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Q+A: Transcript of multi party debate part two

Published: 5:42PM Sunday October 30, 2011 Source: Q+A

Welcome back to Q+A as our multi-leader party leaders debate continues. Now, this particular matter is taxation. Dr Sharples, I think the Maori Party policy is that the first $25,000 of income is tax-free. Mr Harawira, your proposal is the first $27,000 of income be tax-free. That works out to $9 billion of lost revenue. Is this cloud nine?

DR PITA SHARPLES - Maori Party Co-Leader
Its not cloud nine, but what we have at the current time has to change. Theres no doubt that there are many people who are earning big money and who are rich, saying, We could be paying more tax. Weve gotta relook at that. I know weve gotta keep skilled people here and pay them decent wages.

PAUL Yeah, but you cant take $9 billion out of an economy, can you? Or out of the revenue, can you?

 Paul, thats the reason for the Hone Heke tax. Overseas they call it the Robin Hood tax. Other people call it a financial transaction tax. But even the rich fullas are admitting now that unless they start putting money in, or else the way the economies are structured - not just here, right throughout Europe, America as well - the way that the tax is structured at the moment, where the poor are being taxed to support the rich, everythings gonna go belly-up. Now, theres enough money in financial speculation, and Don Brash knows this-

 No, no, no.

HONE -to actually grow this economy. Now, as long as theyre allowed to never pay tax, while the rest of are paying tax, then somethings wrong.

PAUL Well, I wanna know what $9 billion taken out of the revenues gonna do to the country. Youre shaking your head at Mr Harawira.

PETER DUNNE - United Future Leader
 First of all, its gonna see massive tax increases for everyone else. Its totally unsustainable. Its about a 10% reduction in our total tax taking. In fact over 10%, nearer to 15%. The Robin Hood or the Hone Heke tax that Hone refers to, absolutely ridiculous. Itll lead to two things - a massive flight of capital from the country and a massive flight of the very few rich and wealthy entrepreneurs that we have got, and as a result of that, well end up completely worse off. These are cloud, cuckoo-land policies.

PAUL  But arent the Europeans thinking of taxes like this?

PETER  But if you look at the structure of their economies, firstly they have a much higher proportion of people in the category that would qualify to be hit by these taxes. Our problem in New Zealand is we have - and its something Metiria said earlier, actually, is valid here - we have not grown incomes. We have a long tail with very few people at the top. When we rely on taxing the very few people at the top who already pay most of the tax, all we do is drive them away.

PAUL Dr Brash, youve got a comment there, I think.

DON Yes, nobody has put a financial transactions tax in place anywhere in the world. It is simply not a practical tax at all. It would not raise anything like the kind of revenue that Hone thinks it would do. But youre right - currently 10% of tax-payers pay a net 76% of all income tax.

PAUL  See, theyre not all on the run. Now, what about your taxation policies, the Green Party taxation policies, Ms Turei? You want the first $10,000 to be tax-free. Thats a cost of $3 billion to the revenue.

METIRIA That is in our policy, but it is not one of our priorities. Our priorities are smart taxes, and weve put out that plan for the next three years. So were talking about eco taxes, for example, like resource rental or a payment for the commercial use of water. Were talking about capital gains tax, which we think is very wise, and most other countries are doing that, including Australia. So we have a suite of tax reform that is about smart taxes, and its not about taxes on income.

PAUL (TO PETER DUNNE) Smart taxes?

PETER No. Some of the taxes could be. They dont raise a great deal of revenue. Capital gains tax is a dumb tax-

METIRIA Its about a billion dollars a year over the next three years.

PETER  No, its not, actually, cos youre assuming everyone will make their capital transactions on the same day. Theres a long lead-in time. A lot of borrowing needs to be done.

METIRIA Youre wrong about that.

PETER Lets come back to the issue of the tax-free threshold. Ive had the privilege of being minister of revenue in successive National and Labour governments, and I can tell you both have looked at this. Both have rejected it, because if you do that, the cost of that is such you wouldnt be able to do anything else in the tax area, and the real beneficiaries are not the people youre actually targeting through that income package. Far better to have the balanced measure of changes that weve seen over the last number of years.

PAUL I want to move on to the business of asset sales. Labour are big on no asset sales. The Greens, probably, as well.

METIRIA Yes, thats right.

PAUL National, however wants a mandate and is coming to this election seeking a mandate that will allow it to sell 49% of four energy companies, and they think that the government will get $5-$7 billion from this. They keep, of course, majority ownership, but with the $5-$7 billion they can pay off government debts. Now, what is wrong with this?

METIRIA Well, what theyre saying is that theyre going to use it to pay for education and health costs, which is ridiculous and irresponsible. We need to keep our state-owned assets in collective public hands and-

PAUL Hang on, why is it ridiculous and irresponsible?

