Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill

It is a pleasure to be talking on this Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill. This bill is another in a long continuum of bills that we have brought to the House in terms of modernising and improving the settings for the administration of our tax system—which, as we all know, is one of the best in the world—and improving the current tax settings within a broad based - low rate framework.

What I just want to highlight is three areas of the bill. The first one is around employment share schemes. What the bill seeks to do is better align the tax treatment around these with other forms of employment income tax. One of the key changes now is that employees will be taxed on the value of their shares at the time when they meet all the necessary conditions to earn them, rather than when they are initially granted and put in trust. It is common practice that when employment share schemes are set up they are put into a trust and then, over time, the employee gets a benefit once they have met preconditions. In essence, what we are seeking to do is address the concerns that employment share schemes can be used to give employees, basically, tax-free remuneration.

The other area is in employment income. What we are trying to do is reduce the compliance costs for employers by making them, at the time they file their PAYE on a monthly basis, ensure that all the details are then supplied to the IRD at that point, which is a more regular threshold. It reduces the threshold at which companies must, on a mandatory basis, file using electronic means, from a threshold of $100,000 down to $50,000. These are a couple of really good measures. I am really looking forward to debating and discussing this bill at the Finance and Expenditure Committee.

Tēnā koe e Te Māngai. I rise to speak about the Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill—quite a mouthful. It is good to see this bill arriving at the House before the finish of the tax year. We recall that last year’s bill on annual rates, to be set for 2016-17, arrived in the nick of time before the tax year actually started, so at least this year we have the tax rates, which are unchanged, apparently, in the next financial year. Although, given the fact that this is the day before Budget day, who knows?

So we accept this bill as it is. Broadly, it is a bill that makes a number of minor changes. Modernisation, I think, is the theme that is spoken of, and the Green Party broadly supports most of the measures. We support this bill to the select committee, and there are a number of aspects of the bill that we will look to scrutinise. We hope that there will be a degree of accountability on key issues. One of the key issues in this bill is that we can identify a number of measures that will support small and medium sized enterprises (SMEs)—and that is good; it may help reduce compliance costs in some areas. However, there are some worrying aspects of the bill and some things that we have concerns about, with regard to the potential compliance cost for SMEs.

A second issue that concerns us is the potential link from this bill to social policy and social investment measures. While we recognise that income in the hands of beneficiaries should be able to be accounted for and the tax aspects handled as simply as possible, the linking of this tax bill with social policy gives rise to some concerns. We are certainly going to be looking closely at those measures. Through the bill, there is reference to a number of areas where there may be links to child support, KiwiSaver, Working for Families, and also to student loans, and we are going to be looking at those links to ensure that this bill helps simplify and support rather than impose additional burdens, compliance costs, or unwarranted conditionalities on recipients of those Government grants.

Thirdly, we will also take a particular interest and a look at employee share ownership schemes. Employee share ownership schemes are a significant part of this bill. We are going to want to look closely at the changes that this bill introduces for employee share ownership schemes. We have, as the Green Party, a reflex support of share ownership schemes, of ways to give staff, particularly in small business and start-ups, a stake in the companies where they work, a material investment of their time, of their expertise, and of their investment in the company. So the degree to which we can support these companies being a shared enterprise, I think, the greater the linkage in satisfaction for those who work in these businesses, and also the greater the chances of success of the businesses themselves. So we are going to be looking very closely at those changes in the employee share ownership schemes. There are already a couple of things that we see in there that would give us cause for concern.

A fourth area that we want to look closely at is petroleum mining decommissioning. We understand that what this bill aims to do is, instead of spreading back the cost of decommissioning over prior years—a complicated arrangement—it would create a system of tax credits. That, by itself, is not a cause for concern, but we are going to be looking very carefully, especially given the experience in mining companies and oil production companies of the end of life, the decommissioning, and the remediation not being paid for by the companies themselves but creating a public liability after the private sector enterprises have made an enormous amount of money and then walk away from their social and environmental responsibilities. So we are going to be looking very closely at that aspect of the bill.

Fifthly, the bill creates provisions for Lloyd’s of London tax simplification and pharmaceutical company tax simplification. Again, the tax simplification in itself is not necessarily a bad thing, and we will certainly be interested in how that operates. We do have concern that the formula that is being applied is that 10 percent of Lloyd’s premiums are going to be used as the basis for assessment of a company tax of 28 percent. We are going to be wanting to understand closely, with evidence, how that figure of 10 percent is arrived at and the degree to which it is the appropriate tax liability for Lloyd’s of London and, similarly, for pharmaceutical companies.

