Taxation (KiwiSaver and Company Tax Rate Amendments) Bill

I am pleased to be able to take a call to oppose the progress of this bill, which, frankly, will not be good for New Zealanders. This is a bill that will send a very bad message to low-income New Zealanders. These are the people who cannot afford to save for their retirements. These are the people whom Labour came to Parliament to represent.

Let us think about those people who voted for Labour at the last election—the few low-income people who voted for Labour at the last election. They find it difficult to make ends meet. They are working in jobs that in Australia would be paid one-third more.

💬 Hon David Carter: More—50 percent more.

The Hon David Carter says they would be paid 50 percent more. They are people for whom $10 or $20 per week is a lot of money. In fact, one of my colleagues went to a breakfast today held by a public health association and a woman stood up and said that for $10 or $20 per week she could feed a family for 3 days. She asked whether the Labour Party realised that $20 per week pays for 10 loaves of bread, quite a number of eggs, and a lot of other produce that families can have. Those families are not in a position to take the benefits of the KiwiSaver scheme.

I ask Labour members to take a call to explain to me how they will tell the people at the Ōtara flea market on Saturday that KiwiSaver incentives will work for them. What those people in Ōtara need are higher paid jobs and lower personal taxes. Those are what will get those people ahead: higher paid jobs and lower taxes. This bill provides neither of those.

What this bill will do is actually lower their pay increases in the future, because Dr Cullen stood up and said that the compensation for the employer contributions will be pay increase sacrifice. So what happens if someone is one of those low-income people who cannot afford to save in KiwiSaver but his or her employer says they will not give him or her a pay increase because it is going into KiwiSaver contributions? I ask members to remember that this Government has all of these low-income workers tied up on multi-employer collective agreements, so what goes for one goes for the other, regardless of his or her circumstances. This Government is saying to those low-income people that when their multi-employer collective agreement is negotiated, their employer will hold back an increase in order to allow for the KiwiSaver contributions. But most of those people will not be making KiwiSaver contributions. They will not get the pay increase they need to help them and their families survive.

What the Labour Government will say to those people at the Ōtara flea market this weekend, I do not know. What it will hope is that they have not worked out that all of this KiwiSaver hype—all the hundreds of millions of dollars—will do nothing to help low-income people, which the Labour Party says it represents. It will, in fact, harm the chances of hard-working people getting ahead. Because if somebody is in one of those low-income families—as the woman was at the public health association’s breakfast this morning, which was attended by Paula Bennett—he or she wants lower taxes in order to get more money for the work that he or she does, and his or her wages to go up. This bill does not allow or provide for either of those things.

💬 Darren Hughes: What happens when you turn 65?

Well, if someone has not contributed anything then there is no difference at all. What I will be really interested in hearing from the Labour members in this debate is how this bill matches Dr Cullen’s comments that this will help the affordability of superannuation in the future. What does that mean? Do not forget that affordability of superannuation in the future is driven by national superannuation payments. National superannuation is not means tested. Will we end up with means testing based on one’s contribution to KiwiSaver? That is the only way the Government can say that there is improved sustainability of national superannuation payments if it is going to means test the superannuation when people are 65. Is that what Labour means?

How can Dr Cullen say that this will contribute to sustainability of superannuation if it will not have any effect on national superannuation? It cannot contribute to the sustainability of superannuation payments by the public unless there is substitution of KiwiSaver income for national superannuation income. That would be breaching the political consensus across the divide on the universality of national superannuation. I suspect that is the code for what Dr Cullen meant when he said that this would enhance the sustainability of national superannuation into the future.

National is strongly opposed to this bill. We believe that tax cuts will put more money in people’s pockets, give them every incentive to work harder to get ahead under their own steam, and let them make decisions about their own money and its benefits to their families. This bill is not a tax cut, it is not tax relief; it is a money-go-round. It is not a free gift. New Zealanders are paying for this, and that simply cannot be right. It will cost business, and it will not be good for the overall status of many low-income New Zealanders.

