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

I move, That the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Bill be now read a third time.

For the benefit of the members, I’ll use this opportunity to recap the objectives and the content of this bill. The core measure in this bill is a significant improvement in how tax returns of individuals are assessed.

The Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act passed in March last year laid the foundation for a smarter, more responsive tax system by ensuring that the payers of employment and investment income provide better and more timely information to the Inland Revenue Department. With that in place, inland revenue is now able to ensure the right amounts are deducted or withheld from individuals to meet their obligations and to more accurately determine entitlements such as Working for Families.

This bill simplifies tax obligations for individual taxpayers. The changes will help individuals to use the right tax code during the year.

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

Thank you, Madam Deputy Speaker. Well, as I only spoke for about a minute, I might as well reiterate from the beginning. For the benefit of members, I will use this opportunity to recap the objectives and the content of this bill. The core message in this bill is a significant improvement in how tax returns of individuals are assessed. The Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Act, passed in March last year, laid the foundation for a smarter, more responsive tax system by ensuring that payers of employment and investment income provide better and more timely information to Inland Revenue. With that in place, Inland Revenue is now able to ensure that the right amounts are deducted or withheld from individuals to meet their obligations and more accurately determine their entitlements, such as Working for Families.

This bill simplifies tax obligations for individual taxpayers. The changes will help individuals to use the right tax code during the year so that about the right amount of tax is deducted from their income during the year. It will remove unnecessary compliance obligations. It will simplify filing obligations and help refunds be paid out automatically for most wage, salary, and investment income earners.

The changes to the secondary tax codes are intended to address this Government’s concern about secondary tax. These changes will enable Inland Revenue to more closely identify workers with more than one job who’ve been overpaying their tax. Inland Revenue will then be able to suggest a more appropriate withholding rate for an employee’s second job. In this way, we’ll remove the negative impact of secondary tax for those employees. In fact, these tailored tax codes are available at the moment, but a taxpayer has to proactively contact IRD. This is going to make it pretty much automatic.

Another key benefit is that most people won’t have to engage with a third party to ensure they get a tax refund—great news. The changes in this bill will mean that many people will get their refunds automatically—

💬 Angie Warren-Clark: Yay!

—and as a result—it’s a great idea, isn’t it?

💬 Angie Warren-Clark: I like that.

Yeah, so do we—actually, so will 440,000 extra taxpayers, as the Government expects to pay out refunds to that many Kiwis. Ensuring people are paid—

💬 Andrew Bayly: Good thing we initiated that reform.

Oh, it’s fantastic. Ensuring people pay the right amount of tax and also receive correct social policy entitlements will further build people’s trust in the New Zealand tax system. Taxpayers expect the Government to be a good steward of their contribution to New Zealand’s public services, and I think this bill contributes significantly to our tax system’s reputation as fair and simple.

I’m grateful to the Finance and Expenditure Committee for considering these enhancements to the tax system and suggesting further improvements—well done. In the spirit of simplifying the tax system, the Finance and Expenditure Committee recommended clarifying that a taxpayer’s information can be amended so that information can be corrected, and easily, without penalties or interest, and also recommended simplifying the proposed write-off rules. The end result of the consultation and select committee process is that we have a better bill that enhances the simplicity of our tax system while not compromising its integrity.

The full benefit of those proposed changes will be realised in the 2021 year, when, for the first time, people will be able to see a full year of pre-populated information for PAYE and all of their investment income. Most people will pay what they need to and get what they are entitled to during the year without having to do anything. Inland Revenue will make it easy for customers to see what they’ve paid and what they owe, and will be better at detecting errors. However, it is important to note that while more customers will have income reported on their behalf, people will remain responsible for reporting other income and deductions, assessing their liabilities, and, of course, meeting their obligations. But, generally, people will spend far less time and effort ensuring they meet their obligations and receive their correct social policy entitlements, as tax will be correctly withheld and assistance provided at the time it is needed.

This is the key thing: developing a tax system that responds in near real-time to changes in circumstances without requiring a wash-up at the end of the year.

💬 Angie Warren-Clark: Hoorah!

It’s fantastic, isn’t it? The people of Tauranga will just love this. These improvements to how individuals have their tax assessed constitute the main part of this wide-ranging suite of measures to modernise and simplify the tax system. Go this Government.

As well as improvements to how tax obligations and entitlements are assessed for individuals, this bill makes several other key improvements to our tax system, which I am pleased to summarise. We’ll improve how Inland Revenue collects and manages its information. Inland Revenue takes its role as a steward of the taxpayers’ personal information very seriously, which is critical to retain taxpayers’ trust and confidence in the tax system. The bill modernises and clarifies rules to better provide confidentiality and sharing in the future, and more clearly balance the trade-off associated with information sharing.

In respect of collection, the bill will also clarify in legislation that information collected for one Inland Revenue purpose can be used for the department’s other functions. The bill also proposes a regulation-making power for repeat collection of third-party databases in order to provide greater transparency when this collection is to be done on a regular basis. These proposals will make the information management rules more efficient and transparent, and better focus confidentiality rules to clearly protect taxpayers’ information.

Binding rulings—as the Minister for Small Business, I’m pleased that the bill also proposes a new type of binding ruling called a short-process ruling, designed to be more accessible to small to medium sized businesses, and individuals. The ability for a wider range of taxpayers to obtain binding advice from Inland Revenue will help more taxpayers get their tax positions right the first time. Of course, with a binding ruling, it does bind the commissioner, but it doesn’t actually bind the taxpayer, but it certainly provides a level of certainty.

KiwiSaver—I’m also excited about proposed changes to KiwiSaver. The bill contains measures to introduce additional employee contribution rates of 6 percent and 10 percent—

💬 Hon Member: Brilliant.

—it’s fantastic—removes the five-year lock-in period for KiwiSaver, which currently affects members who join KiwiSaver between the ages of 60 and 65; and it actually opens the scheme up to those Kiwis over 65, so age should be no barrier to saving.

In conclusion, these are the main features of this bill, and it is a bill which will improve taxpayers’ experience of tax administration and make the system fairer, which is what we’re all after, after all. As well as these major tax policy improvements, the bill proposes a number of remedial measures to tighten our current tax legislation and ensure it remains fit for purpose. I would like to thank the policy officials and drafters who worked on the detail of the bill, the organisations and individuals who made submissions on proposed legislation, and the Finance and Expenditure Committee for its consideration and recommendations to improve the workability and fairness of the provisions. I commend the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill to the House.