I should say that the bill also provides for new charities that come on for donee status. There are five companies that will receive charitable tax deductions. Having previously managed one of those organisations that had donee status, it is an important step for organisations to achieve that. I am very pleased that Médecins Sans Frontières is one of those organisations, having worked closely with it in the past. I think it is an immensely important organisation internationally. It is great to see it having a base in New Zealand, and it is great to see it having donee status. We also welcome the four other charities that have gained donee status.

Finally, we see in the wording around this bill that the reforms will minimise “the biases that taxation introduces into economic decisions.” Unfortunately, we do not see the broader examination of those biases to include issues like ensuring that multinationals pay tax in this country, or equitable treatment of GST so that online companies supplying the New Zealand market from overseas with products actually have to pay their fair share of taxes, as New Zealand companies do; nor do we see the inherent regressivity that has come into the tax system being reversed. So while the bill is making a number of very minor tweaks and changes to the Act, we note that the big issues have not yet been addressed. We do not think that they are going to be addressed in the Budget tomorrow, but who knows—maybe we are going to be surprised?

💬 Hon Member: Doubt it.

Doubt it—thank you. I think, overall, this bill is welcome. I will not welcome it if, instead of these benign aspects, we see the bill being used for an intrusive administration with social policy. We have already seen social policy coming into our privacy provisions, with NGOs that receive grants having to divulge who their client base is. So we would not like to see that kind of approach adopted in the system under social policy. We have concern about the pre-population of tax returns, in so far as we should not necessarily move back to a situation of tax returns being mandatory for all. With those caveats around the kinds of issues we are going to be looking at in this bill, we will support it to committee stage. Thank you.

I am very pleased to rise on behalf of New Zealand First and on behalf of my colleague Fletcher Tabuteau to make a reasonably brief statement on the Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill. I am pleased, as Mr Bayly was, but not necessarily ecstatic. Tax bills are not something that we generally get excited about, which is kind of anachronistic, because they are a major part of the business that this House concerns itself with. Members of the public watching do, I think, have to have confidence that in amongst all the other shenanigans that go on, particularly during an election year and particularly in Budget week, Parliament is actually debating matters that do affect them, and have the potential to affect them seriously, and tax and revenue is one of those issues.

I do want to pick up on something that my colleague Mr Coates mentioned with regard to considerations around remediation and decommissioning of oil, mining, and so forth. I think that those are certainly very valid observations, but we do have to be cognisant that in the grand scheme of things, such operations can run for decades, and the cost of cleaning up, decommissioning, and remediating has to really be seen, if it is going to be done—if it is going to be, as the concern was raised, carried out by the private corporate in question that has profited from the undertaking, the cost of that decommissioning and cleaning up has to be taken as part of an overall view of the costs and losses and profits of that operation over its lifetime. So it is important that whilst we are not seen to be favouring foreign corporations, we also have to be fair to them because, like any other business operation, the scale, the nature, the scope, and the time frame of their business and the undertaking, and so forth, has to be taken into account. Many businesses that run for generations such as farms and so forth do have annual costs, but they do not then have a 50-year or a 70-year decommissioning period.

So that is an important aspect that will be examined in the Finance and Expenditure Committee. I am not a member of that committee, but I know that members from across the House will be very keenly investigating the submissions from concerned people—both those who support taking a more aggressive approach and those who perhaps take a more conciliatory view based on the long-term nature of those businesses.

So, going back to brass tacks, one of the important matters of this bill is that it does set the annual rates for 2017-18, and, as Mr Coates pointed out, the last one of these bills that we passed—I am not sure it was quite in the nick of time; I think it was actually a little bit late—squeaked through, and we do have to dot the i’s and cross the t’s and make sure that the legislation under which the Government operates and sets tax rates and collects revenue is backed by the appropriate rules being in place at the right time. So it is a necessary thing to be doing.

In a general sense, we have no major issues with the broad aspects of this bill. We will be supporting it to select committee. It is unlikely, we feel, at this point that much will crop up to give us concern to the point that we would withdraw our support for it, but, as with any bill of this nature, there will be details that come to light, there will be suggestions made, and there will be perhaps things that even the officials—despite all their many hours of work in the background—have not considered, and there will be tweaks and refinements that can be made to it. At the end of the day, with input, with reason, and with support from across the House, we will, I am sure, end up with a bill that is fit for purpose and one that takes us forward.

