Tabuteau Fletcher: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — First ReadingText is incorporated into the Bound VolumeTabuteau Fletcher: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — First Reading[Sitting date: 08 December 2015. Volume:710;Page:8649. Text is incorporated into the Bound Volume.]FLETCHER TABUTEAU (NZ First): I am. It is my pleasure to stand up and take this call on the Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill. I just want to start off with the fact that New Zealand firms have been forced to play on an uneven playing field for the last few years. We are talking about businesses that are having to operate in a tax environment that gives advantages to overseas firms. Instead of this Government creating a level playing field actually the reality is—for whatever reason whatever decision-making process goes on over on the other side of the House there—that this Government has taken years to come to this stage. It has had to acknowledge the fact that small to medium enterprises in New Zealand have been struggling with a very real issue around competing with overseas firms that have not had to pay the GST on goods and services.What that has meant is that our local firms here in New Zealand are complying with what is essentially an unfair law that has put them on the back foot. New Zealand First has seen it firsthand. We have spoken to small businesses we have heard from them and they have told us that not only has it compromised profits but also it has actually made it very hard to undertake a business in say Rotorua for example. A bookstore in Rotorua is having to compete with online bookstores but from the outset an overseas firm such as Amazon has a competitive advantage in terms of size and then it gets 15 percent in terms of the GST on top of that.It has been unfair and the Government is addressing it only now. But what we are seeing is a kind of a half attempt and it is even more frustrating. What we are seeing is for example that if you buy an e-book on Amazon after this legislation has passed Amazon will be required to take the GST and pay that but if you buy the same book in the hardcopy version there is no GST on that. It just is completely illogical makes no sense whatsoever and is completely frustrating not only for New Zealand First but also for the small to medium enterprise businesses in New Zealand that are having to cope with the realities of this Government’s apathy. It is just taking too long the Government is not serious about a very real issue and it is compromising New Zealand business. What we are saying is that this tax component is an effort to level the playing field but that it does not go far enough. This Government needs to step up and it needs to step up very fast. As I pointed out it is not just small businesses struggling to cope with unfair tax; it is compromising not only their profitability but also the livelihoods of men and women who are working hard in their small businesses so that needs to be addressed.One of the other parts that has been raised earlier this evening was the actual revenue collected from the GST. It is not really that big a deal. You are talking about $40 million. [Interruption] I am glad I am entertaining Mr Seymour. He seems to be entertained by just about anything at the moment. But the reality is that if the Government had actually implemented the tax for not just the intangible but also the tangible goods you would have been talking about some real revenue take. The reality is that that is not the issue at the moment—the fact that we are getting only $40 million from the intangibles’ GST tax take.David Seymour: What is the issue?FLETCHER TABUTEAU: The issue is the levelling of the playing field. The issue is that small to medium New Zealand businesses will then be able to compete with international competition on a reasonably level playing field.New Zealand First was glad to note the threshold for overseas companies in terms of registering for GST is set at $60000 per yearin income although we noted that there was a $10000 threshold proposed earlier in the piece and we probably would have supported that level as well. I think one of the problems we will find in this particular aspect is actually assessing and getting meaningful information from overseas businesses about what their incomes are and whether they meet the threshold or not.Speaking to the student loans part of the legislation you are talking about 110000 New Zealanders living overseas with student loans with approximately $3.2 billion still being owed. In this instance New Zealand First says that good New Zealanders here in New Zealand are obliged to make their contribution. They are being held to account and so actually it is fair and reasonable to expect those students overseas to do the same. It was pleasing to note the streamlining effect of the rules applying to Kiwis living overseas—for example there was a fix-up of some of the exemptions around Kiwis living overseas who are working for charitable organisations. Their exemption will continue and they will be able to do good work as it were without worrying about their student loan in the meantime.New Zealand First is concerned about the proposed changes in order to facilitate better and more comprehensive information sharing between New Zealand’s Inland Revenue Department and the Australian Taxation Office. Fair is fair: if New Zealanders at home are repaying then those abroad should do the same. What we are concerned about however is that this Government has refused to put pressure on the Australian Government around its treatment of New Zealanders in Australia and essentially making them second-class citizens. The point is that if the rules were applied evenly and fairly and if we were treating New Zealanders in Australia who have been living there for 40 years for example the same as an Australian-born citizen then you could say: “Well yes let us get in there and apply this. Let us be vigorous about it make sure that they are not escaping the net.” The reality is though that New Zealanders are living there as second-class citizens and so I challenge some of those backbenchers over in the Government’s party to actually go and have meaningful discussions first about how to treat New Zealanders fairly in Australia instead of prioritising the collection of student loan debt. There are so many bigger issues to be dealt with in the first place.New Zealand First opposed the brightline bill because of our own analysis—David Seymour: The brightline bill?FLETCHER TABUTEAU: —the analysis of Mr Seymour the analysis of every single expert who submitted. Not just one or two of them but every single expert who submitted on the brightline test told us and saw very quickly that this piece of legislation would achieve none of the stated objectives that it set out to achieve. In fact it would add even greater levels of complexity to the situation.David Seymour: Can the member tell us why?FLETCHER TABUTEAU: I will not go into detail because I do not have the time but Mr Seymour could do some reading perhaps this evening and get a little bit of the detail.Because the bell has already rung I had better jump to my conclusion—[Interruption]—and please my audience. Thank you—thank you. We actually cannot support this bill. Our opposition to the theatrics and empty platitudes from this National Government regarding the brightline legislation are just too strong. Voting for this and supporting this legislation would simply give tacit endorsement of that waste of time piece of empty puffery—and no I am not talking about Mr Seymour. The reality is that there are three distinct parts in this legislation. I genuinely implore the Minister of Revenue to break up this legislation. I ask him to present it as independent pieces of legislation so that New Zealand First could support the good stuff—the common-sense pieces on student loans and taxation—but as to the rest of it we have got issues and therefore we cannot support the bill as presented to the House this evening. Thank you.