Thank you, Madam Deputy Speaker. It’s wonderful to be talking on this third reading of the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill. I want to congratulate the Minister on a beautifully read summary of the bill that we’re about to debate. You know, there is a lot of good stuff in this bill, I’ve got to say, and I think the underlying tenet of this is that I’m just so grateful that my colleagues initiated that major wholesale change at the IRD that brought about the Business Transformation programme that is leading to a lot of these changes. Of course, we’re now seeing the fruition of that coming to pass, and, of course, what this bill does is pick up on some of those issues—and I’ll come back to that in a moment. But the reason why we cannot support this bill is that it is a continuation of this rapacious Government—that all they want to do is grab money from those hard-working New Zealanders.

That’s all they want to do, and this bill enshrines that by making sure that the tax rates remain as they are. That is the worst thing about it. That’s why I am so bitterly disappointed that—when my colleague, the Hon Amy Adams, put up that wonderful Supplementary Order Paper (SOP) which has now been picked up by the Hon Simon Bridges, which is about protecting New Zealanders so that they don’t pay more tax than they need to. We want everyone to pay what they should have to pay but no more.

This bill enshrines high rates of taxes on people, and that is the reason we can’t support it. Of course, the SOP that Amy Adams put up was about making sure the four thresholds at which you kick over into the higher tax rates are enshrined by making sure that they are linked to CPI. So your wages may increase but the tax rates mean that you would stay in the same bracket, provided you don’t actually increase greater than that. And that means it is fairer and it is fair for people. Tax creep is the issue—fiscal drag. That is the worst thing about this bill because this Government, which has already imposed $2.6 billion of additional taxes in the 16 months they’ve been in power—they’ve already imposed that. All they’ve done is enshrine in this bill that they’re going to allow people to pay more tax than they should otherwise have to. That is the issue. That’s the issue.

The only other issue that we have a fundamental disagreement on with this bill is the issue around bloodstock. I know my colleague, Mr McKelvie, is going to speak at length on this issue. We support the thoroughbred industry. In fact, in my electorate, and where I live, there are lots of horse-racing operations. We would have liked to have seen something that actually did some good for the thoroughbred industry. What we ended up with was the Winston Peters flop for the racing industry, because this bill includes a bloodstock mechanism that doesn’t work. We tested the officials at the select committee. And even at the Karaka sales this year it would not have resulted in one single horse getting any benefit, or any owners or buyers thereof. That is why it’s a sop to the racing industry. Those are the worst things about this bill: those two elements.

I’m going to leave it up to my other colleagues to talk about some of the other stuff but I think the one thing that the Minister missed in his summary was the issue of backdating of ACC payments. This is one that the select committee thought about for some time, because often you get ACC payments that span financial years. Of course, people receiving those payments don’t always know about them; they don’t plan for them because the payments are made by ACC as an organisation. What this does is to make sure that those ACC people do not actually end up being disadvantaged by receiving a payment right at the end of the year which would otherwise go towards their assessable income. I think that’s quite a crucial but small step in terms of recognising them.

I think, as a bill, there’s a lot to be commended, but those two issues are fundamental and we, on this side, remain implacably opposed to anything that enshrines the tax rates as they are at a personal level because New Zealanders should be able to keep what they earn, as much as they should earn, and pay only that amount of tax which is fair and reasonable.

What an interesting thing it is that on the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Bill—a bill which the Opposition has determined they will vote against on the basis, apparently, that it is a deep injustice that we are retaining the income tax rates that remained for most of the term of the previous Government—that the lead Opposition speaker could only manage five minutes. I was expecting a little bit more—some more well-developed arguments around what the alternative proposals might be, getting into the detail of the bill a bit more, but we on the side of the House will be very happy to provide that for the benefit of the House and those people who are watching and engaging in this debate.

I doubt that there is a member of this House who hasn’t had a constituent or met a voter who hasn’t complained to them about the impact of secondary tax. It’s a very, very common complaint that we hear from people. And, of course, it’s an interesting one because the nature of secondary tax is that we have the system set up in order to avoid a situation in which a taxpayer might underpay the tax and be faced with a very big tax bill at the end of the year.

And the sort of logical and measured explanation and response you can give to someone who is complaining about secondary tax is “Well, you can seek a refund at the end of the year, if you go through the process, and you work with IRD, and it’ll all sort of end up where it should be in the wash.” But, of course, the reality for many taxpayers—and we’re talking about people often on low and middle incomes who perhaps are doing multiple jobs to try and make ends meet—is that actually, it’s pretty tough from payday to pay date, and those people would much prefer to actually be getting paid the correct amount of income and paying the correct amount of tax at the time rather than waiting for a refund process that they might feel a little bit uncomfortable about engaging with in any case.

The outstanding news about this bill is that, in most cases, we will be able to do away with the need for taxpayers to engage in that process. That is extraordinarily good news. I want to pay tribute here to the Minister Stuart Nash, because I know that he, over many years, has been someone who has pushed and campaigned on this issue in order to make sure that we have a tax system in which taxpayers pay the right amount of tax and don’t have to go through that process of seeking a secondary tax refund. And here as Minister, he has brought this bill to the House, and we are going to achieve that outcome.

Mr Bayly is right: we’re able to achieve this outcome because there has been a significant investment in the IRD’s capacity through the Business Transformation project—that’s both as a result of the investment in the technology and also the processes that IRD is setting up internally. And credit goes to many people in the previous Government for putting the initial investment into that process, but, most importantly, to the good people at IRD, including the commissioner, who have been driving that process through.

It’s also interesting because on the Finance and Expenditure Committee we see this process going through the different bills that come before us. So in the previous annual rates bill, which we actually only finished up with in the House relatively recently, a big focus of that was around the provision of payday and investment income from employers. I was speaking at a payroll conference last week about this actually—we’re asking employers to provide payday information to IRD far more regularly. Actually, the reason for that is that if we have more timely and more accurate information, then we can do this kind of stuff because the way in which we are dealing with the secondary tax issue is by ensuring that IRD have the correct information, which means that the commissioner can look at a taxpayer’s situation and recommend, effectively, what will be a tailored tax rate to that person to ensure that they are paying the correct tax rate, given the different jobs they might be doing at any one point in time. The person will have the right to respond to that, and not take that tailored tax rate if that is what they wish to do, but it gives the ability to give that tailored tax rate and, for many people and many situations, do away with that secondary tax scenario. So that is an enormous step forward for many taxpayers and for IRD, and I commend everyone who has been involved in that process. Many, many New Zealanders will be very happy with us indeed—it’s great news.

