Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill

I move, That the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider this bill. The Government is committed to fostering growth and building on the gains we have already made towards a more secure economic future for New Zealand. The tax system plays a part by ensuring that the Government can continue to perform its function by efficiently and fairly raising revenue. The Government aims to raise the revenue it requires not through raising tax rates but by ensuring that the existing tax bases are fairly applied. An important aspect of fairness in the tax system is that taxpayers must be able to understand and comply with rules, and it is necessary for tax rules to be cohesive, fair, and applied consistently.

This bill aims to continue with the work of further rationalising the tax system. For New Zealand residents with interests in foreign superannuation schemes, the current tax treatment of withdrawals from such tax schemes can be complex. It is not always clear that the rules result in a fair outcome, particularly for lump-sum amounts. For example, a person with an interest in a foreign superannuation scheme might be taxed on accrual under the foreign investment fund rules. In other cases, a person may be taxed when they withdraw or transfer funds from their foreign superannuation scheme. As a result, some people pay more tax than others, depending on how the foreign scheme is structured. This bill provides a much simpler and more even-handed approach to taxing foreign superannuation interests held by New Zealand residents.

From 1 April 2014 a new, cohesive set of rules will replace the current rules. Under the proposed changes, the foreign investment fund rules will no longer apply for foreign superannuation schemes. Lump sums from foreign superannuation schemes will be taxed only when they are received, or ultimately transferred to a New Zealand or an Australian superannuation scheme. The proposed rules for lump sums aim to tax only the investment gains that the person would have made during the time they were resident in New Zealand. Periodic pensions will continue to be taxed in full on receipt, as most periodic pensions currently are. The rules will make it easier for people to transfer their superannuation. In general, no tax will need to be paid if the person is simply transferring from one foreign superannuation scheme to another foreign superannuation scheme. The KiwiSaver rules will also be amended to make it easier for taxpayers who transfer their funds to New Zealand to pay their tax on the transfer. The bill contains a limited amnesty for migrants who have transferred their superannuation funds to New Zealand in past years but not complied with existing tax rules. They will be able to pay a tax on only 15 percent of the value of the transfer, which equates to an effective tax rate of 5 percent. This strikes a balance between helping these taxpayers meet their tax obligations while being fair to those taxpayers who did comply with the rules.

The bill also addresses another aspect of the tax system in need of rationalisation. The current tax treatment of the mining of specified minerals, such as gold and silver, and ironsands activities is concessionary. Although the Government acknowledges that mining is an important sector and part of our economy, we must ensure that tax rates applied here do not advantage one sector over another. It has been a particular focus of the Government to remove distortions in the tax system. The current tax rules allow mineral miners a tax deduction for prospecting, exploration, and development expenditure, including expenditure on capital items such as plant machinery and production facilities. The rules also allow for amounts set aside for mining exploration or mining development to be deducted in advance. Deductions for expenses of this nature are not in line with business expenses for other industries. The proposals in the bill, therefore, will make the tax treatment related to the mining of specified minerals broadly consistent with the rules that apply to other business activities, while still recognising some of the more distinctive aspects of the mining industry. The proposed changes to mineral mining will apply from the beginning of the 2014-15 income year.

This bill also proposes amendments to the financial reporting that dovetail with the proposals in the Financial Reporting Bill. The Financial Reporting Bill proposes that most small and medium sized companies will not need to prepare general purpose financial statements. However, as New Zealand’s biggest user of financial statements, the Inland Revenue Department does have some financial reporting requirements. This bill therefore proposes a framework for minimum reporting requirements for companies and potentially other taxpayers that meets the department’s requirements but minimises the compliance costs.

Other measures in the bill include changes to the tax rules relating to bad debt deductions for holders of debt to make them fairer, changes to the general and life insurance business tax rules to ensure that they work as intended, and further improving the integrity of the Working for Families tax credit provisions.

In addition, donee status is proposed for three new charitable organisations—namely, the Kailakuri Health Care Project’s NZ Link Group, Marama Global Education, and Marama Global Health. Donors to these charities will be eligible for tax benefits on their donations.

I commend the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill to the House.

I am pleased to take this opportunity to say that the Labour Opposition will be supporting this Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill, the maiden bill of the new Minister of Revenue, the bright and shiny Todd McClay, who has got up early this morning to come to the House to read the speech that one of his officials has, clearly, written for him, and we compliment the officials for their excellent work in that regard. What a fine start he has made! He has gone where Jonathan Coleman did not go and he has actually picked up the right speech notes and read the right speech. What a brilliant start! I have to say that the member opposite was a pretty decent chairman of the Finance and Expenditure Committee and we wish him well for the 2 or 3 weeks that it takes for us to bring his ministerial career to an end.

Why is he here? Why is he here? The answer to that is very, very simple. It is because the Hon Peter Dunne is not here. Why is the Hon Peter Dunne not here? It is because he is no longer a Minister. Why is he no longer a Minister? Well, he assured the Finance and Expenditure Committee that he did not leak sensitive Government Communications Security Bureau documents to a journalist. He gave a point-blank assurance. Unfortunately, when he gave the same point-blank assurance to the Prime Minister, the Prime Minister said: “Well, I’d love to believe you, but you’re gone.” So he has gone and Todd McClay is here.

That will be a very interesting ride for him, because he has got his work cut out. While Peter Dunne was busy thinking about matters of the ether, the revenue portfolio was going to rack and ruin before his very eyes. Todd McClay has got a huge job to tidy up the portfolio before it unravels. Nit-picking taxes like the car-park tax, like the iPad tax—imagine applying fringe benefit tax to the personal use of computers or cellphones. The cost of working out which calls were private and which were public would have been far more than the tax was worth. What about applying fringe benefit tax to car-parks for shift workers or only for businesses in the central business district but not two streets further over? Those are the kinds of bizarre tax ideas that emanated from the Inland Revenue Department from the previous hapless Minister—hopefully, not under this hapless Minister.

They were withdrawn under pressure from the Labour Opposition, from labour unions, from business groups, and it has caused a great deal of push-back, because we all know that the word went out from the Minister of Finance’s office to the Minister of Revenue and to the Inland Revenue Department officials, and it went something like this: “If it can get $5 million or more, for God’s sake, tax it, because we are desperate to get to a Budget surplus and we will use any tool in the tool box to get there, real or imagined.” In the Budget debate we uncovered the fact that so many of the fiscal and revenue tools being used by this Government were straining credibility, were in the realm of the fictitious—like a $400 million tax spike in the year 2014-15 alone due to the magical appearance of some redeemed tax credits, or a $1 billion spike in corporate tax revenue, or a $1.2 billion spike in personal tax revenue. So the Minister is going to have to establish some credibility pretty quickly to tidy up those kinds of rubber numbers that have infected the fiscals.

