Wong Pansy: Taxation (Base Maintenance  and Miscellaneous Provisions) Bill Privacy Amendment Bill (No 3) — Third Readings 
Wong Pansy: Taxation (Base Maintenance  and Miscellaneous Provisions) Bill Privacy Amendment Bill (No 3) — Third Readings 
[Volume:626;Page:21465] 
PANSY WONG (National) 
: 
 What a sad speech that was from a dejected Minister. When the public is listening to this debate they will contrast that with the passionate debates that were championed by my National colleagues. My colleagues are very confident and happy because they are speaking on behalf of the New Zealand public. They know that this legislation is the last technical complicated legislation that will be brought in front of the House by this minority Labour Government. This will be the last time because when National takes the Treasury benches we will make sure that both the company tax and the personal tax rates will be lower. 
 That will negate the need for the countless pieces of complex tax legislation that this House has to debate. 
I was reflecting on some of the Labour members who actually bothered to take calls during the second reading debate and the Committee stage. The Hon Harry Duynhoven actually tried to convince New Zealanders that they have not paid enough tax. So I hate to think what else this Labour Government has in mind for hard-working New Zealanders in terms of taking money off them. As United Future has rightly observed Labour is the only party left in this House that does not believe in lowering taxation. The problem with regard to Labour refusing to register the importance of lower tax a complication caused by the different rates for personal tax and company tax and by high taxation is that that leads to tax compliance costs for individuals. As an accountant I can imagine my colleagues the chartered accountants and the tax lawyers. They are the ones who benefit from that situation. I wonder whether the Minister has looked at the number of tax consultants from large accounting firms who come in front of the Finance and Expenditure Committee month in and month out to debate and to make submissions on behalf of their clients. My accounting colleagues have told me they do not actually enjoy tax minimisation work. They would rather expand their management work in their consultancy companies. It is a lot more satisfying than tax consultancy because they can actually assist their clients to expand their businesses rather spending so much time on investigating means to minimise taxation. 
One of the most high-profile issues contained in this legislation is to do with the thin capitalisation rule. I understand that the Inland Revenue Department has carried out separate consultation with the foreign-owned banks and we accept the measures that will be introduced to counteract the very innovative way in which those banks try to minimise their tax payments. But the Minister has refused my invitation to take a call and explain why on the one hand the Labour Government has introduced the thin capitalisation rule to ensure that foreign-owned banks will pay their share of tax while on the other hand nobody is prepared to share with the New Zealand public information on the sort of arrangement Transpower has entered into. Is it an arrangement to minimise tax in New Zealand or to minimise tax overseas? Where is the ethic of a Government that introduces legislation to ensure that foreign banks pay their tax but that will not tell the New Zealand public whether Transpower’s deal disadvantages New Zealand taxpayers? The Minister of Finance the Hon Michael Cullen says the public will simply have to take his word for it. Well I am afraid that the public no longer takes the word of Labour Ministers seriously because we have learnt from past experiences that they sometimes stretch the truth rather far. I think Labour members still have calls available and I hope that one of them will stand up and share with the public the truth behind the Transpower deal. 
I also want to share with the public a piece of information I obtained from the Inland Revenue Department. All my fellow National MPs have raised the issue that even a Labour Minister believes that the New Zealand public is entitled to some tax relief and that the Hon Michael Cullen has proposed a tax cut of 67c a week in 3 years’ time. I have asked the Inland Revenue Department how much work is involved in changing the tax thresholds. The department told the Finance and Expenditure Committee that to adjust the tax thresholds takes only 3 months but that to cater for changes in relation to provisional taxpayers takes about 10 months. So if this Labour Government is serious it should at least show some remorse for overtaxing New Zealanders for the last 6 years by bringing forward the date of that very miniscule tax relief for the majority of New Zealanders. But I imagine that could be too much to hope for. 
My colleague Dr Nick Smith has raised another excellent point about the legislation we are debating tonight. He was asking why people who have applied for resource consent and whose applications either fail or are withdrawn should be grateful for a tax deduction at all. Most individuals who engage in activities would rather that their projects get the green light to go ahead. To have a tax deduction for a very lengthy and drawn-out resource consent process is no consolation prize for them. 
It was because of the refusal of the Labour Government to acknowledge that New Zealanders deserve to pay less tax that we have had the Inland Revenue Department admit it has to set aside $3.2 million to set up a small-business unit to explain to small and medium sized businesses what their tax obligations are. How does that action square off with the continued promises and claims made by Labour members that they are serious about reducing compliance costs for small and medium sized businesses? All that such businesses want to do is to get on and expand. Why should they be grateful for a so-called subsidy to prepare their PAYE and all sorts of other source deductions? The Government has long used businesses as its tax agents and I think that most small and medium sized businesses would prefer this Labour Government to simply lower the whole range of tax to avoid them having to apply for subsidies to fulfil the tax compliance procedures.