Coates BarryBARRY COATES (Green): Tēnā koe e Te Māngai. I rise to speak about the Taxation (Annual Rates for 2017-18 Employment and Investment Income and Remedial Matters) Bill—quite a mouthful. It is good to see this bill arriving at the House before the finish of the tax year. We recall that last year's bill on annual rates to be set for 2016-17 arrived in the nick of time before the tax year actually started so at least this year we have the tax rates which are unchanged apparently in the next financial year. Although given the fact that this is the day before Budget day who knows?So we accept this bill as it is. Broadly it is a bill that makes a number of minor changes. Modernisation I think is the theme that is spoken of and the Green Party broadly supports most of the measures. We support this bill to the select committee and there are a number of aspects of the bill that we will look to scrutinise. We hope that there will be a degree of accountability on key issues. One of the key issues in this bill is that we can identify a number of measures that will support small and medium sized enterprises (SMEs)—and that is good; it may help reduce compliance costs in some areas. However there are some worrying aspects of the bill and some things that we have concerns about with regard to the potential compliance cost for SMEs.A second issue that concerns us is the potential link from this bill to social policy and social investment measures. While we recognise that income in the hands of beneficiaries should be able to be accounted for and the tax aspects handled as simply as possible the linking of this tax bill with social policy gives rise to some concerns. We are certainly going to be looking closely at those measures. Through the bill there is reference to a number of areas where there may be links to child support KiwiSaver Working for Families and also to student loans and we are going to be looking at those links to ensure that this bill helps simplify and support rather than impose additional burdens compliance costs or unwarranted conditionalities on recipients of those Government grants.Thirdly we will also take a particular interest and a look at employee share ownership schemes. Employee share ownership schemes are a significant part of this bill. We are going to want to look closely at the changes that this bill introduces for employee share ownership schemes. We have as the Green Party a reflex support of share ownership schemes of ways to give staff particularly in small business and start-ups a stake in the companies where they work a material investment of their time of their expertise and of their investment in the company. So the degree to which we can support these companies being a shared enterprise I think the greater the linkage in satisfaction for those who work in these businesses and also the greater the chances of success of the businesses themselves. So we are going to be looking very closely at those changes in the employee share ownership schemes. There are already a couple of things that we see in there that would give us cause for concern.A fourth area that we want to look closely at is petroleum mining decommissioning. We understand that what this bill aims to do is instead of spreading back the cost of decommissioning over prior years—a complicated arrangement—it would create a system of tax credits. That by itself is not a cause for concern but we are going to be looking very carefully especially given the experience in mining companies and oil production companies of the end of life the decommissioning and the remediation not being paid for by the companies themselves but creating a public liability after the private sector enterprises have made an enormous amount of money and then walk away from their social and environmental responsibilities. So we are going to be looking very closely at that aspect of the bill.Fifthly the bill creates provisions for Lloyd's of London tax simplification and pharmaceutical company tax simplification. Again the tax simplification in itself is not necessarily a bad thing and we will certainly be interested in how that operates. We do have concern that the formula that is being applied is that 10 percent of Lloyd's premiums are going to be used as the basis for assessment of a company tax of 28 percent. We are going to be wanting to understand closely with evidence how that figure of 10 percent is arrived at and the degree to which it is the appropriate tax liability for Lloyd's of London and similarly for pharmaceutical companies.I should say that the bill also provides for new charities that come on for donee status. There are five companies that will receive charitable tax deductions. Having previously managed one of those organisations that had donee status it is an important step for organisations to achieve that. I am very pleased that Médecins Sans Frontières is one of those organisations having worked closely with it in the past. I think it is an immensely important organisation internationally. It is great to see it having a base in New Zealand and it is great to see it having donee status. We also welcome the four other charities that have gained donee status.Finally we see in the wording around this bill that the reforms will minimise the biases that taxation introduces into economic decisions." Unfortunately we do not see the broader examination of those biases to include issues like ensuring that multinationals pay tax in this country or equitable treatment of GST so that online companies supplying the New Zealand market from overseas with products actually have to pay their fair share of taxes as New Zealand companies do; nor do we see the inherent regressivity that has come into the tax system being reversed. So while the bill is making a number of very minor tweaks and changes to the Act we note that the big issues have not yet been addressed. We do not think that they are going to be addressed in the Budget tomorrow but who knows—maybe we are going to be surprised?Hon Member: Doubt it.BARRY COATES: Doubt it—thank you. I think overall this bill is welcome. I will not welcome it if instead of these benign aspects we see the bill being used for an intrusive administration with social policy. We have already seen social policy coming into our privacy provisions with NGOs that receive grants having to divulge who their client base is. So we would not like to see that kind of approach adopted in the system under social policy. We have concern about the pre-population of tax returns in so far as we should not necessarily move back to a situation of tax returns being mandatory for all. With those caveats around the kinds of issues we are going to be looking at in this bill we will support it to committee stage. Thank you."