Woodhouse Michael: Taxation (Tax Administration and Remedial Matters) Bill — Second Reading 
Text is incorporated into the Bound Volume 
Woodhouse Michael: Taxation (Tax Administration and Remedial Matters) Bill — Second Reading 
[Sitting date: 14 July 2011. Volume:674;Page:20143. Text is incorporated into the Bound Volume.] 
MICHAEL WOODHOUSE (National) 
: 
 I am delighted to take a call on the Taxation (Tax Administration and Remedial Matters) Bill. As the newest member of the Finance and Expenditure Committee I was not on the committee to hear submissions on this bill. 
I will not be as hard as my colleague Mr Gilmore was on the speech of the Hon Shane Jones because apart from his terrible quips on the use of the word “tax” I think he had a very good point: today and yesterday are very important days for tax policy. I think I heard him say that experts will take a very close and judicious eye to Labour’s tax policy and they probably will but that judicious eye was already cast over New Zealand’s tax system at the end of Labour’s term in 2008 when the Tax Working Group released its report. It said that our tax system which had previously been the least distortionary in the OECD in the late 1980s and early 1990s had become incredibly distorted. It made some recommendations that included not tinkering with GST which is something the good Dr Cullen when he was the Minister of Finance was absolutely adamant should not happen. It also said that yes there were some things that could be done regarding capital gains but that included things like the removal of depreciation and the 20 percent premium. They are all things that have been done by the National Government since it came to power. 
So I think that yesterday and today are very important days for tax policy. I mention yesterday because of the oral question asked by that very erudite National member of Parliament from Dunedin of the Hon Bill English about how fair our tax system was. The answer was quite remarkable. We seem to have one of the most progressive tax systems in the Western World where 17 percent—17 percent—of income tax payers in this country pay 97 percent of the tax burden and 43 percent of households in this country pay no effective tax because of the redistributive policies of Working for Families and other schemes. That does not include those families who might also be drawing New Zealand superannuation. We have a clear separation in terms of tax policy. We have a Government that through this bill and previous legislation it has passed is unhooking itself from the very distortionary and punitive tax policies of the past and heading on a low-tax simplification process on the same day that the Labour Party has announced a punitive envious and frankly unworkable tax policy about which its previous Minister of Finance had said: “Do not go there.” 
I was also mindful of Mr Parker’s comments on the removal of gift duty. I find it quite fascinating but illuminating in respect of Labour’s theoretical commitment to a gift duty in the face of the fact that it simply did not work. Its abolition will have no effect and no fiscal impact whatsoever. I do not believe that Mr Parker was dog whistling to tax lawyers and tax accountants around the country when he suggested that the sky would fall in if the duty was changed. But there are many who do think that and who see the huge fees that lawyers earn in tax planning for trusts to avoid gift duty. They will be disappointed when this bill is passed. I certainly will not be one of them. I think it is a very very good change and I commend it.