Smith DamienDAMIEN SMITH (ACT): New Zealand we have a problem—we have a tax problem. This was a pretty boring bill actually. I remember taking it to caucus and sitting down with everyone and trying to explain it. That was before yesterday of course. Just to go back to the previous iteration of the bill one of the great aspects of it was that we were finally trying to at least attempt to align KiwiSaver moneys in relation to what is happening with moneys in Australia. That's a $2 billion problem which I think in this whirlwind of a captain's call on a capital gains tax yesterday has been lost. But I'd just like to reinforce that is vital work inside this tax bill. After yesterday and the stealth tax—call it what you want—I just wanted to point out that on a per capita to GDP basis we've gone back 5 percent. So this is going to affect our wellbeing. And so everybody knows we have the highest tax to GDP ratio and the highest tax to GDP per capita ratio in the Asia-Pacific region.Dr Duncan Webb: What about the State and provincial tax?DAMIEN SMITH: Income tax. So I just want to make a point that in the original iteration of the bill we were trying to address some simple fixable aspects and we were trying to set the rates for the tax base for this year—that was the purpose of that bill. Things have moved on and we now have a situation where—and I guess the Government did flag this by capping rents that can be put up on an annual basis and they have to be thinking now that this premeditated strike yesterday to change the bill was signalled by the finance Minister and it has led to a brightline test where ACT has always been opposed to this test and always seen it as a problem which would grow from an acorn to a giant tree one day and be unstoppable. But I heard this morning interestingly that new modelling has been done on core tax revenue and its implications for the brightline test and it's been a captain's call effectively. And you know what it has led to is another reinforcement that Mr Robertson has joined Mr Cullen as being somebody who's really happy to go back on their word and brought into consideration what is I think the most punitive tax regime we've seen.So effectively against that background we obviously oppose this bill but we'd like the Labour Party to understand that where there is good policy the ACT Party will support tax reform—and we do call for a fundamental review of the tax system in the future. Clearly all our competitors are making themselves more competitive at a corporate tax and income tax level and the people of New Zealand deserve to get that as well. We are also finding there are distortions that are going to arise from the increase of the higher tax bracket which means that people will take out and cap $280000 moneys out of their business and they'll find other ways to get it out. But more importantly people are setting up in other jurisdictions and exploiting our skilled labour to actually take them under contract and we don't get any tax capture from either the company or the individual.I brought a couple of concepts up yesterday because 10 years is a long time—and obviously Mr Parker hasn't budged. But people's lives can change in a nanosecond. There are two things that happen now. One is stranded assets; people are going to either have to hold on they can't make any choices if they go through a divorce there is no flexibility in this area in terms of providing New Zealand people with a loosening of the choke around their neck and we still haven't heard anything back from that. With these tax incentives or negative incentives these properties could be going to better hands and younger people and it is something we felt should be addressed overnight but it hasn't been.One of the things that people seem to forget is that blaming mum and dads and calling them investors" or "house flippers" is just wrong. It is the lack of supply that has driven up house prices. The Government needs to focus not on using tax as a lever here but actually getting on and building some houses because they can get money so cheaply—1 percent—yet it is happy to pay four grand a week for a four-bedroom house to rent. So you know that is the main priority and using the tax system to leverage that: it is not going to land it we're not going to tax our way out of this. The announcement yesterday reinforces to me that we've created an artificial shortage of land in this country—which has a load of land—and until we solve that problem we are not going to move forward and you know investors will now just hold on to their properties.The big issue here is not just the brightline test; the real issue is the deductibility of expenses. That is going to drive up rental prices—that is just a given. I think the Labour Party have to accept that that is now their responsibility and they have to accept that this is an unintended consequence—they accept that—for trying to deleverage a system that is using tax as a driver but that is just one part of the package.ACT has been saying for some time that we need to have some longer-term thinking about infrastructure and partnerships and proposals at a local government level. We also need to be thinking longer term about our tax base. We think that taking money and extracting money from the people of New Zealand whether it is a nurse or a doctor or a teacher it just can't go on for ever. You know we need to look at foreign direct investment as an alternative source of income for the country. We need to be efficient with our tax system where—the Minister points to that he won't look at that. And we need actually to think through what happens when Treasury says it doesn't know what the outcomes of these results will be.So just going back to GDP growth and one of the big problems that we see in this area is that we've got to be more productive. We've got to increase taxes through capturing new companies coming to New Zealand with higher skilled higher wage jobs and lift the boats for everyone. There seems to be a sort of bipartisan warfare going on that doesn't really address the fundamentals of an honest conversation around how we actually improve people's lives and real wellbeing as we would call it in the ACT Party.So we don't believe that yesterday's announcement is a magic solution to anything. The rather boring tax bill that we had there were some good elements to that which we supported. But on the issue of a higher corporate tax rate and also what happened yesterday we can't support this bill. We actually would like to reform a lot of the tax system over the next couple of years with the Minister.Just to conclude when you don't know what the impact of core tax revenue is going to be from extending the tax it doesn't really meet the public scrutiny test. We've had no opportunity to put this through the Finance and Expenditure Committee. We've had no opportunity to consult with the outside world. And you know from the Labour Government knocking back the tax decrease in 2017 the petrol tax the 39 percent tax the brightline tax we now understand that everything is going to get passed under urgency. The one consoling factor I had this morning when I asked the Minister was that he said there were going to be no more new taxes in the foreseeable future—but we've heard that before. So ACT cannot support this bill."