Bayly AndrewANDREW BAYLY (National—Hunua): Thank you Mr Assistant Speaker. Very good. It's nice to be following the Minister of Revenue. I've got to say it's a slimmed-down version of the Minister. Obviously he had a very nice holiday. It's good to be reporting back on this taxation—it's a very long title. It's very noisy over the other side there too. It's the Taxation (Annual Rates for 2018-19 Modernising Tax Administration and Remedial Matters) Bill second reading.Of course there is much that is good about this piece of legislation this bill and I'm going to talk about it but of course we cannot support it because it continues to enshrine the situation where New Zealanders are subject to paying too much personal tax. The key issue is it sets the tax rate for the 2018-19 year and that's the bit we do not like.I was listening to some of the speakers before in the Prime Minister's debate going on about you know the new tax arrangements that are going to come in. Someone quoted $385 that's going to benefit New Zealanders. Well if this bill had encapsulated the stuff that the National Party had proposed this would've meant that on average every New Zealander would've benefited by a thousand bucks—just over a thousand bucks—not that miserable $385 someone spoke of.And when it comes to our superannuitants they love talking about that winter payment which in my view was slightly misleading because the view was that everyone was going to get eight hundred bucks. Well actually it wasn't because the way it was calculated there was only I think two and a half months and so on average it was much less than 300 bucks. So for superannuitants they were disadvantaged even worse. So this bill sets the rates for 2018-19 and it's not right.That brings us to the point about capital gains tax which I just alluded to briefly before. That's going to be another situation where we're going to see this Government—this Labour - New Zealand First Government—piling on the taxes on those hard-working New Zealanders. It's wrong.Anyway—anyway let's talk about the good stuff. It was nice that the Finance and Expenditure Committee worked so collegially last year to bring about some of these changes which I must admit did have their initial genesis under our Government but it's nice to see it coming to fruition like all tax bills. I think the first thing is the issue round information sharing. Many of us have experienced the frustrations of having to provide your information to the tax department and to other Government departments on multiple occasions. One of the things about this bill as the Minister spoke about is the sharing of information amongst other parts of IRD and also there's some special arrangements with other departments. I think that's a good thing because we need a tax system that serves the people not the other way round and it's part of the Business Transformation programme the big IRD tax programme that's been under way for what three years 3½ years—a billion-dollar project. I think this is all about making it much easier for New Zealand and New Zealanders to go about doing their stuff.I think on that very issue there is an issue about filing of returns and this bill actually helps with that in terms of how people have to file their returns. So the issue is—and it's under clause 21—that where you have reportable income—and reportable" is defined as wages salaries or interest. If that is a pretty simple arrangement and you don't have it with a whole lot of other income sources then effectively what's going to happen under these new arrangements is that the automatic filing of that—the tax department will now move to a situation where they will assess your appropriate tax rate. We have many instances of where that's wrong and certainly the issue of secondary tax which we know is the bane of most people's lives particularly those with two jobs is a real disincentive. So some of the streamlining of those processes of the IRD is a good thing and I think to be welcomed. As the IRD roll out their programme this will come to the fore and we'll see much of the benefit of that.The other thing is the issue round tax write-offs and in many cases people do file returns and they have a small margin of error in them. We talked about this extensively in the committee. So what we've said for those with that reportable income the definition I talked about before if you have an error or a benefit of some sense of less than $50 then the IRD will automatically pay that back to you or write off that debt. On the 2017 estimate that the IRD did for us that's going to benefit roughly 580000 people. That is a huge gain and part of that's in making the system so much simpler.There's also the issue of correcting and finalising information on tax returns. Clause 21 also allows people to correct information provided to the IRD and this is an issue we talked about—the threshold. At what point can you say "I made a legitimate mistake and I shouldn't be penalised." and at what point should you be subject to a framework where you should incur penalties? One of the changes was that we increased that threshold in the committee and moved it from 1000 to 10000 or less than 2 percent of the tax or the GST amount of your total earning of that in the course of that year. So we increased that threshold and I think that's a very good thing. We also put in place this issue round no interest or penalties to apply to those with reportable income. So these are all good measures.The other aspect I think as a committee we all felt strongly about is the issue around trying to get binding determinations from the IRD. Many of us have—at a personal level but certainly at a business level—issues where you do not know whether they are tax deductible or not. So we wanted to facilitate. We wanted to promote that system so that people could proactively go to the tax department have that conversation with them and get a binding ruling. I think the outcome of that has been a good one in that what we did—the original proposition when the bill came to the committee was that it had a threshold of $5 million or a total tax bill of $1 million. So if you were under those thresholds you could go and get a binding ruling.We talked about it quite extensively—and I see the officials here—and so we increased the threshold where if your turnover was under $20 million rather than under $5 million as well as your tax liability being less than $1 million then you could access and get a binding ruling from the IRD. That is a good thing—that is a very good thing.The other thing that we talked about was the issue round ACC payments. We had a number of submitters come and see us and talk about the issue of where they had had an injury they had got some treatment and then in many cases the ACC for process issues or as a result of other things that had happened actually gave them money in the next financial year which related back to the previous financial year. Of course that meant for all intents and purposes that they technically hadn't declared income—although they probably didn't know about it—but also it just created a tax obligation which became very difficult. So the agreement in the bill for a schedule of payments such as that paid by ACC to these people that are indisposed was that any of these backdated payments from ACC could be treated in an easier manner and much more efficiently so it didn't disadvantage those that were indisposed.I think those are all good things. The other thing I think—well actually I'm coming to an end but I know my colleague's going to talk about the bloodstock issues and also the KiwiSaver and the charitable status. These are other issues that were important in this bill and I'd like to thank the committee but I think we've made some progress towards improving the tax situation."