A couple of the other key things in the bill that I think are worth talking about—and these were some of the issues that we spent time on at the Finance and Expenditure Committee. One I do want to talk about a little bit is the short-process rulings changes in this piece of legislation. What we have at the moment is a scenario in which larger taxpayers can go through a process of what is called getting binding rulings, where they have a significant tax problem or question and they can seek a binding ruling to give them certainty about how they arrange their tax affairs. But the reality is that for smaller and medium enterprises that is an extraordinarily difficult and time consuming and costly and complex process to go through. So it doesn’t really work for them. It works for the bigger players but not the smaller businesses who we actually want to be assisting as much as we can.

So the short-process rulings is a sort of truncated, simpler way in which those businesses can try and get some certainty, get a ruling from IRD about a particular tax problem or question to give them certainty about their investment or how they’re going to be making decisions within their business. That was very much welcomed from the community when this bill went out to submissions, but the feedback that the select committee did receive from many people was that the initial threshold in the bill was perhaps a little bit too low. It was available to businesses with a turnover of less than $5 million. In response to those submissions—which were really well argued at select committee—we’ve agreed to increase that to a $20 million threshold. So that’s going to give many more businesses access to that short-process rulings facility, and that is going to make life a lot better for them.

There are also changes in this bill around KiwiSaver, and look, on this side of the House we are just immensely proud of KiwiSaver, and every single advance in KiwiSaver from its establishment through to this point has been led by members on this side of the House.

💬 Kieran McAnulty: Did they support it?

Well, this is one of the interesting things. The member Kieran McAnulty asks if the Opposition are supporting it, and the Opposition have tied their colours to the mast on this bill: they are voting against it. But what are we doing for KiwiSaver in this bill? They’re voting against it; Mr Bayly told us that. We’re giving Kiwis more flexibility to engage in KiwiSaver by introducing new contribution rates of 6 percent and 10 percent, and that is going to give people—at the moment, say you are contributing at maybe 4 percent, you’ve got to double it and go right up to 8 percent now if you want to increase your KiwiSaver savings. This is going to give many more people a kind of a staircase to increase their contributions, to grow their savings, and have greater security in their retirement years. That is a really good thing.

This bill also does allow over-65s to join KiwiSaver, and that’s a good thing as well. We know many people continue to work past that traditional cut-off date and we think that those people should have the right to be improving their savings for the time at which they do retire as well. One of the changes select committee made in this area is that at the moment we’ve got a five-year, lock-in provision. We’ve sort of envisaged a situation where maybe someone starts contributing to KiwiSaver a little bit after they’re 60, they retire after less than five years—we do want those people to be able to access their KiwiSaver. So provisions that were enacted at select committee will remove that five-year, lock-in period for people in that situation.

So what we’ve had through this process, if I can really summarise, is a good bill coming to this House that makes many improvements to our tax system. We had a very good process at select committee, and strong support from officials from the Inland Revenue Department—I want to acknowledge and thank them. We had submissions from across the community, which certainly grew our understanding of the issues within the bill and enabled the select committee to engage with officials and make a series of very practical improvements to this bill. I really want to thank everyone who’s been involved in that process. From my point of view this was a bill, as is often the case with the Finance and Expenditure Committee, where we as a committee were able to engage with the issues and we took a good bill and turned it into a really good bill. And I want to thank the Minister of Revenue for his support in that area.

One area I will touch on is that the Commissioner of Inland Revenue’s care and management powers, which were in the original bill, are not proceeding in this bill. This is an excellent example of the way that our parliamentary democracy works. There were some concerns that were raised at the select committee around how these powers might work: they, effectively, allowed the commissioner to address anomalies that might be there within the bill. There were some concerns around where the appropriate delineation of powers between the Parliament and the commissioner were. As a result, those changes are not proceeding in this bill and the discussion was that there’ll be further consultation and dialogue around this. Now, the committee in the next tax bill, which will be coming back to the House sometime a little bit later in this year, has received a revised set of proposals in this area, which are currently going out for public consultation. And I just want to point out what a good example that is of how our system works in this Parliament—that actually, at the select committee stage, we have the ability to engage on these issues; we have Ministers who respond really well to these issues; and we can actually look to adapt legislation to deal with concerns, to listen to submitters, and get the best possible legislation at the end of this day.

So this is a really, really good bill. It makes a lot of changes that are very, very positive to taxpayers. The parliamentary process has worked. The Minister is to be commended for steering this bill through the House and for the significant workload that he has in terms of bringing tax legislation to this House to make life better for taxpayers. And I certainly commend this bill to the House on this its third reading. Thank you, Madam Deputy Speaker.

Just before I call the next speaker, the last two speakers have brought to my attention the contributions to KiwiSaver for those over the age of 65. Just because I’ve had a birthday that does not mean I need that sort of advice.

Thank you, Madam Deputy Speaker. I thought you might like to declare an interest—but OK, thank you, Madam Deputy Speaker.

There are some things in this taxation—I won’t repeat the whole title; we’ve heard it enough—bill that we think, on the side of the House, are good changes. We’re not disputing that. We’ve certainly heard from members previously in this debate about some of those changes and I actually would agree with the speaker who’s just resumed his seat, Michael Wood, that actually the committee, I think, worked well at improving some of the aspects in the bill. So there are certainly components that on this side of the House we think are meritorious: changes to KiwiSaver certainly, the direct refund ability provided for in the bill, the binding ruling changes, and also, following on from the last speaker’s contribution, the pushing back on the extra powers of the Commissioner of Inland Revue was seeking to address anomalies in legislation.

We can all see the merit. And yet when you are giving a delegated, quasi-legislative—well, certainly a tertiary-level, decision-making power to an official in an area like tax law, I think we do have to get that right and be very careful with it. And I would actually agree that the committee worked very constructively across party lines on some of those issues and on those we’ve got to a good place. So I certainly don’t want the fact that we are voting against this bill to take away from the fact that there was some very good work to improve some aspects of the bill that we thought—as I say, without party-line divisions—weren’t quite right and that also there are some aspects of the bill that we think are certainly worth advancing.