I am concerned. I want to hear from Labour members how somebody who cannot afford to save for his or her superannuation will benefit from this. I would like to see those low-income people getting the chance to get more money in their pockets for doing the same amount of work, I would like to see them getting every incentive to pocket some more for working harder, and I would like to see them getting a pay rise.

Dr the Hon Lockwood Smith: Whereas in Auckland they are going to pay a 10c petrol tax.

As Dr the Hon Lockwood Smith says, many of those low-income people in Auckland will now have to pay 10c petrol tax—as we in other parts of New Zealand will as well, I suspect, from what is being proposed in this bill.

So what the National Party says to the Government is very clear: reward incentive; do not discriminate against low-income people; give everybody the message that if they work hard then they will pocket more money, and that if they save and contribute then they will be respected—but let us get those wages up. The Government does not understand that the most pressing issue for families today is that they can go to Australia and be paid 33 percent more than they are being paid here. That is an enormous gap. People can go to Australia and earn a whole lot more money. I think that every New Zealander would rather the Government was concentrating on closing that gap. It should forget about the other “closing the gap” it talks about, which is, incidentally, now being called “reconciliation”. We have gone from “closing the gaps” to “reducing disparity” to “reconciliation”.

I think that the Waitangi Tribunal may be renamed the “Truth and Reconciliation Tribunal”, and, frankly, Helen Clark could never appear before it because “truth” is part of the title. What this Government needs to answer is: how will a low-income person in Ōtara benefit from this proposal versus lower taxes and a pay rise? Let the Labour Party members answer this question: under a highly centralised “MECA-ised” employment market, what happens if half the workers are in KiwiSaver and the other half are not, and the employer says: “We’re taking 1 or 2 percent off the table for the pay negotiations this year, to pay for the KiwiSaver contribution. Michael Cullen said that was OK.”? How is that going to work? Why should the person who is not in KiwiSaver miss out on a pay rise because the other half is in the scheme?

💬 Hon Mark Burton: Stop making it up.

That is the guy who will soon be the former MP for Taupo. I have seen the polling. He will be going back to being the Rural Education Activities Programme coordinator in Taupō in less than a year’s time.

💬 Hon David Carter: They won’t want him.

Well, yes, they may not want him. It is a case of “reap what ye sow.” So, really, the important issue here is that the Government will not answer the questions. The questions are these. How do low-income people benefit? How will we deal, under a “MECA-ised” workforce, with giving some people a pay increase and not others? Why would people sacrifice the pay increases for some poor people for the others who are contributing to KiwiSaver? The third question is: is the Government going to means test national superannuation?

This morning the body language of the Labour members in this Chamber says it all. They came into the House yesterday for the reading of the Budget, and Dr Cullen had obviously conned them and told them that it was all good news and that it would correct the 10 percent poll differentiation between National and Labour. Darren Hughes nods his head and agrees. Then, when those members actually heard the Budget, and a few people who are a lot sharper than Darren Hughes analysed the Budget, particularly the KiwiSaver bit, it became clear that Dr Cullen has been too clever by half. We now know that he has presented a very complicated savings system that simply will not be accepted by most wage earners in this country.

The interesting thing was that Helen Clark knew it by the time Dr Cullen had delivered the Budget. In her opening address, she stood up and said: “Is that it? Is that it?”. Helen Clark knows that Michael Cullen has now delivered his final Budget in this House. He has had eight chances to deliver a Budget that ensured growth for this country and he has had eight failures, one after another. He is gone, Darren Hughes is about to go, and the guy sitting next to him, Mark Burton, is definitely about to go, because KiwiSaver will not work.

What I find sad is that a week earlier the Australian Budget was read. There, for the fifth Budget in a row, the Government has delivered tax cuts, real meaningful tax cuts, to the wage earners of Australia, to the extent now that anybody living in Australia—and 1 million New Zealanders are living in Australia—can earn 50 percent more in take-home pay. The two reasons, I tell Darren Hughes, are that wage rates are higher and now tax rates are significantly lower in Australia.

