Taxation Principles Reporting Bill

Members, we come now to the Taxation Principles Reporting Bill. We come first to Part 1. This is the debate on clauses 3 to 10, “Preliminary provisions”, and Schedules 1 and 2. The question is that Part 1 stand part.

I thought the Minister might be standing up, but no. Look, this is a fascinating bill put forward by the Hon Mr Parker—David Parker—renowned in tax circles for having some extreme views around tax. Of course, he spat the dummy recently, I think, principally around the GST on food—which is a pretty idiotic policy. But he was the main proponent of this. This is his coup de grace, I think, before he leaves this Parliament on this term. Hopefully we see David Parker next term, because I do enjoy him. Even though I don’t share his views, I do have respect for him. At least he has a position on stuff, even if it’s way off in the yonder and most people are not knowing where he is.

But anyway, I think even Labour wonder where he is sometimes with his views on tax. My understanding is they let him, when he had the revenue portfolio, go off and do his little stuff as long as he didn’t make too much trouble. Obviously, he made a bit of trouble around the GST on fruit and veges, because he didn’t accept it and that’s when he left.

Anyway, this bill is a pretty weird bill. Very short. Taxation Principles Reporting Bill. Its purpose is to oblige the commissioner to report on New Zealand’s current tax settings. Why that is required is a moot point. Only because David Parker thought that it should—I’m not sure anyone else had that view. In all of my discussions with tax officials, tax accounting firms, whatever, no one said to me, “You know what, Andrew? We’ve got to do this Taxation Principles Reporting Bill because it is such a pressing thing for New Zealand.”

Anna Lorck: Aw, look up there! [Points to television]

ANDREW BAYLY: Anna Lorck, she’s there. She thinks it would be good. So this is one of these bills that you just wonder why the Cabinet’s shoving it through in urgency now that the Minister’s moved on. I pity Dr Deborah Russell, who’s now in the chair—although she’s a tax expert, I understand. She’ll be loving this.

So there’s a requirement for the commission to report on it. So there’s no need—maybe the Minister can start out by, first of all, explaining why in the dickens does New Zealand need this? By the way, the reporting framework’s quite significant. It’s an annual reporting framework, and then a much more comprehensive one every three years. So why might we have it at least annually? Because tax policy doesn’t move that fast. It’s glacial, it’s glacial. It’s a bit like some of those members—glacial.

So why do you have to do this every year, and what is the difference between what would be reported in the two years when it’s just a bit of a report—apparently. I don’t understand it—and what’s the comprehensive; what would be examples? So, hopefully, let’s see if the Minister can start with that.

I’m happy not to debate it because it’s such a sensible bill. Just a few words, of course, introducing this committee stage in the first instance.

As Mr Andrew Bayly has said, this is a bill about reporting on the tax system, so it introduces no new taxes, it doesn’t impose any taxes, it doesn’t adjust any taxes. But what it does do is it requires the commissioner to report on the New Zealand tax setting against a series of principles—recently very well-established principles—by which tax systems should be assessed.

Now, Mr Bayly did say, “What need is there for this report and why should we do this report? Is it worth doing?” I think the answer, straightforwardly, is yes. There is a great deal of information available in a lot of places, about our tax system. It can be dug up through, obviously, the various pieces of legislation. The annual report from IRD every year has a great deal of information about how our tax system is operating, from things like how quickly calls are answered to issues with compliance and so on.

But you can also dig up more information about the tax system in the Budget every year. For example, you can get to the taxation expenditures report, which tells you where there are exceptions to the tax system; where there are special concessions. But in no place do we find, really, anywhere, a report on the tax system itself in an easily accessible form. This is what this report will do.

What it will do is give New Zealanders a series of facts about the tax system—a series of facts so that when people try to comment on tax, when we’ve got commentary going on tax, and not just from tax experts—you see, people get quite scared of a tax and they do get worried about talking about it except in the most simple terms. But because it is a complicated subject, one of the things this report will do is ensure that everyone—ordinary people; people who don’t know much about tax—can actually have access to some really good information about our tax system as a basis for discussing it. So in terms of that, this is what this bill does. It pools that information together in one place.

Mr Bayly wanted to know why we had to report on it every year in the bill. In actual fact, the provisions are that most years there is an interim report, which uses the best information available for that tax year to report on the tax system. But every three years, there is a rather more comprehensive report. So that will enable people to make some pretty good judgments about the tax system instead of just having a whole lot of ready reckons.

Point of order, Mr Chair. I seek leave for all provisions to be taken as one.

Leave is sought. Is there an objection? There is no objection.

Parts 1 and 2, Schedules 1 and 2, and clauses 1 and 2