That is important, because when we look at the criteria against which the options for change that are outlined in this bill have been assessed, they are quite simple. They are fairness and equity, efficiency of compliance and administration, sustainability of tax and income-related social policy, and a basis for improved social policy and other Government services—all of which are fine goals, and we support them.

I am intrigued by this statement, which pretty much seems a summation of the way that we need to approach these things—and which this bill appears to do. Under the heading “Proposed changes to PAYE and GST”, it simply says that taxpayers need a tax system that is easy to comply with so it is easy to get it right, and I think that is true. Everyone grumbles a little bit and resents paying tax, but I think people understand that if it is a fair amount collected in the right way, although they might not always agree with the way in which various Governments spend tax revenue, they do accept and understand that we—all of us here, voters and taxpayers—have a stake in the nation and we do have a responsibility to pay our share. If it is fair and is done simply and equitably, and in a way that does keep up with changing workforce types and with changing technology, then people are more inclined to accept that.

I do have a concern—and, as I say, I am not on the select committee—about some of the figures that have come out as a result of this, which I was not aware of off the top of my head. The PAYE system raises 37 percent of tax revenue and GST raises 36 percent, and that is two-thirds of the total Government revenue coming from, essentially, sources that—notwithstanding that there are many well-paid individuals in the PAYE system—do not involve corporates.

Of course, we have seen a lot of conversation in the media just of late about, particularly, foreign corporations—not about the amount of tax they pay but about the amount of tax that they do not pay. I am hoping that bills of this type and the structure that comes about through their passing—transparency, adoption of technology—will make it an easier task for the nation to have a look at the structure of how foreign corporates are taxed. Perhaps we can learn some lessons from the way that this bill goes through the select committee process, by which those concerns could be addressed again in a manner relating to, as I said in the earlier example, the decommissioning of oil and mining operations and so forth, so that we can look at those in a more long-term, broad-spectrum light, and so that they will also come to find a way in which they can see a simple track through the tax system and be motivated, shall we say, to provide a fairer share of Government revenue relative to the amount of business they do.

With those comments, I do not wish to tie up too much of the time of the House. As I say, we will be supporting this bill through to the select committee, and very probably beyond, and I imagine that my colleague will be very much looking forward to going through that process in the committee. So I commend this bill to the House. Thank you.

I rise in support of the Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill—and that is quite a mouthful. It has been said, time and again, that the two things that none of us can escape are death and taxes. That is why it is so important that we continue to focus on getting taxation matters, treatment, and processes right, here in New Zealand. I have only just had the recent fortune of joining the Finance and Expenditure Committee, and I am actually very much looking forward to going over this bill in the select committee.

It is amazing—I think members, probably, from across the House will have seen this, but we are all pretty much involved in our electorates with, particularly, party members. One thing that is for certain is that as soon as you hold a policy discussion on matters pertaining to taxation, everyone comes out of the woodwork with ideas as to how we can run our system more efficiently, how we can use it to generate the sorts of behaviours we would like to see from people, and how we can make their lives simpler through the application of taxation compliance, collection, and processes.

I am particularly interested in looking—as we go through the PAYE changes that will see business employers having to submit, electronically, the details around their employees in a more timely way, at the time of the pay runs. I am interested to see whether that can help us to help those employees who may have more than one job and who often have issues, or have had issues in the past, with secondary tax payments at the end of the year causing a large balloon payment and causing them some angst. I just wonder whether we might be able to use this change, while it might not have been intended for that purpose, in a way that helps those employees with that obligation in being able to meet it in a way that is much easier for them to manage in their lives.

I am also very pleased to see the work that we are doing around employee share schemes and the way that these would be treated as income, both from the employee’s perspective but also for what it means from the employer’s perspective. So I am very much looking forward to this bill progressing through select committee, and I commend it to the House.

Kia ora, Mr Assistant Speaker. Ngā mihi nui ki a koutou, kia ora. As everyone knows, tomorrow is Budget day. If there could be a perfect entrée for a National Budget, I would wager this bill was it. What is it? A small, innocuous, non-strategic, and entirely technical bill to tweak around the edges, avoiding all of the big issues regarding tax in our country. That is exactly what we are going to see in tomorrow’s Budget. We have seen nearly 9 years of it—a Government that is prepared to kick the fiscal, the economic, and the social issues down the road, and ignore the big issues.

Once again, in this, the Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill, it is the same thing. What do we see? We see some small technical changes around how tax is recovered from petroleum companies, Lloyds, and big farmer/employee share schemes. But they are ignoring the big issues.