What we see now is the KiwiSaver scheme presented to this country, and even Treasury says that 50 percent of New Zealanders will not take it up. I want Labour members to acknowledge today in this Committee which 50 percent that is. Low-income New Zealanders cannot afford to take it up and they will reject this scheme. So the ones who will take it up are the higher-income New Zealanders—and by the way, they are pretty sensible people who are saving anyway.

I feel for the people Tony Ryall just spoke about. Those are the people in Ōtara who are battling away with no support from this Labour Government. The people who went to the polls at the last election were dragged out of their State house, probably, by the union delegate and made to go and vote. They voted in good faith, thinking that Labour would look after them.

💬 Darren Hughes: What did they get in the Working for Families package, then?

And, here, Darren Hughes refuses to think about them. He is interested only in keeping his seat on the Government side of the Chamber, and he has less than 18 months to go before he is out of there and Nathan Guy is sitting in it. That is what will happen to Darren Hughes.

We see that KiwiSaver is delivering nothing to the people in Ōtara, and Dr Cullen, true to form, wants to hit them again. He has put in a Budget that gave them nothing in KiwiSaver but gave them a tax increase of 10c on their petrol. I remember sitting in the House in, I think, February 2002, under extraordinary urgency when that Government drove through a petrol tax of 5c a litre and said then that it was to fix Auckland’s roads. There is already a tax of 5c a litre on petrol, and it was put on 5 years ago to fix Auckland’s roads. Dr Cullen put that into his surpluses—massive surpluses. He has not fixed Auckland’s roads, he comes to the House with this go, and he says he will slam people with another 10c a litre. People will remember that, I say to Darren Hughes, even if he has forgotten it.

The real issue in the KiwiSaver scheme is that it encourages people to leave this country. I remember when Don Brash used to say that 500 people a week get on a plane and leave New Zealand to go and live in Australia because it is so much more attractive. I thought that that was a huge figure and I wondered whether it was right. John Key told me the other day it was not right—it is now 700 people. Every week 700 New Zealanders leave because of the Labour Government.

New Zealand First supports Part 1 of the Taxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill, and I am delighted to hear about the National Party’s interest in the people of Ōtara. I am a bit saddened about the way that National members speak about them, as though they are an uneducated bunch of people who cannot work things out for themselves. The National Party I used to belong to many years ago actually did know about the people of Ōtara, and it would have supported tax cuts for companies, because it would have wanted to help companies to stay in New Zealand. It would have wanted New Zealand to be competitive with Australia. It would have wanted our companies to be competitive even in Europe, but competitiveness with Australia was just a given. So I cannot believe that the National Party has come to a point where it cannot support the reduction of taxation for companies, and cannot support the reduction of taxation, as contained in Part 1 of this bill, for what I call savings institutions—I presume that people understand what they are—which is where the money from KiwiSaver will be kept, looked after, and, hopefully, will grow.

I cannot believe that the National Party is opposing those things, because it is through investment in our businesses that we all do better. The people who are leaving our country are, to me, absolutely a sign that some policies of past years have failed. I think that is a market signal that we can all work out. I think it is quite obvious. Furthermore, that market signal has been there for many, many years now. We have all talked about it and recognised it. It has been talked about in the Chamber, but this is the first Budget that recognises it and attempts to go some way towards catching up with the taxation regime for businesses in Australia and the trading regime in Australia.

The Opposition promotes itself as the so-called business-friendly party, so it is rather amusing to hear National members say on the one hand that Australia is a great place—where the employer’s contribution to the compulsory scheme equates to around 9 percent of labour costs, whereas the KiwiSaver scheme will be in the region of 1 percent—and on the other hand that they oppose the bill. That cost of about 1 percent is laudable and it should be applauded in the Chamber. I also make the point that I have not heard one National Party member say that National would get rid of either the KiwiSaver scheme or the taxation reductions proposed in this bill. I suggest, most strongly, that is because National does not intend to get rid of either.

New Zealand First is prepared to be quite upfront and to welcome the KiwiSaver scheme. We welcome the company tax deductions. We would like to see, as I am sure Mr Peter Dunne would want to see, further cuts in company taxation. This bill is a first step, and if we learn anything in this place we know that change is incremental. When change is not incremental, people cannot cope with things.

