Watts SimonSIMON WATTS (National—North Shore) (remote): Thank you very much Mr Speaker. It is a privilege to rise on behalf of the National Party and as the member of Parliament for North Shore to talk on the Taxation (Annual Rates for 2021-22 GST and Remedial Matters) Bill third reading.As we've heard from a previous speaker Andrew Bayly National oppose this bill. We oppose this bill for four key reasons and I'm going to spend a little bit of time going through those. But firstly I do wish to acknowledge the Finance and Expenditure Committee of which I am a member for the work that was undertaken on this bill. I acknowledge the officials and the specialist advisers and all of the taxation and special interest groups that provided submissions through that process. While we heard a number of your submissions it is regretful that we weren't able to get the numbers to change this but we'll talk about that a little bit more as we go through.So National firstly oppose the limit on interest deductibility which is included as part of this bill. We know that this is basically stopping the ability for a business to legitimately claim a business expense. This is at the heart of taxation: that where a business incurs revenue it should be able to offset that revenue with expenses—and in effect this will limit the ability to do that. The limitation of interest deductibility applies specifically for residential investment properties and as we've heard previously that will impact a number of middle-income Kiwis mum and dad investors that are in effect claiming less than $30000 of interest per annum. This has sort of been bandied around as these significant big investors that will be impacted but the reality is this will impact a number of middle-income New Zealanders and that is why National are opposed to this. New Zealand also has a housing crisis and middle New Zealand is impacted most through the impact of housing affordability and the cost of living crisis as well. What is interesting in regards to this bill is both Inland Revenue and the Treasury advised that the change in limiting interest deductibility would reduce housing supply and push up rents. So this is not just me and the National Party as Opposition saying that this is bad policy. This is consistent with a number of people that provided feedback through the select committee process that this is bad policy. This is Labour Party policy driven by a Robin Hood ideology and it is not backed up by those that are within the sector and that is because it is an inconsistency which goes to the heart of the ability to deduct interest from business.I want to also talk about the brightline test. National obviously oppose the extension of the brightline test. This is when a person sells a house within 10 years after purchasing it and the sale proceeds may be therefore taxable. Labour are increasing this from five to 10 years and our issue primarily around this—National support the brightline test of two years but the extension of this to 10 brings a large number of unintended consequences. Some of those unintended consequences of this change are aspects that my colleague Andrew Bayly referred to before: it captures people within this net that may include a wide variety of individuals but we did talk about service personnel who are deployed to other areas of the world or indeed the country which means that they will be outside of their home for that period of time. That is a significant issue for us. And at the end of the day the actual change in policy is not going to drive any of the actual intended benefits that have been discussed in regards to this. So again National would oppose the extension of the brightline test.The third element I want to talk about is in regards to the 39 percent personal tax rate. National strongly oppose this element of the bill. This tax will affect nearly 120000 Kiwi taxpayers. This is 44000 more Kiwi taxpayers than the Inland Revenue originally and first estimated would be impacted by this change in the law. The IRD has noted and I quote: significantly higher than anticipated"—so that's the number of people that are captured by this new tax. This element of the bill really acts as what I would describe as the driftnet of taxation that Labour are using to basically harvest and feed their addiction to spending—this driftnet of taxation that we're seeing across the board. The 39 percent personal tax rate the extension of the brightline test the limit of interest deductibility are all examples of where this Labour Government are continuing to put pressure and increase taxation on hard-working Kiwis. The fourth element of the bill relates to changes within the Goods and Services Tax Act. National supports the modernisation of our GST system. The issue that we have particularly—and this was echoed by a number of submitters as well—is that we need and individuals require a lead-in to implement the modernisation particularly around information requirements for GST. We would have liked to have seen some practicality around providing additional time for people to implement these changes in regards to modernisation.Those are the four areas in terms of the bill that National strongly oppose. Through the process and post - select committee we did provide some simple and effective contributions and ideas around effective tax policy to the Government which were not taken up but you know I'm looking forward to the ability in the future for National to implement positive changes to the tax system when we are in Government. One of those is around the inflation-adjusted tax bands to reduce the impact of cost-of-living increases that we've seen under this Government. That's just a sensible change in taxation policy that is very disappointing that hasn't been adopted and wasn't considered as part of this bill. We will obviously repeal the 39 percent personal tax rate. We'll repeal the limits on interest deductibility. We'll repeal the brightline test back to two years. And of course we'll repeal the "ute tax" which is completely ridiculous and does not deal with the underlying issues that we need to do. We would extend the loss carry-back scheme for up to four years for businesses impacted by COVID and increase asset write-off on capital investment and increase depreciation—all ideas that we contributed through this process in the bill which were not picked up by this Government.Lastly again I wish to thank all of those who made submissions to this process. Their feedback is appreciated and National will oppose this bill."