METIRIA Because if were going to pay for heath and education we need to have a sustainable economy that can do that in the long term, and not sell off our assets to pay for it in the short term. We need to keep our state-owned assets and we can use them to drive innovation and renewable energy technologies, which is a trillion-dollar global market that New Zealand can get a piece of if we just support New Zealand businesses to do so.

PAUL Righto. Pita Sharples, what do you think of the asset-

PITA Our policy is against the wholesale selling of state-owned assets, but-

PAUL But theyre not talking wholesale, are they? Theyre talking four energy companies up to 49%.

PITA Well, thats- Yeah, but for those particular companies, iwi have shown interest, and thats a form of saving and we need to save in New Zealand, and if they want to do that, we would support them to invest in that. I think New Zealanders investing in those sales is fine.

METIRIA Thats right, and we would use green energy bonds to do that - green energy bonds in the state assets.

PAUL Could you remain in coalition with National if they were to do the asset sales business?

PITA Oh, those sort of talks havent even been held yet. I mean, were talking about our policies at the moment.

PAUL Right, can I ask you this, though - who cares who owns the power companies?

HONE I do.


HONE Ill tell you why. Ordinary New Zealanders care because we already bloody own them, Paul.

PAUL And we already get bloody stung by them, too. Public ownership doesnt give us cheap power, cheap energy. Theyre greedy.

HONE  And you think- No, seriously, Paul, private ownership has actually made that worse. Now, why on earth are we selling assets that we already own back to ourselves? Theres something seriously wrong with that policy. Secondly, Labour sounds entirely hypocritical talking about stopping the sale of state assets when in fact it was Rogernomics and Labour which actually began this whole thing.

PAUL Which sold the lot of them.

HONE Exactly. Theres only four left.

PETER Weve gotta get the language right here. This is not selling state assets. This is a proposal to sell shares of a minority nature in four energy companies and Air NZ. Provided New Zealand control is retained - the government will retain 51% - provided New Zealand control is retained in the shareholding and that no one can hold more than 15%-

METIRIA You cannot guarantee that, Peter. You know that.

PETER -and provided we never move to sell Kiwibank, Radio NZ or our water resources, we would be prepared to support that policy.

METIRIA Do you trust National not to then move on to those? Really?

PETER Well, at the end of the day it comes down to the votes of the New Zealand public in terms of the people they send to parliament-

DON The question is, does anyone seriously believe that a government runs a business better than private owners do? No one seriously believes that.

PAUL Havent we had a big financial meltdown in private companies throughout the world?

METIRIA Yes, thats right.

HONE  The answer is that New Zealanders should be running our essential services. New Zealanders should be absolutely in charge of our core services in terms of housing, in terms of water, in terms of electricity.

PAUL No, we take your point. Yes, Don, continue.

DON Do we want the government building all the housing? Do we want the government running the supermarkets?

METIRIA There are thousands of people who dont have sufficient homes.

PAUL Are you all seriously telling me you wake up every morning in love with Contact Energy?

HONE Until such time as we have safe and secure housing-

PAUL  I love Meridian.

METIRIA (CHUCKLES) Actually, I do quite like Meridian.

PETER Heres the question that the others on this panel need to answer. How does a 51% government holding in these enterprises, significant local investment-

METIRIA Theres no guarantee of that.

PETER -and I think Pita made the point about Iwi investment, and local superannuation funds being involved, how does that denigrate New Zealand control of those assets, when the government plus the shareholding will be substantially New Zealand based and New Zealand controlled. I want to hear the answer to that, because thats the nub of this debate.

PAUL I want to move on to just another one, before we get to some quick yes and no questions. Youth unemployment - what in Gods name is to be done? One quarter of our unemployed are 15 to 19. Teenage unemployment is 27%. Maori youth unemployment is 25%. Pacific unemployment is 27%. This is young people. What do we do?

METIRIA We need to make sure we invest in genuine job growth, which is government working with the private sector. So the home insulation scheme, which we would increase to another 200,000 homes, would create another 10,000 jobs, direct and indirect. Riparian planting paid for by the price on commercial use of water would provide another 3000 jobs. All of this skill development work for young people in particular.

PAUL This 100,000 jobs you promised a few weeks back - is this on top of Nationals 170,000?

METIRIA National doesnt actually have a plan for creating jobs. Theyre just hoping.

PAUL Don Brash.

DON Well, we know we have to generate more growth and more jobs. No question about that. But one of the things which has caused this very high level of youth unemployment is the abolition of youth rates by the Labour government in 2008.

METIRIA That is not true. Theres no evidence of that.

DON National said it would raise youth unemployment. It has. The Department of Labour estimates the increase in youth unemployment between 4500 and 9000.

METIRIA No, that is not true. Thats not what it says.

PAUL Metiria, hang on, let him finish.

DON -the unemployment rates gone up by 12,000 people, young people, because of that change. The first thing we have to do is get youth rates re-established.

PAUL Which is what National, we understand, are proposing.