💬 David Bennett: Tell that to superannuitants. Are you going to means test them?

R DOUG WOOLERTON: I tell Mr David Bennett that New Zealand First will make an issue out of superannuation at the next election. I challenge him and the party he is a member of to tell the people of New Zealand what National would do about superannuation if it were to become the Government at some stage.

It was very interesting to hear the representative from New Zealand First tell us that he supports this Budget, as I recall that in 2002 that party opposed the Budget because it had a fuel tax of 5c a litre. We hear today that New Zealand First supports this Budget, which has a fuel tax of 10c a litre. So that is inflation, is it not? Talk about a turn-round and flip-flop—New Zealand First has just done a major one.

When I look at the cost of this Budget, I realise the people who are not going to benefit are the poor. In today’s New Zealand Herald I saw comment from the unionist Laila Harré. Do members remember her? The headline stated: “Workers party fails to help the poor”. She is right on that one. There is nothing for people who are struggling, other than a 10c a litre increase in their fuel costs. That is what the Budget does for the people of Botany, for the people of Dannemore, and for the other people of east Auckland. There is nothing for them, except that they will get a 10 percent hike in their fuel bills. That cost will carry right the way through to food bills and to every other sector of the community—to transport costs generally. That is exactly what the Budget means. Those people do not get access to a rail line; they get to pay for a rail line twice. They get to pay extra rates in order to pay for other people to use a rail line, and they get to pay higher fuel bills so that other people can get access to a rail line. That is simply not fair.

When I read on, I saw what Richard Prebble had to say. He pointed out that this Government is now taking $20 billion a year more out of New Zealand taxpayers than National did in 1999. Our taxpayers are now paying $20 billion that they should not have to pay. Richard Prebble is right. In that time, what has happened? We see 700 people leave this country every week to go and live in Australia, and they do so because there they are paid more, their taxes are less, and they have more incentive to save.

KiwiSaver will appeal to some people, that is for sure: people who are already saving money. When I heard Dr Cullen say yesterday that after 45 years of saving, people will have $400,000, I thought that may seem a lot of money. But I will tell the Committee something. In the early 1980s we bought our first house for $33,000. When we bought that house for $33,000, it was a really big stretch. Today that house, even without our improvements, would not sell for less than about $600,000. So if somebody is to be told that after 45 years of renting, he or she will be able to buy a house, I do not believe that is a legitimate promise to make.

It is also unbelievably unfair for people to be told the Government will just take the money out and the person’s employer will pay, and that will be great. It is not great, and the reason is that most businesses in New Zealand are those of small-business owners. Most people do not own their business through a company; most people pay a personal tax rate. Those people will receive nothing at all out of the deduction in company tax. What they will get, though, is to pay for the Government’s election bribe. That is exactly what it will be. I think about people with small businesses in my electorate—panel beaters and motor mechanics—who will face another cost. What will happen? It will go straight to their accountant, and it will put up their compliance costs. Then, when employees go along and say they need some extra money because fuel costs have gone up, the boss will say: “I’d love to give you some extra money, but I’m already giving it to you in KiwiSaver. Just remember that for every dollar that I have to give you now, I also have to top up your KiwiSaver. So how about we do a little deal?”.

That is what will happen. Little cash deals will happen, and little things like that will encourage tax avoidance. That will not help the system, at all. More people will be doing anything they can to get as much cash as possible out of the system, rather than going through the official system. This whole system is about making our taxation system more complicated. Taxation systems must be very, very simple.

I rise to speak to Part 1, which deals with amendments to the Income Tax Act 2004, and particularly to speak about a couple of clauses that deal with tax credits for contributions made by people to the KiwiSaver scheme or a complying superannuation fund. That deals with the way the Government will help employees get a $20 contribution at the end of the financial year. The tax credit will apply to all contributions made, up to a maximum of $20 a week or $1,042.86 a year.

