Wong Pansy: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — Second Reading 
Wong Pansy: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — Second Reading 
[Volume:621;Page:16412] 
PANSY WONG (National) 
: 
 The Labour member Mark Gosche thinks that the Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill is a good bill—so good that he took only 2 minutes to tell the public how good it is. That is all Mark Gosche had to say—2 minutes’ worth. 
National opposes this bill. We lay down a challenge to United Future which I will detail later. Since the minority Labour Government came into office in 1999 it has increased the tax take by $34 billion—$34 billion dollars’ more tax is being taken off ordinary hard-working New Zealanders. Where as Muriel Newman asked has it been spent? The hospital waiting lists get longer. Recently we heard that Wellington is the second big city to announce that the emergency clinic would no longer take night calls. People have to queue up in the hospital’s emergency department. 
Hon Bill English 
: And they have to pay. 
PANSY WONG 
: They have to pay. We also learnt that the Ministry of Health has now relaxed the criteria on the waiting time it is deemed acceptable for people to wait in the emergency departments of our hospitals. Where has that $34 billion extra tax gone to? The Labour Government announced in its latest Budget its biggest spend-up—the so-called family package. It is so complicated that nobody understands it so it has to throw another $21 million at it to promote it. But $34 billion additional tax was taken from ordinary New Zealanders. That is a big part of this bill. 
When the public looks at this legislation they may get confused. This tax grab bill was recommended to pass by a majority of members on the Finance and Expenditure Committee. It is not unanimous. When I flicked to the end of the commentary on the bill I became a bit confused because the parties holding a minority view include ACT New Zealand First and United Future and we do not support it. Where is the majority? If we are all against it where is the majority that supports the bill? But more than that United Future’s Gordon Copeland has tabled a Supplementary Order Paper to index the increase of the tax threshold. Although National does not believe that is the total answer we will make a commitment to support United Future’s Supplementary Order Paper. I know that New Zealand First will support it. I think ACT will support it and the Greens probably will. Now all that is missing is Labour’s support and I think that United Future should be able to demand that its Supplementary Order Paper be supported by Labour. Then a lot of taxpayers will get instant relief. 
Dail Jones 
: Yes. 
PANSY WONG 
: I hear from my colleague from New Zealand First that they will support United Future’s Supplementary Order Paper. In looking forward to the Committee stage and the third reading we now lay down the challenge to United Future to show that it is a decent party—a party that would represent its constituents by coming to Parliament to keep the Government honest. We look forward to seeing it vote against this “Tax Grab Bill” if Labour does not support its Supplementary Order Paper. If United Future exercises its power in this way taxpayers would not continue to be overtaxed by this “tax and spend” Labour Government which likes to redistribute hard-working New Zealanders’ hard-earned money. 
Much has been made of the big step taken in terms of the amendment relating to attracting foreign funds to invest in New Zealand’s venture capital. I do not think the public should be misled. The three groups of submitters who came before the Finance and Expenditure Committee basically represented 100 percent of the venture capital industry. They were unanimous in telling the select committee that the amendments included in this bill were not worth the paper they were written on. I quote from New Zealand Venture Investment Fund Ltd: “In summary the tax changes proposed in the April tax bill will not attract the targeted offshore investors because the eligibility criteria are too restrictive.” 
New Zealand Venture Investment Fund Ltd has taken a very responsible step. It went out and surveyed nine substantial foreign fund investors and gauged their opinions on whether the amendments included in this tax bill would lead them to invest in New Zealand. I am afraid the answer is that these amendments are far too narrow and restrictive. They spelt out the most effective approach to ensure that foreign investors would be interested to invest in New Zealand. They said that the amendments would have to contain certain features. For example a tax-exempt status was needed for offshore investors who invest in New Zealand ventures through appropriate venture capital investment vehicles regardless of their domestic tax status. That is not included in this bill. The types of mechanisms they are looking for are a new limited partnership vehicle and mutual recognition between Australia and New Zealand of partnership structure and tax structure. I am afraid that as usual the minority Labour Government is all light and no heat. It continues to waste the time of Parliament by passing legislation that feels good but that in substance will not do much. 
We do not have much of a problem with the Government introducing the amendment to close down the so-called loophole in respect of Australian unit trusts. However we do think it is a problem that the Government is once again having a knee-jerk reaction and is not at the same time tackling the same issue in respect of Britain. I quote a salient point that was made by the submitter: “Ultimately the existence of investors looking for mechanisms such as the Australian unit trust was because of the tax regime in New Zealand. While New Zealand continued to tax the pool investment fund at 33 percent our investors will be looking at loopholes and setting up vehicles to do that.” Instead of taking up the opportunity to make New Zealand competitive we are debating piecemeal legislation that has the effect of plugging one hole with another one opening up very soon somewhere else because of the underlying principle that New Zealand investors are being overtaxed.