Tabuteau FletcherFLETCHER TABUTEAU (NZ First): I rise on behalf of New Zealand First in support—only at this stage—of this large omnibus bill entitled Taxation (Annual Rates for 2016-17 Closely Held Companies and Remedial Matters) Bill.Hon Clayton Cosgrove: What a title.FLETCHER TABUTEAU: I know—it is a beautiful title but it does speak to the frustration some of us have on this side of the House when we—Tim Macindoe: We can understand your frustration.FLETCHER TABUTEAU: —keep having these remedial bills put in front of us. I say to Mr Macindoe and the New Zealand public that these remedial pieces of legislation should cause the New Zealand public some great concern—some great concern—especially under that National Government. Here the Government will be making as far as I have had the chance to count—I have had some amazing frustration at the pace this bill has been presented to the Opposition parties and then suddenly it is in the House frustrating my genuine endeavours to make a thorough and full analysis of the material before us. From what I have been able to count the Government will be making over 50 changes to amendments across seven pieces of legislation ranging from the Income Tax Act 2007 to the Stamp and Cheque Duties Act 1971. I want to add to the words of my colleague from the Labour Party who spoke quite eloquently about the ad hoc nature of this piece of legislation and in fact I suppose echo the words of the co-leader of the Green Party James Shaw when we ask where the direction is. Where is the understanding that the New Zealand public is supposed to take from pieces of legislation like this especially with regard to hugely important issues that are defining the world around us and certainly defining the nature of the National Government and its lack of action thus far around tax issues and avoidance? This has come on to the Order Paper and I just noted that it took just a couple of weeks to get into the House which is unusual. It sat at the very end. But I do want to acknowledge—although I may not have had the time to do my normal consultation with friends in the accounting field and lawyers—some of the words of Mr Bishop who gave one of his better contributions of late—Hon Ruth Dyson: Not a very high bar though.FLETCHER TABUTEAU: —no it is not a high mark—on the generic tax policy process used. In reading the impact statements you do get an understanding of the consultation that the officials have undertaken in coming to the House with the legislation as it sits thus far. There was comprehensive consultation. I say that with reservations because for example there is tax legislation in here that relates to councils but only the Auckland Council was consulted. So you have to wonder how robust the feedback was in terms of what the nature of those changes will mean for council-run State-held entities. It is complicated. I think everyone in the House has acknowledged that. I do acknowledge that the consultation with the community thus far has been to a degree comprehensive. That is why New Zealand First is offering its provisional support—at this stage of the debate anyway. From here we are able to go to the select committee and have not only officials but also our public and our experts out there come to the select committee and give us feedback. I know without any doubt whatsoever there will be a large large array of issues that will need tidying up. The last piece of tax legislation that came before the House included components of the brightline legislation. New Zealand First opposed that right from the start because we knew that it was a waste of time marketing spin but this one at least in our readings does move us in the right direction. So I agree with the Minister of Revenue's contribution. I do agree with Mr Bishop which is unusual that the tax system does need to be defined and made such that it is broadly fair and that the New Zealand public can have a good and transparent understanding of their tax obligations. The Inland Revenue Department (IRD) and the Minister themselves talk about the issues around compliance becoming fewer if members of the public understand what their obligations are and we fully concur. Unlike the last piece of legislation which did the exact opposite we believe at this stage that we are moving in the right direction. I do not think any amount of fast talking from the Minister on the ICT spend which in my understanding is from $1.2 billion to $1.6 billion on the IRD upgrade can justify those numbers just yet. That is an abhorrent number. That is frightening. I do not know why the New Zealand public has not rallied against $1.6 billion—or $1.5 billion if you concede the Government numbers—on an ICT upgrade. But you know we do want a transparent tax system. The Minister will have a lot to answer for and he will have to answer to the Opposition constantly for that spend so we will move from there. You will note the theme from the contributors this afternoon. We managed to dig into some depth on at least one of the over 50 changes. I looked into the double tax agreements and the anti-avoidance rules which I think Mr Shaw talked to. I think I unlike Mr Shaw will acknowledge that the Government is actually looking at the trust structures here and the companies in terms of their avoidance procedures. I think what the Government is acknowledging with this legislation as I read it thus far is that the DTAs—the double tax agreements—do not prevent … anti-avoidance" at this stage. That is a quote from the regulatory impact statement analysis itself. What I will say is it has taken way too long to get to this point to have this conversation about legislation around tax avoidance for these large multinational corporates. It has taken way too long for the Government to get here. To be fair I am not even satisfied at this point that the legislation as it stands will actually solve the problem. At this stage it is a matter of degrees. The double taxation agreement will take precedence. There has been no case law to examine the issues around this at the moment but I think we may still have some issues as we move forward unless the legislation there has changed. New Zealand First has said that the tax settings need to be changed and we look to Canada and Australia for example as early adopters or those who act quickly in acknowledging the issues with tax non-compliance with large multinationals. I can see that there is work being done by the OECD and New Zealand does need to work in parallel with those efforts but we have examples from around the world of Governments acting unilaterally and not compromising those efforts holding these big multinationals to account with regard to their tax compliance. That is what is fair and what is reasonable in undertaking business in our jurisdictions. I do look forward to a comprehensive select committee process. I look forward to the Committee of the whole House. We here in New Zealand First have no doubt there will be much to debate. I just want to say again for the record so it is clear that it is only at this stage that we support this piece of legislation so that we can get it through to the select committee so that we can have meaningful broad and robust debate on tax legislation that must—must—go through that process. Thank you."