Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Bill

on behalf of the Minister of Revenue: I present a legislative statement on the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Bill.

ASSISTANT SPEAKER (Greg O’Connor): That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon PAUL GOLDSMITH: I move, That the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Bill be now read a second time.

The bill as reported back from the Finance and Expenditure Committee contains a range of adjustments as a result of public feedback. I should point out that feedback from the submitters on the bill has not changed the bill materially. This is because the bill was generally well received by submitters. In fact, responses focused largely on opportunities for extending the ambit of proposals—15 percent on interest payments—that’s interesting. That’s very good.

Many of the things that have been arranged in this legislation relate to interest payments, and they can also pay a levy of 2 percent. We want to make eligible businesses able to access those savings even if they mistakenly register for approved issuer levy (AIL) late, so we’re proposing that the borrowers could retrospectively register a security, in some circumstances, to qualify for the lower tax rate on interest payments.

Submitters supported the proposal but thought it could go further—one of the proposals in this legislation. Some suggested that a two-year time limit on applying for retrospective registration be removed. Others said the concession should be available not only where the borrower overlooked the AIL requirements altogether but also where they failed to register on time despite attempting to do so. It was also suggested that tax pooling should be available to settle an AIL liability resulting from retrospective registration. The committee agreed with those suggestions.

Now, legislation was also needed for the Canterbury earthquakes and 2023 North Island floods and previous efforts, but submitters were generally supportive of the generic response to emergency events proposal. I was pleased to see that.

We also want to help young people secure their economic future. We’re proposing to allow, as part of this legislation, young people under 16 to enrol in KiwiSaver with the signature of just one guardian. At present, they need the consent of all guardians, and that can be difficult where parents are living apart, for instance.

One last thing to note is that some submitters expressed support for the bill’s strong remedial focus. This is a positive thing. An important job in tax policy is to continue to work at rectifying legislation to ensure that it’s fit for purpose while continuing to meet the intended policy objective.

I don’t want to take up too much time of the House, and so, on that matter, I now move that this be now read a second time.

Many—perhaps most—of the measures of this bill are good and sensible measures with respect to tax law, and like a lot of the tax legislation that goes through this House, all sides of the House agree on particular matters in the bill. However, the Labour Party will be voting against this bill.

The reason is not the particular tax measures, but the bill does contain the annual rates for 2024-25, and unfortunately, we do not see in those rates any response to the fiscal needs of this country. We will be examining those rates, in particular during the committee stage of the bill when we reach that—sometime soon, I hope, because this bill must be passed by the end of March. In the debate on Part 1 during the committee stage, we’ll have a long discussion about the annual rates, as is traditional. That is the tax debate for the year, in the committee stage of the annual rates bill, and I trust all members of the House will participate in it. I think, at that stage, you’ll hear us talking about how tax rates relate to services.

One of the duties of the Minister of Revenue is to safeguard the revenue system. One of the jobs for the revenue system in this country is to ensure that it supplies enough Government revenue—gathered from all citizens, all residents—to ensure that Government can do the things that Government ought to do, like paying for a health system, like paying for an education system, like paying for decent school lunches, and like paying for the increased defence spending we’re likely to need in this increasingly uncertain world. Yet we do not see the Minister taking responsibility for ensuring that the revenue system can supply those needs, so we’ll talk about that extensively in the committee stage of the bill.

However, in the meantime, we want to talk about some of the other measures in this bill. As I’ve already said, we pretty much, by and large, agree with them, but I think they are worthy of comment rather than just a garbled rush in order to get the initial speech out in the House. I do want to talk about some of the particular measures in this bill. The most interesting one is the generic response to emergency events.

Now, members of the House and people who have joined the House in this Parliament will know that in the six years that the Labour Government was in office, there were three—arguably four—black swan events that had a huge impact on the country. There was the COVID emergency, which had an enormous impact on the country. Possibly the Whakaari explosion could be counted in this regard. There was very much the Auckland Anniversary weekend floods. There was Cyclone Hale just before the Auckland Anniversary weekend floods, and then, of course, there was Cyclone Gabrielle.

In each of those big black swan events—events that had a huge impact on the country, the nature of which the current Government hasn’t had to deal with one of those yet—what happened was that we needed to take tax measures to help businesses through: help them with their cash flow, help with some of the extra expenditure, and help with some of the insurance implications of what went on. Each time one of those events occurred, a whole series of measures was wheeled out, but it had to be wheeled out individually each time, for each event.

As that went on, the thinking in the tax community, the thinking in our party, the thinking of Ministers at the time, and the thinking of Government departments was that, actually, there should be a generic set of measures, a set of measures that could be plucked off the shelf and rolled out as needed, in order to ensure that people affected by a disaster could continue to manage their affairs in a satisfactory manner. The sorts of generic responses we’re talking about are the ability to get some rollover relief, the ability to defer tax payments, and the assurance that penalties would not be applied if tax payments were late and so on—because of the nature of the emergency. This is a particularly good set of measures—started under the previous Government, quite correctly continued by the current Government, as a way of ensuring that there could be a generic response to emergencies.

Sitting in the Finance and Expenditure Committee, we did some work on that and to improve the particular set of measures that could be rolled out. I think when the next black swan event occurs, whoever the Minister of Revenue is, whoever the Minister of Finance is, won’t have to try to design measures from scratch and won’t even have to look back at the measures that have been used previously. They can reach for them from the shelf. That’s an excellent piece of work from across the House.

There’s some quite complicated stuff sitting in this new legislation, this particular tax bill, around when people moving to New Zealand—in particular, from the UK—try to bring their pension funds with them. There are some particular interactions between the New Zealand tax law and the UK tax law that mean that those people attempting to transfer their savings from the UK to New Zealand—to have them locked up, as they are with KiwiSaver—nevertheless face an extra tax burden just because of the interaction of the legislation. What they have to do is transfer their foreign investment savings, their UK investment savings, to what’s called a QROPS scheme, and that stands for a qualifying recognised overseas pension scheme, but with that, they did get an extra tax burden.

