Clark DavidDr DAVID CLARK (Labour—Dunedin North): This is a bill that is a mixed bag. We will be supporting it on this side of the House. It is important. My colleague Grant Robertson has said it and I will say it in my own words: it is important that we update the tax legislation from time to time—indeed regularly—so that loopholes are removed so that it is refined and so that we collect the taxation that we need in order to fund schools hospitals and roads. At the most basic that is what we are doing with all tax bills that have in their title and Remedial Matters" and this is one of them. Most of them have that in their title. It is about making sure that the system is robust and that we continue with a broad-based system of collecting tax which ensures New Zealanders pay their fair share but also that no one particular group carries an unfair burden of taxation.That leads me into where I do want to be critical of this bill because what it does do is it begins to address the issue of New Zealand's status as a tax haven but does not go all the way. That means it is still more permissive of people who wish to take advantage of lax rules around the world and wish to evade and avoid paying their fair share of taxation around the world. That is something that we on this side of the House simply cannot support as a basic proposition. The Government really is out of touch if it thinks that New Zealanders are not concerned about this—if it thinks that New Zealanders are not concerned about our reputation here and abroad—and the Panama Papers are the tip of the iceberg.I have to say that Mr Key's comments at the time of the Panama Papers are something that we should all be concerned about. His immediate response was a concern about the $24 million of ticket clipping that the industry might lose on the way through rather than about the integrity of the New Zealand tax system and our international reputation. That was his first thought. That was in his first interview on the matter after the Panama Papers broke. That was his concern.The simplification processes in the bill for small business tax are something that we of course heartily support. They are overdue. The Labour Party put forward a proposal that we should simplify business tax and enable businesses to pay as they go to set their own rate and this proposal gets most of the way there—most of the way there. It is a little tepid and I suspect that is in part because of the limitations of the Business Transformation package that has been put in place. We have known since I think about 1993 that the IRD has relied on a tax collection system that is now well past its use-by date. That was years and years and years before Facebook was even a twinkle in the Facebook founder's eye and long before of course many other social media we deal with today.Chris Bishop: You were going to ban Facebook. You remember that?Dr DAVID CLARK: This tax system that we work on has been here for a very long time and does indeed need to be updated. The member is quite wrong. He is on the wrong track. It is not unusual for that member to be on the wrong track. He is trying to get a few words in. He is hoping for a promotion in the Cabinet reshuffle. He has got his hand up over there. "Notice me. I want to jump the queue over a few of my mates. I'll join the forum" he goes. "I'll see what I can get out of this in terms of raising my profile." There is the member opposite. He is always one who is keen to get into the debate to put his hand up and try to get some advantage over some of his colleagues.Coming back to the matter in the bill we support the measures that are being taken to introduce a more simple tax system for businesses. There is no doubt that this is long overdue. The technology is there. It has been done overseas. It was done in the UK a long time ago. It is not something that New Zealand is unique in having—a system of collecting taxes from businesses. It makes sense to do it and I can only say that it should have happened sooner. The Labour Party had of course the proposal out and I suspect as I say that the National Government has been dragging its feet. John Key said a few years ago that the tax system should not be held back because of outdated technology and that it would be worrying if it was. Well of course that is what we are seeing here—the slow and tepid process in that regard.But to come back to the Panama Papers and the recommendations that came out of the Shewan report that have been incorporated into the bill we see the anti - money-laundering changes that have not been put in the bill. Some of the proposals out of the Shewan report have been adopted; some have not. The one that my colleague Grant Robertson touched upon is the requirement to have phase two anti - money-laundering law changes implemented immediately. These have not been picked up by the Government.I think this is of great concern. An ex-McKinsey chief economist estimated in 2012 I think it was that there was $21 trillion in secret trusts around the world. The industry that clips the ticket on the way through is earning but a pittance of that and is surviving at the expense of everybody else. It is doing business and it is harming New Zealand's reputation at the expense of everyone paying their fair share and having the kind of infrastructure that would mean that we would not have a failing health system in New Zealand—$1.7 billion has been stripped out by the current Government over the last 6 years in not keeping up with health inflation and demographic changes. We know our health system is struggling. We know that New Zealanders are waiting a long time for operations. We know our school system is struggling as parents are being asked to give more and more in donations and kids are going to school without their shoes on. That is not adequate.In this bill is the opportunity to address those secret trusts and we have seen here that the Government is not willing to go the whole hog. It has stepped back. It has stepped back and said: "No. Real estate agents you're exempt—real estate agents you're exempt. Lawyers you're exempt. We will not bring you into this anti - money-laundering regime at this stage." So if foreign investors wish to put money into housing in Auckland through real estate—and we know that is happening—they will get away with it under the current regime. They are quite likely to get away with it and that is incredibly harmful to New Zealand's reputation but it is also harmful to New Zealanders. We know we have some of the most unaffordable housing in the world in New Zealand and that means that New Zealanders are missing out. But that Government is not interested in everyday New Zealanders and in making sure that everyone has what is needed to provide opportunity for their kids. It has lost touch. It is arrogant. It thinks that now all it has to appeal to are those wealthy tax-dodgers and that is a great shame. So although we are going someway here in this legislation to correcting some aspects we know that there are still some gaping holes in it. We will support the legislation to make the changes that are in there but by gum if it were us writing the legislation we would be going the whole hog. We would not be leaving these gaping holes which Mr Bishop will get up in a minute and defend. We would not be leaving those gaping holes in the legislation. We would go the whole hog. We would make sure that New Zealand's reputation was defended and that we would have a robust tax system.I have not yet touched upon the fact that in our minority view from the committee we suggested that greater transparency needed to be brought into the foreign trust regime and that a public register should be put in place. This was a minority view supported by the Labour Party by the Green Party and by New Zealand First. The Opposition parties could see the need for a public register.Obviously there would be exemptions I am sure. If there was a feeling that people in vulnerable countries were using the regime for good reason then that would be the sensible thing to do. But in normal circumstances the information about who benefits from trusts how they are run who stands to benefit and so on should be publicly available. There is really no good reason why it should not be or why the tax laws that we have and those of other countries should not be upheld.It is in New Zealand's interests to have a transparent regime that is robust and that builds faith in the tax system and in Government. Instead what we have got is more secrecy than we need. We are allowing that situation to continue where money-laundering can happen through real estate agents and lawyers. It is indefensible that we are not making those changes. I look forward very much to hearing Chris Bishop defend—and this is a challenge. I challenge Chris Bishop to defend those real estate agents and lawyers not being brought into the anti - money-laundering regime. Why on earth should they not be held accountable in the same way as casinos for goodness' sake? Why should real estate agents and lawyers be able to bring money into this country that is not transparently dealt with in the tax regime when even casinos are required to do that? That is the question that I am looking forward to hearing an answer on from Mr Bishop. When there is $21 trillion hidden around the world by the ultra-wealthy why should those people still be protected?"