Let us just focus on one area, the petroleum changes. Currently, here is an area where petroleum companies, when they decommission their oil rigs, have an existing tax regime where they can go backwards in terms of their losses. The Government is trying to change it.

Why the Government is trying to change it is that, as we recently uncovered in an Official Information Act request to Judith Collins, the Minister of Energy and Resources, the Government is looking at a 42 to 48 percent taxpayer liability—up to $960 million relating to their obligations to oil rig decommissioning. I was absolutely shocked, and I think the Minister was too when she saw the scale of the taxpayer public liability—up to $960 million, because the taxpayer has to fork out 42 to 48 percent of that liability. We are making a tiny technical change around it, but avoiding some of those ginormous issues facing not only the environment, from climate change, but particularly the fiscal impact on taxpayers.

That raises the second question. Why on earth is the taxpayer subsidising one of the most profitable industries on the planet? What I am referring to is the $46 million annual tax breaks and subsidies estimate produced by the World Wide Fund for Nature. Why on earth is the taxpayer subsidising big oil $46 million a year? We have got a wealth of clean energy resources that could be growing four times more jobs—well, that is according to the official estimates. But instead we are looking back to the past.

When we talk about tax, we are talking about tiny technical changes on the margins and no doubt this is exactly what we will see tomorrow. Why on earth are we not using Parliament’s time right now to debate the big issues, like a capital gains tax on other than the family home? We saw last week that the International Monetary Fund said that the housing market and the bubble there was the biggest fiscal risk to our economy.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I have sort of waved the bill around towards the member on a number of occasions, suggesting that he might want to address it. The first reading debate is a relatively narrow one. Large discourses about what is not in the bill and what should be done are not relevant.

I did appreciate the visual prompts, Mr Assistant Speaker.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Well, it would be good if the member took notice as well.

There is a lot that could have been in this bill, that we should have been discussing but we are not. But when we talk about the petroleum part, which we will be looking at in detail in the select committee, I note the regulatory impact statement produced a number of options. I think the preferred option, which unfortunately was not taken into account, was the idea of an environmental restoration account. That way, an account could have been built up over time.

As I outlined, the fiscal liability for the taxpayer is significant. As I questioned the Minister in question time, she referred to the fact that these companies pay taxes and there are royalties going into the Crown account. While that is true, the fact is that that money has been spent. As I asked the Minister, when it comes to the tax liability that the taxpayer faces, none of that money has been put aside.

There are a lot of really important things that have a call on the taxpayers’ income—for example, housing and benefits. But because none of that money has been put aside into, for example, an environmental restoration account, the taxpayer has got to come up with it. So we will be asking lots of questions as to why the changes that are in the legislation were picked by the Government, and why the environmental restoration account, which was identified in the regulatory impact statement, was not adopted. Why was this gigantic sum not flagged earlier to the Minister? It was never in any other briefing documents. There is a lot of detail that we want to go into. We urge the public to make submissions to the select committee. Thank you very much.

Tēnā koe, Mr Assistant Speaker. I rise to take a call on the Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill. I want to just briefly echo the sentiments of colleagues across the House about a tax system that is robust and that is fit for purpose. While it is very prescriptive, it is also agile to the ever-growing needs of Aotearoa New Zealand.

Many of the members across the House have focused on different matters in this particular bill. I want to focus in particular on the fact that the bill proposes that payers of interest, dividends, and taxable Māori authority distributions will be required to provide detailed recipient information to the IRD on a monthly basis. The bill proposes a new model for the collection of information on the part of the IRD. I wonder also about the introduction of the big changes to Te Ture Whenua Māori Bill, which might seem quite separate to this, but all of those Māori authorities and Māori entities operate under that particular legislation.

When it comes time for Māori authorities to pay dividends, to make distributions to their beneficiaries, it is always quite a difficult time for Māori entities. I, for one, have been an administrator of Māori entities. Besides the practical challenges in connecting with beneficiaries, just the mere fact of paying out a distribution is very hard. What we know and what I have experienced is that for every dollar that you pay, it costs almost another dollar, if not slightly more, in compliance—not just for tax but also for administration purposes. I wonder, when I look at this particular bill—one of the parts of it is asking for more frequent, more comprehensive information from Māori entities to inland revenue, on a monthly basis. It also provides a provision that says it is optional for those Māori entities on 1 April 2019, but it will be compulsory the following year, in 2020.

