Duynhoven Harry: Taxation (Base Maintenance  and Miscellaneous Provisions) Bill — Second Reading 
Duynhoven Harry: Taxation (Base Maintenance  and Miscellaneous Provisions) Bill — Second Reading 
[Volume:626;Page:21437] 
Hon HARRY DUYNHOVEN (Minister for Transport Safety) 
: 
 I am a little surprised to be invited to join in this debate but it is actually one that is very important to the oil and gas exploration industry. It contains a very significant change which is that the Finance and Expenditure Committee has agreed with a proposition in the bill to provide tax exemptions applicable for 6 years for income earned by non-resident rig operators from the drilling of wells in order to explore and develop offshore petroleum fields in New Zealand. It also provides an exemption for income earned by non-residents from ships providing seismic survey readings in order to identify petroleum in New Zealand. 
Both of those initiatives are very important particularly in my second portfolio as Associate Minister of Energy where I am responsible for the Crown minerals section of the Ministry of Economic Development which deals with mines and of course petroleum exploration. Those two measures contained in this bill will make I believe a not insignificant difference to the industry and will be very much welcomed. The bill certainly allows for the shall we say mobilisation costs in New Zealand which are quite large because of our distance from the main oil drilling centres of the world to be offset at least to a degree in the costs factored in by the companies when deciding where to invest their money and where to send their seismic ships or offshore drilling rig equipment. Whether the drilling is submersible or semi-submersible the mobilisation costs drilling rigs etc. are very expensive. So I think that is a not insignificant measure in this bill. 
I want to take only a short call but I do want to respond very briefly to my colleague on the Opposition side of the House who preceded me. I think New Zealanders are getting just a little tired of the tired old mantra from the right wing of New Zealand politics which keeps talking about New Zealand’s high-tax regime. That is simply a nonsense. When we consider most of the countries that we like to compare ourselves with we find the tax burden on the New Zealand taxpayer is lower than it is on taxpayers in virtually all of them. In fact if we consider the entire OECD I think it would be fair to say that if we take into account all the taxes including such things as the health taxes superannuation payments and all the other things that people stack on top—even such simple things as the registration costs for one’s motor vehicle—we would find that there is one country in the OECD that has generally lower daily costs by way of tax than New Zealand. I think there may be a couple of countries in that situation but Mexico is the one that springs to mind and to be really honest I do not hear a lot of New Zealanders talk about rushing to take their businesses off and establish them in Mexico. 
What I do hear is that a lot of people are very keen to find out how we are so efficient in the running of some of our public institutions. 
Pansy Wong 
: Oh ha ha! 
Hon HARRY DUYNHOVEN 
: I tell the member—and she can laugh and jump up and down if she likes—to look at some of our public institutions. Recently I was talking to a new immigrant to New Zealand a doctor who has been here for several years now. He has worked in the health systems in many of the countries that we like to consider to be more advanced than us including the Netherlands I have to say. He said to me that New Zealand’s health system is the best one he has worked in and that it provides the best outcome for the money provided. That gentleman has worked in several countries at a very high level in the health system. Now what does that have to do with taxation? It is taxation that provides for all those things yet we have seen significant development in this country over the years. Ms Wong can jump up and down all she likes but she is not providing me with the facts and figures that state other countries are doing significantly better than us. 
I just wanted to take a short call on this bill but I am sure the measures taken in it for the oil and gas industry will provide a very good dividend for New Zealand.