Bayly AndrewANDREW BAYLY (National—Hunua): Thank you very much Mr Speaker. The first thing I'd just like to say—obviously we're going to support this bill but I think we've missed an opportunity. I received a copy of this bill which is not insignificant at 1.39 this afternoon and here we are a couple of hours later having to give a speech on it and it is quite a detailed bill. So I think we have lost a little bit of the opportunity to be able to work collaboratively with the Government and to have proper opportunity to discuss this and work through it. Obviously there is no select committee stage and there is in fact no proper Parliament stage to go through all three readings and the committee of the whole House. So my first point is I wish we could've had the opportunity to collaborate with the Government because I think we could've improved this bill.The second point I want to make is one that I made yesterday when the Minister of Finance was lauding the success of this major part of reform to help businesses in their hour of need. There is no doubt that this bill gives some support to small businesses but in my mind I believe that there is a tendency to gild the lily about this bill. What this bill is about is the Government acting as a temporary bank in terms of banking losses that companies would be making and allowing them to claim it in the preceding year rather than delaying it until next year. In terms of a cash payment that is all we've done is changed the timing of when that occurs. The actual net cost to the Government of this scheme using the $1.3 billion is actually the cost of one year's financing $3.1 billion—or in other terms a $90 million cost to the Government. That is the net cost to the Government of this package and so it should be described as a $90 million bill. But I do accept the proposition that by doing and acting as a bank the Government effectively is giving the opportunity for businesses to access or in effect pay less tax than they would've otherwise been required to do so by a period of one year. That is useful in the time of need we've got right now.But my second or third point actually is I can't understand where the $3.1 billion comes from. We actually haven't had an explanation of it. If you look at the projections for the 2020 tax year it was expected that corporate tax would generate $14.5 billion. So we've got this figure of $3.1 billion that's been quoted ad nauseum. I do not understand how that is justified and what the basis is for it and hopefully the Minister of Revenue might be able to shed some light on it. But that represents roughly 20 percent of all the profits so does that mean that 80 percent of companies are still going to have to pay full company tax or that this is the only portion that they're entitled to claim against last year's profits? That is an aspect of this bill I haven't had any explanation on either yesterday or today.I think just explaining the bill—and a number of the members have done it and very adequately and well—what this bill provides for is that either in the 2019-20 income year and we're just at the close of the 2019-20 year if you've got a March balance date or the 2020-21 income year you can look at your situation and reassess your losses. The bill provides though that you may only claim it back retrospectively against one year's profit; and that's the issue with this because for many companies they may have made a profit last year but the loss this year will be substantially greater than that. Therefore this mechanism is quite mean in a way because it hasn't actually given the ability for companies to recover all tax losses. Now again I'm not underplaying the benefit of this scheme but I think if we'd been able to work collaboratively with the Government we might've been able to make it a fairer scheme.It's generous in the sense that it allows you to look at two financial years but you have to make the choice against which preceding company's year you will use it and that is an issue both in terms of the accessibility of the tax deductibility but also it actually brings into play a lot of the implementation issues. This is where we should've had scrutiny in the Finance and Expenditure Committee because if you anticipate that you're going to make a tax loss in either the 2019 or the 2020 or 2021 income year you will need to reassess or re-estimate your tax in the preceding year. So that's OK but for those doing so you're potentially at risk for use of money at 8.6 percent and the issue with that is that you need to make a re-estimate of the 2020 tax year now before you can carry it back to 2019 and you have to do it before 7 May which is only in a few days' time. So if you're going to apply it for this financial year in the next seven days you are required to sit down and re-estimate your profit or your loss and actually then go and make an adjustment through the IRD. Now that's not easy and that's not easy particularly in the environment that many people find themselves where they don't know what the current trading is—if they're a retailer haven't even reopened and they're probably not going to reopen before 7 May. So it places on those entities a lot of concern and administration burden right at a time when they're probably more worried about how they're going to survive.I think also—and this is getting into a little bit of the technical side of it—to be able to access those losses you will have to have required imputation credits and again if you haven't got the imputation credits you may not be able to access all of the losses. But for those small to medium sized enterprises that don't always rely on keeping the profits in their company what they do in many cases—and most small businesses in New Zealand do this—is they actually strip out the profits in part by way of salaries to their shareholders. Now if the shareholder salary is nil or reduced there's a need to make a revised provisional tax payment before 7 May and the issue with that is it then gives rise to things like interest on shareholder current accounts that may be overdrawn and it also gives rise to how you then have to change your accounts if you're a business and what that means for the banking arrangements you may have with your bank because what you're effectively doing is changing prior-period profits.The other aspect to it is if the shareholders are changing their remuneration—and it's all legitimate under this arrangement—they will then have to reassess ACC. So whilst on the face of it this bill looks like it's going to provide a lot of benefit to people the reality is actually it's quite a difficult ability for companies to be able to access and it requires quite a lot of work right now. In many cases businesses will not be entitled to actually access all the tax losses that they may be going to generate in this coming financial year and I think that's a shame. I think if we'd had the opportunity as I said before to be able to work together it might've been more helpful.Now the last little bit I want to cover is the issue of child support payments and again this bill refers to it in Part 1. The issue with child support payments is that they're set at March during the course of each year and they're set for 12 months starting from 1 April. Now of course with the COVID crisis those arrangements and what's happened in April mean that many people parents have lost their jobs and their situations have changed entirely. Something I've spoken to the commissioner about that is very very important is that those who have got revised child support payments need to be able to address those very quickly and make an application to the IRD but in many cases the IRD can't actually reduce those payments. They've got limited capacity and capability around that. So it is an issue that people need to get in touch with the IRD about and to make them aware of the changed circumstances so that children do not miss out.Bill read a third time.