The Inland Revenue Department’s mainframe computer system is in tatters, and the officials have recommended an open cheque book of $1 billion to $1.5 billion to rebuild their pet computer. Well, it is important. The Labour Government that is coming in will have to fix it up, too. But we will not be writing a blank cheque to the officials for a billion-dollar computer. I have no idea how you could pay a billion dollars for a computer. Let me just say that Cabinet and the outgoing honourable Minister were so unsure of themselves that they had to build in a teeny-weeny contingency margin. How much? It was $500 million of contingency margin. So on his first day in the House as Minister of Revenue, I say to the Hon Todd McClay to get out your pencil, get out the ruler, and measure up that $500 million grey area and fix it up, because we are going to be coming after it. If you do not fix it, Minister, we will be coming after you.

While we are on it, the time is now, Minister, that you should be worrying about the erosion of the tax base. Please do not do what the Hon Peter Dunne did and say: “Look, we know multinational companies are laying waste to our tax base by shifting profits across internet sales. We know Google, Apple, and the other multinational giants are really hard to tax, but don’t worry, the OECD is working on it.” Well, the OECD is doing good work, and we commend that. We would agree that we should be participating in it. But here is the difference. Those clowns over there are happy to wait for Paris to do something in the springtime. We are not. We are saying that the Government is negligent if it does not pursue domestic initiatives in parallel. For example, the Labour Opposition is actively looking at the issue of the threshold for GST on purchases online of foreign-sourced goods, because that is creating an incentive to disembowel the New Zealand retail sector, and that needs very serious consideration. But base erosion and multinational taxation cannot wait for some thinktank in Europe to get its act together in 3 or 4 years, because hundreds of millions of dollars of New Zealand revenue is at stake in the meantime.

While we are on that theme, and following the Minister’s maiden recitation of what the officials have given him, let me mention two mega issues that revenue must play a part in. The first is the growing inequality of income in New Zealand. There is a little thing called the Gini coefficient and it measures the difference between the 20th percentile and the 80th percentile, and the gap is getting wider. There are some revenue purists who say that people should never consider the role of the tax system in income distribution, and I say “Bunkum!”. Tax is always a matter of revenue redistribution, and the Government’s major tax steps in this term of Parliament were to take from the poor and give to the rich in an iniquitous tax switch that gave 40 percent of the winnings to the top 10 percent of income earners. It is still the case, Minister, that three-quarters of the wealthiest 100 New Zealanders are not on the top tax rate. They declare an income of $70,000 or less per annum, and that is a national scandal. So if you want to pay for food in schools, and if you want to pay for roads of national significance, do your job and make sure all New Zealanders pay their fair and legal share of tax. Do not turn a blind eye just because they are your big-business mates—not you, Mr Deputy Speaker, the incoming honourable Minister.

This bill is a small part of the tax work programme. This bill is a useful step forward in clarifying the superannuation rules. We have no dispute with the objective of this bill. I will, however, mention several factors that are very important in its construction, which we will be looking at in the Finance and Expenditure Committee. The first is that by the Minister’s own admission the mining sector has had a free and advantageous run in the tax system. This bill goes some way towards re-equalising that. Does it go far enough? Well, that will be a very interesting question to test.

This bill tries to simplify the taxation of foreign-held superannuation funds for New Zealand residents, and in doing so it looks at imputation credits and Australian dividends. It uses the fact that there is a double tax treaty to convey a particular exemption for our Aussie mates. Well, that is very good, but when is this Government going to do something about the fact that the New Zealand corporate sector is being rorted by the Australians over the non-convergence of the taxation of corporate dividend imputation? Why is the Government sitting on its hands while there is a tax advantage to Australian business over New Zealand business that it has been unwilling or unable to negotiate a solution to, despite the urgings of the Productivity Commission? We will ask whether that issue can be picked up in this bill. Whether the bill makes sufficient difference between contributory and non-contributory schemes, whether it addresses the interpretation of KiwiSaver and other portfolio investment entities, and how it interfaces with the broader foreign investment fund rules are all second-tier issues that will merit the select committee’s consideration. But today, for now, in this maiden speech of the bright and shiny new Minister, who, unfortunately, inherits a very non-bright—

Order! The member’s time has expired. [Interruption] Order! The member’s time has expired.

I join the last speaker, David Cunliffe, in congratulating the bright and shiny new Minister of Revenue on his new portfolio. I would just point out that the most important contribution the tax system can provide to our economy is to be an efficient system. To be efficient, it needs to be much more simple than it is, and that is why this Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill is a good bill, because it is getting rid of complexity and it is making the system fairer and simpler—fairer and simpler.

Why do we need it to be fairer and simpler? Because it is part of the Government’s process of making a more competitive and productive economy. This is one of our Government’s key priorities, because it is only by lifting economic performance that we can create jobs, we can boost incomes, we can improve living standards across the Wairarapa, and we can provide world-class services like those that come out of Masterton hospital.

The Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill is the latest piece of tax legislation that is aimed, as I said, at making the system fairer and simpler, and it will help strengthen our economy. This Government aims to raise revenue not through hiking tax rates, as those goons on that side of the House would do, but by ensuring that the tax bases are applied fairly. I support this bill.

To the Hon Todd McClay, congratulations on your appointment and I hope it goes well for you. The Labour Party is supporting this Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill to go to the Finance and Expenditure Committee. There are some issues that we want to check on, particularly around the retrospective nature of the changes to the taxation of foreign superannuation vehicles. The case against retrospectivity is normally very, very high, and we want to make sure that what is happening here is proper. Both the last speaker, John Hayes, and Todd McClay in his opening address said that the taxation system should be efficient and fair, and then said that this bill achieved that.

