Nash StuartHon STUART NASH (Minister of Revenue): Thank you very much Madam Chair. There are a couple of questions that have been brought up that I'll address straight away. The Hon Paul Goldsmith asked if we had the balance right. I think we do have the balance about right keeping in mind that the genesis of this bill actually came from OECD rules. I will commend the officials here. We're very lucky. We box way above our weight when it comes to this complex sort of legislation. Carmel Peters is often at the OECD. She's acknowledged as one of the world's experts in this area and as a consequence—Hon Ruth Dyson: You're such a name-dropper.Hon STUART NASH: Absolutely and proudly so. We played quite a major role in developing the set of OECD rules that would prevent large multinational organisations from literally not paying their fair share. So when we're talking about base erosion and profit shifting what this actually is is companies who earn money in one jurisdiction aggressively tax planning—I'm not saying evasion" but "aggressive tax planning"—so they don't end up paying tax in one jurisdiction. They transfer their payments to perhaps a tax haven and end up paying tax at a very low rate. Or worse what can happen is they end up paying no tax because of the complex arrangements that these very smart lawyers have determined. So this isn't just New Zealand saying we need to do something about this; this is the whole of the OECD.So what we have got here is a piece of legislation—and I'll give credit where credit's due; it was initially brought in by Judith Collins when she was a Minister of Revenue—supported across the House. I understand the Finance and Expenditure Committee worked very closely together to come up with solutions when there were a couple of issues but this is a piece of legislation that we have to bring in under our obligations with the OECD that puts in a number of measures to ensure that multinationals do pay their fair share. Answering the honourable Clayton Cosgrove's question—"Is this all we're going to do? Are we just going to pass this bill and then nothing more?"—no; no. I would say this is the first step and there are already a number of measures that we are looking at Mr Mitchell that will take this to the next step. The thing we do know is that as smart as we are and as engaged and as proficient as the members on the select committee will be as well as our drafters and our officials multinational companies have lawyers that are just as smart. Well they're not quite as smart as Carmel but they're up there. So whenever you put a bit of legislation in there are always people that are looking at doing things slightly differently.Mr Mitchell talked about transfer pricing. We know this is a big problem—we really do—and when companies like Apple and Google don't pay any tax in New Zealand we know there is something going on here that's not quite right. I mean I don't know how many iPhones are sold in New Zealand or how many iPads or Apple Watches are sold in New Zealand but it is a substantial number. These companies are making a profit in New Zealand but the way that they have managed to structure their affairs means they avoid paying their fair share and the people that miss out are actually us. We don't know how much money this will bring in. IRD has estimated it's about $200 million. IRD tends to be quite conservative—I hope they've been too conservative here—but it's around about $200 million. The reason I say it's about $200 million and perhaps not the $500 million that's been reported in the press is because IRD actually have a small compliance group that continually audit the largest companies in this country so we know what the big companies are doing. But what we can't do is go after these large multinationals that are using the law—I mean I'm not saying they're doing anything illegal but they are very aggressive in their tax planning. Hence the reason for the legislation hence the reason for the need to do this and the only way this is going to work is if it is implemented across the OECD.That is why we are just one small cog in a very big machine that is implementing this type of legislation that is going to ensure that multinationals pay their fair share and that we hold them to account. What we are seeing around the world is people like Mark Zuckerberg from Facebook and other large multinationals like Apple and Google actually saying "Game's up. We're prepared to pay our fair share now." And they are understanding that we don't want to rip them off—just their fair share.So to Mr Goldsmith I would say that the measures we are putting in place we are not doing in isolation. I don't think these are going to be seen by large multinationals or big companies as "New Zealand is doing something that will prevent us or disincentivise us from investing in this country.""