Smith NickHon Dr NICK SMITH (National—Nelson): It's a pleasure to take a call on Part 4 of this Taxation (Annual Rates for 2018-19 Modernising Tax Administration and Remedial Matters) Bill. The issues that I want to raise in some questions to the Minister of Revenue are in respect of the changes that are being made to certain Crown companies and identities with respect to tax application. It may interest the House that the Clerk of the House's and the House of Representatives' status in terms of tax is being changed alongside a series of entities in clauses 222 and 224 of the bill. Now the really important principle that we need to be cautious of in respect of these tax changes is that we ensure that we are not giving public entities some advantage in tax. Now I'm pleased to advise you that the Clerk's Office in the House of Representatives doesn't face too much competition from other activities and that doesn't particularly concern me. What does concern me both in terms of State-owned enterprises Crown-owned companies and the changes as they relate to local government companies is that we're not providing any tax advantage for a company that is owned by a Crown or local authority in taxation terms as compared with a private company.Can I give some practical examples: we've got councils that are extensively involved in providing water services and in providing rubbish services. We've got Crown companies providing services like postal services and courier services many of which are also provided by the private sector. So if you take my particular community in Nelson I've got a council rubbish service that's available to ratepayers in my area but there are also private companies that offer those services. We'd all be familiar that in the electricity sector you've got Crown-owned companies that provide electricity services but you've also got a large number of companies that are privately owned and that applies to a huge amount of economic activity that occurs in the community.So what I'm interested in is in terms of the changes proposed in clause 222 of this bill but also in terms of clause 224 (Meaning of term taxable activity)" to ensure that this Parliament is not giving some advantage to its own companies over those in the private sector. What I want to be assured of by the Minister in the chair Stuart Nash is that if you're a council entity or you're a Government entity and you're providing a service out in the public the changes that are being made to both provisions—the likes of goods and services taxes and other sorts of taxes—are such that you're not screwing the scrum in favour of the public entities. What I think this Parliament wants to do is ensure that sure you can have a council trading entity—for example take a big company in my own area Nelmac which is a local government trading entity that provides all sorts of contracting services—but that is not being treated any differently for tax purposes income tax or GST for that matter as compared with a private sector company or an electricity company or any of those sorts of entities. So in clause 222 we were dealing with the question of interpretation. It's proposed that there be a new schedule of qualifying public-purpose Crown-controlled companies. The really crisp question that the Minister needs to address in this Part 4 of the bill is to reassure the Parliament and to be absolutely clear that we are not providing any direct or opaque tax advantage for those businesses that happen to be either owned by Government or owned by council activities. When I look at the changes that are being made around the meaning of the term "supply" and around the issue of what is a "taxable activity" what we want to make sure as a Parliament is that there is that equivalence whether it be a water service—and actually you'd be surprised Minister by the number of communities in New Zealand that have a private water company providing water services as well as those that are obviously council and indeed some of those that are owned by the State. The issue of tax neutrality as it applies to those trading entities is very important and with the intention to establish a new schedule in the bill we would like those questions addressed by the Minister.The second part of my questions in this very extensive Part 4 are around the points that have been raised by my colleagues in respect of the changes around KiwiSaver. A number of my colleagues have raised concerns particularly in respect of clauses 230 through to 237 which make changes to the way in which KiwiSaver operates. National is quite supportive of the amendments that enable for instance a person to be able to continue to be a member of KiwiSaver after the age of 65. It's fascinating in an electorate like mine actually the number of people that are continuing in employment in that area but there are issues around the contribution rates issues around the non-deduction notices and issues also in respect of the rules of those KiwiSaver schemes that my colleagues have raised questions about of which we would like answers.Then the last bit that I would really like to focus on is in respect of the changes in Part 4 around the changed tax status of child support. Now we've got over 200000 New Zealanders who are making contributions around child support. We as a party are very strongly of the view that if you are a parent of a child then you need to meet your obligations and ensure you provide support for that child up to the age of 19. What I'm interested in is to get some reassurance from the Minister around the sections covered from clause 238 through to clause 242 as to whether this means that the parent that's receiving the child support payment from the other parent is going to have their tax liability increased. This is quite a complicated area because you have the income earner paying income tax before they make their child support contributions to their partner. The other partner may well consider the income they receive from their colleague as income for taxable purposes but actually it would work out as a double tax if we then have the receiving parent also having to pay income tax on those. What I'd like to hear from the Minister is some reassurance that through these changes to the Child Support Act we're not having the Government taking a greater share of money that is intended for the benefit of the children particularly with respect to the changes to section 35 of the Child Support Act and the definition of what is a taxable income. The simple question for the Minister: is there going to be any reduction in the amount of net child support that is being received by parents that are receiving funding from a liable parent? We would be disappointed if the taxman was getting in the middle and stopping the money that was intended for the benefit of the child—money on which the earner has already paid income tax—to then have any additional liability as a consequence of the adjusted taxable income that is being amended in that clause. Then my very last set of questions for the Minister is just in respect of the student loan scheme. It's an incredibly important scheme that affects over 300000 New Zealanders. Getting the codes correct in respect of the changes to the student loan scheme is something that needs to be done with care. Again I would like some reassurance from the Minister that those provisions in this bill from clause 243 to 249 and the application of the PAYE rules as they affect those students that have got a student loan and that are now earning—that those workers are not going to be disadvantaged. In effect I'm wanting to know: does this mean that those workers who are having their student loan contributions deducted from their weekly earnings—are we going to see as a consequence of those changes a reduction in those people's net income?"