Taxation (Base Maintenance and Miscellaneous Provisions) Bill

I did not intend to take a call on this bill, but two previous speakers have tempted me to do so. First of all, I would like to clarify what my honourable colleague Craig McNair said. Obviously, Richard Prebble missed his point completely. I just thought that, well, age overtakes us all, and he misunderstood totally what my colleague had been saying. Of course New Zealand First expects banks to make a profit. We do not put our money in banks so that they can lose it totally, and for the Hon Richard Prebble to imply that New Zealand First thought otherwise is totally wrong. We want banks to make a profit. But I make it perfectly clear to the member that the sad fact of life is—and this is what concerns New Zealand First—that the major banks, the trading banks, are all foreign owned. If we cannot run a bank in this country, then what can we run? It is just a building we go into to deposit money. That is oversimplifying it, but we should be able to run our own banking system very, very successfully, and, indeed, make a profit out of it. It is a sad fact of life that the trading banks in this country are all foreign owned. As we have heard members say—and very eloquently by the United Future spokesperson—banks are not paying their fair share of tax, so we support the amendments in the bill that address that anomaly. I listened intently to Lindsay Tisch—

💬 Pansy Wong: Great speech!

It was a good speech. The only problem is that it was not very accurate. But never mind; it sounded good. He said that people are forming themselves into companies to avoid paying the 39c tax and pay only the 33c tax. That might be true, but, equally so, there are considerable advantages in a sole trader forming a limited liability company, particularly if he or she is taking a commercial risk. I suggest that that is a more valid reason to form a company than doing so to avoid the element of taxation that Lindsay Tisch spoke about. Nevertheless, that is a valid reason for forming a company. There is a cost in forming a company, and it is a valid reason. If one can minimise one’s tax liability, then fair enough. But I would say that the major reason that people are forming limited liability companies is that there are a good deal of advantages in doing so.

I would like to clarify that New Zealand First would like to give the public in general some tax relief. We would like that. But we are also committed to having more police. We think that the police force in this country is undermanned, and considerably undermanned. Can I use the word “undermanned” in this politically correct environment? “Underpersonnelised” does not make sense, so “undermanned” will have to do. We want more police. We want more cops on the beat and in all sorts of areas. We want a significant increase in police numbers, and that will cost money. We want to give tertiary students a living allowance, because it is about time that we looked after them equally as well as we look after somebody on the dole. Right now a person on the dole gets funded by the taxpayer but a student does not. Students have to borrow for their funding. We want to put more money into roading, without tolls. I see Mr Cunliffe looking at me. We do not believe it is necessary to have tolls. We want to divert the money that goes into the Crown account into roading, and we want to enhance roading in rapid order. We are not into this 10 to 20-year plan; we want to fast track it. We know how it can be done. We want not only to inject more money from the Crown account into the roading account but also to structure either Land Transport New Zealand, or Transit New Zealand, to have more commercial thrust and to borrow money to get roading cracking. We know exactly what needs to be done and how it can be done within the time frame. [Interruption] Good, the member is with us there. The economic benefits to this country in fast-tracking roading are absolutely huge—almost beyond belief. So there is a degree of urgency about injecting more capital into roading.

We want greater investment in health. If we look at some of the countries in Europe where 9.5 to 10 percent of their GDP goes into health—but it includes the private sector—we see that they have a far better health system than ours. I mean by that that per capita they have more doctors, more hospitals, more hospital beds, better access to modern drugs, and better access to modern technology. We must put more investment into health. We have an ageing population, and that problem is not going to walk away from us. The older we get in this country, the more demands we will put on our health system. We have barely kept pace—

💬 Hon David Benson-Pope: More than a 50 percent increase.

I do not know whether the member knows what he is talking about.

💬 Hon David Benson-Pope: Has the member not looked at the figures?

I have looked at the figures very, very well. The Government puts a paltry 6 percent of GDP into health—a paltry 6 percent.

💬 Hon David Benson-Pope: A 50 percent increase.

Six percent.

💬 Hon David Benson-Pope: He’s having a senior moment.

The member needs a tennis ball. New Zealand First wants to give some tax relief, some tax incentives, to new exporters. This country is dependent on exporters. It is dependent on trade, and we would like to encourage new exporters into the game by giving them some favourable tax relief in order to explore new markets and get things going. We want, and need, to put more investment into railways in this country. The $200 million that the Government is giving to ONTRACK will not be enough. Anybody who knows anything about the railways knows that it will not be enough. Another area that we would like to put money into—well, perhaps not money, but we would like to create a favourable tax regime for it. I am talking about shipping, and it might surprise members that I have come out strongly on this, but it is something that is close to my heart. In this country we operate about nine coastal ships. We have no international shipping—nothing going anywhere outside New Zealand—and the coastal ships operating in this country are struggling.

💬 Sue Bradford: Do you support cabotage?

No, I do not support cabotage, because cabotage adds a cost to users of ships, and it makes them less competitive. Cabotage is an area monopoly, and we do not support it. We support a favourable tax regime, exactly as the ships that service this country now get, so that our guys can compete on an equal footing with foreign shipping. If shipowners do not want to take it up, then we are none the worse off; but if they take it up, it will be a huge advantage for this country. This is an island country, and, believe it or not, 99.5 percent—and anyone can check me on this—of all cargo tonnage that comes into or goes out of New Zealand comes and goes by ship, and they are all foreign ships. That is a disgrace for an island nation tucked down at the bottom of the world. Then after we have delivered on those, we will give tax cuts to the general public.

💬 Pansy Wong: Oh yes!

There might be a little wait, but at least the public will see the benefits of what we are trying to do. The member laughs. If her party comes to office, it will give tax cuts at the expense of health, at the expense of police, and at the expense of education. We are not into that. We support this bill. It is a move in the right direction, but there is a lot more to do.

Bill read a second time.

Instruction to Committee