It is interesting to reflect upon what the OECD said in respect of New Zealand’s tax system in the OECD Economic Surveys: New Zealand 2013 in June, just this month. It is the latest in the advice from a number of international agencies like the IMF and the OECD to critique New Zealand’s taxation system. I want to read out what it says, because it says the opposite of what the Minister and the last speaker said. It says that tax changes should be considered “to make the tax system more conducive to both growth and equity:”. The changes that it proposes, which are supported by the Labour Party, are very, very significant. It is interesting that the changes go to both improving equity in our country and increasing the wealth of our country through more growth. But before it sets out its prescription, it notes that New Zealand now has one of the least redistributive tax systems in the OECD—one of the least. That is one of the reasons that it says that the rate of growth in inequality in New Zealand has been amongst the highest in the OECD in the last two decades. I say those two things slowly, because I think it would shock most New Zealanders to realise that the rate of growth of inequality in New Zealand is worse than in most OECD developed countries, and that we as a country, as a consequence, are becoming less equal.

What it does not go down to is how this Government has made it worse, because it is a prospective-looking document, rather than criticising the Government’s recent policy platform. But of course inequality has gotten worse in New Zealand under this Government, when 40 percent of its income tax cuts went to the top 10 percent. The Government says: “Oh, but we increased GST.” Of course, GST is effectively a tax on wages if you are a low or middle-income person and you spend all your income. You pay GST on everything except your interest and your rent. So you pay quite a high effective rate of GST in relation to your income. But if you are a wealthy person and you save a lot of your income, you do not use up all of your income on GST-related services, and your effective rate of GST is lower as a proportion of your income than it is for a low or middle-income person. So the effect of those tax cuts, which gave 40 percent of the income tax cuts to the top 10 percent of income earners and then effectively replaced it with some GST, which proportionately fell more on low and middle-income groups, was to increase inequality markedly—and I say markedly.

We see the effect of that in Auckland’s property prices. The Government, as its centrepiece of this Budget, says: “Oh, we have now got to do something about unaffordable house prices.” But it is driving them, both with the tax system—which is what I am going to come back to next—and with the increase in inequality as a consequence of more and more of New Zealand’s resources, New Zealand’s wealth, being captured by the top 5 percent or 10 percent of New Zealand. They, of course, are the people who are out there bidding for a third or fourth home, while younger people are closed out of owning even one.

So what does the OECD say in terms of reforms that could make this better—that could, in its words: “make the tax system more conducive to both growth and equity:”? I will read it out. It says: “New Zealand belongs to a group of five OECD countries with particularly high pre-tax capital-income inequality … As much of this income, especially at the top levels, takes the form of capital gains, the lack of a capital gains tax in New Zealand exacerbates inequality (by reducing the redistributive power of taxation). It also reinforces a bias toward speculative housing investments and undermines housing affordability, as argued in the 2011 Survey.”, which is a wee flick at the Government, saying: “Why do you ask us for these reviews and pay for them if you are going to ignore them like you did the 2011 one?”. So it is saying that we are one of only five OECD countries that have this capital income inequality, because we tax a subset of economic income based on a statutory definition of income, not an economic definition of income. We are one of five OECD countries that do that.

Then it says that as much of this capital income takes the form of capital gains, the lack of a capital gains tax in New Zealand exacerbates inequality. Well, I thought the Minister of Revenue told us that that is what it is aiming for—a fair tax system, rather than an unfair one. Then it says that it also reinforces a bias toward speculative housing, which we know is probably one of the largest economic problems that we have in New Zealand. We over-invest in speculative land-based investments and we under-invest in the productive economy—the manufacturers and the like—that export products that pay for our imports and interests. Then the OECD says let us talk about this in respect of growth, and the OECD says: “that recurrent taxes on immovable property are the tax category least harmful to long-term growth,”. The OECD is saying that taxing capital—that is effectively what it is saying—has fewer negative effects on growth than other forms of taxation. So it is saying that the thing that New Zealand could do—and it stands out clearly; effectively, its stand-out recommendation is how to improve both the economy and inequality—is to fix this glaring hole in our tax system, where capital income is not taxed, despite the fact that it is economic income.

Really, I should sit down now, because that points to the most glaring hole in New Zealand’s economic settings. There is nothing more important that this Government could do economically than to get the investment signal right, so that people invest on the basis of the productivity of their investment, rather than on the basis of a tax bias, because there is a tax bias there. No one disagrees now that there is a tax bias. The Prime Minister stands up and says that we have got a capital gains tax on people who are traders in property. No, we have not. They are paying income tax on their trading activities. They are not paying taxes on their capital gains. They are paying income tax on the change in value of their trading stock, because they are traders—just like someone who buys and sells shoes pays income tax on trading shoes, or supermarkets on the goods they sell. If you are a trader in property, it is your stock-in-trade, and you pay taxes on your profits on your trading as income tax, not as a capital gains tax.

New Zealand’s tax system is fundamentally flawed. We face a higher cost of capital in New Zealand because of our prolonged current account deficit and our dissavings. And, again, what would the OECD and the IMF say is the right thing to get New Zealand people saving, rather than over-investing in property and fooling themselves that they are wealthier because the price of the asset has gone up, even though it is just the same asset, and the country is no wealthier as a consequence? It is the same thing that existed at the start of the year; it is just that the number that is attached to it has changed. They would say that to fix that, you need a capital gains tax. So you come back to this absolutely central thing that is important both from an economic growth perspective and from an equity system perspective, and this bill does nothing about it.

One more thing: this bill does nothing to remove the over-taxation that New Zealanders are facing through ACC. ACC is meant to be a levy that reflects costs. It is being used as a tax. It is being used by the Government to over-tax New Zealanders by $700 million over the next 2 years, the effect of which allows it to squeak into surplus. It is good that we are getting back to surplus, but the Government should not pretend that it is using ACC as anything other than taxation, when it is meant to be a levy that reflects cost. It has already announced that in those out-years—around the time of the election, somewhat coincidentally—it is going to drop those levies, after it gets back to surplus. We are supporting this bill going to the select committee, but it does not make the changes that the New Zealand economy needs.

Tēnā koe, Mr Speaker. Tēnā koutou e te Whare. Good morning. It gives me great pleasure to speak on behalf of the Green Party on the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill. The Green Party will be supporting this bill going to the Finance and Expenditure Committee. It would like to congratulate the Government on taking a very small but not insignificant step to improving the fairness of our tax system by removing some of the favourable tax treatments that have existed for the mining industry, which may well be worth $30 million. It is a nice change to see the Government actually moving towards fair tax treatment, particularly for an industry like mining, which we know is a favoured industry of this Government.

