Watts SimonTAXATION (ANNUAL RATES FOR 2024–25 EMERGENCY RESPONSE AND REMEDIAL MEASURES) BILLFirst ReadingHon SIMON WATTS (Minister of Revenue): I seek leave to present a legislative statement on the Taxation (Annual Rates for 2024–25 Emergency Response and Remedial Measures) Bill.DEPUTY SPEAKER: Leave has been sought for that course of action. Is there any objection? There is none. That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon SIMON WATTS: I move That the Taxation (Annual Rates for 2024–25 Emergency Response and Remedial Measures) Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. This is a bill that deals with the 21st century issues and the reality of life in New Zealand today. It recognises the role that the tax system and Inland Revenue play in the lives of our citizens and the economy. The bill also recognises the role of New Zealand on the world stage. The Government and I as revenue Minister have been focused on ensuring we continue to strengthen and rebuild the economy to ensure New Zealand businesses and individuals have a secure future. We know times have been challenging for New Zealanders which is why this bill includes a number and a range of proposals aimed at enhancing the tax system to make life easier.I want to highlight some of the key features of the bill. First the bill proposes that certain tax relief measures be activated through an Order in Council so people affected by an emergency event can receive relief sooner. In recent times New Zealand has suffered a series of emergency events ranging from the Canterbury earthquakes to M. bovis outbreaks to devastating floods and of course the COVID-19 pandemic. Each time the tax system has played its role by providing tax relief to those affected. And each time that relief was provided the Government had to make changes by way of parliamentary Acts to allow aspects of that relief to flow to affected parties. Working through primary legislation is far more speedy and we need to make the necessary changes to provide greater certainty and get affected people relief faster. That's why the Government is making this proposal for certain tax relief measures to be activated through an Order in Council instead. This would not be automatic because Ministers would retain the discretion to determine which measures should apply and when for any given future emergency event.The bill also proposes to allow Inland Revenue to share information with other agencies upon request to help them carry out their roles in providing emergency assistance such as the Ministry of Health. Overall this set of proposals would help streamline the Government-wide emergency response to ensure that we are more prepared to deal with the impacts of climate change and other emergency events.The bill also proposes to address issues with KiwiSaver so that it can better support New Zealanders trying to secure their economic future. Future Kiwis or people moving to New Zealand who are wanting to bring their overseas pension funds with them often face a financial obstacle. They may incur New Zealand tax on the transfer. This causes problems for people who have relocated to New Zealand and are unable to pay New Zealand tax. If they can withdraw these funds from their scheme this can also result in tax charges from their home country. This Government wants future Kiwis to invest here which is why we are proposing a schemes pay" option. This would allow a migrant to elect for their New Zealand provider to pay the New Zealand tax due on the transfer at a flat rate of 28 percent directly to Inland Revenue.The bill also proposes to address another issue relating to the transfer of pension funds. In 2015 a change in UK legislation meant that KiwiSaver schemes ceased to meet certain requirements. Some migrants who transferred their pensions from the UK to KiwiSaver schemes in New Zealand prior to that change cannot now transfer them from KiwiSaver to another scheme without incurring UK tax charges—this locks the funds into those KiwiSaver schemes. To simplify this this bill proposes to allow KiwiSaver providers and individuals to be able to move locked-in funds from their scheme into one that meets the UK criteria meaning that there will be no ongoing UK tax implications.Young New Zealanders who are wanting to secure their economic future here in New Zealand should be able to do so. At present a person aged under 16 who wishes to join KiwiSaver requires the consent of all guardians or parents. This means that a sole parent wishing to enrol a child under the age of 16 in KiwiSaver may face difficulty getting agreement from a former partner. In today's society there are many more sole parents than they were when the scheme was introduced in 2007 and our tax system must reflect the modern reality of our country. We are proposing that people under the age of 16 be allowed to enrol in KiwiSaver with the agreement of just one parent or guardian.New Zealand needs its tax system to be able to deal with the issues of the 21st century including the emergence of crypto-assets. Since the first crypto-asset Bitcoin was introduced in 2009 the market for crypto-assets worldwide has grown significantly. Between 6 percent and 10 percent of New Zealanders own some of the cryptocurrency with most of their transactions undertaken through offshore exchanges. The current market capitalisation for crypto-assets worldwide is in the region of NZ$4 trillion. That figure will only grow as more people enter the trade attracted in part because tax authorities have limited visibility of income derived through crypto-assets. This means that people trading in crypto may not be paying their fair share of tax. The OECD therefore developed a reporting framework to address this data gap ensuring an automatic exchange of this tax relevant information on crypto-assets between countries. This bill will incorporate the OECD's framework proposal into New Zealand law and be effective from the 2026-27 tax year. This is a sensible measure as it supports the integrity of our tax system; people must pay their fair share of tax even as they invest and grow their wealth.Growth is something that this Government wants to encourage and we are committed to supporting the tech sector and start-ups. An existing way to be able to do that is through encouraging the use of employee share schemes which makes it easier for companies to attract and retain that talent. We recognise these schemes are an important way for paying employees in New Zealand. We want to make sure that the exempt scheme which allows employers to provide tax-exempt benefits remains fit for purpose. So the bill proposes that thresholds relating to exempt employee share schemes are increased to recognise the effect of past inflation but also to buffer against future inflation. The proposal would apply to offers of shares made under exempt employee share schemes on or after 1 April 2025.To round off these are only some of the features of this taxation bill today at first reading. All proposed changes in the bill whether outlined today or not will play an important role in ensuring our tax system strengthens the economy with businesses and individuals having a secure future ahead. This is important now more than ever as although we have seen positive impacts to the economy there is still more work to be done. I therefore commend this bill to the House.DEPUTY SPEAKER: The question is that the motion be agreed to."