But—there was always a “but” coming; and it is a “but”—we will oppose the bill because the core part of this bill fundamentally is still setting the annual tax rates. It’s all right there in the title. As it says on the tin, it sets the annual tax rates. And this side of the House is not going to vote in favour of legislation which overtaxes New Zealanders. That’s what fundamentally this does. It says to New Zealanders that because the Government can’t control the loose spending of Shane Jones and others who occupy the Treasury benches, New Zealanders will be paying more tax than they should and more tax than they need to, and of course New Zealanders know—you’d have to be under a rock not to know—that there’s a whole bunch of even more taxes coming, but we’ll have plenty of opportunity to discuss those. But think of this bill as the beginning of this Labour - New Zealand First - Greens Government taking more money from New Zealanders than those New Zealanders should rightly be paying. And we are not, on this side of the House, going to vote in favour of that.

The first aspect in that regard is that the tax thresholds in this bill at which the tax rates apply now haven’t been adjusted since 2010. Now, National adjusted the tax thresholds in 2010 to make sure they were continually being updated for inflation and they did again in 2017. But of course the first act of the incoming Government was to cancel that. So we are now back at New Zealanders paying tax on thresholds that were last set in 2010 because this Government is content to let inflation mean they can take more and more money from New Zealanders. And that is not something we’re going to turn a blind eye to, to fund loose, poorly targeted, poorly overseen, and low-accountability spending.

But it isn’t just that issue of keeping up with inflation, which tax rates absolutely should. In fact, the IMF in Australia just came out and told the Australians, “You should have a system for automatically linking your tax thresholds to inflation. It is bad practice not to.” And I look forward to their next review of New Zealand, when I’m sure this Government will get a similar message. But there’s good news: do we have a solution for them.

But it goes further than that, because in those changes that I have mentioned that were legislated in 2017 and then cancelled by the incoming Government, New Zealanders would have found themselves getting more than $1,000 a year more in their own pockets. Now $1,000 a year might not be much to Michael Cullen who gets that a day, but it is a lot to the average worker. And again, if it wasn’t for poorly-targeted, pork-barrel spending from Shane Jones and others, New Zealanders could have had that money and the country would have been better off as a result. But no, no, this is a Government that said, “Let’s overtax New Zealanders; let’s take more money out of the pocket of every hardworking New Zealander, and we’ll use that to funnel money through weak, poor-spending programmes that aren’t going to help New Zealand, but it keeps us sweet with New Zealand First and others.” That is not a bill and that is not an approach that the side of the House will support. We will be opposing this legislation.

Thank you, Madam Deputy Speaker. A pleasure to rise on behalf of New Zealand First to speak to this fantastic legislation.

I’d just address some of the comments made by the Opposition members, if you’ll allow me. The comment around fiscal drag is farcical. For eight years the National Government did nothing around the changes to inflation and the subsequent drag on the income tax rates—eight years. Eight years they did nothing, and then they decry the fact that they had proposition tax cuts for New Zealanders. Yet they sit there and watch this Government spend absolutely appropriately, studiously, and wisely on hospitals, schools, and infrastructure across the country, and they—anyway. Let’s talk about the legislation because I could spend 10 minutes on what they didn’t do—

💬 DEPUTY SPEAKER: No, you wouldn’t.

But you wouldn’t let me.

💬 DEPUTY SPEAKER: No, I wouldn’t let you.

So let me begin by wishing you a happy birthday, Madam Deputy Speaker.

So I think I will take a short call because those of us who have spoken already have enunciated quite well what this legislation is about. But there are some highlights for New Zealand First, for me personally. This is a legislative package where New Zealanders are witnessing right now the modernisation of our tax system. They are seeing it through this legislation that we are passing through this House tonight, through this third reading. They’re seeing it in the technology being applied in the IRD. Basically, in summary, what that means for New Zealanders is a simpler and more efficient tax system that they will notice first hand. One of the statistics that comes to mind is in the last financial year there were 750,000 taxpayers who could’ve received a refund but they didn’t proceed with that. They didn’t seek to get that refund from IRD. So this modernisation, this upgrade of technology, of implementation around data management, collection of information, means a timely response from inland revenue. And what’s quite amazing is that for the first time New Zealanders will receive a refund automatically if they are so due. Ironically the efficiency also means that these refunds are probably less and less likely to occur because IRD will become that much more efficient in understanding what people’s tax obligations are with their salaries and other incomes. Conversely, there’ll probably be less tax bills sent out because IRD will get that right as well. So that, I think, is a tangible measure of what this modernisation of the legislation will mean for people.

I just wanted to commend the work of the Minister and the select committee, but I wanted to focus on the KiwiSaver provisions to do that because I think it’s quite exemplary that we have taken the issues, known issues, with KiwiSaver and worked on them and put them in this legislation, so that those tax income earners between the age of 60 and 65 who used to have a five year kind of block on accessing their KiwiSaver savings can now do that when they turn 65, which is great. What we’ve also done now is ensure that anyone working who’s over 65 and who wants to can use the KiwiSaver system, the structure here, as a means of savings. Some of our KiwiSaver providers are really good at providing returns for savers. So you know, that’s to be commended in terms of providing options.

The other thing I wanted to touch on was probably one of the most fundamental things for me coming from the Rotorua electorate and that was around the secondary tax rates. It was a common conversation amongst the people of Rotorua in my office, and the frustration of having these multiple tax rates. People will be so pleased to know that if they work with inland revenue, discuss their income for the year and they both understand what their likely income is to be for the year, they will be taxed on those incomes at that one rate. The simplicity of that and the helping people with their day-to-day lives in terms of money management will make a big difference for many of the people in Rotorua. So this legislation is significant in that.

💬 Alastair Scott: All your own work. All your own work.

Yeah, yeah. I would probably end it there because it’s just too easy to attack the other side. Not in the mood for it tonight. So may I please commend this legislation to the House, and thank all those involved. Thank you.

Thank you, Madam Deputy Speaker. Hey, isn’t it wonderful the way that Fletcher Tabuteau, who’s resumed his seat, gave a big shout out to us for the great work we did in Government to actually bring about the opportunity for inland revenue to work with people so that they can, where they have more than one taxable income, work out what their tax should be so they don’t have to pay a secondary tax as well. And that is something which over some years and with different ministers we were able to do. It’s good to see it’s finally going to come into law. That is the best thing, of course, out of this particular bill.

Obviously I’d like to acknowledge that the Hon Stuart Nash—who’s now the Minister of Revenue, following on a particularly fine couple of Ministers of Revenue—was able to continue with these changes and did not cut the funding or cut any, let’s say, drive and impetus that inland revenue had for this change. Because unlike some ministers, I have to say, who have done silly things like just cut programmes because they weren’t that particular person’s name—and I’m not looking at the Hon Phil Twyford that much when I say that.