However, the Government does not completely level the playing field. It is still picking winners. My colleague the Hon David Parker mentioned the recent report from the OECD, the OECD Economic Surveys: New Zealand 2013. What the OECD found was that the use of environmental taxes in New Zealand is very, very low by OECD standards. Their increased use would enhance the quality of future economic productivity growth. And the OECD recommended the creation of a sovereign wealth fund, as Norway has, to manage any mining royalties much more equitably. The OECD has found that mining royalties and access charges are still extremely low New Zealand, as is the carbon price signal.

The Greens have in our taxation policy a number of principles. Basically, we think that taxes should come from a broad base to avoid excessive reliance on income tax and, in particular, that the tax base should include personal and business taxes that reward sustainable activities and enterprise. We would like consumption and expenditure taxes that discourage wasteful use of energy and finite resources, targeted environmental taxes designed to reduce and eliminate behaviours that simply are not sustainable in a finite world, and taxes that acknowledge the value of common property through resource rentals and that encourage long-term, sustainable business practices. Of course, those principles are very much in line with what is recommended internationally by organisations like the OECD.

We think that investment income from different sources should be treated equally for tax purposes. I would like to congratulate the Labour Party on finally coming on board with support for the capital gains tax. I think the Hon David Parker gave an excellent explanation of why a capital gains tax is so important for rebalancing New Zealand’s economy and for ensuring that we do have high-quality economic productivity rather than just speculative investment that does not actually increase the wealth of New Zealand.

Of course, the lack of a capital gains tax is just one of the factors in the housing affordability problems that are being faced in Auckland. There are other factors, such as an unknown quantity of foreign capital coming in because there is no restriction to New Zealand residents and citizens on the purchasing of property. We have foreign capital coming in and bidding up the price of houses, the lack of a capital gains tax, and quite an easy or a loose credit situation where it is quite easy to get credit that is leading to it being more favourable to purchase as opposed to rent. What we have seen in Auckland is that it is much less a supply problem that is causing the housing unaffordability, and that is indicated by the gap that has opened up between house price inflation and rent inflation in Auckland.

So the Green Party has as its priorities three basic areas. One is the economy. I think it is really important to look at rebalancing the economy and reducing our current account deficit, and there are many easy ways that we could be implementing policy that would do that. Unfortunately, the Government is doing the opposite of most of these. For example, in its transport policy it is spending a lot of money on a few projects that tend to aggravate our reliance on private vehicles rather than giving New Zealanders real choices. That means that New Zealand households and businesses have to spend well over $12 billion a year on vehicles and fuel to run them while the Government spends $4 billion of our taxes on a few motorways that have extremely poor benefit-cost ratios. These will not actually reduce transport costs for New Zealand households and businesses but will mean that New Zealand households still have to rely on their cars for trips. That means they have to go fill up the tank, and they are paying a lot of money for petrol. They would be paying even more if the New Zealand dollar came down to a level that would be more appropriate for it. Of course, all of that contributes to our current account deficit.

The other priority for the Green Party is protecting our natural environment and our natural capital. The fact is that the planet is finite. We have finite resources. If one accepts that we have finite resources, it makes sense that we cannot count on extracting resources for ever and infinitely polluting the atmosphere in order to achieve a higher quality of life. It is simply not possible. On the one hand, we are being told that if we want to have a high quality of life, if we want wealth, we have to dig up our precious minerals, we have to dig up our forests, like on the Denniston Plateau, and we have to encroach upon these precious areas that are actually of very high value to New Zealanders in order to extract the minerals beneath them so that we can sell them.

But that is not a sustainable strategy for long-term wealth creation, because once that place is gone, it is gone for ever. And once we have sold the minerals, or the coal, as the case may be, what is our strategy after that? Once we have sold the coal, then what do we do to earn a living in the world? The sooner we recognise that there are sustainable industries that we could be cultivating and that we should focus our attention on those, the less it is going to cost us and the easier it is going to be to achieve a higher standard of living for all New Zealanders.

It is also important to reduce inequality, as David Parker mentioned earlier. New Zealand has one of the fastest-growing rates of inequality in the OECD. Not only is that not fair, it is also not sustainable. It is not good for the economy. One of the factors in the global economic crisis was growing inequality. We are in this together. There has been a lot of research that shows that when the gap between those who have a lot and those who have very little increases, then everybody is worse off. The entire country ends up paying more in terms of increased crime rates and having to put people in prison, and we end up paying more because of worse health outcomes. If we have an economy that looks after our people and our environment, that is going to be the best thing for all New Zealanders, and that is the priority of the Green Party.

So the Greens support a tax policy that can contribute to the overall quality of life of New Zealanders, and one of the most obvious ways to do that is through ecological taxes. We want to see a real price on carbon. The OECD has criticised New Zealand for not having a meaningful price on greenhouse gas emissions. We know we are going to have to reduce our greenhouse gas emissions. We know we are going to have to transition to a low-carbon economy. The sooner we do that, the less it will cost us. The sooner we face up and say that we are going to have to develop new ways of doing business that do not rely on activities that pollute the atmosphere, the easier it is going to be for us to make that transition. The sooner we put a tax on capital gains, the better it is going to be from an investment perspective. We are going to have people investing in productive industries in New Zealand, hopefully, and at the very least it should dampen the housing speculation that is driving up prices in Auckland.

There are many other ways we can have a more direct, fair, and transparent tax system. We congratulate the Government on its tiny move in that direction by removing favourable tax treatment of the mining industry in this bill, but we would very much like to see, and we ask for, a greater move towards ecological taxes.

I rise to speak to the first reading of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill. This is a very straightforward piece of legislation, and it, potentially at least, enjoys the support of the political allies we have in this House, and oftentimes foes. Even the Greens, not known for being particularly positive, have supported it because it is a very straightforward piece of legislation in its purpose. It is simply this: to protect the tax base changes to make the tax system fairer and the economy stronger.

Our very eloquent new Minister of Revenue, Todd McClay, has already outlined the three main provisions of the bill, so I will not waste the House’s time by going over them again. Just to recap, though, the changes in the taxation of foreign superannuation to make it simpler and fairer both for New Zealanders returning from overseas and for migrants, with a limited amnesty for foreigners, are a very good thing. The bill also sets up a framework for the specifications of minimum requirements for company financial reports.