PETER The first thing we have to do- Its not about youth rates. The first thing we have to do is ensure that young people completing their education either from school or from post-school education are qualified and skilled enough to take up the jobs that are becoming available. Its not about taking people on the cheap. Its about saying, Are the people coming on to the job market skilled and qualified to take up the jobs that are becoming available? Thats where our focus has got to be. You can create jobs like, with all due respect to Metiria, insulating homes, or you can bring in youth rates - thats depression talk mentality. But weve actually gotta look forward and grow.

PAUL All right. Pita Sharples.

METIRIA Its not depression talk, making homes warmer and dryer.

PITA Weve gotta continue with our programme for training for real jobs like the cadetships that weve been running working for infrastructure. Were building roads flat out. We trained 2000 last time. Weve gotta keep this up. Trade training. We started in Christchurch already and got people on those things. But the real solution, though, is education. Weve gotta actually get into education at the base level and bring everybody through. But one of our projects weve got going that the Maori Party will lead is getting a hub around our marae and putting in some support to help them and get Maori organisations to find jobs, two jobs for each hub.

PAUL  Very good. Understood. (TO HONE) A quick word from you before I move on to quick questions.

HONE Treasury gave us these facts: theres enough money in the tax cuts that were given to the super rich in 2009/2010 to take every New Zealander off the unemployed register today, put them into full-time employment tomorrow, 40 hours a week and $15 an hour. Now, those were Treasury figures provided to the Council of Trade Unions, provided to us.

PAUL Right, well, lets leave that there. Now, I want yes or no answers. Go right round the group. Cannabis decriminalisation. Starting with you, Dr Sharples.


PAUL Dr Brash?

DON Personally, yes.

PAUL Metiria Turei?


PAUL Peter Dunne?

PAUL And Hone Harawira?

HONE  Happy to consider it after the kids have been fed.

PAUL Yeah. Maori seats - do we need them? Pita Sharples?

PITA At this time, we still need them.

PAUL Dr Brash?


PAUL Metiria Turei?


PETER  At this time, yes.

HONE  Absolutely.

PAUL  Benefit increases or welfare reform. Yes or no?

PITA Its not just as simple as benefit increases. I just think we need big welfare reform, and Whanau Oras leading that.

DON Welfare reform.

METIRIA Benefits have to increase. Our kids are going hungry because they are too low.

PAUL Peter Dunne.

PETER  Welfare reform.

HONE  Benefit increases for the same reason that Metiria said - theres too many poor people in this country right now.

PAUL  Free breakfast and lunch for New Zealand school kids. Are you proposing that?

HONE Absolutely.

PAUL  Thats a yes. Yes, Peter?


METIRIA Wed support that for schools.

DON  No.

HONE  Temporarily, but wed rather support the families to provide for themselves.

PAUL Whats wrong with a loaf of bread and a bit of Marmite and butter?

METIRIA Schools are doing it already.

HONE The fact is that a lot of kids arent getting fed, Paul, and if I could just give you this final fact, its this - it costs us $40 million to keep our boys in Vietnam. It cost $38 million to feed the kids. Bring the boys home and feed the children.

PETER This Hone Heke tax gets higher every moment. Vietnam?

PAUL  Are you talking about Afghanistan?

HONE Afghanistan. Bring the boys-

PAUL You said Vietnam.

HONE Sorry. Bring the boys home and feed the kids.

PAUL All right. Now Ive gotta ask this just to finish, and please give me brief answers cos Im getting the wrap-up. What difference can you make, actually, as a small party?

PITA We can make a major difference because we speak for Maori and they are the people who tell us what to put into parliament, and we have already gained the reputation in New Zealand of taking Maori and New Zealand forward. We stand for a stable New Zealand growing.

PAUL (TO DON) What can you do?

DON The people on the ACT Party list have got the experience to help a John Key-led government make a material difference to all New Zealanders.

PAUL Metiria?

METIRIA Theres 120,000, 130,000 homes insulated warm and dry, kids who are not getting as sick, parents who are able to be more productive because of the Greens. That is a good Green change.

PAUL  Very good. And Peter Dunne?

PETER Well, weve got 240,000 more New Zealanders getting access to medicines as a result of our Medicines New Zealand strategy. Weve got better arrangements in terms of tax cuts, gift duties being abolished, company taxes come down, a whole range of new family initiatives have been introduced. Theres a lot of things that weve achieved, and thats the difference that we can make.

PAUL (TO HONE) And what are you going to be able to achieve?

HONE Feed the children, Paul. Give everybody a job. Give everybody a secure house. Free health. Free education. The only party offering it is Mana.

PAUL And no ones going to go anywhere near you. Theyve said it.

HONE I think these guys will.


PAUL Very good. I thank you, Dr Pita Sharples, Dr Don Brash, Metiria Turei, Peter Dunne and Hone Harawira. Thank you. Its been a pleasure. Good luck in the campaign.