I would like to say that we are not going to support this bill in the end, That’s not about the good things in it, which obviously also include the changes to KiwiSaver that increase flexibility. We think that’s a good thing. We think that the removing of the five-year look-in period, opening up KiwiSaver to over 65s—which, I have to say, was a National Party Papakura electorate remit at a conference just a couple back—that was a good thing, and also increasing the number of contribution rates. We think that’s all good.

What we do not think is good, and we cannot vote for, is the increase and cementing of the higher tax rates that New Zealanders need to be paying. We see a lot of nonsense talked about energy payments, winter energy payments to millionaire retirees. At the same time this Government took away the thousand dollars extra that people were going to get because of the tax cuts that we legislated for. So in essence we do not support this bill even though there are parts of it which do have the genesis in our work, and that we do agree with. But ultimately no, the tax is too much and we should have less of it.

Thank you, Madam Deputy Speaker, and I’m not sure if I have the day right but if I’m correct, well, happy birthday.

💬 DEPUTY SPEAKER: I said recent.

Recently. Belatedly happy birthday.

The Green Party supports this Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill—snappily titled—through its third and final reading. I do want to note, of course, the irony that this bill is going to pass roughly 10 days before the end of the tax year that it covers. But I’m glad that we are getting to it.

There are, as has been noted, three main objectives: reform of administration of individuals income tax; addressing key aspects of the Tax Administration Act 1994, including information collecting and shareholding of taxpayer information; and, setting the annual rates of income tax for the 2018-19 tax year. I just wanted to draw out a few points in particular in relation to the debate and the fact that this is not passing with the support of the other side of the House. First of all, in addition to those main objectives the bill does propose amendments to simplify and clarify key aspects of our tax law, for example, as Mr Tabuteau just said, removing the need for people who only earn employment or investment income to file a tax summary to get a tax refund. So what that means, for the folks at home and I know that there are tens of thousands of you, is that that change will automatically give around 750,000 New Zealanders tax refunds without them having to file a tax return. I just want to note that the National Party is voting against that. So the National Party are voting against removing paperwork from the lives of three-quarters of a million New Zealanders.

They are also voting against changes that will help individuals to use the right tax code in the year to avoid tax overpayments. The National Party are voting against that. Also, they are voting against removing the unnecessary compliance costs which this bill gets rid of. So the party of regulatory reform and small government is voting against unnecessary compliance costs. This is about the modernisation of our tax system, and the National Party are voting against that, preferring the old, outmoded tax system that this bill helps to replace.

So the amendments here are part, obviously, of the ongoing process, the multi-year—in fact, multi-Government process—of inland revenue’s Business Transformation process that links the department’s ability to operate with its technology upgrades, and to implement a range of measures that help to modernise and simplify the tax system.

I just wanted to highlight, also, the changes to KiwiSaver here, which are based on material that occurred under the previous Government and the Retirement Commissioner’s report in 2016 on retirement policies. I just wanted to note that at the time, or earlier in this process, the Green Party did express concerns to Minister Nash about the amendment to reduce the maximum contribution holiday period from five years to one year, because we were concerned that that could be a burden, particularly for some vulnerable people whose circumstances, leading to a savings holiday or a suspension, might not get resolved in a year. We know that people who are in those kinds of circumstances, if they are feeling that they need to take that holiday because their current circumstances require it, then they might, essentially, end up getting ejected from the system because that period of time is too short. However, I want to say that we have been assured that as part of the IRD’s Business Transformation programme, there are ways that would be included to reduce compliance costs for KiwiSaver members who are looking to renew a suspension and come back into the system. So we feel that that concern has been assuaged.

Now, as I said in the first and second readings of this bill, few of us enjoy paying tax, especially people on the other side of the House. Some spend a great deal of money with, you know, rooms full of tax lawyers finding new ways and exciting ways of paying less tax, and as little tax as possible, but as I’ve previously said, tax is a social contract that allows us to pay our fair share to pay for the public services that we all need for a functioning society. Now, in return, obviously, a tax system should be based on fairness, it should be simple, and it should operate efficiently, and the reforms that are in this bill, the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill, aim to meet those criteria to ensure that we do have a fair and simple and effective tax system that is fit for the 21st century. So, therefore, on behalf of the Green Party, I do commend this bill to the House.

This bill is a missed opportunity, an opportunity that a lazy Government could have taken up to reward taxpayers, who deserve to have more of their money in their pockets. After nine years of real growth in the economy, it would only be reasonable to allow the tax rates to be adjusted to enable Kiwis to have more money of theirs in their pockets. That is what we proposed, despite Mr Tabuteau’s assertions, in 2017, when we wanted and legislated for a change in the tax brackets. Those tax bracket changes would have enabled $1,000-plus to be in taxpayers’ pockets.

💬 Priyanca Radhakrishnan: Which ones?

In every taxpayer’s pockets over a minimum amount—an average income earner was going to take home $1,000. But, no, this Government has missed the opportunity and has set the tax rates unnecessarily high, because they are a lazy Government who does not do the thinking before just saying, “Let’s just keep the tax rates the same. We’ve got no interest in being innovative. We’ve got no interest in giving to Kiwis more money in their taxpayer pockets”.

The other opportunity that was missed was in KiwiSaver. Again, speakers across the House have acknowledged the KiwiSaver changes were done from this side of the House. Nothing new from that side. Another example of a lazy Government: not thinking about the opportunities that existed to do something more for KiwiSavers. There are not enough people in KiwiSaver. We know that. The Government had an opportunity to do something about it, and they did not. Those two reasons are why we are not supporting this bill.

“There’s not enough people in KiwiSaver”—what an amazing statement from a very, evidently, angry man. It’s quite incredible that Alastair Scott—I had to take a moment to remember his name—could stand up here after his Government made changes to KiwiSaver that would disincentivise people from joining and then make comments to say, “There are not enough people in KiwiSaver”. What a disingenuous statement. It just goes to show that some people in this place here wish to play politics instead of actually standing up and acknowledging when things are a good idea. They just still—they can’t help themselves and they’ve got to make silly statements that, actually, just make themselves look foolish.

