McNair Craig: Third Readings 
McNair Craig: Third Readings 
[Volume:613;Page:10169] 
CRAIG McNAIR (NZ First) 
: 
I note that the Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill was referred to the Finance and Expenditure Committee on 26 June this year. I recall hearing about 20 submissions from people from different companies. Once again I thank the officials from the Inland Revenue Department and Treasury for their advice and I also thank Terese Turner the specialist tax adviser. 
New Zealand First wants to confirm and applaud different sections of this legislation that we agree with. We have voted against only one part. We agree with and want to applaud the section allowing zero rating of business-to-business supplies for financial services. Under the Goods and Services Tax Act business-to-business supplies of financial services are exempt from GST meaning that GST is not charged on the supply and the financial service providers are therefore unable to claim import tax credits. This treatment has resulted in distortions due to the potential for overtaxation of the supply of financial services to businesses. The legislation introduces new provisions allowing the supply of financial services from providers to business customers to be zero-rated if the customer is GST-registered and makes taxable supplies that equal or exceed 75 percent of total supplies in a 12-month period. The proposal is optional of course and financial services may be treated as exempt if the provider does not wish to incur the compliance cost associated with zero rating. 
We also applaud this legislation for introducing a reverse-charge mechanism to impose GST on certain imports and services and for reforming the imputation laws to reduce double-taxation of trans-Tasman investments as part of an agreement with Australia. The legislation changes the imputation laws to address the problem of triangular tax which involves the double-taxation of certain trans-Tasman investments. That is all I briefly want to say on trans-Tasman imputation. 
We also like the sections of this legislation introducing a deferred deduction rule to combat aggressive tax arrangements and introducing progressive rates of specified superannuation contribution withholding tax on an employer’s contribution to match the employee’s marginal tax rate. We applaud measures in clauses 5 and 17 that provide community trusts established under the Trustee Banks Restructuring Act with an income tax exemption. 
I want to close on a note that is not quite as positive but I want to reiterate New Zealand First’s position. I want to convey New Zealand First’s disappointment in this Government for not taking more initiative with this area of taxation. We feel that the No. 1 priority for this Government should be reprioritising social spending to place a greater focus on the real needs of New Zealanders. We believe that the real solution lies not just in keeping annual tax rates as they are in the Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill but in providing tax incentives for research and development for exporters and so on. 
Once again I thank the select committee and the advisers for putting the legislation through. We support most parts of this legislation.