On the face of it that appears to be a good scheme, but the problem is that the average yearly wage is $45,000 in this country. That is the average wage, so I imagine the median wage would be significantly below $45,000. People on $45,000 cannot afford to save money, going forward. That is very typical of people living in Napier, where the median wage is well below the average of $45,000. Many people in my electorate are unable to save and will find they cannot afford to take 4 percent out of their wage to contribute to the scheme.

Let us look at what that 4 percent means. It is 4 percent of the gross wage, not the net wage. It is 4 percent of the gross wage but is deducted from the net wage, so it would be quite a significant chunk of their take-home pay. It is more like 5 to 6 percent. For people on $25,000 or $30,000 per annum who are bringing up a family and trying to get ahead, that is hard yards. No one in the Chamber sits on a low level of income, so we have to take into consideration the people on those incomes. The reality is that for the money we are talking about here—$26,000 a year—that is a $20 a week contribution.

Out of a take-home pay of, say, $360 or $380, $20 is a significant amount. Rent might be $180 or $200, then there are power and electricity bills. Out of, say, $100 left over for food, $20 is significant. In fact, I would challenge anybody in this House to be able to save in that environment.

If it becomes impossible for those people to save, then the question is what we do as a country to lift the game for them. That is where the National Party comes in with a totally different tack from where the Labour Government is taking our country. It is a totally different tack. We take the tack that we need to put the handbrake on Government spending.

We saw the Minister of Finance, Michael Cullen, stand up and tell us how he was going to spend $54 billion on this nation’s income. He stood up and told us how he was going to spend some 32 or 33 percent of the GDP of this country. There has been a $20 billion increase since the year 2000. He has the cheek to stand up here and tell low-income New Zealanders who are on $26,000 to $30,000 a year that they will now have to save money by putting aside $20 a week while this Government continues to crank up its spending. It has cranked up its spending by an additional $3.8 billion in this last Budget. The Government is saying that it is OK for the Government to spend big time, but it wants average Kiwis to save.

National members say that that spending increase has to stop. It can continue to rise by the consumer price index level—so we are not talking about massive cuts—but we cannot keep adding to the fire of Government spending with continued increases. On top of that, National members say that we should take the Australian approach, with consistent and ongoing cuts to personal taxes. There should be consistent, gradual increases to cuts in personal taxes, so that Kiwis have the opportunity to invest their own money in the choices they want to make as people living in this country—whether it is repaying their mortgage, investing in business, or investing in their family’s education and trying to get them up the income ladder. Because, as I said earlier, if people are at the bottom of the ladder, then it is impossible for them to save $20 a week.

I want to pick up from where the member for Napier, Chris Tremain, left off, when he made the point that for many New Zealanders the KiwiSaver scheme will be out of reach. He was reinforcing the point made earlier on by the co-leader of the Māori Party Tariana Turia. She made the pretty straightforward statement that if 50 percent of Kiwis take part in this scheme, it means that 50 percent do not. The 50 percent who do not take part are missing out every way around. Not only do they miss out on the now multibillion-dollar contribution by the Government to a personal savings account, but also—probably worse than that—they miss out on the changes to their tax thresholds, which at least would give them the cost of a packet of chewing gum a week. That is really what is hard to understand about this particular package of measures.

💬 Shane Jones: You’ll adopt it, though, Bill.

We certainly will not adopt that bit.

Why did the Government decide that, with a large surplus, it was not going to follow through on the promises it had made for the last two Budgets to allow for changes in income tax thresholds because of inflation? That would have put some money in the pocket of every low-income and middle-income earner in this country. Out of mean-mindedness, or some other motive that the member from the Hutt Valley could no doubt tell us about, the Government decided to pull back the change in income tax thresholds, which has the effect of excluding at least 50 percent of New Zealanders—and in the next couple of years probably more than that—from any benefits at all from this Budget. I cannot understand the political logic of it, nor can I understand the economic logic of it, actually.

I would like the Government to explain it. If the Government is willing to put through a tax credit—which is not actually a tax credit—of $20 per week when employees contribute, then why is it not willing to give them $5 a week as a tax reduction which it had already promised? I am sure many New Zealanders out there will themselves be asking that.

