McKelvie IanIAN McKELVIE (National—Rangitīkei): Thank you Madam Assistant Speaker. Well when you get to the stage of Thursday afternoon and you're following Andrew Bayly and Judith Collins you really think there's nothing left to say. But I have got a little bit to say. I've got a little bit to say and a little bit of comment to make on the last speaker Fletcher Tabuteau. But I wanted to comment on Dr Deborah Russell and thank her for probably the best lecture I've had for nearly 50 years. I listened to all 10 minutes of it and actually I'd have to say in my university days I never would have understood anything as good as that. And of course Deborah Russell is ex-Rangitīkei. I guess I stand to—not to support this bill because we are of course unable to support the bill because of I guess the tax changes that effectively it signalled. Tax in New Zealand is quite a big item and our leader in recent times of course has signalled where we intend to go with some of these tax issues. Tax is a big issue for most New Zealanders because there are many many New Zealanders earning in that $40000 to $50000 to $60000 range many of whom are paying way more tax than they should be and very shortly the average wage will be on the maximum tax rate. So there are some significant issues in that area and that's one of the reasons we can't support this bill. I want to talk about one or two other things and then I want to get on to—it won't be quite a lecture of the Deborah Russell mould but I want to talk about the bloodstock taxation stuff towards the end of my short contribution. KiwiSaver I think is really interesting; I think it is a great product. I'm very supportive of the changes and I of course fall into the age bracket where I could join KiwiSaver under this legislation. It would be wonderful. I am actually a member of KiwiSaver but I could also withdraw my KiwiSaver had I ended it within the last five years. Interestingly that's something that you get quite a lot of comments through the electorate offices about because people have been trapped in this getting into KiwiSaver at age of 63 or whatever and not being able to get out until they're 67 or 68 and that's been the challenge for them. So the changes to KiwiSaver are I think very sensible.Interestingly during the course of the submissions on this bill we had a young man and his mother come in—well he wasn't particularly young. I in my spare time—and I think I've said in the House before—chair an organisation called Special Olympics New Zealand which is a sporting organisation for the intellectually disabled. He came in to submit on the fact that he didn't have a life expectancy the same as everyone else does. He'd joined KiwiSaver very sensibly had a pretty good saving; I think he told us he had about $8000 or $9000 in his KiwiSaver. What worried that family and worries many families in New Zealand—they join KiwiSaver but they're never going to get necessarily to 65 years of age. It was quite an interesting—well it was a very interesting very compelling submission. As it happens it won't get changed in the course of this bill but it was something we learnt and something I'm sure that a Government of the future will pick up. It is a challenge of KiwiSaver because there are many many people also in KiwiSaver who get to a point where they suffer from hardship and justifying that hardship's difficult. The reason I use that as an example is because justifying the hardship and justifying the fact that you might not live till you're 65 are equally fraught sort of issues. So it's quite a challenging issue and it will be a challenging issue for the legislator when it gets on.I just wanted to talk about a couple of things that Fletcher Tabuteau talked about a minute ago. I myself think that the transformation is a great thing as well and I think it's going to be very useful for New Zealanders. The challenge we've got is that most New Zealanders have never contacted the IRD and if they got a letter from the IRD they'd be absolutely terrified of it. I think it's going to take almost a generation to work through just like it's taken a generation of us to work through some of the technology challenges that we face nowadays. It's going to take a long time to work through some of this transformation. It won't be picked up as quickly as the IRD would like to think it will be and one of the reasons it won't be is because most people—well no not most people; many of the older community in New Zealand and certainly many rural people in New Zealand don't have access to the types of communications that are necessary to make this system work properly. That will be a little bit of a challenge for the Inland Revenue Department I think in the future; it will also be a challenge for our taxpayers but none the less when it's implemented it will be extremely successful.The other thing I like and I think it's very good is the idea of small-business men going to inland revenue to get a short-term process ruling on how taxation law applies. Very intimidating for many small businesses very worrying for them actually and even for some professionals in industry—quite worrying as to how you should apply some of these tax rulings. I think that's also a great bonus for all New Zealanders. So there's been some pretty good stuff happen in the course of this bill and so you'd wonder I guess that I'm talking about it so favourably and in fact we're not supporting it.I want to now talk about though Supplementary Order Paper (SOP) 135 and I'm not talking about it because I want to criticise it but I want to talk about it because it points out the fraughtness of trying to get a piece of legislation through that's actually going to work. This legislation is the piece of legislation that was I think unfortunately called the good-looking horses" issue in the course of the Budget but it was introduced to try and enable people buying into the horse-breeding industry to access the tax system in the same manner as those already existing in the industry. So in other words current breeding programmes or current breeders have access to tax just like any other business does but people buying into the industry didn't and this was put in place to try and enable that. Now it was set at a level—I think $404000 for a colt and $460000-odd for a filly something like that; I might have it the wrong way around but it was something like that—and we heard at the time that it was going to cost about $4.8 million in year one. Now we've just of course been through the first of the yearling sales. Probably almost half of the horses that will be sold in New Zealand this year have been sold and by my reckoning there might be three horses that might qualify for that tax deduction—they might not. In fact I know that a fair portion of them won't qualify. It's a bit of a "might".Now instead of a $4.8 million tax cost so far we might be looking at $100000. So what I'm trying to point out is the fraughtness of introducing legislation like this—and I'm not criticising it because that's the Government's wish to put that bit of legislation; that's right. It just hasn't achieved what it set out to achieve—it can't possibly achieve what it set out to achieve because there just aren't the number of horses going to qualify in that bracket. I think there were only 24 or 25 horses sold in that bracket in New Zealand. The bulk of them went overseas and so they were never going to qualify anyway. If you wanted to incentivise more people to get into that industry you would have to lower that threshold significantly to make it work. Now I think it would be to our advantage to do that because if you think about it it's got to be a pretty brave business person who's going into a new business who's going to shove up $404000 first up to get their business going; they're going to have plenty of other costs before they do that.The other interesting thing that I think was of concern to some on the committee and certainly was a concern to some of the officers was that people would then get close to the threshold price and want to ratchet up their price to get over the threshold so they'd claim the tax deduction. Now by my reckoning there were three horses that were sold in this last year's yearling sales—and you've got to bear in mind there are 1200 horses going through the ring. There were three horses that were sold just below that threshold all to New Zealanders none of which went over the threshold. So what I'm saying is there was no threat that someone was going pay more—well it turned out there was no threat—just to qualify for the tax deduction. So it just shows how when you try to introduce a piece of legislation to incentivise something it really is very difficult to make it work.So other than all the complications of SOP 135 there's some very good stuff in this piece of legislation but as I said earlier at the beginning of my speech we can't support this piece of legislation simply because we believe that people should have their own money to spend and that they're better at spending money than the Government is effectively. So that's my lot and I commend it to the House but can't support it."