Russell DeborahDr DEBORAH RUSSELL (Labour—New Lynn): I'm just sort of intrigued by some of what my colleague Jo Luxton has been saying about compliance costs and convenience to taxpayers. I think one of the difficult things about tax law—and we see it in this bill—is that it is extraordinarily complex and that changes in one part of the Income Tax Act or whatever will presage changes in other Acts as well. This particular one that my colleague Jo has picked up on has been the amendments to the Goods and Services Tax Act and it is to do with the way that rebates are paid to Pharmac. Now it's a little bit hard to get your head around this but there are some GST consequences when rebates are paid. What it can do in some circumstances is it can in effect change the price of the original negotiated contract so it has a backwards effect on the original contract and that means you need to do some thinking around how the rebate is actually paid and how much the contract is going to be valued at.But even more complicated than that is that because of the nature of district health boards (DHBs) as opposed to the nature of community suppliers of pharmaceuticals—so that's your average family chemist—the rebates could be different. The GST consequences of those rebates could be different depending on whether Pharmac was paying that rebate through to the DHB or paying it through to the community pharmacist. That's problematic for this reason. Now often Pharmac actually calculates those rebates—it's because it manages to negotiate a discount with the supplier—and that of course can be a commercial and confidence matter. So there's a really extraordinary flow-on of effects from what was going on with the GST Act and the payment of these rebates right back through to the suppliers of drugs and a whole set of stuff that sort of interacted together and created some real difficulties for DHBs. Now it happened to be something that really had no fiscal effects. It didn't actually change the amount of tax revenue collected. It didn't really change anything significant there. But what it did do and it does do is it creates quite significant compliance costs in particular for Pharmac. It gives rise to a whole set of uncertainty and compliance costs for Pharmac.Now going back to my friend I should say—the person I admire greatly when it comes to tax Adam Smith—one of the things that he says about a good tax is that a good tax must be certain. That is the person who is paying the tax must be able to calculate it must know how much it is—there must be a whole lot of certainty around tax law. There's good reason for that. It is so that people can actually calculate their tax obligations so that people can understand the consequences of any transactions they enter into. So we do aim for certainty in tax law. Now because of this sort of confusion over what was going on with pharmaceuticals and with the rebates paid by Pharmac the amount of certainty was decreased. There was a whole lot of uncertainty in the Goods and Services Tax Act and this particular amendment sets out to change that. It's going to apply to rebates paid by Pharmac on or after 1 July 2018 so provided that this bill goes through in time we'll get that particular little wrinkle sorted out.Now interestingly the Finance and Expenditure Committee had no changes to make to the recommendations made by the officials as to how we should structure the law. Our colleagues on the other side of the Chamber haven't made any particular objection as yet—though I see Mr Bayly scribbling—as to the way this particular law is structured. What it is is one of those simple measures that we actually all want to work on together to make sure that we get the law right. In fact if we look through Part 4 of the bill that is largely what Part 4 is about. It's about clarifying and tidying up the law. It's about making it more certain and of course as soon as you make the law more certain you also make it easier for people to comply with. You reduce their compliance costs.So that is why I support this particular amendment that both Jo Luxton and I have talked about but it's also why I support the intent of Part 4 of the bill which really is to tidy stuff up to make it more convenient and more certain for taxpayers and to make our tax law the best law we can possibly have within the constraints of the sheer complexity of it all. Madam Chair I recommend this part to the committee.