Goldsmith Paul: Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill — First ReadingText is incorporated into the Bound VolumeGoldsmith Paul: Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill — First Reading[Sitting date: 10 December 2013. Volume:695;Page:15376. Text is incorporated into the Bound Volume.]PAUL GOLDSMITH (National): That speech from Dr David Clark had no discernible theme or coherency and I was struggling. One moment he was attacking theUnited States—I thought that that speaker was a friend of the United States—but the next moment everything was disgusting. I think that maybe one thing you could learn is that hyperbole on a regular basis sometimes waters down the effect of the nature of the speech.Labour’s approach to tax is to squeeze the lemon until the pips squeak and it showed that over its 9 years when Michael Cullen was the most rapacious tax-gatherer in the history of New Zealand. We have a different approach from—Dr David Clark: And we ran surpluses.PAUL GOLDSMITH: That is right. Yes you justhoovered up every cent and dollar of tax that was possible whereas this Government aims to raise the revenue it requires not through hiking tax rates but by ensuring that the existing tax bases are applied fairly.This bill the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill is about maintenance of the tax system and it is ultimately about building a more competitive and productive economy which is one of the National Government’s key priorities. It is only by lifting our economic performance that we can create jobs boost incomes improve living standards and provide the world-class public services that Kiwi families need.This bill deals with a large number of issues in relation to employee allowances thin capitalisation rules black hole expenditure deductions foreign account information-sharing agreements charities deregistration tax exemption for community housing schemes and a whole lot of minor matters. I want to touch just briefly on the thin capitalisation rules because this is an area that is of particular interest to the people of Epsom whom I have been talking to recently. Changes to the thin capitalisation rules will help ensure that foreign-owned companies investing in New Zealand pay their fair share of tax. We welcome foreign investors in New Zealand. In fact this country and this economy have been built on foreign investment but we expect everybody participating in the New Zealand economy to contribute their fair share. The thin capitalisation rules are designed to address the situation where non-resident investors can artificially load debt into their New Zealand investments to limit their exposure to New Zealand tax—a very old trick. However they currently apply only where one non-resident owns 50 percent or more of the New Zealand investment. That means that the rules apply to traditional multinational companies but not to other types of non-resident investors such as private entity investors and there are a lot of those in Auckland at the moment.This piece of legislation proposes amendments to extend the thin capitalisation rules so they apply to non-residents who act together when investing in New Zealand. I think that that will go a long way to strengthening the tax system. On that basis I commend this bill to the House. I look forward to it coming to the Finance and Expenditure Committee for a thorough investigation. Thank you.