Bennett David; Parker DavidHon DAVID BENNETT (National): To the Minister you've made it clear that the income tax rates will probably require the Government to look at the trust tax rates to even that out if the situation arises where they feel that there is abuse of the process or tax take. The necessary part of that then would be that you would also have to look at the company tax rates as well because effectively trusts are used as an asset ownership and a company is used as a delivery vehicle in most tax planning cases. So if the Minister's indicating to the House and to the public and to the tax community that he's willing to look at the trust rate then effectively he's also going to have to look at the company tax rate—and the company tax rate will have to go up. So once there is a move on the trust rate the company rate will go up and that then will create a situation where New Zealand will be well out of kilter with our nearest neighbour—for example—Australia that has reduced its company tax rate in recent years. That will cause a major dilemma for the Minister because if he just does the trust tax rate by itself then people will have a discrepancy between trust and company tax rate and they will adjust their affairs accordingly which will create some more tax compliance issues where he will actually lose some tax from the trust regime. Then if he has to follow that through and go on to the company tax rate he will put the New Zealand economy at a very competitive disadvantage from our nearest neighbour and many companies that are dually domiciled in both countries will decide that Australia is the place to be domiciled not New Zealand.So what is his plan in regard to the company tax rate? Is he also putting that on the table as he has put on the table the trust tax rate? Is he going to give us a commitment that the company tax rate will be treated separately and will not be increased if the trust tax rate is increased? Then what would his implications be for the movement between trusts to companies or companies to overseas to avoid essentially his tax system that is getting very complicated and very out of kilter as soon as he changes that tax rate on the trusts?Hon DAVID PARKER (Minister of Revenue): With respect the member compares final taxes with provisional taxes. Income tax and trustee taxes are final taxes; company taxes are not. The final taxes paid by people are on the dividends they receive not on company profits. We have no plan to change the company tax rate. We are not concerned about the differential between the company tax rate and the individual tax rate. The member already made the comparison with Australia. The Australian corporate tax rate has a much larger differential between their top income tax rate than ours does now and ours will in the future because they as the member has said have a lower company tax rate and a higher income tax rate their highest income tax rate being 45c in the dollar not the 39c in the dollar that we propose here. The final point I would make—and I feel this is getting repetitious because this has been raised earlier—is that the National Party never seems to worry about increasing differentials when they drop the company tax rate causing—Hon Michael Woodhouse: Yes we do. That's not true at all.Hon DAVID PARKER: Well they do it anyway.