Dunne Peter: Taxation (Savings Investment and Miscellaneous Provisions) Bill Taxation (Annual Rates of Income Tax 2006-07) Bill — Third Readings 
Dunne Peter: Taxation (Savings Investment and Miscellaneous Provisions) Bill Taxation (Annual Rates of Income Tax 2006-07) Bill — Third Readings 
[Volume:636;Page:7124] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Taxation (Savings Investment and Miscellaneous Provisions) Bill and the Taxation (Annual Rates of Income Tax 2006-07) Bill be now read a third time. 
 I begin by acknowledging the contribution made by the members who took part in the Committee stage debate and also that made by the members of the Finance and Expenditure Committee who have worked so hard on this legislation over the last few months. 
I also join with other members who during the earlier debates expressed their congratulations to and admiration for the work of Robin Oliver and the team at the policy advice division of the Inland Revenue Department. This year has been one of the busiest years on record in terms of tax policy and I know better than most the stresses and strains that Robin and his team have been put under. I simply want to put on record this evening my appreciation for the admirable work they have done and I am sure that most members of the House would join me in that. 
These bills complete a long process of reform that had its genesis way back in the 1980s. Reference was made earlier to Sir Roger Douglas attempting in the 1980s to do what these bills do and being unable to complete the exercise. The National Government in the 1990s attempted something similar—and I seem to recall being Minister of Revenue at that stage as well—but was unable to complete the exercise. Finally tonight we complete the exercise of getting a fairer and more comprehensive regime for the taxation of both managed funds and offshore investments by individuals. This debate has been a long and arduous one at times. The proposals we originally released caused a great deal of controversy and a huge number of submissions. The select committee managed to work its way through them and it accepted some proposed amendments and I think a pretty good regime is about to be put in place this evening. 
I want to pick up on a couple of points made at earlier stages of the debate that I did not have a chance to respond to. Reference was made earlier on to the Government’s commitment to the generic tax policy process and I want to reassure the House that the generic tax policy process remains one of the jewels in our policy formation crown. This Government and this Minister have absolutely no intention of tampering with that. In fact it is worth noting that across a range of tax policy issues—and we have not finished yet; we have more to come tomorrow—around eight discussion papers as part of that process have been released on various topics this year alone. 
It is also worth noting that the Taxation (Savings Investment and Miscellaneous Provisions) Bill which gives effect to the offshore investment regime had its genesis in some work done by Mr Craig Stobo a couple of years ago. A discussion paper was issued in 2005 and it attracted from memory around 800 submissions. Dr Cullen and I released proposals for change earlier this year. They then became the original bill which attracted several thousand submissions. We have now modified those proposals with the help of the select committee the select committee has gone through a further round of consultation and the legislation now stands on the verge of being passed into law this evening. So I say that the process of consultation has been honoured absolutely. There has been more discussion on this measure than on any other measure that I can recall in the last 20 years in this House. 
Essentially at the end of it the differences between the parties come down to some relatively minor points. The position that the bill advances is that we will have a fair dividend regime under which managed funds will be taxed at 5 percent and for individual offshore investors the tax will be 5 percent of the opening value unless they can demonstrate that their actual rate of return has been less than that. The position advanced by the Opposition—by National in its minority report and during the debate this evening—was that the 5 percent rate was too high. It wanted a flat rate of 3 percent—for I think the funds but certainly for individuals. But the difference is that whereas under the proposals in the bill no tax is payable in years that individuals incur losses under the proposal advanced by the Opposition they would pay the flat 3 percent rate regardless of whether they had losses or gains. 
 So I say that if at the end of this process we have a difference of that minimal nature what we also have is broad acceptance around the House that it is correct that the concept of a fair dividend yield be the basis on which we tax these investments that the process we have gone through to arrive at that has produced a law that in the circumstances is sufficiently robust to stand the test of time and that we have completed an exercise that successive Governments over the last 20-odd years have embarked upon but failed to complete over. I think that all round in the circumstances that is a pretty satisfactory outcome and I simply congratulate all of those who have been involved—be they submitters technical advisers members of the Finance and Expenditure Committee officials or members of the House who have taken an interest—and have had a hand in bringing the legislation to this point this evening.