There is no doubt who supports this Budget or who is keener on what is in it: higher-income New Zealanders. It is quite clear that that is who supports this Budget. The people who are represented by the Māori Party—what is in it for them? We are going to hear a lot of talk from Labour about engaging low-income people in KiwiSaver, but the raw facts of the matter are pretty straightforward: one has to give up spending in order to take part. This is where Dr Cullen is having trouble with the consistency of his message. He is trying to say that this whole package is going to lead to big increases in savings but no reductions in household spending. If he had the courage of his convictions, he would have made the whole thing compulsory. But of course he did not do that, because he knows he would then collect the blame from every single household in New Zealand for confiscating some of their weekly pay so that they can have it back when they are 65. At least this way New Zealanders have to put up their hand to volunteer for it. But the effect is the same.

The Government has decided that low-income and middle-income people who cannot afford to save have to just stick it. They have to just stick it. They cannot afford to save, so they do not get either the benefit of the employer contribution or the benefit of the Government contribution, and they miss out on the reduction in taxes that was promised to them in the last two Budgets. Now, worse than that, they are going to be caught up in confusing industrial relations negotiations over pay, because some people in the workplace may opt into the scheme, and the Government is compelling the employer to put any prospective pay rise into the employees’ savings accounts. If some workers do not opt in, what will happen then? Those people may face no increases in pay and may not even get the benefit of the employer’s contribution either. That is a price that Labour is going to become much more aware of over the next 6 months as the reality of semi-compulsory savings bites.

It is usual for members of Parliament to have quite a bit of feedback sent to our electorate offices the morning after a Budget. When there are things in the Budget that are good, members will often hear people saying it was great that they happened. I can report immediately to the Chamber that the feedback I have received from the people of Howick and Pakuranga is that of sheer outrage. They have never had access to a rail network and never will have. Even those who are quite green in their feelings, and would love to use a rail network if they could, simply do not have one. They simply do not have one.

It is really interesting. Outside my electorate office is the Pakuranga Highway—a three-lane highway—and in the mornings I look out to see cars just locked, blocked, and stopped as far as the eye can see. Guess what? Yesterday Dr Cullen said to those people that he would charge them another 10c a litre on their petrol tax in order to pay for the electrification of a rail network somewhere on the other side of the city.

That went down like a cup of cold sick with the people of Howick and Pakuranga, and I bet it was the same with the voters of the North Shore, Northcote, Murray McCully’s East Coast Bays, and Judith Collins’ area of Clevedon, Beachlands, and Maraetai. People in those Auckland regions will be saying to the Government: “Excuse me? You are going to tax me to pay for the electrification of a rail network that I don’t have any access to at all, even if I want access to it?”. That is what the feedback from those people has been.

I have to speak on behalf of what may end up being a new constituency block for me. I may, with boundary changes, end up with some people from the Glen Innes and Point England areas. I have not had contact with those people yet, because the boundaries may not be changed, but they may end up in my constituency. I understand that those people are mainly Labour voters, but I can tell the Labour Government that they will be pretty angry about what happened yesterday, as well.

I know for a fact from the levels of household debt being accumulated by people in areas like that that they do not have one cent of spare discretionary income each week to put into anything. What with hire purchase payments, their budget does not exist. Their budget is blown to pieces each week, and they struggle from day to day to make ends meet. If not, they are accumulating debt on their credit cards. Often we hear people in Glen Innes say they have maxed out on their credit cards. These are the people whom Dr Cullen should be representing. They are not the people whom the Tory party would normally be out there speaking on behalf of. That is why this Budget will not go down well with Labour voters.

Dr Cullen says to those people who do not have a cent of discretionary expenditure that if they save some money each week, then they will get into this KiwiSaver scheme, and the Government and the employers will put some money in, and that will be good for them. I can tell members now that if Trevor Mallard wants to come with me and wander the streets of Glen Innes or Point England, the very first response he will get from those people will be: “How the bloody hell do I save anything when I can’t save already?”. They will ask how they can save a cent, how they can have money taken off their pay and put into a KiwiSaver account.

