Scott AlastairALASTAIR SCOTT (National—Wairarapa): Madam Assistant Speaker thank you for this opportunity to speak on this long-winded titled bill the Taxation (Annual Rates for 2018-19 Modernising Tax Administration and Remedial Matters) Bill. I'm going to touch on half a dozen things but first of all I'd like to make a couple of comments vis-à-vis James Shaw's speech.I suspect there's a leadership issue in the Green Party. There must be—there must be. He's been talking about increasing taxes. Here's a guy who's an environmentalist and he's talking about increasing taxes not taxing the taxpayer enough. He's talking about capital gains tax (CGT)—must have capital gains tax. He's appealing to his members who are the left of the left and so I'm suspecting that there must be an issue inside the Green Party and I imagine we'll hear a little bit more about that down the track.It is ridiculous that we need more taxes; we have surpluses. The Labour Government has inherited surpluses coming out of its ears. There is no need for further taxes and that is why we support and legislated earlier for tax cuts by changing the thresholds. That is why Simon Bridges has recently announced the movement by indexing the tax thresholds to give more people their money in their pocket because after all it is their money—it is their money. The sanctimonious attitude that comes from James Shaw to say that New Zealanders need to be taxed more for his purposes to do what he wants is outrageous.We have to remember that we are spending taxpayers' money. About a third of every dollar in the economy is spent by the Government. It's far too much; it's outrageous. In my view people should be left to look after themselves their communities and their families and they've proven—Hon Andrew Little: So James Shaw was right?ALASTAIR SCOTT: —and they know how to look after—we don't need Andrew Little's help in looking after our family or James Shaw's sanctimonious attitude to say We need more tax to do the stuff that we want to do." despite what the individual might want to do. It's quite amusing. You might recall—ASSISTANT SPEAKER (Poto Williams): All right Mr Scott. I think we can come back to the bill.ALASTAIR SCOTT: Well I was just going to say: James Shaw's maiden speech—look back on it. He reflects on markets. He actually quotes Margaret Thatcher and I can't understand the flip-flop that he talked about this afternoon.Anyway the six points that I would like to make: generally I support the bill—the points in the bill. It's all about simplifying and modernising the tax system around the Business Transformation process. I like it. You know I'm a pretty simple sort of guy. I think I'm reasonably modern. So you'd think I might even support all of the bill but I don't. I don't because of the tax rates—and we've touched on it already—that are implemented and accentuated in this bill.The good bits of it some people have talked about already. The information sharing—very useful very useful. I still advocate for and look forward to the day where delinquent fathers who have multiple children or multiple lots of children—not even multiple; any number of children—and disappear on them as delinquent fathers and do not pay their paternal obligations through the IRD—this information sharing will help and the Business Transformation sharing will help track those guys down because as others have said it's almost a real-time situation. At the moment we can have fathers who go from job to job and are never really called up by the IRD and miss out and do not fulfil their parental obligations to their children. That will change I'm sure as time goes on.The KiwiSaver: the Minister said KiwiSaver is very good because it makes retirement easier for all New Zealanders. That's not quite the case. Unfortunately not all workers' salaries or wages are in KiwiSaver and I think there is still a lot of work to be done around that. In fact most of the people who are not in KiwiSaver are the lower-income people because they simply cannot afford to contribute the 2 or 4 or 6 or—I think it's even 10 percent that one can contribute now to the KiwiSaver scheme. So while it is an excellent tool for people who can afford to save there's still a lot of work to be done to ensure that those that are the most vulnerable at retirement should be able to contribute more easily.The secondary tax: we've covered that off reasonably extensively with Deborah Russell's contribution. I agree it is a problem. I'm forever explaining to people that the secondary income tax is something that if they overpay they can get a refund on and that they should still go for that second job because at the end of the day the total income is what is taxed not just the secondary income. The secondary income is taxed at a higher rate but it is balanced and at the end of the year it's the total income that matters and that's really pleasing to see that this legislation enables that to happen.The next point I would like to raise is around the volunteers. Again this is a matter of simplifying and modernising with the use of the technology as well. So this revolves around the volunteers. At the moment volunteers let's say are on a salary. They don't need to put in a tax return—if you're simply on a salary that's done automatically—but these guys who volunteer who get paid an honorarium that's withheld at a higher tax rate a little bit like your secondary tax rate. So to ensure that they're treated fairly they've had to put in a tax return and as we've heard from a number of contributors this afternoon people don't. They just don't bother. They're just concerned that if they file a return they might get a notice to pay a bit more. They'd rather just keep clear of the IRD—it's a Government agency; you know Big Brother. Whatever their reason is they don't necessarily want to interact with the IRD—unfortunately because in a lot of cases they will be due a refund whether it's a secondary income or whether in this case they might be a volunteer fire or emergency service volunteer. So again that's a good thing. That's a very useful piece of legislation.The other piece was around the brightline test where a property is bought off the plans. Prior to this legislation the time would start ticking when the land was purchased. Now it's when the contract is signed if you like. So that brings the start date forward if you like. It will compel the owner of the property to hold the property for longer if you like from the purchase date of the land and that's good but remembering of course the brightline test is essentially a capital gains tax. The Labour Government moved it from a two-year brightline test to a five-year brightline test and that has put a whole lot of landlords off investing in property. That has increased the cost of being a landlord. Obviously if there's going to be a possible or even an imminent tax burden the landlord demands that cost of capital to be recuperated in some way or they'll leave. If they want to recuperate the cost of capital they have to go to the tenant in increased rents.Chlöe Swarbrick: Or they could sell their property.ALASTAIR SCOTT: Or they could sell the property; that's another point. They could sell the property but the problem with that—and this is part of the problem with the capital gains tax: if you do sell the property you're going to be liable for a tax bill. So that's a problem when these landlords go to the bank.So you go to the bank and say "Look Mr Banker I want to buy another property." and he looks at your balance sheet. You bought a property 10 years ago; it's worth $200 today—that's about a 7 percent return compounded—and you think you've sort of doubled your money if you like. But unfortunately the bank is going to say "Mate your property isn't worth $200 because that $100 is taxed. So I can't bank you on $200 worth of asset; I can only bank you on $166 of asset." So what you're going to find is that bankers aren't going to fund it. That's a problem because if the bankers aren't going to fund the landlord the landlord can't build the next property or invest in the next property to house the tenant.So I think we've got to be a little bit careful about the unintended consequences of some of these legislative moves—well I'm talking about the brightline test in the bill at the five-year point but particularly the CGT that's proposed and that is why we have to be careful about what we do here. So at the end of the day I reject and oppose this bill.ASSISTANT SPEAKER (Poto Williams): I understand this is a split call. Kieran McAnulty you have five minutes."