Woodhouse MichaelHon MICHAEL WOODHOUSE (National): Thank you Madam Speaker. I want to join with previous speakers in thanking the submitters on this bill. I particularly want to acknowledge and thank the independent tax expert that the Finance and Expenditure Committee relied upon Therese Turner. I've been on the Finance and Expenditure Committee on and off over the last few years and she is as sharp an intellect as I think we have had the benefit of advice from but also there is a candour about her contributions to the discussion that I think is refreshing particularly on those issues that go against the prevailing preferences and wisdom of the Government. I want to acknowledge the officials. I won't name them because that would take the rest of the 10 minutes of my speech to do so.If I can gently rebuke the Inland Revenue Department about whom I have the highest regard as a former Minister of Revenue and as a lapsed accountant I do think 27 officials for a taxation annual rates and remedial matters bill is rather excessive. I did comment to my colleague and friend Nicola Willis in one select committee meeting that the arrival of the tax officials looked like the last scene of a Benny Hill show comedy where they were all coming in and I wanted to add music to it. There is I think a risk that policy advisers and tax officials become a solution looking for a problem and I think there are a couple of examples of that in this bill.I want to start with the main principled opposition to this bill and in doing so I'm going to quote Thomas Sowell one of the world's most renowned economists of the 20th and 21st centuries when he said of tax—of inflation actually—It is a way to take people's wealth from them without having to openly raise taxes. Inflation is the most universal tax of all." We have this issue with what is commonly known as bracket creep. We have a Government that is determined to raise the wages of workers particularly low-income workers but the risk is that they are no better off because the higher the income with inflation at the same time the higher the tax that they pay and therefore at best they are no better off and at worst they are worse off.Andrew Bayly: I think we've got members who don't understand.Hon MICHAEL WOODHOUSE: Yeah. Well it is certainly the lived experience of those people who are moving from one tax bracket to the other through no fault of their own except that inflation is pushing them into those brackets and they pay a higher tax rate. Now we have a progressive tax system within the broad based - low rate framework that both sides of the House will support but we cannot support a bill that will have the impact of pushing people into higher tax brackets and to pay greater levels of income tax through no fault of their own but to be the subject of inflation.Now we also have a situation where the Government has engaged in what is known in economic theory as pump-priming. We are in very straitened economic times because of COVID and we are pushing huge amounts of money into the economy by different methods mostly Government spending and Government support. Normally that sort of strategy is associated not only with that kind of fiscal stimulus but with lowering of taxes in order to further stimulate the economy. Not only is this Government not lowering taxes but it has raised the top tax rate to 39 percent. Now that rate is not the subject of this bill but we will very shortly when the 2021-22 annual rates and remedial matters bill is introduced be debating that very point. So at a time when we should be raising tax thresholds and potentially lowering tax rates we're not raising tax thresholds and we're raising tax rates and for that reason the National Party certainly cannot support this bill.Now there are some good changes and they were laid out by the Minister and there are some changes to the bill as it was introduced that I think constitute an improvement. The purchase price allocation framework is problematic and I think what we will see is tax planners and tax accountants doing pretty well out of this change as they work with their clients to make sure that the tax—not advantages actually; that tax planning is such that they are not penalised by these changes. There are scenarios where it may well be quite appropriate for the vendor and the purchaser to treat those transactions differently for tax purposes. The vendor particularly if the assets have been held for a long period of time will have been subject to different for example depreciation rates.Within my time in this House the tax depreciation rates on fit-out within buildings have changed demonstrably and the question is: will there be a scenario where the purchaser and vendor do necessarily have to treat the purchase price and the sale price differently for tax purposes? Probably. What I do say is an improvement—and I appreciate the Government responding to the submitters and the select committee's call—is that in the bill when it was introduced the disallowance of a deduction and the valuation of the purchase effectively at nil for all time has been amended by the bill so that where there is a dispute about what the appropriate purchase price allocation should be then there isn't a deduction until that dispute is settled. That will certainly motivate people to get a settlement either with the vendor or with IRD but I think it is some improvement albeit that I still have those concerns with purchase price allocation.The area where I think there has been a solution looking for a problem and the remedial matter that I most strongly object to is the GST on roaming charges. It's bad in principle and it's bad in practice. Now we've had the Goods and Services Tax Act in place for 35 years and it is held up globally as the most efficient value-added tax framework in the world. Countries are envious of it and a lot of my former tax accountant colleagues made a lot of money in Australia when the Howard Government introduced their GST some years ago and in order to be able to placate support parties in the Parliament they had to do some ridiculous things which led to variations in things like raw chicken versus cooked chicken and bread being GST-exempt but chips not—all sorts of crazy variations. We don't have that. We have a GST on everything except exported goods financial transactions and residential rentals. There might be one or two others. I'm sure Ms Edmonds will be able to fill in the gaps.Global roaming services is an overseas service by a New Zealander who is overseas and a service that is overseas. There is no way in principle that that should be subject to New Zealand's GST regime. When we get off the plane in Australia—and eventually I hope we'll be able to do that—we automatically hook into the domestic provider TelstraClear or whoever it is in Australia. The bill may come through on our local service but they are the pass-through agents for an overseas supplier to a New Zealander overseas and there should be no GST applied to that. This is not a good change and by the Minister's own admission and as mentioned by Mr Bayly it's only going to generate about $6 million of revenue. What the telcos here in New Zealand told us was that that pales in comparison to the amount of money they need to invest in their own systems in order to apply a GST regime that frankly shouldn't be there in the first place.Now when we think about a tax regime being broad based low rate and efficient there's very little efficiency. There's no efficiency in a scheme that means the payers of the tax—or the tax agents in this case—have to pay more to get those systems in place than the Crown will gain in revenue. For that reason this part of the bill should not be there. When we get to the appropriate stage in the committee of the whole House I will be introducing a Supplementary Order Paper that deletes those sections in their entirety. It's punitive it's wrong in principle and it won't raise more than a jot of revenue for the Crown. That said I look forward to the conversation continuing but we cannot support this bill."