Taxation (Annual Rates, Returns Filing, and Remedial Matters) Bill

I rise to support the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Bill. We are debating Part 3 of the bill now, in my understanding.

💬 Louise Upston: No. 2. We’re on Part 2.

Part 2. Well, that is very, very good, because I have some things I still wanted to say about Part 2 but did not have the opportunity to say. I thought I had missed my opportunity.

The loyalty bonuses issue was one that came up in Part 2. I wanted to raise some concerns, but did not have the opportunity, in relation to where that issue had broader relevance. We saw that coming up, likewise, at a similar time in our Parliament, around the asset sales legislation. In some places there appears to be an inconsistency. In the asset sales legislation that this Government is trying to ram through the House as quickly as it can, we are encouraging people by giving them bonus shares. In Part 2 of this legislation, on the other hand, we are taxing bonus shares. The submitters to the Finance and Expenditure Committee who spoke about this suggested that this was really the wrong way round, and asked how we could encourage investment in capital markets and local markets when we are taxing these shares, rather than encouraging more shareholding.

In Part 2, clause 17 talks about software development write-offs. The way in which this de-risks business is something that the Labour Party supports. We believe that there are some sensible things in this bill. Overall, the bill does contain some sensible measures, but, by and large, it is restricted to tinkering around the big issues of the day. The pro-growth tax policy that would take our country ahead is left grasping and excluded from this legislation, whereas taxing bonus shares is included. We have no plan for KiwiSaver beyond the unimaginative plan, which we will discuss in further parts of this bill, to increase it mildly after the Government had previously cut it. The Government is all over the place on KiwiSaver. And then we have nothing in the bill about monetary policy. Of course, this would not be the place, but it all adds up to no real vision for this sector.

What we have in the bill, part by part, is this little piece of tinkering and that little piece of tinkering. Many of the provisions are good, many of them valuable, particularly in the area of write-offs for software development, but we do not have the big picture in here. We do not have a real vision for saving in a beefed up KiwiSaver scheme. We do not have any pro-growth tax policy, and that means that as a country we have seen our tax take drop. We have seen it drop 4 percent during the time of this Government, in policies that were described as broadly fiscally neutral. We have nothing in this bill that seeks to correct for that or that seeks to make sure there are the right conditions for growth in our economy in order to secure the revenue base that we need as a country to secure future public services that we rely on—the hospitals, the schools, which look after our children, and the police, who look after our society. All of those services that we as taxpayers value are at risk when the tax base has been eroded and when there is no plan through the tax system or otherwise to grow our economy, other than things like taxing bonus shares, which is actually going to make our capital market more shallow than it already is.

If we compare our capital market with that of our neighbours in Australia, we can see part of the picture of why Australia has got so far ahead of us in recent years. It has $1.3 trillion in its retirement savings scheme. In New Zealand our KiwiSaver is a johnny-come-lately. The Labour Government in the 1970s put in a scheme that would have seen us actually better off than the Australians with our savings, but Mr Muldoon pulled that back, and we are all rueing that part of the story.

But there are opportunities now in the KiwiSaver space. There are opportunities here in terms of the decisions we could make. The plan to have write-offs around software development that has not been successful, which de-risks some of that development work, is a good step forward. The replacement of the—[Bell rung]—KiwiSaver 3 percent—

No. The member must sit down when I have rung the bell. That is it. You do not continue. Otherwise, I will give you another call.

I move, That the question be now put.

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Paper 98 in the name of the Hon Peter Dunne to Part 2 be agreed to.

Amendments agreed to.

Part 2 as amended agreed to.

Part 3

Amendments to Tax Administration Act 1994