With the big changes coming with Te Ture Whenua Māori Bill, which is currently in front of the House, a lot of the challenges around compliance will be around the fact that Māori entities will need to have a better engagement with their beneficiaries. While that might sound like an easy thing to do, I can tell you, as a land administrator for Māori trusts, that it is actually very hard.

I wonder, when we talk about a robust tax system—we should always be careful about heaping so much compliance on entities such as Māori land trusts and others, because, first of all, their resources are limited, and, secondly, their capacity is limited. When we consider the task that is being asked of them, through this particular bill, of providing monthly regular information for IRD records—I understand the purpose of it, but I would be interested to hear, as this bill progresses, input from the likes of the Federation of Māori Authorities and the likes of some of the large Māori land trusts that actually do pay dividends to beneficiaries.

Here is an example of just how difficult it is. If you go on to the Ngāti Hine forestry website and you look through the list of beneficiaries, if you search for a gentleman by the name of Peeni Henare, it will come up with—

💬 Simon O’Connor: Who’s that guy?

Oh, some quite famous fella from up north. You will find that “Peeni Henare” will come up, and he will be a large beneficiary. Then you will have a look at that gentleman’s birth date and you will find that he was born in the early 1900s. So those records are actually very, very old.

💬 Simon O’Connor: You’re looking really well.

Yes. You know, I did think about a vampire stint. But look, the point is this: it is easier said than done—updating that type of information. My namesake died in 1979, months before I was born, which is why I am named after him, yet his shares are still there. I wonder how that information might come across the desk at the IRD.

Just in conclusion, because I am mindful of the time, there are a whole bunch of technical changes here. We, like the Green Party, will be looking at the employment share schemes a lot closer. We are looking forward to hearing some of the submissions on those. Once again, I would encourage the Federation of Māori Authorities and other Māori land trusts to make sure that they make a submission on this bill. But otherwise, we support this particular bill and look forward to it going to the select committee.

I am not sure how long this will last.

The time has come for me to leave the Chair for the dinner adjournment.

Sitting suspended from 6 p.m. to 7.30 p.m.

I am reliably advised that the previous speaker, Simon O’Connor, who preceded me at the dinner break, made a Commonwealth record of a speech that lasted, I think, less than a minute. That may be because—and I congratulate him on his recent marriage—now that he is under the influence of a higher authority, shall we say, he has become far more efficient and eloquent than prior to the nuptials. This is yet another tax bill brought in by the Government. I note the Minister—oh, congratulations, I say to Simon O’Connor. I hope you were not late for the wedding. Anyway, this is yet another tax bill that the Government has put before us in respect of annual rates and other matters. I note the new Minister in charge of revenue, Judith Collins, is present.

As we go through this bill, I note that the first part is a substantial section that deals with the Business Transformation project and the technological changes within the Inland Revenue Department. We will give notice, on this side of the House, of one thing we will explore, and we have explored, as the IRD has come before us in various guises over the last few years—and the IRD commissioner, in fairness, has been quite forthright in respect of outlining the Business Transformation programme that the IRD is going through. But one thing that the Finance and Expenditure Committee, of which I am a member, has touched on and wanted to explore and gain assurances on is that such a wide-ranging and extremely expensive technological input is on time, on budget, and will actually work. We are mindful of Novopay. We are mindful, going back to the 1990s with the then National Government, of INCIS and other programmes.

To be fair, I acknowledge that IT programmes are particularly difficult—or they seem to be far more difficult—to manage within the Public Service than they do in the private sector. We have had many experiences, of course, of spec creep, where at the end of the day the product you actually get has a whole series of other added bells and whistles that the consultants have persuaded the department to put on it, except the difficulty is it does not work. We have seen that with Novopay. We have seen that with INCIS, as I say, in the 1990s. So I would be grateful—and give notice to the Minister that we will ask questions and seek assurances as to the nature of that programme.

I agree it is vital. It is appropriate that—for instance, the IRD, I think, only recently started communicating with taxpayers in respect of email. In the old days, the law did not allow that and you had to communicate in writing. One of the bugbears, I think—and I think perhaps some of these issues in terms of business simplification may be dealt with in part in this bill—especially that small business has, is that when there is a tax difficulty, 9½ times out of 10 with a small business, it is a mess up; it is a mistake. It is not an issue of criminality or fraud; it is just a mistake, because, in respect of most small businesses, often it is the partner who sits at home under the bad light doing the books.