Now, the thinking going into select committee was that all KiwiSaver schemes would be required to provide a QROPS service to people who wanted to join those schemes, but through the select committee process, we realised that in fact that wasn’t necessary for all KiwiSaver schemes, that it could be done on a voluntary basis. You’ll see that change coming through in the legislation as it comes through the House, in the committee stage, and I’m sure we’ll talk about it a little bit more there. The objective there, complicated as it was, was to ensure that people paid their tax but paid no more tax than they ought to between the transfers in the country. Otherwise it could have been a double taxation situation for some people, which does seem at least a little unfair.

There is another nice measure in here sitting around the minor beneficiaries rule. Now, that’s a rule that applies to trusts. There was a particular complication around trusts for people with disabilities, where they could get hit with the minor beneficiaries rule, meaning they’d end up paying extra tax. This bill fixes that—so, again, another good measure. I would note that that was sitting in the remedials.

The Minister of Justice just said that the bill contained a number of remedial measures. Of course, remedial measures are important, and they occur in a couple of situations. One is where the tax law just doesn’t—the drafting of the law, the way it’s gone through—quite work in the way it was intended. Tax law is complicated, and sometimes there can be interactions that are not foreseen. Sometimes the law as drafted doesn’t really quite meet the commercial situation, so we need to put through a remedial to remediate the law, to fix it up. Sometimes the way that we do business changes and the law no longer quite fits. That is the purpose of a remedial.

Inland Revenue often spots remedials itself. Businesses write in all the time, particularly tax consultants, saying we need a remedial for this, that, or the other—something needs to be fixed in the legislation. What that points to is a very important process in New Zealand, that the tax community—tax professionals; the firms; the academics; and the Treasury and Inland Revenue, the tax experts there—and, by and large, politicians as well too, do work hard to make sure that those remedials get through the process and that we keep the Income Tax Act looking shipshape. It is a complicated Act, and it is hard to keep it shipshape, but there’s a lot of work that goes into it, with a lot of goodwill from across the House and from across the tax community.

As I said previously, we will be voting in favour of all the amendments to the bill at committee stage, but we will not be supporting Part 1 of the bill, and alas, we cannot support the bill overall because of the annual rates in it. Having said that, I’m looking forward to the debate we will have at the committee stage.

E te Māngai, tēnā koe. Tēnā koutou e te Whare. I just wanted to appreciate the contribution made by the Hon Dr Deborah Russell just then, walking us through the changes that were made at the Finance and Expenditure Committee. It is, of course, in those moments that we see that cordial working across the aisle to try and improve pieces of legislation, even if indeed we are opposed to those laws. Herein I just want to speak to firstly some of the parts of the legislation that the Greens do support but make the point that we cannot support the bill in its entirety because it entrenches the Government’s trickle-down tax cuts.

Some of those initiatives which we support in the bill are the likes of incorporating the crypto-asset reporting framework, and the amendments to the common reporting standard, of course, enabling young people under 16 to enrol in KiwiSaver with the agreement of one parent or guardian—making it a lot easier for solo parents, I might add—and also addressing the issue of locked-in KiwiSaver funds for migrants. But it would be remiss of me not to spend the majority of my time in this contribution today speaking about the so-called meat in the sandwich that is the centrepiece of this Government’s Budget from May last year, which was of course those trickle-down tax cuts.

Here, if I may, I would like to refer to the regulatory impact statement of those income tax cuts, which are entrenched within Part 1 of this legislation, and where we see the benefit of those tax cuts aggregating who ends up actually winning from these changes that the Government is making to our income tax system. Herein you can see the distribution of who gets what on a weekly basis based on quintiles—that is, every 20 percent of the population. You can see painted here very clearly that the top two quintiles—that is, 40 percent of households—gain $1.6 billion or 55 percent of the total of the value of those tax cuts. Those top two quintiles, that top 40 percent, it must be noted, also benefit from $750 million a year from the landlord tax cut reduction. When that is included, that top 40 percent in our country ends up getting 64 percent of the value of the Government’s tax cuts—by far the lion’s share of that total. What is actually even more shocking is that the lowest quintile, the bottom 20 percent of New Zealanders, are getting just 5.4 percent of the total over here. Even more than that—and the Government knows this—we are seeing 130,000 households get nothing at all. Meanwhile, 8,000 households are worse off.

Now, that’s just about the distribution of these income tax cuts as put in Part 1 of this legislation. That’s not even speaking to the bigger thematics and the consequences that we will see in our economy and in our society as a result of the decisions that this Government has made in its Budget in May 2024, which this bill goes some way to actually rolling out, because these tax cuts were paid for by the reintroduction of prescription fees, by increases in bus fares, by increases in vehicle registration fees, by increased and raised immigration levies, by higher tertiary education fees, by more toll roads, by increased court fees, of course, by a hiring freeze at the front line of our public services, particularly at our hospitals, and by cuts—cuts, cuts, cuts: cuts to Dunedin Hospital plans, cuts to the per child cost of the school lunch programme.

This is trickle-down economics in practice. It is reheated from the 1980s. What are we seeing in terms of the Government’s plan? Well, they’re telling us a heck of a lot about their plan to go for growth. Yet so far, what we have seen in practice as a result of the intentional decisions that they have made is that they have knowingly increased climate changing emissions, they have knowingly increased child material hardship, and they have knowingly increased inequality. I want to spend a moment particularly on that point of inequality, not just on the distribution of who wins and who benefits the most from these income tax cuts as put forward by the Government but with regards to the broader sense of disdain that this Government seems to have, and that the Prime Minister echoed in his responses in question time to me the week before last when I asked him about whether he thought it was the Government’s job to deal with inequality.