What this bill does, in terms of KiwiSaver, is actually address the concern that Alastair Scott said about people not joining KiwiSaver, because what it does is it makes those changes to make it easier for people to join. It incentivises people to make the most of KiwiSaver—because what we have here is a system brought in by the previous Labour Government, which, I understand, the National Opposition of the time did not support—because it brings in new saving rates. It brings in saving rates of 6 percent and it brings in the saving rate of 10 percent, and I, for one, would encourage any new worker—particularly those young workers who are just starting out; they might be starting out in a new job, they might be starting out in their first job—if they can, they should go for the highest possible saving rate they can. This is because 10 percent over a long period of time—the intent of KiwiSaver is to allow for workers to have a nest egg in their retirement; to be able to actually have a benefit from a lifetime of contribution, a lifetime of work; and to have money put aside for their retirement.

Another aspect that is an absolute positive to KiwiSaver, in this bill, is the ability for people over the age of 65 to join. It is no longer a barrier for those very valued citizens in our society who are over 65. And because you’re 65—I don’t agree with that side of the House, Madam Deputy Speaker; 65 is not old these days. People at 65 years of age can do anything, and it shouldn’t matter what age you are. If you are working you should be able to—

💬 DEPUTY SPEAKER: Don’t bring me into it, please.

You’re dead right, Madam Deputy Speaker. You are dead right. I should not have brought you into this, even if, in this instance, it is applicable. The point is that those workers who are over the age of 65 should not be discriminated against, and this bill allows them to do it.

Now, earlier, I mentioned about those young workers—perhaps they might be starting out, and I think of those in the area where I live, Wairarapa. I think I am—actually, I look around and I am the only MP here that lives in Wairarapa, so I’m looking around and I talk to those people on the street. Now, often when they’re starting out working. they might get one or two or three jobs, and those people are affected by secondary tax. They’re not 100 percent sure why, but they know that if they get a second job or a third job secondary tax kicks in. It is a burden. It is a burden because at the end of the day, at the end of the tax year in fact, the vast—well, actually not the vast majority; around 750,000 people do not follow in the process of collecting a refund. Now, for those who know about the system, they know that the tax is collected just in case they—to avoid having a tax bill at the end of the year. But for those who don’t understand the system and for those that it is a burden, this bill is going to make a good positive change to their lives, because this allows the IRD with the appropriate technology to be able to track the rate of tax that they pay across their various jobs. So the intent of secondary tax, to avoid a tax bill, is enabled through this technology and through the provisions in this bill to allow them to do it.

Those that I’ve spoken to on the streets, and the street corners of Wairarapa, from the areas of Featherston all the way to Waipawa, those that work more than one job—when they hear that this Government is going to remove the burden of secondary tax, it is like a weight is lifted off their shoulders. They are delighted at the provision in this particular bill. So it is great that the other side are acknowledging particular aspects of it. They’re making a lot of noise around—oh, they would have made tax cuts. They wouldn’t have increased spending in health and education, but they would have made tax cuts. It is a shame that politics is getting in the way of a bill that is going to benefit the vast majority of New Zealanders.

Oh, it’s a pleasure to rise and speak on this, the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill. This is an opportunity lost for New Zealand. I just want to take up on comments Mr Shaw made. Fairness—how many times did he say “fairness”? Yet he voted against Amy Adams’ Supplementary Order Paper that would have indexed tax thresholds to inflation, ensuring that we wouldn’t be increasing the tax burden on people by stealth, through increasing taxation through inflation. He thinks that’s fair. He’s voting for a bill that’s going to retain tax rates that take more tax by stealth. He calls that fair.

But then there’s Mr McAnulty. He said KiwiSaver—it’s going to make it easier, easier for people to join. Mr McAnulty, there are two new rates in this bill for KiwiSaver, both of them higher than the minimum. There is nothing in this bill that is going to make it easier for people to join KiwiSaver and start contributing—not a single thing. In fact, the other thing Mr McAnulty fails to mention is while there are 2.9 million people enrolled in KiwiSaver, there are 1.2 million of them that are not making contributions. What they should have been doing is looking at a lower threshold, maybe 2 percent. They could have been looking at maybe having employers still make contributions when employers are on contributions holidays. I swear, I looked over at Mr McAnulty wondering where the wires join at his wrists, because whatever this bill is doing, it certainly is not making it easier for people to join KiwiSaver. This is an opportunity lost. We oppose it.

Can I just make it clear to this next speaker that she has the full 10 minutes, because we do not have anyone else. So I call Dr Deborah Russell.

Thank you, Madam Deputy Speaker. I’m delighted to have a full 10 minutes to speak on this bill.

💬 DEPUTY SPEAKER: I thought you might be.

The Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill is a thick and heavy bill. As so many tax bills are, although it contains matters of real policy change which have already been discussed at length in this House, it is also a workhorse bill. It is a bill which contains changes which are there just to keep the tax Act in order, to keep it functioning well. The Income Tax Act is a long and dense Act, but one of the interesting aspects of our tax system in this country is that in large part there is a great deal of agreement about how to run it. We have very few special concessions in the tax Act. We have very few special little rules for special groups of people. It is largely free of the loopholes that exist in other countries where some special rules have been put through to benefit a particular group of people. The attitude of the tax community in this country, and indeed the attitude across the House, is one of getting the Income Tax Act right, to measure income accurately, to measure tax liabilities accurately, and to make sure that each person contributes their share according to the law.

As a workhorse bill, this bill contains many provisions which are just there to tidy the Income Tax Act up and to make sure that it keeps on working as it ought. They might not seem like significant changes, but they are real changes. So, for example, I want to turn to a particular change which is to do with changing or adding to the definition of the market interest rate for fringe benefit taxes. Now, in the Income Tax Act, as it stands, market interest is very important because when an employer gives a loan to an employee, that could be a fringe benefit if the rate that is charged on the loan is quite a bit lower than the ordinary rates that are available to the ordinary punter on the streets. This is particularly important for, say, banks and the like. So in the Income Tax Act as it stands, the market interest rate is charged at the arm’s length rate—so the rates that would be set by an ordinary lender, lending to a person who has the characteristics of the person borrowing the loan: the particular income, the particular liabilities, the particular demographics, what kind of interest rate would be charged for that person.

That definition of a market interest rate has worked pretty well for a large number of years, but in recent years there has been somewhat of a shift in the way that interest rates are set. In particular, people have been able to go in and negotiate interest rates. So as it turns out, if a person is a good negotiator, they might be able to obtain a somewhat lower interest rate.

So what we’ve done in this bill is ensure that that lowest interest rate can be available as the market interest rate that is used for the purpose of the fringe benefit tax legislation. It simply ensures that we are being fair to employers and to employees and we are trying to get the Income Tax Act right. That’s one example of what this bill does just in order to get the right rates of income tax.