I am concerned too with the change that is happening with regard to mining, because bringing the tax treatment of the mining of specified minerals—such as gold, silver, and ironsands—into line with general business tax principles really has to be done. Looking at that in more detail, we know, of course, that mining is a very important sector, but we have to ensure that tax rules do not advantage one sector over another. So this proposal to remove the concessionary tax treatment that currently applies to the mining of scheduled minerals like the ones I just mentioned, by replacing it with rules that are more consistent with those that apply to the rest of us—other taxpayers more generally—while still creating space for some of the unique aspects of the industry, is, in fact, a very fair thing to do. At the moment the tax on mining effectively allows a tax deduction for capital expenditure in the year that the expenditure is incurred and, in certain circumstances, after that expenditure is to be deducted in anticipation of its being incurred. That is something that needs to be tidied up, and this piece of legislation does just that. Thank you.

I take a call on behalf of New Zealand First, and we also congratulate the new Minister of Revenue, the Hon Todd McClay, the former chairman of the Finance and Expenditure Committee, who is now taking up where the Hon Peter Dunne left off. In this respect, New Zealand First also supports the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill. There is a lot of good, sensible, sound policy in this bill that will help tidy up aspects of our taxation system and simplify areas of filing requirements for individuals and record-keeping requirements for businesses. It will also provide that taxpayers who choose to file a tax return also need to file their returns from the previous 4 tax years, so they cannot, basically, cherry-pick a particular year. If they are going to file a tax return, it must also include the tax returns of the previous 4 years, to ensure that it is fully covered.

We are pleased that the Government has seen fit to move in the direction of KiwiSaver to increase employer contributions and employee contributions back up from 2 to 3 per cent, which we believe is, again, a positive thing for long-term savings in this country. We were very disappointed when the Government reduced its own contribution in July 2011. It reduced the annual Government contribution, halving it from $1,042, or $20 a week, down to $521, or $10 a week. We thought that was a negative way of addressing the problem of savings in this country. The Government reducing its contribution to KiwiSaver did send the wrong message.

Just recently I was reading—I do not have the figures in front of me—that the impact on that KiwiSaver fund in the next 10 to 20 years, as a result of the reductions of the Government contribution, is into the tens of billions of dollars that New Zealanders will not have in the long term, and that is a great shame. It is a great shame that the Government could see fit to give $2 billion in tax cuts to its wealthy, rich mates, and could provide $2 billion in tax cuts for those who do not need it—$5,000 a week in tax cuts for the likes of Paul Reynolds, the head of Telecom; $1,000 a week for the likes of John Key; and goodness knows how many other thousands of dollars a week for very wealthy people in this country who simply did not need it. Those tax cuts gave them the opportunity to buy a new boat at Westhaven and that sort of thing, or a new bach at Ōmaha, but for the people who actually could have done with tax cuts and could have done with the ongoing significant contribution to their KiwiSaver schemes, it was a pity that the Government had its priorities wrong and saw fit to take $2 billion out of the tax revenue coffers to give to the wealthy, while reducing the KiwiSaver contributions.

It is also interesting that in this bill it talks about taxing bonus shares issued by companies under profit distribution plans. Is that not interesting? I wonder whether that would include Mighty River Power bonus scheme shares, because it almost seems like the Government is putting out the little carrot, putting out the tempter, for people to buy Mighty River Power shares, and saying: “If you keep them for 2 years, you will get”—

💬 Hon Clayton Cosgrove: Just after the election.

—yes, that is just after the election—“a bonus just after the election next year in your shares of Mighty River Power.” But here in this bill it says that it will be taxing bonus shares issued by companies under profit distribution plans. So it is bad news for New Zealanders. You have not been given the full story, it would seem, by this Government, because it is giving with one hand while at the same time it is ripping your other hand off with the other.

It will be very interesting if the Government makes a little bit more of a feature of this when it tries to launch the Meridian Energy shares with a similar bonus scheme. Will it be telling the people of New Zealand, when it tries to sell off Meridian Energy: “Oh, by the way, the bonus shares come with a little bit of a tag to them—that you will get taxed on those as well.”? It is clear here that the Government does not always necessarily tell the full truth, but we have understood that in the last week on many other issues as well.

One of the areas where New Zealand First is in support is where the bill talks about foreign superannuation and different tax regimes around the world, and assisting people to bring their superannuation back to New Zealand. In this respect, this lines up very nicely with New Zealand First’s superannuation policy, which we put out in just the last month or so, in relation to keeping the superannuation age at 65 years. Some parties in this House would see the superannuation age sliding up to 67 or an even greater age than that in the future, while others would keep it at 65 as long as the current Prime Minister is at the helm. Once he is gone from the helm, I am sure that Steven Joyce, Judith Collins, and Bill English will be just chomping at the bit to move the age out to 67 or higher, in order to try to balance the books.

In that respect, the New Zealand First policy—and we have put it out this month—is that we would have a graduated superannuation scheme based on the length of time a person has been living and working in New Zealand. If a person has in the 45 years between the ages of 20 and 65 lived and worked in this country—and when I say “worked”, that could include non-paid work in terms of a spouse, a husband or wife, taking care of the family; they are still contributing in a non-paid situation—for the full 45 years, then, under the policy of New Zealand First, at age 65 you would get 100 percent of the universal superannuation. However, if you have been out of the country for a period of that time, you would get that percentage of time taken off your superannuation payment. Perhaps you had worked overseas for 10 years. You would then get 10 years taken off the 45 years, and therefore you would get 10/45ths taken off your superannuation when turning 65.

What this also means is that where we have a lot of repatriation of people coming back to New Zealand who have worked a huge amount of their time overseas and have contributed very little in the way of tax to New Zealand, they will not come back and just get on the bandwagon and take the hard-earned taxes that all those people who have been in this country and who have worked most of their lives in this country have contributed to the scheme. Similarly, those who come to join their family when in their senior years of life, who arrive here and stay the minimum requirement of 10 years, would not then suddenly get the full 100 percent of superannuation, either. If they have come here and had 10 years in this country, then they would get 10/45ths of the superannuation for themselves. They would not get the full 45/45ths of superannuation. Therefore, they would get some form of payment, but they would not be stepping over the New Zealanders who have contributed all their lives to the scheme.

In that respect, that fits in with this bill, because we would also permit them to transfer and bring back to New Zealand their own superannuation from schemes that they may have been paying into overseas. They could therefore keep the payment from their scheme, plus take a percentage from the New Zealand scheme on the basis of the years that they have been in this country. We believe that that is a very sound and solid policy, which New Zealand First will be pushing, and will certainly be pushing into the next election. It will mean that New Zealanders will be able to keep a superannuation scheme at age 65 going on for many, many decades to come, whereas, under the current situation, that is looking increasingly perilous while the New Zealand tax base does not have a bright future in many areas.

