Genter Julie Anne: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — Second ReadingText is incorporated into the Bound VolumeGenter Julie Anne: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — Second Reading[Sitting date: 12 April 2016. Volume:713;Page:10428. Text is incorporated into the Bound Volume.]JULIE ANNE GENTER (Green): I rise to take a call on the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. The Green Party of course supports this bill. It is largely non-controversial. It is certainly nothing earth-shattering. It makes a number of small administrative changes to the tax system that will hopefully result in it being a bit simpler and will enable Government departments to work more effectively through sharing information.I have to say that I really agree with what my colleague Grant Robertson said earlier tonight though. The name of the bill suggests that it could be doing quite a bit more. Obviously transformation and simplification would be quite welcome I think by many members of this House when it comes to the tax system. I can speak on behalf of the Green Party and say that a simpler fairer tax system is one way that we can address the two major challenges that are facing us: growing inequality in this country and climate change. Changing the tax system making it simpler and fairer is one way that we can reduce the growth in the gap between the very rich and everyone else but especially those who are doing it incredibly tough right now.It is another way that we can send signals to business and consumers and transition to a cleaner smarter economy—one that is not going to leave us susceptible to the challenges of climate change. We can reduce fossil fuel use we can reduce pollution—all of that can be done through the tax system and of course that is a challenge that unfortunately our National Government has completely failed to take up in its nearly 8 years in Government. All it has done with the tax system is tinker around the edges. I have to say that the work on this bill was done by officials—it is good work; nothing to criticise other than that there are some omissions—but ultimately the officials’ priorities are determined by the Government of the day.It is interesting because last week we heard from the Prime Minister that the Inland Revenue Department (IRD) had not been able to progress changes to the rules around New Zealand foreign trusts to avoid the use of New Zealand as a tax shelter by individuals who live overseas because the IRD had other priorities. But I think that is really shifting blame because it is the Government of the day that directs the officials in what their programme of work should be. It determines their priorities and gives them the resource to be able to undertake that work. So I would say that certainly something that is missing from this bill—which would be very appropriate given all of the news around the Panama Papers in the last week and a half—would be amendments that would simplify the work that the IRD would have to do and does have to undertake if and when other countries request information from us about New Zealand foreign trusts.At the moment the situation is this: we have got these New Zealand foreign trusts and somebody who does not live in New Zealand and does not earn money in New Zealand can set up a foreign trust which they can use to hide assets and avoid paying tax or even worse hide criminal activities. Of course there are legitimate purposes for these trusts as well but because of the secrecy around them it is inherently attractive to those who would want to hide criminal activity or avoid paying tax in their home country.Last week the Prime Minister claimed that there was full disclosure there was no problem to change it and the IRD was collecting or requiring the trusts to keep all of this information. What he did not say was that unless the other country is Australia if any country in the world was to ask us for information about foreign trusts that have been set up in which the settlor is resident in their home country the IRD would not be able to give them that information because the IRD does not collect the information. It would have to go through the 12000 New Zealand foreign trusts that are registered here. You can imagine that huge burden of bureaucracy. It would actually be impossible for us to effectively share information with other countries even those that have a double tax agreement with us. Of course there are about 40 countries that have a double tax agreement with New Zealand and another 12 that have some information-sharing arrangements with us but fundamentally because of the nature of the New Zealand foreign trusts and the information collected by IRD at the point at which they are set up the only information that needs to be given to the IRD is the name of the trust—Mr DEPUTY SPEAKER: Come back to the bill.JULIE ANNE GENTER: —which may have no bearing whatsoever on who the settlor is or what the activity is or even the date that it has been settled.Mr DEPUTY SPEAKER: Back to the bill.JULIE ANNE GENTER: So one way that this bill could be improved—because it is about transformation first phase simplification and other measures—would be to have provisions in it that set up more complete disclosure and a registry so that when the IRD collects that information it would then be much easier for it to share information with other countries and prevent tax avoidance and other criminal activities. I am sure that is something that New Zealand would want to be doing.The Prime Minister himself said that we are working with the OECD and that we are trying to crack down on people who are avoiding paying tax here in New Zealand—although unfortunately of course we have heard just in the last few weeks as well that the Government has no idea whatsoever about how much tax it is missing out on from multinational companies that avoid paying tax in New Zealand. We have had estimates anywhere from half a billion dollars a year to a billion dollars a year—potentially more. This is a lot of revenue that this National Government has simply failed to prioritise while just earlier today we were going through the Committee stage of a bill that is setting up a regime amending the student loan scheme so that we can get more information about people who have outstanding student loans who are living overseas and chase down the money that they owe the Government—those students—rather than chase down the revenue that is owed by big multinational corporates that earn huge profits.So I think that what is missing in this legislation and what has been talked about in the House earlier in another bill that we heard at the same time really demonstrates the priorities of this National Government. Ultimately it is protecting the status quo. It is tinkering around the edges but fundamentally is committed to an economy that is unfair and unsustainable.Mr DEPUTY SPEAKER: Order! I will just remind the member—she will be seated while I am speaking—that this is not a general debate speech. It is specifically about this bill in relation to taxation. The fact that she spent some time talking about what it is not does not actually address the bill. So I invite her to come back to the bill please.JULIE ANNE GENTER: I raise a point of order Mr Speaker. I think that of all the speeches that we have heard tonight on this bill mine is straying no more from the bill than any other speech.Mr DEPUTY SPEAKER: Well that is not the point. The point is that I have asked you to come back to the bill. The fact that you are saying that you are sinning to a lesser degree than other speakers does not bring your speech into order. The fact that I may have gone to sleep while somebody else was giving their contribution does not necessarily allow you to have a similar amount of lack of attention from me. So please come back to the bill.JULIE ANNE GENTER: As I said the Green Party will be supporting this bill. It does not make any radical changes to our unfair tax system which the National Government is continuing to support. With all the different issues that have been in the news in the last few weeks I do think that the National Government should be rethinking its priorities and looking out for average New Zealanders and looking to making changes to the tax system that are actually going to deliver a fairer greener society here in New Zealand.