Tolerance of inequality, of gross inequality in particular, is precisely what creates poverty. This was spelled out by research done by the Inland Revenue Department in 2023, which told us that the top 311 households in Aotearoa hold more wealth than 2.5 million New Zealanders. That report also spelled out that that is not an accident but a consequence of a tax system which sees those at the top pay an effective tax rate that is less than half of that of the average New Zealander. Just before we got into this debate, we had one Minister of this Crown actually chastising me for making the point that there was something that economists across the board agree with. The point that I had made is that economists across the board agree with the fact that Aotearoa New Zealand is an outlier and that we pay the cost for not having any form of capital gains tax, stamp duty, wealth tax, or otherwise that addresses that fundamental inequality but, more so than that, exacerbates the productivity crises that we have in this country.

Here I would only just quote from the OECD Economic Surveys: New Zealand 2024, where they say, “There is a need to reduce distortions to household choice of asset allocation. Shares, land and owner-occupied residential property are tax favoured. Most capital gains from shares, owner-occupied residential property and land are not taxed. To ensure the tax system is not overly distorting saving and supporting broader growth,”—by the way, something the Government keeps telling us that they care about— “capital gains taxation reform should be done as part of a review of tax settings for saving.”

Of course, we are, unfortunately, not having that debate today, are we? We’re not actually meaningfully talking about, from an evidence-based perspective, how we go about improving productivity in this country, how we go about fixing those distortions in our tax system. No. We are, unfortunately, still stuck in the frame of these trickle-down tax cuts and, effectively, of austerity, of being told that we need to put private gain ahead of the public good, which only continues to further entrench all of the issues that we see play out in society, because after 50-odd years of this playbook, New Zealanders are not safer, New Zealanders are not healthier, and New Zealanders are not happier. In fact, the opposite is true. The way to remedy all of these issues is for us as a Parliament to finally take meaningful responsibility to build the public infrastructure and the public good that New Zealanders deserve and ultimately rely on, which, I might add, those who currently enjoy untaxed capital gains also benefit from and make their money off the back of.

We know that societies with greater wealth inequality are less cohesive. They are less functional, and they are less healthy than their more equal counterparts. Inequality corrodes the basics of a good society. That is people’s ability to participate not just in this ephemeral notion of society but actually in our democracy. I think ultimately what you will find in this bill is continuing to spearhead the charge for trickle-down economics thinking, which has deeply, deeply under-served our communities for at least 40 years now. Unfortunately, that is the reason that we simply cannot support this bill, because despite there being a sprinkling of a few good things that are relatively overdue and have consensus across the House upon, this Government is forging ahead with a path of continuing to cut our public services. What do New Zealanders have to show for it? Some trickle-down tax cuts which absolutely do not touch the sides on the cost of living, which this Government promised New Zealanders that it would deal with.

We simply cannot support this bill. I would remind all members of the Government that this is in the regulatory impact statement that was first issued along with the income tax proposals. It shows all of you, all of this Parliament, precisely what this Government values. It is not fairness, it is not justice, and it is clearly not equality or everybody’s ability to participate in our society or this economy that they keep banging on about.

Thank you, Madam Speaker. I rise on behalf of ACT to speak on the Taxation (Annual Rates for 2024-25, Emergency Response, and Remedial Measures) Bill.

Let me start by just thanking my colleagues on the Finance and Expenditure Committee. As we’ve already heard in some of the contributions this afternoon, it was a collaborative process. It is good to actually have some tax experts like the Hon Dr Deborah Russell on our committee. She’s obviously very interested in some of the issues and a lot of the technicalities, so she does add a lot of value, so it’s good to have her. We were also ably helped this year by John Cantin, who’s our adviser to the committee, and, again, we really appreciated the advice that he was able to provide us, along with IRD officials. It’s good to have an independent adviser just to check on those officials and also make sure that the IRD are reflecting what the tax community are thinking.

As we’ve already heard, there’s actually a lot of things to agree on in this bill. You know, we’re putting in place some of these issues around the OECD framework for tax reporting. We’ve dealt with issues around pension transfers across borders. We’ve heard about the ability for under-16-year-olds to enrol in KiwiSaver with just a single consent. There’s a few other issues, including actually streamlining the tax settings for an emergency response and actually having something that can be used immediately without having to pass additional legislation, and as we’ve witnessed in the last few years, we have had a few of those matters here. There’s a lot, obviously, that there’s consensus on across the House, which is great.

Obviously, though, a very key part of this bill is the setting of the annual tax rates. Look, in ACT we’re unapologetically in support of that as part of this Government, because we are actually about delivering tax relief for New Zealanders, and look, we should be very proud of our tax system. We do actually have a very robust tax system. It actually does have a lot of transparency. We don’t have a lot of deductions. It works very well. With our package, we’re obviously putting in tax relief for Kiwis. It does show a difference between what our Government and some members of the Opposition think

In addition to dealing with lowering tax—actually giving Kiwi families and businesses a break, actually letting them get on with spending some of their own money—we’ve also been able to do that by actually reining in Government spending, and so we’ve actually had to take a very considered approach to how we’re taking and spending taxpayers’ money. We wanted to make sure that that is being spent well and they are actually getting the public services that they deserve.

Chlöe Swarbrick: They’re not.

TODD STEPHENSON: Well, that’s right, because under the last lot, we didn’t measure how public services were actually being delivered and what they were getting, and so we’re taking a different approach.

Chlöe Swarbrick: I’d check the veracity of those statements.

TODD STEPHENSON: I also heard Ms Swarbrick say that tax cuts won’t actually improve productivity. Well, that’s wrong. Actually, putting in place a capital gains is a tax on investment, and, in fact, what we need to do is actually have people investing in our businesses to improve productivity—adopting new technology, training their staff, etc., etc. Actually, lower taxes do improve productivity.

The other thing that we’ve made sure we’ve done is we’re being very clear about what people are getting for their taxes, and so we’ve been able to do two things with this reduction in taxes. One, we’re saying, “People, you had no tax relief for many, many, many years, and we’re delivering that.” Number two, we’re taking a hard look at the Government books and making sure we’re getting value and spending for money. It’s a totally different approach to what has been done previously, but we’re very proud in ACT to be a part of a Government actually taking that approach, and so I will be commending this bill to the House on behalf of ACT.

Thank you, Madam Speaker. I rise on behalf of New Zealand First to support the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Bill.