In the old days, I recall with the IRD you could actually go—and it has been done away with now, essentially, but it was a highly efficient process—to the IRD and get in front of a human being, a tax specialist, with your files, and sit there. Many of us have sent people and had really good responses, I have to say, from the Inland Revenue Department in terms of sending small-business people there to solve problems. You could get in somebody’s face, you could explain the difficulty without letters flying back and forth through accountants and other representatives costing an immense amount of money, and you could get the problem solved. Sadly, to a large extent, we do not have that ability for a business to make an appointment and see a human being. It has to go through the call centre, all these wonderful automated processes, which are great, but if you are a small-business person out there and you are a specialist in making a widget or installing a product or whatever—that is your total focus—anything that gets in your way, especially trying to deal with your tax arrangements, can be laborious, and many small-business people would admit that they do not have the skills to do that. Equally, they do not have a lot of money often to go and just take the briefcase full of receipts and bills and bits and pieces, hand it to the accountant, and say: “Can you sort it for me?”.

So my hope in respect of the Business Transformation project and my plea to the Minister would be this. As we drive for wonderful technological efficiency and wonderful technical innovation, often with Government agencies many of those innovations are fantastic when it comes to the productivity, the efficiency, and the ease of doing business for the agency. Often there is a gap between that and the practical effect, and we lose touch with the practicalities of the customer, the client, the taxpayer, the small-business person actually having to interface with the bureaucracy and interface with that technology. Not every small business is on Mind Your Own Business (MYOB). Not every small business can afford automated processes that will, at some point, plug into the IRD’s Business Transformation programme. Many small businesses still get the ledger book out, because that is what they do. As I say, I hope that in this wonderful transformation that there will be some thought or has been some thought given to the practical application for that small individual called the taxpayer, the client, the customer.

In respect of the costs of that, it would be helpful, I think, as we go through—and as this bill is examined in the Finance and Expenditure Committee, I know, under Mr Bishop’s sound stewardship, we will be asking for justification in terms of cost. There are hundreds of millions of dollars utilised within this transformation programme. We also know about the budget for the Business Transformation programme under a number of Ministers. The longest-serving revenue Minister in the history of any Commonwealth Parliament, I believe, the Hon Peter Dunne, presided over it at a time when there was a cost blowout. We found out about that, of course, only when the Hon Todd McClay got the high ball. “Mr Head-High Tackle” got the department under his portfolio and we actually found out that there were some difficulties with this programme, and that the budget had blown out, I think, by several hundred millions of dollars. I think I debated that when I was our revenue spokesman some time ago.

The torch has now been passed to the Hon Judith Collins, and I know that in her own colourful, diligent, and snappy way—

💬 Hon Ruth Dyson: Modest. Humble.

“Modest. Humble.”, Ms Dyson says—and with the ability to crack the whip, I am sure the Minister will be all over the expenditures, and she will be asking her officials at her weekly meeting: “Is it on time? Is it going to work? Is it on budget?”. And I hope that if her officials, as other Government agencies have done—i.e., Novopay—come to her and say “Oops, sorry, Minister. We have given you a series of assurances but now we have got a problem and we need a few more pingers, a couple of hundred million bucks more, perhaps.”, or whatever, she may go back to them and say: “No. This is the commitment you made. Take it out of your baseline.”

Perhaps a bit of fiscal discipline around those sorts of projects—particularly Novopay—may have focused the minds of those who administer them, because there is another difficulty, I think. I have never been able to understand why certain Government agencies, unlike the private sector, can contract—particularly for IT projects—can procure them, but somehow lose control of them. When they do not work, again, unlike the private sector, which would go and either sue or have a very tight contract so it could gain recompense or compensation and pursue the supplier, for some reason our procurement standards or our procurement policies—Defence, I would say, is another one that has had an interesting and colourful set of experiences over the last 20 years, particularly around boats and other things—are such that the taxpayer cannot get recompense. The contract is too fuzzy, too muddled, too complicated, and we cannot actually nail down who is responsible.

The average person looks at these sorts of arrangements and says: “Well, if I buy a car and the car does not work, I am entitled to a new car or my money back, and perhaps some compensation for my time and suffering.” It is a very simple principle. It actually works in the private sector reasonably well, but, for some reason, we get into such a tangle with these sorts of transformation and technology projects that often the poor old taxpayer is left holding the bill, but, of course, then there is a question of accountability.

We will support this through, as we always do, in respect of tax bills. I look forward to a robust examination of the features therein.

Bill read a first time.

Bill referred to the Finance and Expenditure Committee.