Foss Craig: Taxation (Tax Administration and Remedial Matters) Bill — First Reading 
Foss Craig: Taxation (Tax Administration and Remedial Matters) Bill — First Reading 
[Volume:669;Page:15886] 
CRAIG FOSS (National—Tukituki) 
: 
 Obviously the previous speaker David Cunliffe has been very busy over the break practising his elocution speeches and presentation. I thought I was watching the United States House of Representatives for a while then. I would point that member towards the Supplementary Order Paper that will be put forward in the Committee stage of the other tax bill on I think Thursday. I also point him towards Budget 2010 which talked about loss attributing qualifying companies qualifying companies and the need to claim credits at the same rate that they were built up in the first place. That is what that Supplementary Order Paper will be all about. 
Hon David Cunliffe 
: Tinkering. 
CRAIG FOSS 
: Well it is quite major tinkering because the thrust of those arguments has already been debated in this House and voted for in Budget 2010. The member will see those amendments in the Supplementary Order Paper on Thursday and I am sure he will be voting for them given the speech he just made. 
The Taxation (Tax Administration and Remedial Matters) Bill is a continuation of a move towards a world-class tax system. It is a move to remove arbitrage to remove any problems or differentials between the various tax rates where possible and to try to align rules and regulations. 
The previous speaker talked about tax avoidance. If members look at the statistics from 2000 to 2002 they will see that as a consequence of moving the highest marginal tax rate from 33 percent to 38 percent versus the corporate tax rate and the trust tax rate there was an absolute explosion in the use of loss attributing qualifying companies in various structures and even more so when the portfolio investment entities came out. 
Only the Labour Party would want the community—middle New Zealand as the previous speaker said—to spend $70 million in order to retrieve $1.5 million of tax revenue. That is such backwards economics. Given the previous speech we see that essentially the Labour Party wants New Zealand to spend $70 million on accountants and lawyers to retrieve $1.5 million in tax revenue. That is total voodoo economics. There are less polite ways of describing it but maybe a bit of education is required over there. It is absolute nonsense. We now know that Labour members will be campaigning on a platform of introducing a capital gains tax and hiking the top tax rate. They will be bringing back gift duty by the sounds of things. Given the speeches the other day from Mr Goff and Mr Cunliffe or “Mr Caygill” I think they are all over the show. At the end of the day Labour can promise all it likes but we inherited an economy that had tax problems with declining revenue and an increase in expenditure and we are just hearing a continuation of that from members opposite. Obviously that will be a debating point on this bill. 
The other point is about sharing information across agencies. Many electorate MPs have people coming through the door and often their problem is a communication issue between various Government departments. For example Work and Income New Zealand might not have spoken to the Inland Revenue Department or to the Accident Compensation Corporation and they all throw up their hands. In fact often it is not actually legal for them to share information. But for the benefit of that person and for the benefit of the taxpayer and the taxpayer’s balance sheet a more lateral sharing of information is required within the tight parameters that the Minister outlined earlier. This change is a welcome move towards a world-class tax system. 
If this bill passes its first reading and I am sure that it will the Finance and Expenditure Committee will welcome it and will work hard on it. I look forward to seeing this bill at the select committee. Thank you.