A lot of people in my current patch of Howick and Pakuranga will say they have enough discretionary spending to put 4 percent of their pay into the scheme. They are in the wealthier, higher-income end, and they will say they are OK with this. They will say that they can do with this scheme, and that it is fine—they will provide 4 percent of their pay, and their employers and the Government will tip in some money. They will say that it is not a bad idea. But what about the people at the bottom end of the spectrum whom the Labour Government is supposed to be an advocate for?

💬 Hon Trevor Mallard: What about the workers?

Absolutely; Trevor Mallard has called the question right. There we are, “Stadium Boy” has made the right call for once; “Stadium Boy” has it right. What about the workers? Well, the workers have been shafted even more than Auckland was over the stadium—and, boy, that was the biggest shafting I have ever seen. The workers are being absolutely shafted. Any of the workers who are listening out there, all those people who are sitting out in the workshops of the South Auckland factories now, hanging on every word that Parliament is broadcasting into those factories—and there will be thousands of them—will be asking: “Hang on, why is Trevor Mallard yelling out ‘What about the workers?’, when what he did yesterday shafted those of us at the low end?”.

That is what KiwiSaver is: it is a nice little welfare benefit for those on a high income, or those with a bit of discretionary expenditure or a few bob that they can put away, and it is an absolute kick in the guts for people down at the bottom end. That is the point National is trying to make. This Budget is best typified by the old Joe Hill days of the trade unions. “Pie in the sky when you die”—that is what people will get.

Let us return to what we are actually gathered here for, which is to talk about the Budget, and let us recite some recent history. In 1967 dollars and cents came to New Zealand as our currency. The point at which we moved from the pound and the ha’penny to our current currency, I say to all listeners out there in Aotearoa, marks how far we have to go back to identify a time when National members actually introduced a tax reduction for company tax. In all the years since 1966-67, National members have not brought to this House a bill or a proposal to reduce the tax burdens on company tax. That is a statement of fact.

💬 Hon Maurice Williamson: But you give with one hand and take with the other.

Those members had the opportunity in the 1990s—when my very good, and friendly, co-watcher of rugby, Mr Williamson, was in power—to change that tax rate. The facts betray them; despite the rhetoric, those members did not reduce the company tax burden.

Let us look at what Labour has done in relation to the specific steps we have taken. Within the same period of time, our friends the toilers in the company world, the toilers in the firms, and the toilers in the world of enterprise, with regard to the burden of tax placed on their shoulders, have enjoyed a reduction of 33 percent—33 percent, I say to Mr Carter. Up in Kerikeri, Dargaville and the Northern Wairoa, Kaikohe, and Kaitāia, people are clapping and singing praises. They cannot believe that not only have we come good on our promise but we have also gone further than that. We have addressed those long-term problems of bottlenecked, degraded infrastructure in Auckland.

Of course, the people of Auckland need to participate democratically in their regional council, because regional councils, I say to Mr Woolerton, have a critical role to play as to what, when, and at what level this petrol tax would be imposed. It is entirely up to them because this is democracy flourishing, in the context of the Budget. The decision, I say to Mr Carter, moves to the level of the community most impacted on by the ongoing clogging and problems that Mr Williamson talks about, but the facts show that when Mr Williamson had the chance, he did not move to remedy the problem.

So I would say to all listeners in Aotearoa that over the same period of time that National members did nothing with the company tax rate, Labour has reduced that tax rate by a third. This Budget lays out what will happen when we go forward beyond this year—for all political spectators, all citizenry, and all firms—and it is a clear platform upon which National is looking forward to a fight between ourselves and its team, which has at least found someone who is willing to give it a go. For the last 9 or 10 years we have had a game of sport under way, but there has never been a team on the other side that has been anywhere near match-fit—no. Now, at least, there is someone who might be. Admittedly, we believe that he has filched our garb. He never has an original idea and wanders around the country talking about things that he will quickly toss out, but he borrows liberally from this side of the Chamber as to what his party’s ideas are. We understand that. As I said last night, that is very predictable. Ah, Polonius has come back to the Chamber, no doubt to strike more poses. You know, a good poser will never overcome the presence of vacuity, and that is what that member ought to remember.