In closing, New Zealand First supports this bill. We believe that much of this bill is very much technical. Much of it is just tightening up loopholes. It does improve the tax system in a great many areas. New Zealand First has always said in this House that we will support good, sound, solid policy and we will oppose bad policy. In that respect, there is good policy in this bill, and New Zealand First will be supporting it.

I am very pleased to stand in support of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill, here in its first reading. When it comes to taxation bills, it is all about how we are going to carve up the golden egg. Sometimes I think members on the other side want to kill the goose and divide that up.

💬 Hon Amy Adams: Just sometimes?

Just sometimes. It is very important to get the balance right so that we are actually able to raise taxation but also maintain and build a sustainable base for that taxation as well so that going forward New Zealanders can receive the benefit of that income source.

We have heard today the old story, the old criticism, of those people who received tax cuts, but many people forget, and certainly do not bring it up, that in order to have received a substantial tax cut, you were a substantial taxpayer in the first instance. So perhaps there are some people in our nation who have received that cut, but they were paying in the vicinity of about $350,000 per annum in tax, and now they might be paying $285,000 per annum. Of course, their contribution sustains probably about 20 superannuitant families in our country, so it is a matter of actually understanding the whole story and getting some perspective around these sorts of things.

Certainly, in this instance—[Interruption]

💬 Hon Amy Adams: Oh, they’ve woken up.

—yes, I have woken them up—we believe that we have got our taxation system working far, far better than it has done in the past under the stewardship of those members. What we are seeing is that we are addressing issues around education and skills training in order to enable people to be self-determining, to have choice in their lives, and to not be dependent upon only the State for an income and a life.

So it is important to get these matters right, and I believe that as a Government we are working in a multifaceted, holistic way in order to improve New Zealanders’ way of life here in this country. So with that said, and with those points made—bringing some reality back to those members’ argument—I am very pleased to speak in support of this bill. Thank you.

You have just heard the age-old sort of explanation for providing massive tax cuts for the wealthy and providing very few cuts, or little assistance, for the middle and low-income earners. It is called trickle-down. It did not work for Thatcher and it did not work for Reagan, and these geniuses over there are sort of clawing back into history, because they have not got any innovative vision or policy, to the old trickle-down theory, which, for the uninitiated, goes like this—so I am told. You fund massive tax cuts to those on the top—first step. So what did those members do? The top 10 percent got 40 percent of the tax cuts, so they put a tick next to “income tax”—they put a tick in the box there. The theory goes that if you give massive income tax cuts to those on the top, then somehow, in some quasi-religious, beneficial way, those at the top will shell out these wonderful hundred-dollar notes and they will trickle down to the masses, the proletariat, those poor souls at the bottom, who have very little income, who scrape for it every day, and who cannot make ends meet. And from this great trickle-down theory, nirvana will occur. Everybody will be rich. Everybody will be better off. Unemployment will disappear. Economic growth will be sparked. The veil will fall from the temple—as I am sure Mr Clark would know from his religious experience—and all will be well.

Well, there is a wee problem with that: it has not actually worked. It did not work for Margaret Thatcher. It did not work for Ronald Reagan. George Bush had a crack as well. It just does not work. It is a bankrupt, invalid economic policy. But, oh no, these guys are dusting it off yet again—for the last 4 years—and having another crack. They are having another crack. John Hayes, who with a haircut like that looks like he is sort of morphing into, or sort of channelling, Peter Dunne, I have to say—

💬 Dr David Clark: He’s lost the bow tie.

He has lost the bow tie, though—that is true. This bill, the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill, comes on the back of a series of botched tax proposals—botched tax proposals—like, as my colleague said, the car-park tax. John Hayes, I have got to say—he will not thank me for saying it, but I have got to pay tribute to him—showed a tonne of guts, did our Johnny. He opposed the car-park tax in the privacy of the select committee room, where it was not public. He opposed it on principled grounds, and I admire him for that. He always shows a ton of guts, does John Hayes. He opposed the iPad tax. He had some real problems with the student loan tax, of course. I think he also opposed the paper boy tax—these groundbreaking reforms that National bring into this House.

Well, it just shows how bankrupt these people are, because on the back of those botch-ups, on the back of that, we have this sort of trickle-down theory, which is not working. Those members talk about how they gave a bit in GST, so they dropped the tax rates down. The top 10 percent get 40 percent of the tax cuts. John Key gets a thousand bucks a week. The new Minister, who—forgive me, I should congratulate Mr McClay, who was not a bad chair of the Finance and Expenditure Committee. I wish him well, in a limited way, but a hundred bucks a week Mr McClay did get. Now he has gone up a bit because his salary has doubled. Those on the middle and low incomes, those who actually spend money and actually grow the economy because they have no choice but to spend their income, they have not got any spare money to save. They cannot ferret it away. Often they have mortgages and debt. They actually have to spend their money on school shoes, school fees, food, and basic things like that, and electricity, of course, which, apparently, is very competitive, and no one is paying too much for their electricity, according to the National Government, in its small, myopic bubble of a little world, which no one believes. But if you actually want to grow the economy, what these guys could have done is—

💬 Dr David Clark: Geniuses!

—geniuses, yes—do what the Aussies did, and that is target the tax cuts, one, at those who need it, and, two, at those who are going to spend it and those who are going to create jobs by spending that money that they get back—their own money—not give it to the top, as these guys did, because the most wealthy do two things. They have got a ton of dough anyway. So what do they do? They either retire debt with their tax cut, or they save it and put it in the bank.

💬 Andrew Williams: Or buy more champagne.

Or buy more champagne. So they are not actually providing the juice and the lifeblood that the economy needs by getting those dollars moving. But, of course, over there, National looks after its mates.

It is interesting that in this bill there is talk of a limited amnesty. Well, Peter Dunne was in charge of the bill, and had Peter Dunne been the Minister today, I would be asking a simple question: will that amnesty extend beyond the realm of tax to perhaps Mr Dunne’s own misdemeanours and difficulties? Will the Government extend or accept an amendment, or will somebody propose one from that side, that will give Mr Dunne an amnesty for the deeds that he has committed in the last few days, or is this confined to just tax? Or is the fact that he has been removed from the revenue portfolio because the Government is going to extend an amnesty, and there would be an inherent conflict of interest if he stayed as the Minister? I do not know. I know this is a simple question. I am sure somebody can perhaps answer that.

