Bayly AndrewANDREW BAYLY (National—Port Waikato): Thank you Madam Speaker. It's a pleasure to be talking on the Taxation (Annual Rates for 2020-21 Feasibility Expenditure and Remedial Matters) Bill second reading. First of all I'd just like to compliment that Minister. He's a dynamic Minister. I've got to say that he is so much better than the Minister who introduced this bill into the House back in June last year the Hon Stuart Nash who stood there and read the most boring speech about this bill; at least you showed a bit of passion Mr Parker—and that's what we like to see from a revenue Minister. Just for the record we will be opposing this bill as we said at the first reading—and at least we are consistent. I will certainly be talking about why we will be opposing. But I thought because the National Party is an optimistic party and we are there for people to get ahead and also are worried about the vulnerable but we are about creating opportunities—so in that vein I thought I'd just talk about some of the good stuff in this bill. I do just want to acknowledge the officials over here who have worked on this bill. There are some good aspects to this bill. The first one—and probably in reverse order: the issue around the Australian superannuation claim and dealing with that funds are held under the Australian Taxation Office. That is a good measure and I'm sure that's going to help many New Zealanders because when National gets back in we will see lots of New Zealanders coming back from Australia and they will want to bring their funds back to New Zealand because they know under a National Government this will be a thriving economy. That's why they'll be coming back. We're glad that Mr Parker is forward-thinking about that thinking about the future! So that is a good thing and certainly we've all heard stories of people who've been affected by that—so that's a very good thing as I said.The second thing I think is around habitual buying and selling of property. I thought your commentary on this Mr Parker just assumed people knew a lot about what we're talking about. What we are talking about in this section is this situation where people buy and sell property and they might do it in their personal name—Dr Duncan Webb is buying property in Christchurch as he does I'm sure—Hon Member: Yeah big property magnate!ANDREW BAYLY: —property magnate yes I know—so you buy it in your personal name. And then Dr Duncan Webb suggests to his wife Maybe we should form a trust." I'm not suggesting that the good doctor is doing this but I know he's a professor of laws and he would be the type of person who would have that intellect and that cunning desire to get around his proper tax obligations. So in that situation—and this is hypothetical of course—Dr Webb might say to his wife "Well why don't we form a trust and buy another piece of property?" So it's a Dr Webb and associate and then he sells that property and then they think "Well why don't we buy it through a company?" This is what we're talking about: people who habitually buy and sell property but do it through different structures whether it's personal name corporate structure trust whatever—and of course there are many people who have tried to do this. So this is a good measure in terms of how we address that issue.The other one—and the Minister omitted to talk about this I think—is the M. bovis situation. So many of our farmers around the country unfortunately have suffered from M. bovis infections of their pride and joy—their cows particularly because that's their breeding stock—and that's necessitated them at the direction of the Ministry for Primary Industries to have that stock slaughtered. I think it's only fair that because you get a payment assessed by the Government in terms of what your stock are valued at you get a lump payment. And of course for tax purposes that means that you've got big revenue in that year and therefore consequently a big tax bill. As Madam Speaker will know this is all about fairness and equity and of course helping our rural communities which is vitally important. So what the bill caters for is to allow for that revenue and basically the tax obligation that underpins that to be spread over a number of years so that the farmer is not disadvantaged through the unfortunate introduction of M. bovis into New Zealand.So I said we're opposing it. I think the first thing I've got to say is this bill is another grab for another $50 million worth of tax—that's what this bill is about. In the bill there will be another $50 million going into the coffers of the Government. Most of that $45 million is related to tax and there's another element—about $6 million—relating to GST. We are—I think I'll just deal with the GST and this is the deal with the roaming fees. This means that if you now are in New Zealand—and when we eventually get these borders open again—and you travel to Australia you're going to end up paying GST on your roaming costs when you're reporting back to New Zealand. That means that for most New Zealand business people and also for people travelling on holiday it is now going to be a bill that's imposed on them. Now the revenue expectation out of that is about $6m; the cost we understand—conservatively I suggest—is about a million dollars for the telcos to put that system in place. It is such a small amount of money in the scheme of when we take in about $85 billion of tax a year and $5 million is spent like chump change every day. Just to put it in context: this country borrows about $115 million every day and here we are we've got a piece of legislation saying that we've got to collect the GST on that and make about $5 million and put the inconvenience of every New Zealander who if they're going to travel the most likely place they're going to go to is Australia—I think that is a pretty weird sort of imposition. It is one that has been delayed and only this Government has sought to put it through.The other $45 million comes from this what we now call purchase price allocation. Just technical words that basically mean: if you are buying and selling property or property in the wider sense you as the vendor and the purchaser now have to agree how you're going to treat various aspects of that sale for tax purposes. Under the rules that have persisted for long periods of time what that means is that the vendor works out what works for his or her situation and the purchaser does the same. Now by making this all come together and requiring the purchaser and the vendor at the time of sale to agree what the basis is for how it's going to be treated for tax purposes it will generate about $45 million a year—that's the current estimate.But there are two stages to it. So if you've got residential property it only kicks in at over $7.5 million which I think is sort of a reasonable barrier; that's pretty generous actually. Where it's I think pernicious and I think unworkable and where there was a number of submissions from people who know about this stuff the tax advisers is where it relates to transfers of other property non-residential property. The threshold is basically a million dollars. That means that every sale and purchase agreement now has to go through this long convoluted process of agreeing the tax. Now most people will sit there and go "Well that's pretty fine and dandy." I've bought and sold advised on buying and selling business for 25 years. Whenever you have to get tax lawyers involved in the sale and purchase after the point where you think you've agreed all of the terms of the sale and what's going to happen to the staff what you're going to do with brands what you're going to do with the hard assets the intangible assets the purchase price the settlement terms the last thing you want to be doing is having a big scrap around tax. This is what this requires now in a commercial setting which is far more complicated multiple times more complicated than a straight residential sale: that you are going to have to get a tax adviser in because no one else will know about it. Unless you're Dr Duncan Webb you will not know the tax treatment and you will have to have a specialist tax adviser. Even for me who has been around this for a long long time I wouldn't have the competence to do it.So what we've now done is imposed a big cost on companies. That is why we do not like this clause. We think it's impractical and we're opposed to it and we think that in time that limit will have to be increased."