Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill

When I was speaking last on this bill, Minister Andrew Little interjected and he said that it was far right for me to suggest that many New Zealanders would have appreciated tax reductions this year—that many New Zealanders would have appreciated being $1,000 better off as a result of tax threshold changes that National would have introduced were we to be leading the Government. He seemed to think that this was far right.

What I was saying, and what I say today, is that it is not far right to believe that New Zealanders can make good use of their own money that they earn. It is not far right to suggest that New Zealanders, when they work hard, when they work an additional hour or take a promotion, might actually benefit from paying less tax. In fact, that’s pretty mainstream thinking. So the reason that National is opposing this bill is that what it does is it entrenches tax rates that, we believe, mean that New Zealanders are paying too much tax. What that results in is a Government that is sloppy with the way that it spends and doesn’t get good enough results from the work that it does.

So let’s look across some of the key pledges that this Government made coming in about what it would do with additional tax revenue. Let’s take the example of mental health, when the Government campaigned on doing more for mental health but has not put in an additional extra dollar—not even one—into mental health services in a way that has been meaningful at all.

💬 Dr Duncan Webb: Manaaki—Manaaki in Christchurch.

The Hon Duncan Webb interjects and he’s correct. The Government did produce a working group on mental health to look into some of the issues, and the working group has come up with recommendations, and the Government has taken it to the next stage, in which another six working groups have been created. I put it to you, Mr Assistant Speaker, that when New Zealanders think about mental health and the Government solving problems, what they don’t think about is additional working groups. They think about additional services.

Then we can look to housing, where, again, this Government has appropriated billions of dollars of New Zealanders’ tax, of New Zealanders’ hard-earned wages, to improve housing, and yet we’ve seen fewer than 50 houses built. So what we see here is a bill that entrenches tax rates that are too high, that takes money from everyday New Zealanders, and that National opposes.

We have wanted to make it very clear on the record that this bill also introduces a number of changes administratively that we think are good for the tax system and that we worked on hard in Government, particularly as they pertain to KiwiSaver and to secondary tax. That’s the good work that a National Government did, and how nice it is that Labour are able to conclude in this bill, but what a shame that necessary tax reductions are not included as well. We, as the National Party, will oppose it for that reason.

Thank you, Mr Assistant Speaker. I want to take this opportunity to talk about something which is relatively technical, which the Finance and Expenditure Committee looked that, and that is the commissioner’s duty of care and management under this bill. Perhaps, interestingly, I want to talk about something that didn’t make it past the select committee, and that is the proposed power of the commissioner to, essentially, suspend tax provisions where the legislation doesn’t reflect statutory intent. It’s an unusual thing. Tax legislation is drafted by the Inland Revenue Department and not Parliamentary Counsel Office. One of the obligations of the commissioner is to get the most tax possible.

One of the difficulties with technical legislation of this nature is that drafting errors inevitably slip in. Historically, that has been tidied up by amendment bills later on. The proposed provision was one which said that the commissioner could take an administrative action—so this is here in Part 2 of the bill, clause 9—which, essentially, suspended the operation of the offending provision and required the taxpayer to buy into that. Now, that was a provision that raised real concerns. It was actually taken out of the bill, and I invite Inland Revenue, when they come to draft it again, to look very closely at that question. But we absolutely commend this excellent bill to the House.

The question was put that the amendments recommended by the Finance and Expenditure Committee by majority be agreed to.