Before I begin, I do want to say a congratulations today to Stuart Smith, who has become the Chief Whip of National and of the Government. He is someone I’ve worked closely with in the Kaikōura electorate. It also just reminds this House of the importance of South Island MPs, as we’re now sitting in very prominent positions, and also our new Minister for the South Island. But I realise I need to keep focused and get on to the bill at hand.

New Zealand First does support this bill, for a number of reasons. As you can see, this bill is substantial. It’s complex——170-odd pages, with 200 amendments, so it is a piece of legislation that is difficult to get to know every amendment in it. But, again, the people who have specialised knowledge—and I do acknowledge the Hon Dr Deborah Russell and her contributions during the committee stage, because this stuff in here can put the ordinary New Zealander to sleep. But the ordinary New Zealander is interested in the tax rates, and they’re being confirmed in this piece of legislation.

It is also difficult to hear from the Opposition as they, again, discuss that they will not support this as we go through the readings. This Government finally made the proactive decision to change the thresholds in the tax rates. That is something that New Zealanders have waited for since 2010 to see changes in the thresholds—2010. We actually have the Opposition saying to us, “Actually, we don’t support that. We don’t support seeing extra money in New Zealanders’ pockets.” I find that very difficult to understand in a cost of living crisis, that we can’t get support across the House to actually get the support that our families, our business owners, and our individuals need to just buy the basics. That is disappointing. It’s a different philosophy, where that side of the House believes they will tax, tax, tax, and their philosophy is that they will do everything for everyone, but there is self-responsibility, and this side of the House believes that by putting more money into people’s pockets, people can make the right decisions.

Also, as I mentioned, there are so many amendments in this piece of legislation. Probably the most substantial one is the emergency events. I’ve seen in my electorate, in Kaikōura, the earthquakes that came. We’ve seen the North Island floods and weather events, and we’re seeing, over time, the different events that come. In this piece of legislation, the changes here allow an Order in Council, and I think that is the big thing. Instead of having to have a piece of legislation that goes through the House, an Order in Council can make the necessary, quick changes to actually help people that are in times of need, in times where different emergency events have occurred. It is good that there is consensus across the House on that amendment.

We’ve also heard around KiwiSaver the overseas pension transfer reforms. We heard through submitters how people bringing their pensions back into New Zealand were actually being penalised. So, for those people, this actually helps them to not get taxed in a bulk amount but actually allows the money to come back into the pension fund and actually be dealt with in a way that the pension fund can actually pay the amount of tax that is required, instead of the individual ending up with a lump sum of tax to have to pay.

Also, through the bill, there were zero-rated issues, the GST zero-rated issues around the international vessels—some common-sense remedials in that sense. We also heard from the Minister of Finance a few weeks ago around FamilyBoost and the importance of changing so people are eligible for FamilyBoost—some minor changes there.

We had 28 submissions. It’s a technical bill. We did hear from the likes of PricewaterhouseCoopers, KPMG, those tax advisers who specialise, and they were able to bring those finer details to light. The committee, through the 16 oral hearings, have made changes. What I can say is that it is a minimal fiscal cost to the Government but they make substantial changes to individuals and to businesses in New Zealand.

I think what I want to end up on here is that sometimes with remedials, they only affect you when it’s something out of the blue or it’s a minor thing, but when they actually affect your business or you as an individual, they become a substantial issue, and that’s what this remedial bill does. Those loopholes—it actually gives an answer to people having to pay their tax. So, in that, it is good to see that this bill sorts out those issues, those pitfalls, and, actually, what you hope happens is that future taxpayers don’t have to stumble or fight IRD or have to go through lengthy discussions, because we actually find a solution in this bill.

On all those parts, New Zealand First supports. I look forward to this going through to the committee of the whole House stage. So I further say that I commend it to the House. Thank you.

I rise to my feet and give a short kōrero on the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Bill.

The change is a change of income tax by stealth, hammering the wrong end of town once again. I just heard the last speaker, Jamie Arbuckle, talk about how there’s a minimal fiscal cost on the Government, but it would have quite a substantial cost to the income earner. I’m talking about Māori as a whole. As we all know, our tax system has fuelled extreme wealth inequities, and this Government’s changes will further facilitate the theft of our hard-earned money.

The Government’s tax adjustment will make our poorest whānau worse off—3,000 single-parent householders are earning less because of these tax cuts. This Government has given $3 billion tax cuts to landlords while over a million people who are earning less than $30,000 a year will only get $2 a week from their tax cuts. They have taken away public transport subsidies, free prescriptions. They’ve also taken away first-home grants. They’ve increased rates. They’ve cut the minimum wage, cut the benefit, cut 10,000 jobs. All of this for a couple more dollars a week.

We are not stupid. We know that you are taking away more than you are giving. The $3 billion tax cut for landlords is more than just a blatant example of the real priorities—looking after the rich mates. This tax cut is actually going to make the housing crisis so much worse in the long run. It will allow mega landlords to borrow more money to buy more houses until 99 percent of the people in Aotearoa are paying their rent to the 1 percent of homeowners. We have heard a lot of talk about Māori privilege because the super-wealthy need us to blame each other before we blame them. First they stole the land, then they stole our labour. This is what this country has come to.

It is an absolute travesty that the tax policies were implemented—if we had a tax policy, 98 percent of the whānau here in Aotearoa would be better off overnight. I’ll tell you why: removing GST, removing income tax for whānau on low incomes, we would increase take-home pay for 98 percent of whānau, income tax on those earning more than $200k, the company tax rate from 28 percent to 33 percent. We’ll introduce a wealth tax, foreign companies tax, land banking tax, vacant house tax. These are the omnibus taxes that we should be discussing in any bill.

When you’ve got 2 percent of the country controlling 50 percent of this country’s wealth, that is a travesty. And we continue to talk about omnibus bills that affect the lowest income earners here in Aotearoa. This Government has no aroha. It has no heart for those hard-earning, hard-working communities out there, and this, once again, is going to make it even harder. Yes, there are some good things in there, but there are a hell of a lot of other things we should be doing with our tax system. The tax system is broken and it continues to allow the rich to pay only 9 percent while the rest of Aotearoa pays 20.2 percent. This is the reality, and that’s the omnibus bill that we should be talking about.