However, let me continue. Not only have we allowed regional councils to play a key role, and not only have we forged ahead and rewarded the toilers in the world of private enterprise and companies, but also—and the members on the other side of the Chamber do not realise this—we know that the pit within which low-income people fell was traceable back to National’s time in Government, when those members held authority. Step by step, I say to Mr Woolerton, along with our great friends from Aotearoa Tuatahi, who have vigilantly watched the importance of savings, we will take low-income people out of that pit. I look forward to that party joining with us some more.

It gives me great pleasure to follow the Tory in the Labour Party, Shane Jones. You know, Shane Jones and I are Northland MPs, and along with the other MPs from that area, we all work well in the Northland scene. But the unfortunate thing with Shane Jones is that when he decided to get into politics, he tripped over and fell into the wrong party, because underneath it all, he is a Tory at heart, and he hates having to defend this Budget. If one can get Shane Jones in the quiet, in the back room somewhere, he will say: “Man, I just do not know where we are going.” Here he is, and we could see the lacklustre effort that he put in when he was trying to defend this Budget.

I am really looking forward to the next election campaign and being on the campaign trail with Shane Jones, because I would ask him three questions about this Budget that affect the people of Northland. The first thing is that he is out there saying that Labour has done it for business. Well, when we look at it, it may be that Labour did do just a little bit for business—until we actually start doing the maths. Then the only way we can say that businesses got an increase is if we stand on our heads, and the figures will then go up the right way. The fact is that businesses will pay. Labour gives it to them on the one hand and it takes it away on the other. That is the first point.

My second point, though—and this is the point I really want to ask Shane about—is that he talks about the fact that KiwiSaver will be great. He talks about the fact that it will work for people in Northland, and he talks about businesses. Well, you know, in Northland most of the businesses are sole traders; they are not companies, they are small, individual people who have gone out and taken a chance. They have gone out and had a go. They are standing up as we would expect New Zealanders—good Kiwi people—to do. They are men and women, out there having a go. But what will this legislation do for them? It will penalise them, will it not? It will cause them cost; they will have to pay. They will not get any benefit from the reduced company taxes—they do not pay them. But if they are employers—and most of them are employers of one or two people—and they are paying wages of, let us say, $60,000, they will have to pay something like $3,000. Whatever the figure is, it will cost them money.

How will that benefit or encourage the small-business people in Northland? It will not help them at all. In fact, it is a negative for them. Just maybe it will tip them over the edge. In Northland a good number of businesses are right on the edge—they go from hand to mouth, and they just keep going. They make it, they work hard, they do all the things they can, and now the Government comes along and says: “Well, here’s another bill, and here’s another tax. You are going to have to pay. You are going to have to front up.”

What about the people who work in the Moerewa freezing works? What about the people who work in kiwifruit businesses in Kerikeri? What about the small people who work driving a school bus to Mangamuka? What will they get out of this? They will get absolutely nothing. The fact is that they will get nothing out of it because they cannot afford to take anything from it.

How much surplus cash does the person who is earning $18,000 a year have hanging around to put into KiwiSaver? Negative—they have no surplus cash at all. I say to Mr Mallard and Mr Shane Jones that these people do not have a spare cent to put into KiwiSaver. So what is their only option? They will opt out—they have to opt out. This legislation does not help the people of Northland. I know a young fella up there who has just started working at Pak ‘N Save. He has a partner and a child, and a second child on the way. He earns $15 an hour. He is doing well and getting himself established, but man, he sure ain’t got any surplus cash to pick up his share of what Michael Cullen says he should have. That is the shame of it. This young lad wants to buy his own home. This young lad is having a go. This young lad is actually trying to make a go of a life for himself here in New Zealand, and this Government has done absolutely nothing for him in this Budget.

I move, That the question be now put.