We will support this bill to the Finance and Expenditure Committee. We have some reservations over a number of aspects, but we do believe in simplicity. We do believe in transparency in respect of tax. The other thing that you have got to have in tax is confidence in the system. So GST as a tax is a pretty simple tax. It is a transparent tax and people generally have confidence in it, apart from when they are told in an election that it is going to stay at the level it was, and then they are lied to after an election and it is bumped up, as this crew did, for middle incomes and the lower incomes, of course, because they are the ones who pay the most of that. So it has got to be transparent, it has got to be simplistic, and people have to have confidence in it. But I argue that it also has to be fair.

Mr Hayes got up and had a bit of a crack, trying to talk about equity and fairness in taxation. Well, this bill simplifies a whole series of processes, but I do not see anything in it that corrects the mass inequity where Mr Hayes’ Government gave the top 10 percent 40 percent of the tax cuts. Does anybody over there across the aisle—I am not an economist—think that it is equitable to provide the top 10 percent, who are the wealthiest in our society, with 40 percent of the tax cuts and give certain folk a thousand bucks a week, while others languish down the other end and get a few cents, the odd crumb, off the National Party table? Do the colleagues across the aisle think that is equitable? Will anybody stand up over there—maybe I am going deaf. There is silence. Does anybody think that is an equitable proposition? Presumably, they talk about equity and they talk about fairness. They have all these high and mighty visionary words, but when it comes to actually finding some spine, a bit of backbone, and standing up for their own policy, I just simply ask them again—

💬 Jonathan Young: Sorry, we weren’t listening.

I am happy to yield to them, if they would like. Does Mr Young, who has woken from his slumber, think that giving 40 percent of the tax cuts to the top 10 percent—the top 10 percent getting 40 percent of the tax cuts—while those on the bottom languish is equitable? Oh, I do not know whether the mikes are not working, or maybe I have gone deaf, or something has happened, but there is silence. They cannot even stand up—even the Minister over there who is guarding the shop cannot stand up, and we will love the Hansard around this next year—and support the proposition that they have put forward, that they believe their own tax policy is equitable and fair. I know that in the privacy of his own room Johnny Hayes will be grinding his teeth, saying that this is not fair and this is not equitable, but the whips will not let the reins off him so he can go public on it.

So although these tax changes will provide some simplicity—some of them are positive, but there is a gap in the detail in some of the superannuation propositions in them—the point about it is there is nothing in this legislation that corrects the mass inequity, the mass unfairness, that we now know even Government Ministers and members will not stand up for. Even Maggie Barry, who is known for dishing it out around the place and being very vocal, will not stand up in this House and say that giving 40 percent of the tax cut—revenue and income—to the top 10 percent is equitable or fair. Even she knows that over the bridge, in her patch, no one will believe her, just like no one believes the Government proposition that says people are not paying too much for power. If those members really believe that, and they really believe that their tax policy is fair and equitable, I argue they should go out and make those claims publicly, on the stump, on every street corner and in every hall in the land, especially about the electricity price issue, and see what sort of a response they get.

I invite Mr Hayes to continue to show a tonne of guts and oppose some of these tax proposals. I would like him to do it publicly, but I give him credit for at least doing it privately. I invite some of his other colleagues, perhaps, who believe the same way he does, to maybe use his example and step up to the plate.

It is a pleasure to take a call on the first reading of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill. After listening to the speeches from Labour members, I have come to the conclusion that what Labour wants is a society where everyone is equal, but everyone is poor. That is the society it wants to live in. That society has been abandoned in China, and China is now developing very well, basically based on what we call the market economy.

This bill will make the tax system fairer and simpler, and it will strengthen our economy. The National-led Government has been focusing on returning our Budget to surplus and growing our economy. It is building its record as a responsible economic manager that taxpayers can rely on. It will provide the steady hand our economy needs.

Taxation is a key component of our economic package. This Government aims to raise the revenue it requires not through a hike in tax rates but by ensuring that the existing tax bases are applied fairly. An important aspect of fairness in the tax system is that taxpayers must be able to understand and comply with the rules. It is necessary for the tax rules to be cohesive, fair, and applied consistently, and this bill does just that. For instance, it makes changes to the taxation of foreign superannuation to make it easier and fairer for both New Zealanders returning from having worked overseas and migrants. This is a timely bill. I commend it to the House. Thank you.

Kiwi power bills are too high. John Key is on the side of the energy companies, and Kiwis are hurting. Labour will reduce power bills. These are the big issues—these are the big issues. We know that power bills are too high, we know that John Key is on the side of the energy companies, and we know that Labour has a plan to reduce those power bills. And what are we debating here? We are debating a remedial tax matters bill again—again. We are debating the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill.

This is not the first time we have debated minor tax law in the last 12 months. My colleague the Hon David Cunliffe will agree that we have spent a lot of time in this House debating minor amendments to the tax legislation when the fundamentals of this economy are wrong. But this Government is not prioritising correcting the big things that are wrong in the economy. We have to ask ourselves why. Why are we debating these matters when the economy is struggling, when ordinary Kiwis workers are struggling, and when the fundamental settings of our economy are wrong?

The IMF says that New Zealand has the worst current account deficit in the developed world. It is worse than that of Greece. What is this Government doing about it? I asked the Minister of Finance when he came down to Dunedin, on a rare visit by the National Party to Dunedin, what he would do about addressing this fundamental imbalance in our economy. He did not give a straight answer to that question. This Government does not have a plan. It is so focused on bringing down Government debt, which is not the real problem. This Government inherited zero net Government debt; that is not the real problem. Labour would bring us into surplus in the same time frame that this Government would. The Government is hoping to get there next year or the year after, and we think it probably will. That is not the real issue.

The real issue is that New Zealand is continuing to spend more than it is earning. That means, long term, that borrowing in New Zealand will become more expensive and that will hurt Kiwi businesses. This Government does not like business. This Government does not like small business, because small business has to borrow. Everything is setting itself up against small business. I do not understand why this Government does not like small business, but it does not. How can we get there? How can we correct those things that are wrong in our economy? Well, I will come back to those things. First I want to say a few things about this bill.