All of these changes would actually affect 98 percent of Aotearoa’s earning capacity, but what we’re doing is continuing to favour the 2 percent that continue to control 50 percent of the country’s wealth, and this Government continues to move bills in their favour. We must look at a tax system that’s fairer. Wealth tax is the only way—is the only way. Yes, you’re allowing people to be able to transfer monies from overseas back here, but we are not punishing those who are making billions of dollars—the banks, the supermarkets, who are Australian-owned—to take the income and the profit that they make overseas. That’s the tax we should be talking about. That money should be used for the greater good of Aotearoa, but it is not.

What we are doing here is discussing an omnibus bill that’s going to put more pressure on those who work hard to uphold the lavish lifestyle of the rich—and, again, the 2 percent that control 50 percent of this country’s wealth. We will not be supporting this bill to the House. Kia ora tātou.

Thank you, Madam Speaker. As my colleague Chlöe Swarbrick mentioned before, the Green Party of Aotearoa New Zealand will not be supporting this bill. Yes, there were parts that have been mentioned that were a technical change, but let us be clear: this bill is a technical solution. It is a gentle edit to the potential hopes and dreams that people of Aotearoa New Zealand could achieve, and this bill does nothing for most of the people of Aotearoa, in this case.

Let us reiterate: through this bill, the top 40 percent get a break of $1.6 billion or 55 percent of the break, and that is from the officials themselves. That is in the regulatory impact statement. On top of that, $750 million a year for landlords for tax cuts, with the bottom 20 percent only getting 5.4 percent of the tax cuts—130,000 households get nothing. Let us just remember those stats: 130,000 households get nothing at all; 8,000 households are worse off.

You have people who will tell you, “Isn’t a tax cut good? Isn’t it nice that some people just get a little bit of money in their back pocket?” Let us break it down. If you are a couple and you are on superannuation and that’s all you are on, you are getting—through the Government’s own budget calculator—$8.62 for the couple, for the two of you, per fortnight. That is $2.16 per week. That is 31c per day. A two litre bottle of milk has gone up by 29c, just most recently. A one kilo block of cheese has gone up by 10c. When the cost of living cannot keep up, when the money that people are getting, the tax cuts people are getting, cannot keep up with the cost of living, that is not a tax break. That is not beneficial to the people of Aotearoa.

What we are seeing is a Government that only talks about growth, and before we talk about the fact that we have seen a Prime Minister who consistently uses the term “ruthlessly in pursuit of growth”, I would like to remind the House that the adverb “ruthlessly” has never been used in any positive light. That is only ever used to describe cruel and cold-blooded intent. That is the official definition of ruthlessly. This is the leadership that we have in Aotearoa.

We are seeing the Government, in order to cover the deficit, using overseas as a way of selling off and of entertaining the privatisation and the commercialisation of assets from Aotearoa of things that people of Aotearoa have worked and earned them for themselves and for their whānau and for their communities. We have seen the fact that just today, the Prime Minister will not commit to our nationally determined contributions as part of the Paris Agreement and without even recognising the fiscal cost that this will have on Aotearoa, on the whole. We are seeing shocking stats for child poverty. We’re seeing one in eight of our tamariki living in material hardship, one in five for tamariki Māori, one in four for Pasifika children.

We’re seeing hack and slash to the Ka Ora, Ka Ako programme, and within that we’re seeing the way that this Government chooses to evaluate programmes that are meant to be feeding our tamariki. Out of the six evaluations that they will be using, three are about cost saving. They are not about our tamariki, they are not about our mokopuna, and they are not about our future. This is the reality of this bill, but an alternative is possible. It just requires political will. Poverty is a political choice, taxation is a political choice, and we have the tools to make those kind of genuine changes based on data, based on what economists around Aotearoa and internationally are telling us. What we need, what we need in terms of a capital gains tax, what we need in terms of trust tax or stamp duty—those are things that are possible for us. This is the time for us to hold on to that hope, and let’s not just simply edit.

We’ve heard a lot on the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Bill, particularly the Opposition continuing to decline and continuing to reject the tax cuts that New Zealanders deserve 14 years on from the last lift of the tax thresholds—14 years on. What we are hearing, for those that are upset about this reconfirmation of the 2024-25 tax year, is their anti-ness of hard-working Kiwis getting some tax relief, as they have done in the last nine months. Can I remind the House that, overall, 83 percent of Kiwis or 94 percent of households benefited from the Government’s tax package—personal tax package—that we are confirming today through this taxation bill.

The thresholds have risen from $14,000 to $15,600 for the 17.5 percent tax rate. They have risen from $48,000 to $53,500 for those paying the 30 percent tax rate. They’ve risen from $70,000 to $78,100 for the 33 percent tax rate. The threshold above that hasn’t been changed. This is a tax cut that only benefits those that are earning those dollars—the dollars treated beneath $78,100. It’s a tax cut from low to middle income workers; it’s not skewed towards the wealthy. It’s effectively capped: the tax-cut benefit stops at every dollar earned after $78,100.

This is a tax cut not for the rich. I reiterate: this is a tax cut for low to middle income workers, and frankly, any dollars earned after $78,100 are not getting a tax cut. This is for middle New Zealand. We are proud of this, and this is why this side of the House will be voting for this taxation amendment bill. Thank you.

Thank you, Madam Speaker, for the opportunity to comment on this bill. I do so mainly in my capacity as the Labour Party spokesperson on emergency management.

For those who are familiar with the content of this bill, they’ll be aware that there are significant changes that this bill makes in relation to the way that emergencies are dealt with in New Zealand. Unfortunately, we do live a country, otherwise known as the “Shaky Isles”, that does frequently experience emergency situations due to natural events, and also we’ve had emergency situations in our recent history to do with COVID-19. This is something that everyone in this House will be familiar with, and I’m sure there’s many people who have lived through and supported their constituents through some of these events, which are mentioned in the documentation provided to support this bill.

