Williams Andrew: Taxation (International Investment and Remedial Matters) Bill — Second Reading 
Text is incorporated into the Bound Volume 
Williams Andrew: Taxation (International Investment and Remedial Matters) Bill — Second Reading 
[Sitting date: 09 February 2012. Volume:677;Page:275. Text is incorporated into the Bound Volume.] 
ANDREW WILLIAMS (NZ First) 
: 
 Firstly can I congratulate you Mr Assistant Speaker Robertson on your reappointment to the role as an officer of the Parliament. I have greatly enjoyed dealing with you in other capacities over the years. I have always enjoyed the relationship we have had in local government and working with you in your central government role and I appreciate the support wisdom and great knowledge in many areas that you have been able to give to me over the years. So I do congratulate you and your fellow officers of the Parliament.  
We are here today to further the Taxation (International Investment and Remedial Matters) Bill. New Zealand First will support this bill but we do have some reservations and caveats in relation to it. The bill is intended of course to move to allow reciprocal arrangements between countries for investments and taxation to ensure that companies and businesses are fairly treated in the various jurisdictions where they are operating. However we would not wish to see departures from New Zealand as a result or any encouragement for companies to see this as an opportunity to set up their businesses elsewhere for the benefit of a lower tax regime in some other jurisdiction.  
Increasingly of course business these days is done over the internet in the ether via all sorts of other means rather than physical hard products and physical hard manufactured goods. Therefore as a result companies can in effect be based anywhere. They are almost cyber-companies in many respects because you are only as far as the distance from your mobile phone or your laptop. As a result companies can operate from anywhere. Therefore we certainly would not want to see a situation occurring where this was used as a matter of convenience so that companies could operate in cyberspace in order to secure more advantageous tax regimes.  
We do not have to remind you of New Zealand First’s longstanding commitment to this sort of situation going back to the most famous wine-box saga in the 1990s. Many of you will recall particularly those of you who were in this House at the time—and Mr Assistant Speaker you will recall—that that was a sad period of time in New Zealand because it was very clearly a situation where there was an attempt perhaps on the part of some to evade paying their due taxes to the Government and the Crown of New Zealand. In that situation it was convenient for some companies to find alternative locations for the registration of their companies and in so doing it was a significant situation in terms of the revenues to this country. For instance Treasury officials estimated during that period of time that New Zealand was losing up to a billion dollars a year in the mid to late 1980s through the wine-box tax deals situation. Companies’ tax money was not being paid meaning that the burden to meet the Government’s expenses here in New Zealand on welfare health and education fell on to the ordinary PAYE taxpayers. It meant that the Government kept running Budget deficits for a lot longer than it might have needed to and those deficits had to be funded by borrowing. We certainly would not want that situation to be repeated again in this decade.  
The Taxation (International Investment and Remedial Matters) Bill also raises the aspect of third-party situations where again I would remind you—and looking back in the records from those wine-box days—that apart from Australia the other country that took a pounding from the wine-box deals was Japan. Tax credits funnelling something like $1.2 billion to generate tax certificates were subsequently presented for tax rebates in Japan. The tax losses to Japan from those deals alone may be in the region of almost $200 million.  
As I said at the beginning of my address we certainly would not want a situation where clever creative accountants and clever creative organisations try to use the Taxation (International Investment and Remedial Matters) Bill and the law that will come out of it as a means of avoiding or evading tax. I am not talking just about New Zealand companies; I am talking about international companies. We had a situation in recent weeks which is before the courts in relation to some activities occurring in this country that are perhaps less than desirable and that we would not wish to be occurring in this country if they are proven through the courts to be so. So at the same time we certainly do not want to have international operators operating in this country for the purpose of perhaps avoiding taxes in their own areas of jurisdiction.  
New Zealand First has always supported reform of taxation. Our long-term objective is always that New Zealanders will pay less tax in the long run. We would like to see tax law simplified and enforced so that it is applied equally to all taxpayers. The burden of tax should fall equally to us all; it should not be imposed on some sections to the benefit of others. This includes incentives for increased research and development and reduced tax on export industries is a main platform that New Zealand First through this Parliament would like to see moved on.  
At the same time—and although this is slightly away from this particular bill—it does raise the issue of anomalies of instances of tax situations and pension situations for immigrants to this country and vice versa for New Zealand citizens living in other countries who do not necessarily secure the appropriate pensions and superannuitant payments because of the location of where they choose to live in their retirement. In a sense it is a penalty to them. Therefore while we are looking into this situation of being fair to corporates and companies to put them on a level playing field in terms of taxation so they can compete in world markets and in terms of investments around the world it does also raise the irony that we do have individuals—citizens of this country and citizens who have come to this country—who similarly perhaps are not on a level footing simply because of relocating to another country.  
So in a wider sense I think in the future we need to raise our expectations in terms of fairness. It should not just be fairness to the corporate world and the business world but perhaps in the future we need to give consideration to the everyday Joe Bloggs in the street who moves to another country another location.  
In closing can I just say that taxation is with us all. It is something you do not avoid in life; that and death are two things you are assured of through life. In terms of taxation it is beholden to us all to ensure that taxes are fair. We do have an increasing burden in terms of health education and social security. We do have a responsibility to provide for the people of this country and of this nation in a fair and equitable manner and we do have to ensure that our companies and our corporates are competitive at the same time in order to compete in the world markets.  
I hope that this bill will be supported in the House but with those caveats that when it does go through and is confirmed by this Parliament it is on the basis that it will ensure fair taxes both within New Zealand and in other markets where our corporates operate to the benefit of the New Zealand economy and to the benefit of our corporates and to ensure that New Zealand is a strong global player. Thank you.