Taxation Principles Reporting Bill

I move, That the Taxation Principles Reporting Bill be reported to the House by 27 July 2023 and that the committee have authority to meet at any time while the House is sitting (except during oral questions), during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House and outside the Wellington area, despite Standing Orders 193, 195, and 196.

The Taxation Principles Reporting Bill needs to be passed by the end of the year to ensure that that the requirement outlined in the legislation to provide its first report at the end of 2023 is met. The legislation empowers Inland Revenue to achieve this. In order for that to happen, there’s also a two-month lead-in period for the report to allow the commissioner to publish new measurements referred to under clause 14 of the bill. That’s why, in order to facilitate this, I’m moving that the select committee meet at other times to properly consider the legislation and ensure that the committee process is fulsome but completed in an appropriate time. It’s a relatively short bill—it’s five pages in length. There’s sufficient time for public submissions and consideration of that by the committee. The interruption caused for the House by rising due to the election and the requirement for this legislation to be in place by the end of the year makes a shorter select committee process appropriate. Finally, before I hear the howls of outrage from the Opposition, I would note that in 2015 when National introduced the brightline test, they gave a six-week select committee period, which took from 8 September to 20 October 2015. In contrast, this period is 10 weeks.

Thank you, Madam Speaker. I rise to oppose that motion, on a number of grounds.

The first ground is a technical one—and Mr Parker, you might want to listen to this. The Minister has said that the report back date was 27 July 2023. The bill specifies that the Act comes into force on 1 July 2023, so there’s an issue in mathematics. Because how can you have a report back date that is after the commencement date of the bill? So technically, I’m just hoping the Minister might have the opportunity to hear what I might be saying to him, because it sounds like it’s a screaming, clashing mistake. And it seems like a sort of 101 mistake, where you have a report back date after the bill comes into force.

Even with Labour doing retrospective tax legislation and doing other stuff like that retrospectively, you’ve got to say that’s number one. I think that’s the best example of trying to impose something before you’ve even finished talking to people about it. That’s a beauty. I’m just looking at my good colleague here, Louise Upston. Have you ever seen anything like this?

Hon Louise Upston: Crazy.

ANDREW BAYLY: How many years have you been in here? What a clanger. I’m just looking across the other side and, of course, they’re all pretty much new MPs. That’s why they’re here on an urgency motion. All the Ministers have disappeared; of course, it’s all the young new MPs sitting over there. Of course, they’ve got no experience about what I’m talking about here. So that’s the first thing. What a clanger. What a clanger.

But the second thing is there is absolutely no reason why this bill has to go through urgency, nor does it have to go before the select committee. Of course, this Government doesn’t worry about the private sector. You know, they might be a bit busy, particularly accountants. What do you do at the end of 31 March? Accountants are sort of slightly busy, aren’t they? I’m just looking at my good colleague Simon Watts, here. What do accountants do after the end of the balance date that most entities—only the Government uses a 30 June balance date, but most companies have a 31 March, so a lot of accountants are actually pretty busy right now.

Of course, the Minister’s so devoid of reality and so disconnected with what’s going on in the business community, he’s proposing that right in their busiest time, for some useless reason like this bill—he wants those people to put down their work for their clients and roll along and come to talk to the Finance and Expenditure Committee, because this is so pressingly, desperately needed.

It is not needed because this bill is not an absolute requirement; it is a good thing it’s a final hurrah from David Parker before he disappears after the election. And what’s driving this ultimately—and he should have been honest about it—is that they want to have this in place, because this is a launch pad for the start of the election campaign, which starts officially about 1 September. So by having this in place, this is what gives them the leverage to be able to talk about capital gains tax, increasing company and portfolio investment entities rates, because that’s the next evolution of what’s happened today by increasing the trust tax rate.

This is a sham. It’s a shocker, and the Minister’s made an absolute blue and he needs to fix it up. And we’re opposing it as we’re opposing this bill. What a waste of Parliament’s time on a day when we could be out talking to constituents, looking after people, dealing with their complaints, dealing with their issues—many of them by that Government over there. People who can’t get a hospital time, can’t get operations, can’t get ACC—all the good stuff that all of us are going to have to try and deal with tomorrow, Saturday. Oh, but some of our members over the other side, the list MPs, of course, don’t have to do that.

Point of order, Madam Speaker. Thank you, Madam Speaker. We have grave concerns that the Finance and Expenditure Committee won’t be able to meet this time frame, so we will be moving a motion for an extension of time on the basis that the date in the bill is wrong, and we will also be looking at the actual submission process very closely and who’s invited to that. We encourage the industry to actually get together very quickly—even this weekend—to meet these time frames, because this is a quintessential bill. It’s not necessary. We believe it should be put in the shredder, and we will be—

Order! Order! The point of order that the member is actually trying to raise here about a select committee is not a valid point of order.