In relation to those emergency measures that are in this taxation bill, essentially, as I understand it—and I wasn’t privileged enough to be on the committee that looked into this, but from my understanding—this bill, effectively, enables an off-the-shelf measure of tax support that can be utilised in an emergency situation. We did have that under the previous Labour Government and also under the previous National Government, who dealt with other disasters.

We’ve had a number of emergencies that have been looked at in relation to tax relief. We’ve had the Kaikōura earthquake; we’ve had the COVID-19 response. We’ve also had the Auckland floods and Cyclone Gabrielle as recent examples of when tax has been utilised in order to assist the emergency response in a situation. That part of the bill the Labour Party is supportive of. You would have heard my colleague Deborah Russell, who has been participating extensively in this at select committee, mentioning the reasons that those provisions are necessary. That is something that I think will be welcomed by New Zealanders in terms of these particular changes.

Another thing which I think is interesting is the proposal to turn off the brightline test in a situation where there is an emergency event. Obviously that type of situation could be quite catastrophic for the person involved, and so these obviously address those situations. I don’t need to tell the House about how awful some of these situations can be, but it was interesting for me to see how our taxation system and the good people at Inland Revenue were able to utilise the existing measures in order to address some of these emergency events but also, hopefully, to make this easier in the future so that future Governments—obviously, we all knock on wood and we hope that there aren’t huge emergency situations that this country has to face in the future, but we understand and emergency management people will tell you that it is when, not if, we face another disaster. I think it is prudent that those are included.

That was the main aspect that I wanted to cover in my contribution today, but the other thing that I feel I must address is the fact that, as has been mentioned by other members and also members across the House, we will not be supporting this bill as a whole. That is really because of the fact that there are the inclusion of the tax changes that were brought in in the Budget as a schedule to this bill. That is something that we disagreed with. I’ve heard members opposite say they can’t understand why we would feel that way. I just think it’s important to look at this holistically in terms of the impact that those tax changes have had on New Zealand.

Of course we want New Zealanders to have support in a cost of living crisis, of course we want all of our needs to be met within a society, but unfortunately the thing with tax cuts is timing is really important. It was a very difficult time, and we’re seeing the consequences of that through our health system. We are seeing consequences of that through other programmes, like the school lunch programme, which has had a reduction in funding. We are seeing things that we wouldn’t necessarily choose ourselves. This is a very important political difference that is highlighted within this bill within the way that we approach taxation within New Zealand.

On this side of the House, we want New Zealanders to flourish. We want to see an economy that is doing well. We want to see a productive economy. We want to see people doing as well as they possibly can. In our view, the changes that were put in place by the Government during the Budget process are not the way to do that. That has been seen through some of the terrible implications to our public services and our health system and our education system that we have already discussed. This is an important matter of principle. It’s not something that we do lightly. I just wanted to acknowledge some of those comments that the members on the other side of the House had in relation to that.

Overall, this is a bill that we can’t support, but at the same time we do recognise the hard work that has actually come about through not just this Government but also the previous Labour Government, and possibly even previous Governments to that, in working towards building better taxation systems. Not everything in a bill is always something that is bad. In this bill there are aspects that we support, and I think we really showed our good faith in that through the participation of—as has been widely acknowledged around the House—our resident tax expert, Dr Deborah Russell, who participated in good faith to make sure that although she didn’t support wholeheartedly the purpose of the bill, she worked very hard to make sure that the changes within that are workable. That sometimes happens in this House. I think that we have set that out really clearly.

I cannot commend this bill, but I want to acknowledge the work that has been done by others on the committee and through other parliaments in the House.

Thank you, Madam Speaker. It’s very telling what the last speaker Camilla Belich just said—things like “We take a holistic approach.” and “Tax reduction is all about timing.” We actually felt that, after 14 years and a cost of living crisis, it was actually pretty good timing. But, no, that side of the House thinks Government knows best. That’s why we’re now having reforms with tertiary, hospital, tax—just a mess everywhere we go, because they think Wellington knows best. Well, we like to give money back to the Kiwis that earn it.

One thing that I haven’t heard also is about FamilyBoost, which is another supportive mechanism. Some of the elements of it were ratified through this tax bill. In fact, one of the things I learnt, and you might learn too, sir, is that you can actually claim FamilyBoost for up to four years. If any family members haven’t claimed—sorry, Madam Speaker; not you personally, but anyone that wants to claim FamilyBoost can actually claim it for up to four years, such is the opportunity there, which really helps those lower and middle income families, as Cameron so aptly put before.

There were over 100 tidy-ups in this bill. Given it is a second reading, it is important to reference the select committee process, and I just want to read some commentary from Deloitte which was published at the time: “The bill itself is less controversial than some of its predecessors as it largely contains taxpayer friendly measures aimed at reducing compliance costs and increasing productivity.” For this reason, all Government parties and the Labour Party also voted in favour of the bill at the first reading, while the Green Party and Darleen Tana voted against the bill. Note, Te Pāti Māori were not present to cast a vote, so there aren’t many surprises there.

One thing that was quite interesting with this is this bill touches on tax administration, GST, KiwiSaver, stamp and cheque duties, and income tax, and the great thing about KiwiSaver is those under 16 can now access it with only the consent of one parent or guardian, which is just awesome. We support it. That’s a brilliant thing.

The other thing which I wouldn’t want to go unnoticed was SPV, or special purpose vehicles. There was a bit of a tidy-up—recommendations 65 to 68. We’ve heard a lot about infrastructure and infrastructure funding and financing, and a lot of the entities that sit behind that are special purpose vehicles. It’s very important that the tweaks such as “has received assets from a third party that is not a trust or has self-originated assets.”—those things were tidy-ups and it’s wonderful, so I’m pleased to commend this bill to the House.