Let me talk about another issue here that’s a change that’s in the bill. It’s just one of the other policy matters that wasn’t much discussed during the select committee processes, and, actually, no one really had any issues with it. It turns out that businesses often incur expenditure in order to reduce noise. So they want to mitigate noise problems. The trouble is that often that particular bit of expenditure can’t be deducted for tax purposes. It becomes what’s known as black hole expenditure, and it falls into a, sort of, no person’s land: it can’t be deducted and it doesn’t really add to anything. That creates a disincentive for businesses to spend the money to reduce noise.

So this bill contains a rather clever measure—and I think it’s really rather nicely done—saying that, in actual fact, if we bring noise mitigation expenditure in under pollution provisions, under pollution remediation provisions, then the businesses can obtain a tax deduction for it. It’s a simple little rule change, and it’s a rather nice one because it ensures that businesses get a perfectly reasonable deduction, and it removes a disincentive to engage in reducing noise.

So by these two provisions, which I’ve discussed in a little bit of detail, what I’m showing is just exactly the nature of the work that goes on year in, year out to ensure that our Income Tax Act remains fit for purpose. I commend the officials who work on such matters. I know the hard work that goes into it. I also commend the Ministers who year in, year out, through Minister after Minister, have worked on these sorts of changes, and, of course, the select committees who have worked on them as well.

Let me turn to the issues that have been raised at length by the Opposition tonight; that is, the issues of the income tax rates. Despite all the great work that is done in this bill, the Opposition is going to vote against it because they don’t like the tax rates that are set in the annual rates part of this bill. They don’t like those tax rates. They claim that we are taking too much out of New Zealanders’ back pockets and we are taking too much tax out of the economy. They say that we should have put tax rate changes in effect; we should have chosen to reduce the amount of tax that is collected in this country.

I challenge the Opposition on this. Tax is critical for the good functioning of our society. It is through income tax that we fund all of the activities that we enjoy in a civilised society. It is through income tax that we fund our health system. It is through tax that we fund our education system. It is through tax that we build our roads. It is through tax that we fund our welfare system. It is through tax that we pay our police. It is through tax that we have a defence force. The list goes on and on and on. Tax is not just imposed for the fun of it; it is imposed because it funds the society that we want to live in. It is imposed because we need to fund a certain way of living in this society.

The interesting thing is we have a large part of agreement in this country. By and large, we are committed to health; by and large, we are committed to education; by and large, we are committed to welfare, we are committed to roads, and we are committed to defence and police. We argue about the extent of it but not whether we do it at all.

But we were described as a lazy do-nothing Government. I say: what about the lazy do-nothing former Government? What about the lazy do-nothing former Government that let the hospital buildings crumble? What about the lazy do-nothing former Government that allowed a huge crisis to build in mental health? What about the lazy do-nothing former Government that failed to build any more State housing? These are all activities that are funded through our taxes. So I say to the Opposition, that if the Opposition wants to cut tax rates, what else are they going to cut? What else will they cut? Because that’s the simple equation: if taxes are cut, then necessarily the expenditure must be cut too.

We’ve had many cries from the Opposition for more expenditure on roads, but how can we spend money on roads if we do not collect an adequate amount of tax in the first place? That is why cutting tax rates, as the Opposition have suggested again and again and again this evening, is simply not an appropriate response. Yes, we can always think about the amount of tax that we ought to be collecting, but at the same time we need to think about what we want to do with those taxes, and at the same time we need to think about how we fund our society. That is why this bill, as it is written, is so important, because it has a fundamental commitment in it to funding our Government and to funding the good of a civilised society.

On this side of the House, we support all the excellent provisions in this bill and we support the tax rates in it because they are the price of a civilised society.

Well, the only thing that Shakespearean performance of note failed to recognise was that we on this side of the House believe that people are better at spending the money themselves than the Government is at spending their money, and that is the critical reason we oppose this bill. But I want to take my short time, rather than talking about that, because enough has been said on that tonight, to talk about a couple of other things in the bill.

One is the racing industry, and we had great hope for the changes in the racing industry, of course. Unfortunately, they did not work out as they were intended, and our mutual concerns were, I guess, recognised when, in fact, I don’t think one single thoroughbred qualified for the benefits of the tax changes made. Ironically, a number of harness horses may well have qualified, and the interesting thing about it, of course, is that if in the future those price thresholds are changed, it may well have some benefit.

KiwiSaver has been talked about at great length tonight, and I think those changes are very positive, particularly opening that up to people over 65 years of age. I agree with my friend Mr Hudson, who said that it doesn’t make it any easier at all to join KiwiSaver, because there’s nothing I’ve seen that makes it any easier. The only thing that will make it easier is if they reintroduce the $1,000 and put it in the account before people start. That will certainly make it easier. It leaves it up by a thousand dollars.

And, finally, I want to talk briefly about the transformation project, which I think is very positive. It will be intimidating for some people as we work into it, and it won’t be quite as easy as Government members have alluded to to change the secondary tax situation, because, in fact, the secondary tax will still be paid on this. The only difference will be that people will have the ability to calculate those rates, and the IRD will help them to do that, midway through a tax period. So, instead of paying too much or too little tax, they should end up paying the same amount. So I dispute the fact that secondary tax will disappear; it won’t. It will just make it more equitable in some cases.

So we certainly don’t support the bill, but there’s only one reason we don’t support it, and that is, as I said at the start of my little contribution, that we believe individuals are better at spending their money than the Government is.

Thank you, Madam Deputy Speaker. It’s with a real sense of sadness that I hear the same old story again that we need to leave money in the pockets of New Zealanders, and let’s lower the tax rates.

💬 Brett Hudson: Well, it’s their own money, Dr Webb. It is their own money.

You may say that, but it’s about fiddling around the edges—

💬 DEPUTY SPEAKER: I didn’t say that.

—and I’m glad that we are part of a Government that’s looking at the equity of the whole tax system and not looking at just giving a bit more money to the same old few. We need to look at the system as a whole, and this bill is part of doing that. We’re looking forward, though, to a much broader examination of it, and I’m looking forward to that—a real adjustment, real equity in our tax system.

