tax Act 2007. Section CZ 23(1)(f) states that income is exempt if it \u201Cis available to another employee, who is not an associated person of the employer\u201D\u2014I understand that\u2014\u201Cand is or was immediately before a Canterbury earthquake in full-time employment with the employer, if the employee is an associated person of the employer;\u201D. I suppose I am asking how the Inland Revenue Department will police this provision, or how it will confirm that, in fact, something that was given to one employee was open to all employees. It might be a very easy test; I am not very sure about that. I suppose I am asking for a bit of clarification that this provision will not be so onerous that a lot of business owners will just throw up their hands and say: \u201CGoodness me, we wanted a bit of light relief. That is why we went to the Inland Revenue Department.\u201D The fiscal cost of this is only $3 million, so in the scheme of things it is not much. But we do not want to have legislation that is pretty onerous. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000773\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EThe other point I would like to raise is with regard to section CZ 23(2)(b), to do with the extent of the income exemption. It states that it is to be \u201Cless than or equal to $3,200 in total, if the income is in a form other than accommodation.\u201D I may be wrong here\u2014totally wrong\u2014but I suspect what will happen is that once this legislation is passed, a lot of businesses will try to get hold of a copy of it, because they will want to know the status of what they have given, or the status of their requirements in terms of their provision to the Inland Revenue Department. They will look at this legislation and say: \u201COh, shivers, \u2018other than accommodation\u2019\u2014well, what does that mean? And \u2018less than \u2026 $3,200\u2019. Oh, shivers, how am I going to account for this?\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000774\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bbded2ec-ac25-4a73-a380-3f4d87693084\u0022\u003EI suppose that where I am coming to is that this is a very small bill, and I wonder whether it would be practical\u2014and it is a question; it is not a suggestion\u2014maybe to have somewhere in the back a definition of \u201Caccommodation\u201D. Again, I am not sure how many employers have provided accommodation to their employees, or how many employers have actually offered goods to the value of $3,200 or even maybe of over that amount. So I really just seek clarification of a lot of this, because one of the purposes of this legislation is to provide a level of clarification for businesses that have donated to the people of Christchurch. It is very important; we all know this. It is very important that tax legislation is easy to understand. I suspect that this legislation may be accessed by more people than those who would usually access tax legislation, but I could be wrong about that. We could go through this bill, if we were really going to draw this debate out, and pick all these things out, but as I mentioned, I am just a little concerned that there may be room to expand on some of the definitions in this bill. Thank you very much.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022 data-id=\u0022dbe5d86a2d7f400099f732e261ea65af\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000775\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022dbe5d86a2d7f400099f732e261ea65af\u0022\u003EBRENDON BURNS (Labour\u2014Christchurch Central):\u003C/span\u003E I have just a couple of very brief queries on the Taxation (Canterbury Earthquake Measures) Bill for the Minister of Health, and, via him, the officials. It relates to this issue. During the course of the aftermath of the quake I have observed goods being donated by businesses. I welcome that, I think the response of business has been overwhelming and generous. But I have noted that sometimes the stock donated has been out of date. I was aware of one hub in my community, in Shirley, that received crates and crates of cheese that was out of date. I am wondering whether there might be situations in which claims are made for special taxation treatment of materials donated that were out of date.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000776\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003ESimilarly, everybody will be well aware that supermarkets and wholesalers suffered enormous damage in the quake. There would be more dented tins in Christchurch on 22 February than in a lifetime elsewhere. Again, it is the same question: if those tins are covered by insurance, is there any potential for a double-dip to be going on? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000777\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002267aa5137-7503-4a8f-bde1-1811615598e2\u0022\u003EFinally, I have bought wine from a local retailer in my electorate. The bottles have dented caps, they are sticky, and on occasion there are even slight slivers of glass on the edge of the bottle or on the label. Again, I wonder whether insurance claims are being made and special tax treatment is being sought. I would like an official to answer that. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022 data-id=\u00225510ae34873c49f48f9bce19e3632756\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000778\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225510ae34873c49f48f9bce19e3632756\u0022\u003EHon RUTH DYSON (Labour\u2014Port Hills):\u003C/span\u003E I know we have a commitment from the Minister in the chair, the Minister of Health, to answer our questions. I appreciate that offer. I have one question in relation to the number of people who are likely to be affected by the Taxation (Canterbury Earthquake Measures) Bill, and whether people will be getting reversals of actions that they have already taken between 4 September and now. Will they have already paid some tax liability and now receive a refund; if so, how will that process work? I just want to get a bit of a feel of how many people we might be talking about, how many organisations we might be talking about, and what sort of process they will have to go through in order to access the benefits of the legislation. I am looking hopefully at the officials, who are busy writing some advice for the Minister, who unfortunately is not the Minister responsible for this legislation. The Minister of Revenue has been detained on very important matters of public business no doubt, and is unable to join us tonight. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000779\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EThe second question I want to ask is whether any consideration was given during the preparation of this bill to the terrible situation that our early childhood education centres have found themselves in. The Minister of Education has recently announced that the operations grants for our compulsory education in schools are to be maintained at the pre - 22 February level until the end of the calendar year. That is an absolute delight for our schools, which were really wondering how they would be able to fund-raise in order to meet the deficit, when they have quite traumatised children who need additional support, not less support. That was a really welcome announcement by the Minister. But nothing at all has been given to early childhood education centres, which are in exactly the same position as schools. They are even worse affected than schools, because both their staff as well as their comparable operations grants come from their daily attendance records. They are paid by the number of pupils, the number of students, who attend early childhood centres every day. Once a few families leave the suburb or leave the town, those numbers drop. We do not know quite when people will come back to Canterbury, if they will at all. The insecurity for early childhood centres is also really problematic. During the preparation of this package of support for Cantabrians, I wonder whether any consideration was given to that; if not, would the Minister give a commitment to pass that matter on to the Minister of Education for her consideration at the earliest possible opportunity? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000780\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EThe final question I want to ask is one that I will also answer for the Minister. It is not because I do not think he knows the answer, but because I received a commitment last evening from the Hon Peter Dunne to answer the question when I asked it, so that we would have it on the public record that this was in fact the case in relation to this legislation and the employment subsidy. The concern I raised with Peter Dunne last night, when I read the legislation, was whether the tax exemption applied to the employment support subsidy. It might sound odd, but if it did it would be very problematic if it was not counted as income. I do not need to go into the details unless the Minister would like me to share them with members, in which case I am happy to do that. I checked with the Minister on whether an employment support subsidy would be counted as a gift to a Cantabrian, and therefore be exempt from income tax. I had my fingers crossed that he would come back to me and say no, and I was very pleased when he did that. The employment support subsidy is treated as income. It covers loss of wages, and it is subject to PAYE. I am happy with that, but I want it to be put on the record that the Minister gave me that advice, so that there can be no confusion as to the status of the subsidy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000781\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EThose are is all the outstanding questions that I have, and I look forward to the Minister\u2019s responses.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022 data-id=\u002249a83ea9c7604c4eb60e36f97fce2899\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000782\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002249a83ea9c7604c4eb60e36f97fce2899\u0022\u003EHon TONY RYALL (Minister of Health):\u003C/span\u003E I will respond to a number of questions that have been asked. There is no firm indication of the number of businesses or people who are likely to benefit from these changes. The amendment has come because of a number of concerns that have been raised with the Government, and we do not have any specifics that we can put our finger on regarding the exact number of people who will be affected. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000783\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EThe Taxation (Canterbury Earthquake Measures) Bill, of course, is not unusual in this sort of environment. Members will recall that during the Rangit\u012Bkei floods specific legislation went through the House by leave that provided some tax flexibility around some administrative issues. However, officials advise that for the Canterbury earthquakes, which are extraordinary events, more specific responses are required because of the breadth of issues that have been raised to be dealt with. The bill represents those responses. The depreciation amendments referred to earlier are also part of the response, and the third responsive issue is the Order in Council stuff that happened at that time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000784\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EA number of accounting-related questions were raised, some of which took me back to Accounting 101 at Massey University, for which incidentally I got an A\u002B, but it was all downhill from there. In terms of periods of relief, any trading stock donated between 4 September last year and 31 March this year will be covered. The redundancy provision finishes on 30 September 2011\u2014that is all redundancies, not just earthquake-related redundancies. The Working for Families provision will be at the discretion of the Commissioner of Inland Revenue. There is no evidence that employer welfare contributions were needed for any of the so-called aftershocks, but for the two major earthquakes, which significantly damaged businesses and affected employees, we are providing for employer welfare contributions in the 8 weeks after each of the two main events to be exempt, which makes a lot of sense. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000785\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EThe GST questions have been raised. GST is payable by businesses on their sales income. If the goods have been given away, then there is no GST liability, and the usual business systems will be involved. The Income Tax Act 2007 requires that trading stock on hand at the end of the year be added back. That is because trading stock is a deductible when it is purchased, so therefore it has to be put back in over the top line. These proposals mean that no special accounting requirements are necessary. All businesses with trading stock have to file a return. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000786\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EOn the question of compliance costs, clearly the trading stock provision will not create any issues, the redundancy provision is pretty straightforward, and, in terms of the Working for Families discretion, Working for Families always has some compliance cost, and the extra cost will be pretty small. On the employer welfare proposals, logically there will be compliance cost implications because of the detail that is required, but the officials do not think there will be any great specific burden. The relief, of course, is voluntary for employers who are suffering these costs, and there is a benefit for them in incurring those costs in order to make a claim.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000787\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EThe question was put that the following amendment in the name of the Hon Ruth Dyson to clause 4 be agreed to: \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000788\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003Eto insert in section CZ 23(1)(b) and in section CZ 24(1)(b) \u201Cor 26 December 2010\u201D after \u201C2010\u201D.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000789\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EAmendment not agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000790\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EParts 1 and 2 and clauses 1 and 2 agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000791\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EBill reported without amendment.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000792\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EReport adopted.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000793\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022e88b714b74ab43249667fc743611832f\u0022\u003EThird Reading\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022 data-id=\u0022e9bb6f7594c44d3585f097ea9d12dd15\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000794\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e9bb6f7594c44d3585f097ea9d12dd15\u0022\u003ECHRIS TREMAIN (Senior Whip\u2014National):\u003C/span\u003E I raise a point of order, Mr Speaker. I am just in the middle of a\u2014just give me one second. I just have to find a third reading speech.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000795\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022247b98c7735a47dc8af05ebf8766573b\u0022\u003EHon Rick Barker\u003C/span\u003E: I raise a point of order, Mr Speaker. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000796\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228f2c33c302d347df8d37e8eec447f67c\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: Are you speaking to the point of order?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000797\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222c3c13d146f14994b33aa0e0f7c5adc2\u0022\u003EHon Rick Barker\u003C/span\u003E: I am just saying I will give the member an extension of time\u2014ha, ha!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000798\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f9d2c154683c49158f46c24391b4b3e4\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: No. That is not a point of order.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000799\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002263b284b765654435853c197a8cddde0f\u0022\u003EHon Tony Ryall\u003C/span\u003E: Mr Speaker\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000800\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002295f164c77ef14a059ce2b7465ee76eda\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: Is this a point of order or a call?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000801\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228953446a417e4b42b17e51801c462099\u0022\u003EHon Tony Ryall\u003C/span\u003E: It is a call.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000802\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f4112fc5-c53f-4aa9-bf6d-5a05ce6252cf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225355c8a476584957ab0b42d690190931\u0022\u003EThe ASSISTANT SPEAKER (Eric Roy)\u003C/span\u003E: Oh, a call.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022 data-id=\u0022d8eb1309eb504f31a296c7c6e25e703f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000803\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d8eb1309eb504f31a296c7c6e25e703f\u0022\u003EHon TONY RYALL (Minister of Health)\u003C/span\u003E on behalf of the Minister of Revenue: I am pleased to be able to move the third reading of this bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000804\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225a5add09101a463f82086acdf42f4e8b\u0022\u003EHon Ruth Dyson\u003C/span\u003E: The Taxation (Canterbury Earthquake Measures) Bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000805\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ff9007cdcd494a97b792f72401756e2f\u0022\u003EHon TONY RYALL\u003C/span\u003E: That is right; it is the Taxation (Canterbury Earthquake Measures) Bill. As we spoke about in the Committee stage, a number of issues were raised in the bill, and I think the very strong support this bill has enjoyed from across the House was quite clear. In the Committee stage of the Taxation (Canterbury Earthquake Measures) Bill, I was able to provide quite detailed answers to the questions from the members opposite. There was some considerable debate particularly in relation to trading stock issues, which always cause quite a lot of consideration and discussion. I commend the progress and the finalisation of the bill to the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000806\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225e1601703f1846ad92f4b14c660772de\u0022\u003EHon Rick Barker\u003C/span\u003E: I raise a point of order, Mr Speaker. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000807\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226b9af764668444748aca3a2440dcbb48\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: I will just rule on something first. The member must move a motion first. This is the third reading, so if the member would like to do that\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000808\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002210a800bf8382447bb37cf1b75acd6b5b\u0022\u003EHon TONY RYALL\u003C/span\u003E: Yes, Mr Speaker. I did seek to do that at the beginning\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000809\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002203bc0052-6dd8-4807-998a-4768a4732e0b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226bb561588212403785b9a5ce271b8261\u0022\u003EHon Rick Barker\u003C/span\u003E: I move that the Taxation (Canterbury Earthquake Measures) Bill be now read a third time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000810\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226d4defbf47f646bfb7169aad13378273\u0022\u003EHon TONY RYALL\u003C/span\u003E: I move, That the Taxation (Canterbury Earthquake Measures) Bill be now read a third time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000811\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002259a33ddb8dae40398d722472bdb9e4d2\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: Yes; that is what it should be.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022 data-id=\u0022c14abcda56ca421aa042cae395be453c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000812\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c14abcda56ca421aa042cae395be453c\u0022\u003EHon CLAYTON COSGROVE (Labour\u2014Waimakariri):\u003C/span\u003E Firstly, I congratulate the Minister of Health on his high degree of management and organisation in respect of the Taxation (Canterbury Earthquake Measures) Bill. It exemplifies and sets a high bar in terms of how to manage legislation through the House. Many precedents have been created in the last 2 or 3 minutes, and I thank the senior Opposition whip for assisting to move the motion. We would not want to see this bill delayed, or implode on itself, through a bungled legislative process. Putting that aside, we did right in supporting the clean slate legislation, and I think we should probably adhere to that principle, as well. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000813\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EWith regard to the Opposition, I think there is unanimity on all sides of the House, in all parties, that this bill will be supported. I will not waylay it much longer. Suffice to say, this is good legislation. It will provide some comfort and assistance to a large number of people, and entities, in Canterbury who in many cases are going through a living hell in respect of their businesses, and in respect of their livelihoods. This legislation will take one small bit of stress out of a number of people\u2019s lives. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000814\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EIt should also be noted that through the earthquakes, as I think all members have alluded to, the generosity of spirit exhibited by people, businesses, and entities has been well beyond anybody\u2019s expectation. Those of us who are Canterbury members of Parliament\u2014I am sure this is shared on the other side of the House\u2014have found out through these disasters, firstly, just how generous people can be, and secondly, the ability of community leaders, councillors, and others to make calls and simply ask for things. It is amazing what people will do, and it is amazing what people do in terms of dipping into their own pockets and providing goods, services, and comforts. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000815\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EIt is also noteworthy that a large number of employers treated their staff very, very well, and went beyond the minimal requirements. I think those who did that had the ethos that staff are the most important asset that organisations have. If they are looked after, organisations will perform, and perform well. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000816\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EAgain, it is with a great deal of pleasure that I commend the Minister of Health, whom, I suspect, was dropped in it at the last moment to shepherd this legislation through its last stage in the House. He has shown amazing legislative and parliamentary flexibility and dexterity to make sure this bill goes through in a timely fashion and does not hit any roadblocks on the way. I give our thanks to the officials, as well.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002292824476-4e66-4052-8435-b049833d8b83\u0022 data-id=\u002208ac6c8f67e04c729cf35c7891e68fd5\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000817\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002208ac6c8f67e04c729cf35c7891e68fd5\u0022\u003ENICKY WAGNER (National):\u003C/span\u003E I rise to support the Taxation (Canterbury Earthquake Measures) Bill at its third reading. Rebuilding Canterbury is one of the Government\u2019s top priorities. We have seen that in the Budget this week, and we are doing everything that is needed to support and build Canterbury over the coming weeks, months, and years. The Government and all New Zealanders stand behind Canterbury in this difficult time and together we will get Christchurch and Canterbury back on its feet. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000818\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003EThis bill is one of a number of actions the Government is taking to support Cantabrians and to help rebuild Christchurch. It provides real and practical help through the tax system to the people of Canterbury. Much has been said and written about the 22 February earthquake, and this bill represents concrete action to provide help that is both useful and practical. We have heard from members across the House of the number of generous donors that we have had in our city, both local people and international people. We have heard of them donating to neighbourhoods and employees; we have heard about fantastic opportunities from everywhere. So this is an opportunity to make sure that their generous donations do not carry any tax liabilities. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000819\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002292824476-4e66-4052-8435-b049833d8b83\u0022\u003EThe bill focuses on the tax treatment for a range of situations where people could have been negatively affected by tax law, because the current tax law, of course, has never been designed to cope with disasters of this scale. As has been noted, this is the first time that we have had a national civil defence disaster. I think right across the House everybody has been supporting this bill. We see that it is needed. We see that it is practical and common sense. I commend the bill to the House. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022 data-id=\u0022371b05ab4c6f4276a8160667b9953f2f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000820\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022371b05ab4c6f4276a8160667b9953f2f\u0022\u003EHon RUTH DYSON (Labour\u2014Port Hills):\u003C/span\u003E As I said earlier, this debate is a very good note to end the parliamentary week on, particularly after the very tense debate on the National - ACT - M\u0101ori Party provisions to hack away at our KiwiSaver, which many people around the House and around the country are very distressed about. Being able to conclude the week on a unanimous vote of support for Canterbury is very good. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000821\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EI remind the Government members that the Taxation (Canterbury Earthquake Measures) Bill is not the end of the work that needs to be done in Canterbury. I hope they take some note of the concerns that have been raised about the plight of early childhood education centres. A large number of people are still living in homes that, as a result of damage from the earthquake, do not have a source of heating, and it is cold in our city in the winter. I would really like everyone to have at least one source of heating in their home. We want speedy resolution of our land issues. We have land that people are not certain they will ever be able to rebuild on. We have the danger of rockfall. People are not sure whether they will be able to move back to their homes because of the danger of rockfall. Those are the practical and big issues that are facing our residents at the moment. I do not want the Government to relax after we pass this bill tonight but to understand that we have not by any means finished the job. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000822\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EThis bill is a good measure. It recognises the generosity of individuals and organisations that donated various items either to their employees or to other people affected by the earthquake. That generosity should be matched by the Government taking away some tax liability. That is what the Government is doing tonight. It is a very good move. Pushing out to October the tax credits for people who have been made redundant as a result of the business situation following the earthquakes is good, but it is not enough. We should have used the opportunity tonight to get rid of that scheme altogether, because it is basically unfair. I am saddened that the Minister of Health did not take the brief moment of power he had while acting for the Minister of Revenue to accept the amendment I proposed, which would have extended the scheme to events covered by the 26 December earthquake, because that was a significant event. Omitting it makes the legislation look a bit cheap and it need not; it could be a complete package. But that is the decision of the Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000823\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002275a05f96-2474-4c90-a6ea-cf7b5798e03e\u0022\u003EI have enjoyed the contributions from members around the House tonight. It is good to know that even though the people of Canterbury are off the TV screens and out of the newspapers, we are not out of people\u2019s minds altogether. I have only one lasting regret, and that is that despite what has clearly been a lot of work from the officials\u2014they have put a lot of work into this legislation\u2014they did not have to do a lot of work at the select committee, because the Government bypassed that opportunity for them. They clearly gave the Minister in the chair very good advice, and he reported it back to the House well, to his credit, in response to the questions that we raised, and I appreciated that. Some Ministers do not bother doing that for their own portfolios, so for an acting Minister to do that was very good. But it is to my deep regret that they were not able to provide him with a third reading speech in time for him to give it.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ffff330f-1757-41d6-9973-25244f0fdada\u0022 data-id=\u00224be709368ea7427eaa4dd151ce81c9ee\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000824\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ffff330f-1757-41d6-9973-25244f0fdada\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00224be709368ea7427eaa4dd151ce81c9ee\u0022\u003ECOLIN KING (National\u2014Kaik\u014Dura):\u003C/span\u003E In speaking to the third reading of the Taxation (Canterbury Earthquake Measures) Bill, I say it is good to see that this measure has been well considered and well canvassed. It is a sensible, pragmatic, compassionate, and fair attempt to use the Income Tax Act 2007 to consider the full circumstances that have happened in Canterbury and in Christchurch. When we look at the legislation in general, we see it is an anti - tax avoidance measure. Therefore, it is fair and reasonable that it provides the relief that Christchurch so admirably deserves. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000825\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ffff330f-1757-41d6-9973-25244f0fdada\u0022\u003EWe look forward to Christchurch\u2019s return to its former glory. The dislocation is on a phenomenal scale, and we look forward to a speedy recovery, although we do recognise that that will take some time and that there is a lot of pain and suffering down there. I commend the bill to the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000826\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ffff330f-1757-41d6-9973-25244f0fdada\u0022\u003EBill read a third time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id201105192ba322a262024ec2bd40030aec23f2aa000827\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ffff330f-1757-41d6-9973-25244f0fdada\u0022\u003EThe House adjourned at 8.22 p.m. (Friday)\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n  \u003C/body\u003E\n\u003C/html\u003E"