Kia ora, Madam Speaker. It’s interesting listening to the previous speaker, Ryan Hamilton, about how votes were cast at previous readings. That’s part of this Parliament; part of the process is to litigate the issues and to vote yes sometimes. Then it moves through select committee, and then minds can be changed, as they should be, because it’s not a binary decision from the first reading to the third reading. It’s actually about looking at the issues and debating them, which this place is all about. I feel really comfortable with the fact that maybe at one stage a party has voted yes and now they’re voting no, as we are here, because we on this side of the House and the Labour Party will not be supporting this legislation.

As the spokesperson for economic development, it is really interesting to look into the taxation and what it means and then to hear the comments from the other side in terms of, you know, giving tax cuts and people’s hard-earned money that they get to keep, which, of course—

Cameron Brewer: Great idea.

GLEN BENNETT: Yeah, I’m just going to let—if you let me continue my train of thought, which you’re not even sure where I’m going with this. The factors around economic development is something that is crucially important to the wellbeing of Aotearoa, and in terms of the challenges we have in this space, I believe it comes back to looking at the expectations that councils had, which has been removed from the current Government, which is around the wellbeings, because we’ve got to look at this holistically.

We’ve got to look at this not just in the ecosystem of economics and cash; we’ve got to look at where it fits within our environmental, with our cultural, with our society. It is so important for us to be looking at taxation, not just taking money off people, but we’ve got to rethink the narrative around that—and they have their views and opinions; they’re not even listening, which is fine by me—because we need to talk and have better conversations around tax. We’ve got to consider it as our contribution. We are members of society, and unless they were part of the 1980s Tory Government in the UK, we do believe in this country that society is something that we participate in, and participating in society is around paying our fair share to drive on our roads, to access our hospitals, to access our education system, to access the infrastructure needs that we have.

The challenge that the Labour Party has around this legislation is really seeing that the Government made some choices. They made some choices to give some tax cuts, but the challenge now is “Where do we find the money to ensure that our hospitals, to ensure that our schools, to ensure that our public transport is world class?” That’s where we really need to sit back and consider the conversation around tax, and not just that “It’s mine. I’ve got to keep every last penny, and I’ve earned this. It’s my right”; it’s around “What is my contribution to my community, and what is my contribution to my neighbour?”

I know that many people in the National Party that I meet with and talk with do believe in that. They believe that we as a society are judged by how we treat our most vulnerable, and being a member of the New Zealand society, being a New Zealand taxpayer, is around our contribution. As we look at this legislation, as it’s been through the select committee process, there have been things from the Labour Party that we have looked at and said, “Well, we just can’t support this going any further forward.”

I find it interesting, also, that in my community of New Plymouth, we look at what choices Government has made in terms of tax breaks, and then what things have had to be cut because of that. I was very passionate and very confident in the work that I had been doing around housing, which was something I did long before coming into this House, and then since being in this House, and the fact that we’re able to get many new Kāinga Ora houses on the schedule to be built—we got many built. In fact, just earlier, or just like last year, we had 48 new beautiful homes open in central New Plymouth. To see, then, the hard work that was done and investment made be cut—to have the number of Kāinga Ora houses that were being built in my own city, to have that cut—has been devastating not only for the community but for myself in terms of championing the causes, of getting everyone into a place that they can call home, because it is so important.

We can’t support this beyond second reading. We want to work constructively with Government, and we can’t support this bill.

Well, look, the irony, with a couple of minutes to go, of hearing from the spokesperson for economic development that he would oppose this bill. The best way to achieve economic development is actually to make sure hard-working people get to keep more of their hard-working dollars. Wellington does not know best, but people do.

Let me finish with a quote from the famous economist Milton Friedman, who, by the way, shares a birthday with my wife. Milton said, “I am in favor of [tax cuts] under any circumstances for any … reason, whenever it’s possible. Governments never learn. Only people [do].” With that, I commend the bill to the House.

Members, it is time for the dinner break. The House is suspended until 7.30 p.m.

Sitting suspended from 5.57 p.m. to 7.30 p.m.

Members, the House is resumed. Before dinner, we were debating the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Bill, and we are on call No. 11, which I believe is a Labour Party call.

Tēnā koe, Mr Speaker. Thank you very much for the opportunity to stand and speak on this bill.

I reflect on a number of matters in this bill from my time as a Minister, and importantly, the ones around emergency events. I think it’s a little known fact that only two Ministers in the history of this country—if I recall correctly—have actually signed a national declaration of emergency, and I know I was one of them. I was what was termed the Minister of Civil Defence at the time of the pandemic, and when we locked down the country, one of my key roles was to use the powers I had in the legislation to declare a national emergency. The pandemic itself was unique in so far as it’s one every 100 years, I think it was, so it triggered a whole heap of other things that needed to happen to make sure that we could support New Zealanders, and that was about ensuring that where there were challenges around taxes or the ability to file—businesses who were struggling. I do see some of the sense in making sure that we’ve got a particular piece of work under way.

I know, when we were in power, we looked at how we might make things a little more streamlined, make it far more efficient. The fact of the matter remains, though, that emergency events are different, just by the fact of the types of emergency events that happen in New Zealand. Through my time, I can say I’ve dealt with two fires, three floods, a pandemic, a volcanic eruption, and there was one more I was trying to think of—oh, no, I wasn’t quite there when the Kaikōura earthquakes hit, but I remember there was a lot of apprehension around those emergency events that happened in New Zealand. The point here is making sure that the tax system is able to respond when it needs to.

Overall, and underlining much of what we talk about in tax, is the tax policy and its overall intent—what it looks to do to support New Zealanders. While there are parts of this bill that I can reflect upon, as I mentioned in emergency stakes, overall, ultimately, what we can’t accept is that we would change a tax policy—and we opposed the tax changes that this Government did in last year’s Budget, because we believe it didn’t actually provide the kinds of support that New Zealanders deserve. At the time, New Zealanders were sold something that said you could get up to $250 a week back through the tax cuts being proposed by this Government, yet reality tells us that in our communities, that isn’t the case. Just overall, this tax policy from this Government is something we can’t support.