Look, in response to this point, there is just one short aspect I want to comment on, and that is in regards to the fact that this is an indictment on our democracy in regards to the shortened report-back. We have already articulated, this afternoon, around the fact that this Labour Government have already blocked the transparency required in order to bring the IRD in to talk about the exact report that underpins this bill. And now what we’re seeing is a Government rushing this through without allowing due public consultation or public input into a significant tax principles bill.

What is that side of the House scared of? Why will they not allow the public to be involved in consultation on a bill that may lead to more taxation out of their back pockets? Well, I can tell you why: it is because they do not want to talk about this bill. The shortened report-back option is on the table. Not only, as the member Andrew Bayly has articulated, is the report-back date after the commencement date of the bill—and I’m looking forward for the Minister to comment and provide an explanation of why that is the case, because it seems completely at odds with any logic, but very consistent with that side of the House in terms of how they operate. Why are we not allowing due public consultation? Why are we blocking New Zealanders being able to input and go through a normal, standard consultation around this? Why are we not letting Kiwis’ voices be heard in regards to what is significant, underpinning legislation around our taxation system? Why? People need to question: why is this Government pushing this through? I think it’s absolutely unacceptable. I think Kiwis need to absolutely open their eyes to what this Government is trying to do. They are simply not a Government of transparency. They want it all for themselves.

I move, That the motion be amended so that the 27 July date is replaced with 1 September 2023.

ASSISTANT SPEAKER (Hon Jenny Salesa): You’re welcome to give your speech to that motion that you just gave—whatever speech you were going to give.

DAMIEN SMITH: The significance of this bill is such that it requires the industry and anybody who is involved with the tax code to reply in a sensible and a well-thought-through fashion. We don’t believe that the time frame that’s been proposed can be met, and the Finance and Expenditure Committee will struggle to actually do its work in a proper fashion, hence the extension of the date.

Thank you, Madam Speaker. We would support the motion put by the member of the ACT Party. In support of the fact that the bill is wrong—the dates are wrong, and the report back is after the time frame of when the legislation would start—the amendment to 1 September would make sense.

Speaking to the proposed amendment, the Government is not in support of Mr Damien Smith’s suggestion. The reason is that the Minister had articulated very clearly in his justification for the referral motion for the time frame. It is over to the House to determine whether it is a suitable time frame; the Government’s position is unchanged in that respect.

Yeah, thank you, Madam Speaker. I know that the whip is doing a valiant attempt to try and justify something which I’d suggest, respectfully, that maybe he doesn’t understand the realities of what this meant, whether it’s an intentional or unintentional—I suspect very much unintentional—mistake by the Minister. But you cannot have an Act come into force before you’ve had the report-back date from the bill being considered by the select committee, because for it to be considered by the select committee you’ve got to then come into this Chamber, it’s got to go through the process of a second reading, then the committee of the whole House, and then the third reading, all of which takes some time. But if you’ve got a report-back date of 27 July, inevitably we’re going into August, and, of course, the House finishes at the end of August. So it’s logistically illogical and inappropriate, and I think it’s a genuine mistake. I know the whip’s trying to support his Minister, but this is a clanger—it’s an absolute clanger of process.

Speaking to the amendment proposed by the ACT Party member, the arguments advanced by the members opposite are a contrivance. The reality is that the bill is not law. A bill is not law; it is a proposal for a statutory change or addition for consideration by the House, and normally consideration by a subcommittee of the House in the form of a select committee.

My colleague the Minister of Revenue has introduced a bill as part of the Budget measures, which is a bill that has a commencement date—as part of the draft bill—but that is up for consideration by the select committee, and what is being moved now is a select committee with a slightly truncated time frame, which is ordinary for the consideration of that bill. It will be a matter for members of the select committee to recommend any changes to the bill, including the commencement date, and it’s ultimately for this House, in the second reading, the committee of the whole House, and the third reading, to determine the commencement date of that bill, having gone through public submissions and a consideration process in the truncated select committee process. There is no clanger. There is no contravention of basic constitutional principles when it comes to revenue statutes. It is entirely proper and appropriate, and the time frame proposed by the Minister of Revenue is an absolutely proper time frame in the circumstances.

I’m just responding to Minister Little and his contribution there. Either the Minister of Revenue has got it totally wrong, because he was the one who would have made sure that the bill actually said that the commencement date is 1 July—so the bill is in his name. It’s in Mr Parker’s name, this bill, and it states categorically in the commencement clause at clause 2 that “The Act comes into force on 1 July 2023.” Now, the Minister has just been talking about this as if it is a bill; it’s not. When it comes into force, it is an Act—right?—and it specifies that it comes into force on 1 July 2023, which means that that is before the date for the select committee to report back on it. So can I suggest to the member that his logic is absolutely flawed.