I’ll tell you one thing that I think’s really good about this, and that’s secondary tax, because true hard-working New Zealanders have been suffering under secondary tax for some time. It’s those people who are working, often on very low wages, with two or sometimes three jobs, who have been working across these jobs and who, in their second and third job, are paying an increased tax rate. They’re paying it and they’re not getting it back until the end of the year, when they put their return in. Now, you know what? A lot of these people—people who might be doing cleaning jobs or working in a factory and then as a security guard after—they can’t afford to bank that money and wait till the end of the year. They desperately need it. So making our tax system administratively fair for those people is really, really important, and the ability to have more nuanced tax codes that are more responsive so that people get to keep as much of their money as they can is a really, really good thing.

Of course, one of the things that this means is that there won’t be a tax refund industry—an industry which really preys on the apparent complexity of the system, a system which, in fact, is not as complex as it’s made out to be. But those tax intermediaries, those industries out there who take 30 or 40 percent of a tax refund, really for filling out a very simple form—well, that industry will shrink significantly. They won’t need that large tax refund; they’ll pay only the right amount of tax. That’s a very, very good thing, and I know that a lot of really hard-working New Zealanders in several low-paid jobs are really looking forward to and appreciate that initiative.

Of course, the other thing that’s going on there is the automatic filing of these returns. Can I just say that the Business Transformation project is a great project, a project which is streamlining information and making the tax system administratively much more simple. But one of the things that it does do, and is picked up in this bill, is it automatically calculates tax liability, which means it may require adjustment further down the track. And one of the questions that is addressed here is whether, when we come to correct that, interest or penalties should be payable. In the select committee, I consider it a significant improvement—and, I must say, officials were quizzed at length on penalties and interest and how just they are, and we got to the conclusion that if there’s automatic filing going on, if the return is, essentially, generated within the IRD, then it’s not appropriate to be imposing penalties if it needs later adjustment. So penalties and interest aren’t appropriate there, but it was a good discussion and one where we really moved forward.

Of course, the other important thing for small business—small and, I must say, medium sized business as well—is the binding ruling process. Now, the fact of the matter is that no matter how hard we try to make our tax system simple, to make it fair and simple at the same time is a challenge, and where we get into complex financial transactions and complex business arrangements, we don’t always know exactly how the tax system interfaces with what’s going on, and business people need certainty. So the binding ruling process is a great idea but it was expensive and long. So the introduction of a short-form process is a great innovation here, but it’s not just for genuinely small businesses. Businesses with a turnover of $5 million—it’s easy to think of a business that might have only five or 10 employees. We wanted to push that out so that for businesses that are significantly larger than that—I can think of professional services firms with 100 employees who turn over around $20 million—a binding ruling process for them is a great innovation.

So that’s another innovation here, where taxpayers can go to the IRD in an expedited process and find out their tax position without having to engage in any conflict process. It’s not litigation. It’s very much determining what the best tax position is and it’s binding—that is to say, even if a later decision of the court determines that it wasn’t appropriate, it’s binding as regards the parties to it and those that relied on it. So that again is a very good process.

The other good thing, of course, and it’s another administrative simplification, is the write-off rule, because quite often there’s a lot of small tax bills floating around and, really, the cost of administering them, the costs of putting in returns, exceed the benefits from it. Whilst the IRD accepted this, it had a relatively complex process, a relatively complex set of rules. And, again, always for simplicity, the Finance and Expenditure Committee looked at those issues and said, “No, no, we don’t want a whole lot of rules. Let’s have a pretty brightline approach—50 bucks. If it’s a tax bill of 50 bucks or less, we’ll write it off.” And that’s going to affect thousands upon thousands of New Zealanders who won’t need to go and file a return. Their tax is not worth collecting and it’s a very good write-off rule. So another win for hard-working New Zealanders out there who won’t have to engage.

I just have to say, though, we do need to keep our eye on the fact that our tax system remains one that is based on taxpayer honesty and taxpayer compliance. Whilst a whole lot’s going on inside IRD, and a whole lot of automatic filing’s going on, it is up to the taxpayer, the onus remains on the taxpayer, to ensure that their tax position is correct, and the integrity of the tax system relies on the integrity of New Zealanders who are fair, decent people, know that it’s appropriate to pay their tax and do so in full and on time. These systems are really supportive of that, but they don’t replace it.

Of course, with KiwiSaver, we’ve heard already the fantastic improvements to that, and I really didn’t understand the suggestions that these, in some way, were anything other than outstanding innovations. The additional amounts that can be contributed—6 and 10 percent—just more options. Let’s give New Zealanders some choice—

💬 Brett Hudson: What’s there to encourage the 1.2 million to start contributing? Come on.

💬 Hon Kris Faafoi: Well, they just had $1,000 that you took away.

Yeah—and, of course, the five-year lock-in period; we’ve done away with that—more flexibility.

💬 Hon Kris Faafoi: Where’s the kick-start?

CHAIRPERSON (Hon Anne Tolley): It’s very difficult for the speaker when members on their own side are yelling as well as the Opposition.

But Mr Faafoi’s contribution was excellent, I must say.

CHAIRPERSON (Hon Anne Tolley): Well, he doesn’t have the floor.

💬 Hon Carmel Sepuloni: He doesn’t need it!

Ha, ha! To move finally to something which I thought was important, and another one which really showed the rigour that a select committee—and, I must say, the Regulations Review Committee—can bring to these proceedings, is the care and management rules. It was proposed that the commissioner have an ability to, essentially, suspend the operation of parts of the law where there were obvious drafting errors and the purpose of the Act wasn’t achieved. Those powers were stated broadly, and the Regulations Review Committee, which I am lucky enough to sit on, pointed this out to the Finance and Expenditure Committee, which I’m also lucky enough to sit on.

So we took cognisance of that, looked at it, and suggested that further scrutiny of that was required because, of course, it’s an extraordinary power for a member of the Public Service to be able to, essentially, suspend the operation of the Tax Administration Act, which is what was happening here. Now, whilst we accept that legislation can grind relatively slowly through Parliament, we wanted real scrutiny of any legislation which conferred that kind of power not on Parliament, not on the executive, but on a member of the Public Service.

So that section of the legislation, that care and management section, was taken out of the legislation and it is coming back before the committee in another guise, in another tax Act, to have a closer look at, and I look forward to seeing that, because it’s an indication of the real scrutiny and, I think, the real quality improvements that can be achieved in this kind of legislation. But overall, this is a bill that really does help New Zealanders and it helps New Zealanders, especially those hard-working New Zealanders on lower incomes in respect of secondary tax. A fantastic addition to our tax law. Well done, Minister. I commend this bill to the House.