Goldsmith Paul: Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill — Second ReadingText is incorporated into the Bound VolumeGoldsmith Paul: Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill — Second Reading[Sitting date: 27 May 2014. Volume:699;Page:18323. Text is incorporated into the Bound Volume.]PAUL GOLDSMITH (National): I rise to speak on the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill. I think that previous speech by David Clark was by way of saying that Labour was going to support this bill but it was a roundabout way of getting to that story. I do want to thank the members of the Finance and Expenditure Committee who worked together. I pay tribute to the Hon Shane Jones who was part of the select committee and has now gone off to other pastures having concluded that the prospect or the possibility of being an economic development Minister in a party that does not believe in economic development was not one that he wanted to pursue any further. So we wish him well in his career. The rest of the committee carried on and we welcome the arrival of Mr Robertson to work on the committee. I was interested in the comments that the previous speaker made about Facebook. He did not repeat his threat to close down Facebook if it did not bow to the knee of the New Zealand taxpayer and I think all the hundreds of thousands of Facebook users in this country will be grateful for that.Drilling down into this bill it is all about building a more competitive and productive economy and that is one of National’s key priorities. When we come to taxation the most important thing is that the Government can raise the revenue that it requires not through hiking tax rates but by ensuring that the existing tax bases are efficient and are applied fairly. So this is a piece of maintenance legislation that is about ensuring that taxpayers can understand and comply with the rules. It is necessary for the rules to be cohesive and fair and to apply consistently and be regularly maintained given the cleverness of people who seek to get around the rules.The first thing that a Government can do in tax policy is make sure that its spending is under control so that we are not having to hike rates or dream up new sorts of taxes like capital gains taxes as proposed on the other side of the House. This Budget that we passed and were debating last week has reduced pressure by keeping Government spending under control. We are now back to around 30 percent of GDP and are on track to get lower for core Government spending and that means that we do not have to be quite so rapacious in our tax gathering as previous Governments have been.Drilling down into the details of this bill I will look first at the area of employee allowances. The select committee received 97 submissions from interested groups and individuals and we heard oral evidence from 30 submitters. To be fair most of those oral submissions related to the foreign account information-sharing agreements and theForeign Account Tax Compliance Act. That unfortunately is not something that is around maintenance of the tax system in New Zealand; it has been forced upon us by the very unusual tax system that the United States has which taxes US persons rather than residents and by the changes that were being brought about through their changes that were going to come into effect on 1 July 2014. We did hear from a number of US persons who have been living in New Zealand who were concerned about the possible ramifications.I suppose the main point to make is that this bill does not change tax law in the United States and it does not change any obligations of US citizens living in New Zealand. The obligations are no different from what they were before after the passing of this bill. What this bill does do is to allow New Zealand banks to pass information on to the US in relation to US persons once they cross a certain threshold and that threshold will be set by the intergovernmental agreement. So people underneath that threshold need not worry and it is only people who are identified as US persons andwho have had those tax obligations. We have heard a lot of concern about this but this is ultimately about collecting taxes across international borders. More broadly speaking the select committee did support global efforts to combat international tax evasion and accept that New Zealand’s global reputation would suffer if we were not seen to be playing our part. So although this is a difficult piece of legislation for some people overall we believe that this legislation is important for the New Zealand economy.The only other thing I would quickly draw attention to is the review of employee allowances. We heard a lot of submissions and made several changes there just to try to clarify the rules so that the tax treatment of employer-provided accommodation and accommodation allowances and reimbursements were made clear and so that taxpayers will minimise compliance and administration costs in any of those areas. On that basis I commend this bill to the House. Thank you.