As I mentioned, there are some things—and that’s just by virtue of the experience I’ve had as a Minister to try and make sure that tax works for our people, because, for the most part, people don’t understand how tax works or doesn’t work for them. Most people will sit back and just expect it to happen to them, and that’s certainly the case in a lot of the communities that I’ve represented in my years here in Parliament, and I reflect on some of those communities, like the ones that were impacted by significant emergency events—so it just sort of happens to them.

As I’ve mentioned, the Labour Party made it very clear that we didn’t support the work that this Government was doing overall on tax because we didn’t feel that it actually supported Kiwis how they’d hoped, how the Government promised it would, and how we hoped on this side of the House it might, and it just simply didn’t. What we’ve seen from this Government over the last year—at least—is more changes to see those who are worse off have less, and those who are well-off actually get to save a lot more of their money for themselves.

Now, when we look at such omnibus or big bills like this, we look towards the detail. As I mentioned with regards to the emergency stakes, there is some good stuff there. For some of the other things, though—and there were some expressions throughout the Finance and Expenditure Committee process that showed concerned around the Privacy Commissioner and their view about the sharing of information. In light of a number of events that have happened over the past 12 months, it’s important that people’s data, people’s personal information, continue to be protected and have the kind of apparatus around it to give confidence in the public institutions.

Simply having quite a liberal approach, if you will, to the way that information is shared—with other agencies, or what have you—should always bring questions about it from all members of this House as we look towards the work that we do to support our constituents. As I’ve mentioned, there have been a number of challenges with data and with data security, and I suspect that those challenges will only continue to grow when we look at the big challenges with the protection of data.

I can recall one time, in one of my previous roles as an associate health Minister, the health system came under huge cyber-attacks, and significant amounts of data was challenged and was compromised. It’d be easy for New Zealand to say, “Well, we’re a small country, we should be able to secure it.” Well, the way that it worked was it was so broken up into different parts that there was no way actually that we could have protected that data. Simply having a provision in this bill that looks towards an easier stream or share of data, without the kind of analysis on the systems that I’ve been privy to in my previous roles as a Minister in different portfolios, must always bring questions about in the House.

The fact that the Privacy Commissioner in their submission and in their advice that they gave to the committee highlighted that is, I think, one of the things that need to be said on the record here, to make sure that the New Zealand public take their data and their information as something serious, and that we continue to grow the kind of confidence that New Zealanders expect when they think about their own personal information.

On top of that, there are a number of other smaller things that it attempts to do—looking at offshore superannuation accounts and the ability to look towards tax support or provisions there. Ultimately, though, when I think about that particular provision, I think about what actually needs to happen on a bigger scale as we look towards the way that people travel between countries and the arrangements that we have with these countries, because I’m sure most electorate MPs, or those that support constituents, have constituents that come into their office to talk about their super that currently sits in another country.

Now, I accept that some of them are countries that we would never have an arrangement with that would allow them access or to bring those super funds here, or, you know, something that’s more favourable to them, but for others, they do have questions. I recall just recently jumping in an Uber here in Wellington and the Uber driver, a scientist sadly laid off by a number of the cuts the Government made, but none the less a lovely wahine who is German, her and her tāne—her and her husband—had constant battles with the law, with Inland Revenue, as they looked towards their super that they had offshore.

Now, my point here is we can tinker around the edges on these things, but, ultimately, there’s going to have to be something far more substantive to make sure that those who are impacted by these matters around overseas super—the ability to access, the ability to transfer, and even the sharing of information around those particular superannuation schemes must be something that’s looked at (1) with considerable competency, but (2) with a considerable view to the entire superannuation package.

That’s why, on this side of the House, I’ll reiterate the point: the devil is in the detail, but we can tinker with the tax system as much as we want and we can always change little bits here and there on the edges, but, ultimately, what the country deserves is a tax system that is clear, is transparent, is easy to understand, and is something that the country and the public have the ability to have a clear eye across and a say on.

On a number of these matters—because there are a lot of matters in this bill—I feel the public are in the dark. I don’t know if they’ve actually been consulted or whether or not it’s just something that’s driven out of Wellington. I think of the family tax credit, which just in recent days a number of stories in the media have highlighted around shortcomings of how this Government is managing the family tax credit scenario and complicating it for more and more Kiwis who rely on those types of matters.

We can’t support this bill despite there being some parts in there that were started under our Government. Ultimately, if this Government wants to get it right, they’ve got to make sure that tax works for New Zealanders instead of the other way around.

I’m very proud to be standing, as the last speaker, to support the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Bill at the second reading. I think it’s time to make it clear now, after the 11 speakers before me, who spoke about the different parts in this bill: yes, it is a giant bill, in the way that it includes so many hundreds of changes. There are many, in media responses and also in experts’ responses, with experts having to look into the different categories to really understand the areas that they are interested in.

I guess, as the last speaker on this bill, it is very important for me just to summarise for everyone who has turned on their TV right now, and also summarise all of the speakers above me, the key messages that this bill is really doing. It is a bill to ensure that the New Zealand tax system is efficient, is fair, and is also fit for purpose. For what? For who? For the ever rapidly changing New Zealand economy and tax system for all New Zealanders, and all of us sitting in this House, this side or the opposite side, are lawmakers in New Zealand trying to make laws—for who? For New Zealanders. All that we are doing here is making sure that our tax system—our revenue system—is reflective of what New Zealanders need on a day-by-day basis so that they can get on with making money, making progress, and making things work for their family. I think it is very important to actually look into the community, to look into the economy, on what people think this bill is doing.

Now, I have to quote one of the big four accounting firms, Deloitte—and there are many more, and I have worked for some of them, so I respect the level of expertise that they have in their firms—and I have to quote this, which I particularly like: “The Bill itself is less controversial tha[n] some of its predecessors as it largely contains taxpayer friendly measures aimed at reducing compliance costs and increasing productivity.” This is exactly what the National Government is doing. We are talking about cutting red tape, so therefore reducing compliance costs. We are talking about growth for New Zealand, which is about increasing productivity. This is why I commend this bill to the House.