Prebble Richard: Taxation (Base Maintenance  and Miscellaneous Provisions) Bill — Second Reading Instruction to Committee In Committee 
Prebble Richard: Taxation (Base Maintenance  and Miscellaneous Provisions) Bill — Second Reading Instruction to Committee In Committee 
[Volume:626;Page:21450] 
Hon RICHARD PREBBLE (ACT) 
: 
 I have say to the honourable member that that speech was even more confused. If I understood him correctly he criticised Westpac and said that certain assets should remain in the hands of New Zealanders. Westpac used to be the Bank of New South Wales—I think it was formed possibly even before New Zealand was—and now the member appears to be saying he thinks it should be confiscated. I think he should think through his positions. He did make one reasonable point: given my strong speech against the bill why am I not voting against it? Perhaps I did not explain it to him clearly enough. Given the complex nature of our tax laws if we are to keep an integrity to it then these sorts of laws are inevitable. We have thin capitalisation rules for other entities. Is there a particular reason why they should not apply to banks? No there is not. So for that reason the ACT party will reluctantly vote for the legislation. 
Let me give the member an example of the arbitrary powers that exist. I turn to clause 110 “Cancellation of registration” which is a simple example. Clause 110 allows the Commissioner of Inland Revenue to cancel the GST registration of a non-resident. Perhaps that does not worry the New Zealand First Party but non-residents like New Zealanders in Australia do not get treated like that. Is that a police power? Yes it is because the commissioner who is a civil servant is able under this measure purely at his or her own whim to cancel the GST registration of someone just because that person is not a New Zealand resident—and we will trust the commissioner to do it properly. Well I do not know; I just do not like that. I think one should never have any right that one has—and the right to be able register for GST could be quite a valuable right—removed except by process of law by the courts. But we have this measure and the reason it is inevitable that we have to have it is that we have such a complicated tax system that in order to make it work we need police-State measures. 
That is the point I was making to the honourable member. I am saying that if we continue to collect this much tax if we continue to have an escalating tax system and if different taxpayers continue to be treated in different ways then because people think that that is arbitrary and unfair we will inevitably end up having police-State measures. The Australian tax system has it so does the British system so does the United States. Any country that has an escalating tax system that treats different taxpayers in different ways according to arbitrary rules—and I was trying to say to the member that it is an arbitrary rule to determine that something is capital or income—ends up with these sorts of police-State measures. 
I am philosophically opposed to giving those sorts of powers to unelected civil servants even if they have the highest integrity. That is why I say to the member that as a general principle we as a House ought to be starting to have a look at these tax laws and starting to ask ourselves what sort of country we are creating and whether there is a different way of doing it. Of course there is. We just have to go to a low flat rate of tax. Then everyone is treated the same and there are no exemptions and we would not have to hand the Commissioner of Inland Revenue police-State powers in order to be able to collect the revenue. 
Perhaps the member is right. Perhaps for that reason I should vote against the whole of the legislation. I thought about that but I thought the New Zealand First Party might then go around the country—of course that member would not but his leader might—and say I was trying to do special deals for foreign bankers. I am not. I want everyone including banks that are foreign-owned to be treated in exactly the same way. So I thought it would be safer not to vote against the legislation and instead speak against it vigorously in the hope that I might educate the honourable member so that he could see that there are some real reasons why this House ought to be concerned about the Taxation (Base Maintenance and Miscellaneous Provisions) Bill. 
I make this prediction and I am sure the Minister in the chair David Cunliffe will not disagree with it: next year no matter which party is the Government we will see a similar bill that will probably also be 170 pages long and will also give the Commissioner of Inland Revenue arbitrary powers—and this one is an arbitrary power because under that provision he can cancel the GST registration of anyone who is a non-resident New Zealander.