Genter Julie Anne: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — In CommitteeText is incorporated into the Bound VolumeGenter Julie Anne: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — In Committee[Sitting date: 10 May 2016. Volume:713;Page:10953. Text is incorporated into the Bound Volume.]JULIE ANNE GENTER (Green): In rising to speak on the bill this evening I would like to comment first on the Supplementary Order Paper that I have put forward which is Supplementary Order Paper 173. This would amend the Taxation (Transformation: First Phase Simplification and Other Measures) Bill which fundamentally amends the Income Tax Act.The purpose of my Supplementary Order Paper 173 is to improve the disclosure around New Zealand foreign trusts. We did not consider this issue at length in the Finance and Expenditure Committee. Of course the reason for that is that the Inland Revenue Department never did continue its review that it intended to undertake back in 2014 around the disclosure regime for New Zealand foreign trusts. It had intended to undertake a review because we were attracting criticism because there was the possibility that people offshore were using New Zealand foreign trusts as a way to avoid paying tax in their home country and for perhaps more nefarious purposes. But of course as we have come to know in recent weeks the National Government was lobbied directly by people who are very active in the New Zealand foreign trust industry some of whom were very close to the Prime Minister and some of whom are directors of an astonishing number of companies.We have here the Cone Marshall directors of around a thousand companies—look-through companies—and of course they lobbied the National Government which then decided to give that message to the Inland Revenue Department that we should not continue the review of the New Zealand foreign trusts regime. So we are left here with a situation because the Mossack Fonseca leak has pointed to the role of tax evasion and avoidance globally and the terrible problem that it is playing in increasing wealth inequality around the globe. Of course tax havens serve no useful economic purpose. They do not further the goal of achieving a more prosperous and fairer economy for all people and that is something the Green Party holds very very dear. We want to have a fair and prosperous economy and we do not want New Zealand to be playing the role that it has been playing.Simply—very simply—we think that it is a perfectly reasonable and sensible idea to have the Inland Revenue Department collect information on the people who are setting up New Zealand foreign trusts so that they cannot be used for tax evasion avoidance or any other nefarious purpose. We just want full disclosure. I think that is something that the National Government—really I cannot understand why it would not want full disclosure. It does not cost anything. It simply means that our New Zealand foreign trust regime cannot be abused by people who are seeking to break the law or do things that are wrong.Although the Prime Minister started talking about this issue when it first broke saying that New Zealand already had full disclosure in respect of New Zealand foreign trusts of course it turned out that that was not true and many tax experts and academics pointed this out. I have a paper here from Michael Littlewood from the University of Auckland. Anyone can go and look it up online. He is a tax expert—The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the member. I have looked at this closely I say to the member and this is actually outside the scope of the bill. Because we are in the Committee stage here we must focus on Part 1 of the bill. I have sought advice and if we look at Speaker’s ruling 132/1 it is covered there that amendments that are outside of the scope of the bill do not widen the scope of the debate of the bill. So unfortunately I am going to have to rule it out. If the member wants to continue I am not going to cut your time off but in terms of the Supplementary Order Paper specifically that you are actually referring to and the foreign trusts part of that then that is out of the scope of the bill. The member can continue but keep it within the bill as Part 1 actually identifies.JULIE ANNE GENTER: I raise a point of order Mr Chairperson. I am just seeking your clarification because my understanding is that the Supplementary Order Paper was accepted and it was not ruled out of scope. So I am unclear how it is that you are able to now rule it out of scope.The CHAIRPERSON (Lindsay Tisch): I am just going to seek some advice on this because although a Supplementary Order Paper can be tabled and then it becomes evident whether it is in or outside the scope of the bill my understanding is—and I am seeking advice—that if it is outside the scope it cannot be ruled out until it is tabled. That is why it has been tabled. You have got a Supplementary Order Paper number on it. I am seeking advice now but I am advised that because it is outside the scope of the bill you cannot actually refer to it in the context that you are. You can refer to Part 1 of course—that is the part that we are on—but in terms specifically of your Supplementary Order Paper on foreign trusts that is what is out of the scope and out of order. I say to the member that I have sought advice and the ruling that I have made stands. Although you have tabled the amendment—and that is fine to table the Supplementary Order Paper that you have—until you actually start speaking to it one does not know what you are actually going to be saying. It was not until your speech had started—I did seek advice before I intervened. The ruling is a ruling of the Chair that it is outside the scope and it is out of order so from the member’s point of view if you wish to continue you still have time available. You need to come back on to the scope of the bill which is Part 1.Grant Robertson: I raise a point of order Mr Chairperson. I just want to ask a couple of questions about your ruling because I would have thought it was normal practice when the decision is made to rule out an amendment that either it is at the point at which a person attempts to table—this is not a handwritten amendment. This is an amendment that has been tabled. It has a number. It has been accepted. So the first hurdle is that it has to be accepted and that has occurred. It is then in my understanding normal practice that when we come to the vote on the amendment that would be the stage at which you may or may not decide that it remains relevant to the bill rather than you making a ruling actually in the middle of someone’s speech when it is being debated. I mean I had intended to give a speech and I would have thought you might hear some calls and that would be what would help you decide when we came to a vote as to whether or not it was in order.The CHAIRPERSON (Lindsay Tisch): I thank the member for those comments. They are helpful. Although a Supplementary Order Paper can be tabled and the Clerk’s Office has allowed it to be tabled until a debate on it actually happens one does not know what the points of debate are going to be. It is only once the debate has started—and that is why I did allow it to carry on longer. In reference to what you are saying I did allow it to happen to see what the content of the debate was going to be. On that basis once the member got into the discussion of the substantive part of what the debate was about and referred to the Supplementary Order Paper and the foreign trusts it was at that stage that I intervened and said it was out of scope of the bill and now out of order.Stuart Nash: I raise a point of order Mr Chairperson. I am just seeking your guidance on when we will actually be able to debate the Supplementary Order Paper. There are some clauses in the bill that do talk about foreign investment funds. So there could be some relation to that or there are parts in the bill that talk about listing on the Australian Stock Exchange. I suppose my question is at any point in time during the Committee stage will we be allowed to debate Julie Anne Genter’s Supplementary Order Paper at all?The CHAIRPERSON (Lindsay Tisch): It is the Chairperson at the time who makes that deliberation. I have ruled that this Supplementary Order Paper is out of order and out of context. If the member wishes in the course of the debate to talk about the points that you have mentioned the presiding officer at the time will make that determination. I have said that this Supplementary Order Paper is out of order because it is out of scope and that is the end of the matter. Now I am inviting Julie Anne Genter to continue with the time available if she wishes to continue on Part 1.JULIE ANNE GENTER: Thank you Mr Chair. The purpose of this bill is to simplify and improve the administration of the tax system and so it makes a number of minor amendments to a variety of Acts including the Income Tax Act 2007. I take it that I am allowed to at least say what my Supplementary Order Paper would have done which was amend section 59B of the Income Tax Act which currently requires only the name or potentially just the date of settlement on the trust that relates to a foreign trust which is clearly not full disclosure. I am sorry to say that the National Government will not even allow us to debate this in the Committee even though it would have been a perfectly relevant and simple amendment to the Income Tax Act that would have simplified greatly our tax system and provided a whole lot more disclosure on an issue that is of great importance to New Zealanders and indeed people all over the world.