Robertson H V Ross: Taxation (Tax Administration and Remedial Matters) Bill — First Reading 
Robertson H V Ross: Taxation (Tax Administration and Remedial Matters) Bill — First Reading 
[Volume:669;Page:15895] 
H V ROSS ROBERTSON (Labour—Manukau East) 
: 
 Tena koe Mr Speaker. Kia ora tatou no reira e te Whare e nga iwi e nga reo e nga hau e wha. Tena koutou tena koutou tena koutou katoa. This bill the Taxation (Tax Administration and Remedial Matters) Bill will be referred to a select committee as the Government has the numbers to do so. There will be a debate on whether the removal of gift duty will assist or hinder social interaction but that is only one part of this legislation. It is wide-ranging legislation. It is taxation. I know that the Minister of Revenue has spent a number of years in this field and one would expect him to be well versed in how the system works. 
The explanatory note outlines that the bill amends the Tax Administration Act 1994. The reasons are: “to improve the ability of the Commissioner in defined circumstances to disclose information in the course or furtherance of good tax administration practice.” The explanatory note goes on to state: “Some information may be disclosed in circumscribed cases if it is in the interests of government efficiency. The bill also provides for other matters including the abolition of gift duty improvements to the tax disputes process and improvements to tax pooling legislation. A number of minor issues are also remedied as well.” 
It is the job of the Opposition to hold the Government to account. As a result the Opposition will oppose the bill. The reason is that the bill is seen as a tax break for the top 10 percent of wage earners and salary earners who have already benefited substantially from the two previous tax cuts. We are told by the Government that the bill abolishes gift duty. We are also told that gift duty no longer raises any significant revenue and that it imposes a high level of compliance costs on the private sector. 
I am all for the cutting out of waste and the reduction of compliance costs because this is an issue that has always concerned small business. I well remember campaigning throughout New Zealand as the small-business spokesperson some years ago when I was last in Opposition. I remember walking into a small business in Winton. It was a grocery store. As I walked in I saw the owner of the business sitting at a desk behind a mountain of paper. That has not changed; we still have compliance issues. When I told him that we were looking at the whole issue of compliance he said “Hallelujah!” and he threw all his papers into the air. 
Although I can understand from the Government’s point of view the need to cut compliance costs the question has to be asked of the Minister—and this is of interest to me—whether this bill might lead to additional compliance costs. The Minister shakes his head but I do not know. When we are talking about trusts all sorts of things can happen. 
Peseta Sam Lotu-Iiga 
: You don’t know. 
H V ROSS ROBERTSON 
: There is Sam Lotu-Iiga. I tell him to get up on his hind legs and take a call. But he has not yet because he has no answer to this. He has no answer and he does not know. 
The Minister said today in answer to a question in question time that people were using trusts to avoid taxation. Yet this evening we see that people who have trusts will no longer have to pay gift duty which in itself is a tax. This afternoon we have had it laid out to us in the House that there are those who use family trusts to avoid taxation in order to access family support so the indication was that those tax loopholes had to be closed—and rightly so; they will be. But tonight what we have here is robbing Peter to pay Paul—robbing Peter to pay Paul. What happens now is that those who have trusts will no longer have to pay gift duty. 
The member over there Sam Lotu-Iiga will take the next call. I challenge him to get up and answer those questions because that is what the member should do. The member should be answering those questions and I expect him to. Here are the questions that I will put to the honourable member and here are the reasons why Labour will oppose the bill. We want to hold this Government to account for anything that it does and it needs also to justify what it does. We look forward to the select committee process. Obviously— 
John Hayes 
: Being in Opposition is what you look forward to. 
H V ROSS ROBERTSON 
: No I tell the member that we will be swapping sides in 1 year’s time. It will not be too long now. Labour members will not support this bill but we look forward to the submissions to the select committee so that Labour members will have the chance to challenge the Government. Here are a few reasons why Labour opposes this bill. 
John Hayes 
: That is why you are still in Opposition. 
H V ROSS ROBERTSON 
: No. Scrapping gift duty represents a tax cut for the wealthiest New Zealanders. Labour is about fairness in taxation and that was one of the problems with the recent increase in GST. We know that the top 10 percent of those who received the benefits of the GST increase received 42 percent of the tax reduction. That is not fair. We also oppose the bill because scrapping gift duty is yet another tax break for some of the 10 percent of people who have already received a significant increase in their income as a result of the tax cuts. 
Hon Peter Dunne 
: Could the member explain how that is the case? 
H V ROSS ROBERTSON 
: We have just had the GST issue and we saw the top 10 percent of salary earners and wage earners receive more than 40 percent of the tax reductions. The bottom percentage of people saw very very little. That is the problem we have. 
Politics is all about priorities but scrapping gift duty underlines the fact that this Government is focused on delivering tax cuts for the wealthy. The Government has again justified its decision by saying that gift duty raises only $1.5 million a year and it costs half that amount to administer. I challenge the Minister to table the information that indicates that although the Government receives only $1.5 million a year half of the cost goes on administering the scheme. That is a considerable amount so I ask the Minister to front up to the select committee and justify that figure. 
The abolition of gift duty allows the wealthiest New Zealanders to structure their affairs by transferring income and assets into trusts and to their children to reduce their tax liability. That is not good enough. Labour is concerned that there be fairness in the tax system. We say there should be equity for all not just for the wealthy. The fact that people currently spend $70 million on gift duty compliance in order to avoid paying their fair share of tax is no reason for removing it. It just shows potentially how valuable this free lunch is for wealthy New Zealanders. I ask Mr Sam Lotu-Iiga who will take the next call to get up on his hind legs and justify the abolition of gift duty. 
Peseta Sam Lotu-Iiga 
: Sit down then. 
H V ROSS ROBERTSON 
: I have not finished. I challenge that member to get up and justify the Government’s stance because members on this side of the House will continue to hold this Government to account to justify everything that it has to say about this legislation. 
We welcome the bill going to a select committee because that is where the debate will take place. That is where we will find out whether the Government can justify what it wants to do. At present Labour members are not yet convinced of the arguments that have been put forward by the Government to justify its removal of gift duty. Although we accept there is a need to cut compliance costs and I am all for that there is a need for the next speaker to justify everything the Government is doing.