There are some good things in this bill. It is attempting to address some of the minor problems with the taxation system, and we will not oppose it going to the select committee, because we want to see these minor things fixed up too. But we are frustrated that the big issues are not being tackled, and they are not being tackled, of course, because this Government does not want to tackle them. It benefits from having its supporters benefiting from an unjust regime.

One of the big issues dealt with in the bill is that of foreign superannuation charges. As a former tax spokesperson for the Labour Party, I have had plenty of phone calls from those who are experts in the field, and they are asking why the Government is doing it in this way. The proposal is preposterous. The first issue that is dealt with here is that all transfers—from British schemes, in particular, and this is where people are the most het up—will be locked in, made to enter a locked-in scheme such as the KiwiSaver fund, and they will attract an expectation of a tax payment. So in this case it is proposed to allow the taxpayer to withdraw an amount up to the value of the tax due from their KiwiSaver scheme. It sounds good, but it ignores the fact that where the transfer is made from a UK pension fund, withdrawing funds would possibly either invalidate the transfer or trigger a 55 percent tax charge in the UK. The two systems are different, and this legislation does not deal with that.

I am fairly certain that we will have some fairly substantive and energised submissions to the select committee on this particular issue, because there are a lot of New Zealanders who are returning from overseas and have money in UK pension funds, or immigrants who are coming here and are going to be treated in a really rough way by this Government. These people also have a lot invested, and their life-savings are under threat because of a system that is set up to be unfair.

According to the regulatory impact statement, an “amnesty is not recommended as it would create an unfair advantage”—and I am quoting here—“for non-compliant people over people who have complied with the law and fulfilled any resulting tax obligations.” I would like members of this Parliament to contrast this with the leeway given by the Speaker to Peter Dunne, leader of the deregistered United Future party. He has been given time to get his affairs in order while still claiming Parliamentary Service funding for his party with no penalty. By contrast, taxpayers are expected to pay tax on transactions involving law that is, in the Inland Revenue Department’s own words, “complex and difficult to understand …”, and about which the department has offered no guidance.

💬 Hon David Cunliffe: There’s 70 percent non-compliance

There is 70 percent non-compliance, as my colleague here says—this is a lot of people who are affected. The Inland Revenue Department has given no guidance. If the Inland Revenue Department is concerned about equity, it could either allow those taxpayers who previously paid tax in relation to a transfer to reassess their position using the proposed 15 percent option, or refund the tax paid. The fact that it will not do so, demonstrating its desire to raise revenue, has triumphed against equity in this case.

I am quite certain we will get some full submissions on this. I have talked to some people who are very exercised about this. Where you have a situation where an unfair rule is proposed, one that will disadvantage the 70 percent who are non-compliant—and they are non-compliant not because they are intending to be that way; it is because they have had advice that they did not need to do things this way, or that it was too complex, or the Inland Revenue Department could not give them guidance—we will see those people come back and say that this is just simply not fair. I am sure that once this bill gets to the select committee this matter will need to be addressed.

I hope members opposite will give the matter the attention that it deserves. There are a lot of people out there who face bankruptcy because of this legislation, and that is not fair. The Inland Revenue Department is there to collect what is due to it—that is quite correct—but it is not there to send people to the wall through unfair systems and unfair treatments. So I think that is something we will hear more of in the select committee.

In the bill there are a number of other measures that, although worthy, are minor. They do not address, as I said at the beginning, the fundamentals that are wrong with our economy. What we need to be seeing in bills like this is measures that bring about pro-growth tax reform. We need research and development tax credits. The OECD says we need a capital gains tax. The Labour Party says this. The OECD says this. The IMF says this. Almost every single OECD country has one. New Zealand does not have one, and that creates a distortion in our system. We know, from recent statistics, that of those people in New Zealand with net assets over $50 million—with assets over $50 million—75 percent of them are not on the top tax rate. That is not fair.

I beg one member opposite to say that that is a fair system, when 75 percent of those in New Zealand with assets over $50 million are not declaring income of more than $70,000. There is silence on the other side of the House—silence. None of them are willing to defend that. They all know that the tax system is not just, and that the gap between rich and poor is growing at a frightening rate in New Zealand. But they will not do anything about it, because their mates are benefiting. They are not willing to tackle these issues. They do not care about the equity issues. They do not care about the future of society and investing in all citizens. They are prepared to let those who have got the money now build more money through an unfair system. The OECD says it is unfair, and, what is more, it says that the economy will suffer because of it.

This inequality is not just a social bad; it is hurting our economy. It is part of the reason why this Government has the worst economic record of any Government in the last 50 years. I will repeat that: this Government has the worst economic growth record of any Government in the last 50 years. Mr Henare knows it is true.

💬 Hon Tau Henare: Boring.

He is saying it is boring. He does not care about growth. That party does not care about economic growth, and that is part of the problem—that is part of the problem. It is concerned only about looking after those who have already got the money. That was clear from the 2010 tax cuts, where 40 percent of the value of those tax cuts went to the top 10 percent of earners in New Zealand. Just 2 percent of the value of those 2010 tax cuts went to those in the bottom 20 percent, and that is an outrage, but it tells you where this Government is coming from. It wants to make sure that the privileged few are looked after. The middle classes, who are being hollowed out, who are suffering, are not getting any relief. It is bad for society, and it is bad for our economy. Our economy will not grow unless these issues are addressed.

It is a pleasure to take a brief and short call in the final slot on this Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill. I want to join with previous speakers in congratulating the new Minister of Revenue, the Hon Todd McClay, on his maiden piece of legislation. I thought he gave a very eloquent and good introduction speech. He is going to make a very good and fine Minister of Revenue and I am looking forward to working with him.

This bill is a bill that on the face of it makes great common sense. It is a bill with a number of measures in it. There are three points in it. It really instils a further view for the public, who are watching this morning, that this is a Government that is careful about taxation measures, that does not want to hike taxes unnecessarily, and that wants to keep a careful and controlled approach to fiscal management. This bill goes a long way to ensuring a continuation of that guidance under the very capable leadership of our finance Minister, Bill English.

This Government is all about making sure that our revenue tax take is taken from citizens carefully and judiciously, and that we do so in a way that does not promote extra tax hikes of the sorts that the Labour Party and the Greens would want. I do not think the Greens, in particular, have yet figured out that every time they mention a capital gains tax it takes the Labour Party’s polling down by several points.

This is a good bill. It is one that I think the Finance and Expenditure Committee is going to give very due and full consideration to. I commend it to the House.