Dunne Peter: Taxation (International Taxation Life Insurance and Remedial Matters) Bill — In Committee Third Reading 
Dunne Peter: Taxation (International Taxation Life Insurance and Remedial Matters) Bill — In Committee Third Reading 
[Volume:657;Page:6640] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 At the outset of this debate on the Taxation (International Taxation Life Insurance and Remedial Matters) Bill I want to make a couple of points. Firstly this is the resumption of a Committee stage debate so a number of the measures that the previous speaker David Cunliffe referred to have already been disposed of in earlier parts of this debate. But I think he was simply reintroducing our memory to those matters. I want to comment on the point though about rushed legislation. I cannot accept his assertion in that respect. I want to place on the record once more a little bit of the history. This bill was introduced in July 2008 over a year ago. Because of the intervention of a general election it had not progressed far before the change of Government last November. It has been worked on pretty efficiently by the Finance and Expenditure Committee during the course of this year. 
One of the issues I was conscience of as the bill was proceeding was that the implementation times for a number of the regimes that it contains—the international tax changes the changes to life insurance payroll giving and there were one or two others as well—were much shorter than they are in the bill at the moment. So rather than the legislation being rushed I wrote to the select committee recommending that it defer the implementation dates to in some cases next year. I did that simply because I wanted to make sure there was sufficient time. One of the reasons I am grateful for this bill being taken under urgency today is that I am getting many inquiries from a number of people seeking assurances that we will stick to this timetable that the dates that we have amended in the bill will be honoured and it will not be further delayed. I do not think we can draw a conclusion from that about rushed legislation. We can draw a conclusion about the size of the bill and I am freely conceding—as I have done before—that this bill in retrospect did bite off too much territory. In future we will do things a little differently. 
I want to pick up on the comment the member made about the associated persons changes and I was grateful for his intervention on this point. I say to the Committee and to any of the public who are anxious about this provision that from the outset we were seeking to simply ensure that the law as put in place—in this instance way back in 1973—worked as it was intended to at that time. We were not seeking to broaden the scope or to introduce new definitions or changes to definitions through that mechanism but simply to ensure that what we thought we had been doing since 1973 was accurately reflected in the law as it stands today. 
Mr Chairman let me make a quick comment in response to the member about petroleum mining. Again there are very substantial points of agreement. One of the things that could conceivably happen under this bill—and I am not being taxpayer specific when I make this observation but certainly to illustrate the point that Mr Cunliffe was alluding to—is that it could well be possible in the future for a company to take advantage of the changes we are making to the international tax rules in terms of the active/passive test and therefore be subject to taxation in the jurisdiction of their location only and not double taxation in New Zealand. At the same time have we not changed the petroleum mining law being able to write off the cost of exploration incurred on that offshore jurisdiction against the New Zealand tax base? So the New Zealand taxpayer in that hypothetical situation not only gets no tax but is paying out a tax deduction to that company. That clearly would be wrong under any reasonable assessment of the law and that is the sort of situation we are trying to guard against. 
With regard to some of the issues that are coming up in the remaining parts of this bill I draw members’ attention to the amendments to the KiwiSaver Act that are contained in Part 4 of the bill. These relate particularly to the situation that has had some publicity of recent times where a contributor has died intestate and the difficulty that the family have had in gaining access to the funds that have been deposited in KiwiSaver. This bill corrects that unfortunate situation and has been backdated to the time of the introduction of the KiwiSaver scheme in 2007 and will be a huge benefit to those families who have been suffering as a consequence of the loss of a family member in that situation and being unable to access the funds that they contributed to KiwiSaver while they were alive. I am grateful for the Committee considering and adopting that amendment in the bill. I am also keen therefore to see it pass so that those people who are in a state of anguish can have some relief.