Nash StuartSTUART NASH (Labour—Napier): As with every tax bill Labour will support this bill through to select committee. But yet again we have another bill in the House where we are amending the Income Tax Act the Tax Administration Act and the Student Loan Scheme Act. This is about the fourth fifth or sixth bill this year that we have had on this and I just would like to request of the Minister of Revenue that perhaps he just get it all right in one bill. Put it together so that we can actually do it at the same time.We in the Labour Party are all for making tax easier. There is absolutely no doubt about that but there is a great saying that imitation is the highest form of flattery. This Government has been in power for 7 or 8 long years. It had not even addressed this issue at all until one pivotal moment. What happened—what that moment was—was Labour introduced a tax policy to make provisional tax easier or certainly to make it easier for small to medium sized businesses to not have to pay provisional tax. What the Government did was it said: What a fantastic idea. Let's adopt that." I am pleased that it has from a small to medium sized enterprise's perspective because doing business in this country has to be easier. But I just wish that the Minister would give a little bit of credit where credit is due. You are welcome Minister.I am sure that what we will do however is make this bill just a little bit better through the select committee process. What I do urge is that those who are listening those who are involved in the tax business—whether you are lawyers accountants financial advisers—submit on this bill so that we can actually adopt the best practices out of the Labour policy and put it in this legislation.There is something called the accounting income method which is the pay-as-you-go method. The thing about this—and I am not too sure of the extent of this—is that to be able to access this a business must use accounting software to derive the level of provisional tax required to be paid. I will signal here my slight concern about this because it appears to me that those good hard-working Kiwis who sit down at the kitchen table at the end of the day and undertake their tax return in the way it has been done for a long long time may well be disadvantaged. I am unsure of what the extent of that problem might be. I do not know how many of the small to medium sized businesses that operate in New Zealand are actually on accounting software and how many do it the old-fashioned way but what we do need to do is understand the extent of that problem and if there is a solution then let us see whether we can find it.The other question for the Minister is why wait until April 2018 to implement this. Why not do this next year? Certainly it does not take that long to put these provisions in place. I would have thought the vast majority of small to medium sized businesses and certainly those operating in an environment of uncertainty—we all understand that they find provisional tax a little bit of an imposition so let us get this sorted sooner rather than later.The other point that the Minister talked about—and that I would like to set the record a little bit straight on—is the foreign trust disclosure rules. There are a number of information disclosure requirements that this bill puts in place—these are for foreign trusts with New Zealand resident trustees. The trust must register with the Inland Revenue Department (IRD). The trust must file annual returns pay regulation and filing fees and share information with certain Government agencies. You would have thought that any trust in New Zealand would have to do this anyway. But no we are changing the law to make sure this happens.The interesting thing about this is that the Minister and the Prime Minister said that there was no problem. There was no problem and then what happened was that Grant Robertson and Andrew Little went on the offensive and explained the injustice about this. And what happened? The media understood it. They understood the issue. The IRD certainly understood the issue because it had written a paper about 2 years ago outlining the risk of this. But there is one group that understood this issue more than anyone—that is the small powerful industry sector which lobbied first of all the Prime Minister and then the Minister and magically this whole issue disappeared. Maybe it is just a coincidence that when the Prime Minister's tax accountant lobbies the Minister with an issue that the IRD had highlighted it disappears. Let us go with the fact that it is a coincidence.But when the Prime Minister and the Minister both say "There is no issue. Move on." and then the Opposition highlights the fact what do we have next? The Prime Minister says "Well maybe there is an issue here." and he appoints John Shewan. John Shewan comes out and highlights the extent of the issue—and we know it is an issue. The interesting thing is that the Minister said in his speech: "We are doing this to preserve New Zealand's reputation." Well I would argue that by not doing anything we have tarnished New Zealand's reputation. One of the few things that we have—one of our few global competitive advantages—is our reputation for honesty and integrity. When this incident this loophole was reported in the global media people talked about New Zealand as a tax haven. It did not matter if by whatever definition we actually were not a tax haven the perception globally was that we were and the perception is all that matters.So when the Minister says "We are doing this to preserve New Zealand's reputation." I would argue that the damage to New Zealand's reputation is reasonably significant and we need to act really quickly to address this. But the interesting thing is if this had been done 2 years ago if the Minister had followed IRD officials' advice when they came to him and said: "Minister we have an issue but Minister we have a solution."—he did nothing about that. I think that is negligent I think that is irresponsible and I think that is playing hard and fast with New Zealand's global reputation. It is wrong. It is just wrong. I ask the Minister: was it worth it? Was it worth it?What we have now is a piece of legislation in front of the House that was pushed to the very top of the Order Paper—not under urgency but as urgent as you can get without operating under urgency—where originally the Minister was not even interested. The Prime Minister was not even interested and he himself said: "There is no issue here." What has changed? If I was a cynic I would say that the Prime Minister polled on this. New Zealanders understood the issue better than the Prime Minister because I think the Prime Minister after 8 long years has actually lost touch with what good hard-working Kiwis want. He used to have his finger on the pulse. He used to be very very good at this. For 3 years you could argue he was one of the most in-touch Prime Ministers we have had. After 6 years he was beginning to—he was still there but now he has got "third-term-itis" where he has lost touch with what New Zealanders want.The interesting thing about this I think is that the Prime Minister and the Minister both thought: "This is about tax and foreign trusts and New Zealanders don't care about this—it's too complicated for New Zealanders." But the thing is New Zealanders got it—New Zealanders got it. The thing is that New Zealanders understand when they are being ridden roughshod over by a group of high-powered lobbyists who go to the Minister and say: "Can you make this disappear?". The reason New Zealanders got it is that we will put up with a lot but one thing we really do not like in this country is that sort of behaviour because what it does is it has a slight tinge of—I was going to say "corruption" but that is the wrong word—let me say favouritism. That is not how we do politics in this country.To sum up Labour is supporting this bill to the select committee. Of course Labour wants to see the tax system made simpler for small to medium sized businesses. It is about time this bill is here but we will support it and we will ensure this legislation is better when it comes back to this House than it is going into select committee. The second thing I would say in summing up is that after consultation we will support with reservations the changes around foreign trust disclosure but this is too little too late. This is an issue that could have been headed off at the pass and I think the Minister has not only dropped the ball but really really missed the boat here. He played hard and fast with our global reputation and it is simply not good enough. Thank you very much."