Dunne Peter: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
Text is incorporated into the Bound Volume 
Dunne Peter: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
[Sitting date: 28 August 2012. Volume:683;Page:4828. Text is incorporated into the Bound Volume.] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I cannot let the moment go without injecting a note of reality into this debate on the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill. The previous speaker David Cunliffe has waxed lyrical about KiwiSaver. 
Hon David Cunliffe 
: That wasn’t lyrical; that was prosaic. I waxed prosaic. 
Hon PETER DUNNE 
: Well he attempted to be lyrical. It certainly was very Harvardian prosaic shall we say. The point I want to make is simply this: the allegation put forward is that enrolments in the KiwiSaver scheme have somehow stalled since this Government came to office. I was there as the member acknowledges when the KiwiSaver scheme was devised and I should tell the Committee that in its original conception the plan was that we would hit—wait for it—700000 KiwiSavers by 2015. 
Todd McClay 
: How many are there? 
Hon PETER DUNNE 
: Seven hundred thousand by 2015. In February 2009 we topped a million. 
Chris Hipkins 
: That’s because it was a good idea. 
Hon PETER DUNNE 
: And the member opposite says it was a good idea. The members opposite are arguing if they would just bear with me for a moment that the steps this Government has taken have been to the detraction of KiwiSaver. As I say we have topped a million KiwiSavers in February 2009. A little over 2½ years later we are within days of hitting 2 million. The point I want to make to the Committee is that if this scheme has been so tarnished so tinkered with and so destroyed how come we have doubled its membership in 2½ years? I would have thought that had the claims the member was making had validity we would have seen a downward tail but in fact here we are going to be by the end of 2012 not at 700000 but probably three times that original prediction and twice what we were early in 2009. 
I listened to the previous speaker bar Mr Cunliffe Dr David Clark and Mr Cunliffe as well talk about the Labour Party’s taxation plans and I listened in vain. What I heard from both was a lament about current circumstances the fact that incomes have fallen with no reference to the global financial crisis the biggest crisis to hit the world since the Great Depression—no reference to that. And then I heard two suggestions made as to what we could do to rectify the situation. One was to bring in a capital gains tax. That was rejected by the electorate last year. It has been rejected by the electorate every time a political party has campaigned on it at every election over the last 30 to 40 years. It was also rejected substantially by the Tax Working Group in its work in 2009-10. But the Labour Party clings to it and when it realises it will not work it then falls back on the claim that the only reason we do not have it is because the Inland Revenue Department’s computer will not let us design one. The reality is that we are about to embark on the biggest re-design of our technology since the introduction of the first system in 1991 and we will be making announcements about that and the scope of it a little later in the year. 
So we are left with this: a lament from the Opposition about the annual tax rates and a failed plea that the overall solution lies in a capital gains tax. Then Dr Clark made the point that low-income people and middle-income people have been the big losers from the 2010 tax changes. In fact the bulk of the expenditure on those tax changes in 2010 were on changes to the bottom two steps. I do not think the Labour Party opposes the reduction in the bottom two steps of taxation which was where the bulk of the spending occurred. So what we come down to is this: the one thing that they have not said tonight is that their bold new plan is to put the top tax rate back up. What happened the last time they did that in 1999 was that we saw a massive explosion in the number of trusts—we saw a massive explosion post-1999 in the number of trusts—and tax avoidance and tax evasion and one of the reasons why we deliberately aligned the trust and the personal rates in 2010 was to stop— 
Hon Member 
: Who was the Minister of Revenue? 
Hon PETER DUNNE 
: Michael Cullen. The reason we deliberately aligned those rates was to stop that process—[ 
Bell rung 
] Mr Chair— 
Hon David Cunliffe 
: I raise a point of order Mr Chairperson. I seek to raise a point of order under Standing Order 107(2) “Misrepresentation”. The guidance in paragraph (2) is that “A member may not introduce any new matter or interrupt any member to explain a misquotation misunderstanding or misrepresentation.” and Standing Order 107(1) says that the member should rise when the member has resumed his seat. So now that the Minister has resumed his seat— 
The CHAIRPERSON (Eric Roy) 
: Sorry can you just tell me what the point of order is. 
Hon David Cunliffe 
: The misrepresentation is quite simple. The Minister has waxed on for 5 minutes suggesting that I had alleged that KiwiSaver was in decline— 
The CHAIRPERSON (Eric Roy) 
: Order! I am on my feet. The response the member should take is to take another call to correct it not to correct it by seeking to do it through a point of order which is not a way of introducing debating points. 
Hon PETER DUNNE 
: Mr Chairman. 
Hon David Cunliffe 
: Mr Chair. 
The CHAIRPERSON (Eric Roy) 
: I will hear the Minister who— 
Hon David Cunliffe 
: I’m seeking a call as per your instructions. 
The CHAIRPERSON (Eric Roy) 
: Yes and I am giving the call to the Minister. 
Hon David Cunliffe 
: He’s just had one. 
Hon PETER DUNNE 
: I sought the call again. 
The CHAIRPERSON (Eric Roy) 
: He sought the call and I had given him the call. You raised the point of order and I am now referring back to the call. 
Hon David Cunliffe 
: I raise a point of order Mr Chairperson. Without wishing to second-guess a call that has already been given you will remember that I was seeking a call previously when you gave the call to the Minister. I know that you are impartial and I wonder whether there is any room for you to reconsider your decision by giving the call back to the Opposition so that the— 
The CHAIRPERSON (Eric Roy) 
: OK. Order! I hear the member. Please sit. I hear the member. Firstly let me say that once a call is given it is given. That is the nature of this place and there is no rescinding of a call once it has been given. Also members might consider that it is part of the institution of this Committee that a Minister responding to speeches has unlimited calls and they generally get a call. I have given the call to the Minister. He shall now take the call. 
Hon PETER DUNNE 
: Thank you Mr Chairman and lest members be concerned I doubt that I will take the full 5 minutes because I was simply winding up on the point that the argument that the Opposition has put forward about the changes that it requires to be made to the tax system has been pretty inadequate. We have got an argument about raising the top tax rate when we know that what happened the last time that happened was an explosion in the number of trusts and an explosion in avoidance opportunities and the reason we have aligned the trust rate and the personal top tax rate was to curb that. The figures that the member—I am not sure whether it was Mr Cunliffe or Dr Clark; I cannot recall which one of them—quoted from the Council of Trade Unions’ release earlier in this week fall neatly in the middle of the period where that realignment was occurring. So the argument about how much people in the top income brackets in New Zealand were paying in tax needs to be taken into account from two perspectives. Firstly it falls within that period where we were shifting out of those massive evasion and avoidance opportunities created by trusts and secondly the figures also show an improvement from the previous time that survey was conducted. 
I am happy to support Part 1. I think it is an eminently sensible part of the bill. It confirms the annual tax rates. It confirms the direction in which we are moving. It confirms a reasonable and fair tax system for the vast majority of New Zealand taxpayers and it gives them the opportunity to get ahead in their own lives.