Shanks Katrina: Taxation (International Taxation Life Insurance and Remedial Matters) Bill — First Reading 
Shanks Katrina: Taxation (International Taxation Life Insurance and Remedial Matters) Bill — First Reading 
[Volume:649;Page:17831] 
KATRINA SHANKS (National) 
: 
 It is my pleasure to rise and speak tonight to the Taxation (International Taxation Life Insurance and Remedial Matters) Bill. This bill is having its first reading and as I said it is a pleasure to stand here and support it. 
I will give a bit of a background on what this bill is about and I want to look at one little part in particular—that is the payroll giving section. This is really all about charities and about allowing money to be channelled much more effectively into charities in New Zealand. In fact in the 2007 Budget the Government announced plans to look at several measures aimed at laying the foundation for a stronger culture of charitable giving in New Zealand which sounds really wonderful. 
Unfortunately it has taken the Government a long time to get to this point in terms of encouraging people to donate to charities. In fact this measure has come on the back of National Party policy which was announced last year on community groups and turbocharging community groups. It is surprising that it took National to come forward with such an initiative before the Labour Government actually thought of doing this and putting something in place. The Government waited 8 long years—until National came out with a discussion document and some policy around community initiatives—to get this legislation to where it is today. 
National’s policy is to introduce the following measures in order to promote the growth and vitality of our community groups. It is about removing the cap on personal donations in order to encourage more people to donate to charities in New Zealand. The cap on personal rebates for charitable donations will be removed. Donations of any amount up to an individual’s total net income would be eligible for the rebate. So if a person wanted to give $30000 for example he or she would be able to get a rebate of $10000 at the end of that year. This is absolutely a great initiative that we put out in our policy paper. 
The other policy is the removal of the cap on business donations. Every business will be able to claim a tax deduction for any level of donation up to its total net income for the year. This will encourage businesses to support groups doing good works in their communities. It is very important as well that we get businesses involved in donating to organisations and charities around New Zealand just as individuals do. Hand in hand individuals and businesses can make a huge difference to the charities in New Zealand. 
Then of course we went on to expand it a little bit further—which this bill does not do—by having tax-free reimbursement for expenses. Payments that charities make to volunteers to reimburse their expenses will be tax free regardless of the amount of that payment. Currently if a charity reimburses a volunteer for his or her costs it has to be declared as income and income tax should be paid. Some charities have an historical arrangement with the Inland Revenue Department to waive this tax but most do not. That just is not fair. 
As members can see National has gone ahead and addressed many of the issues around donations and giving to charities which this Labour-led Government has not yet got around to. Maybe it will put forward a Supplementary Order Paper to reflect some of our good initiatives and that may happen as we go through this debate. Also National brought out in its policy the fact that honorarium payments of up to $500 per year per person will be tax free. At the moment if a charity makes an honorarium payment to a volunteer it is seen as a taxable income. That is something that really should be looked at and adjusted. 
National went on to say that bureaucracy and compliance costs will be reduced. When the Government funds a community group to provide a service then that money should go towards helping out on the frontline not towards filling in forms that Government departments often do not read anyway. So we can see that National’s policy on communities goes a lot further than this bill even looks at going in terms of businesses and employees working together to give more money to charities. 
National went on to say that when the Government wants to run a community-based programme and there is a competitive tendering process community groups will be encouraged to put in bids that reflect the full cost of delivery including all relevant overhead costs. National policy then went on to talk about a venture capital fund. National is investigating developing a venture capital fund to boost organisations that have capacity to do more want to do things in a different way or are new to the community sector altogether. 
I find it really interesting that the Labour members of Parliament who are sitting in the House tonight have just let me read word for word National’s whole policy on communities and not one person has got up to say that this is not relevant to the bill. As we can see National members of Parliament are listening to the debate and are actively inputting into it. Labour members though are obviously not particularly interested in this legislation—I have just managed to read out National’s policy word for word. Listeners tonight have just heard some fantastic policy from National as we talk on the taxation bill. 
I am trying to work out what other policy announcement I should make while I am standing up here because we know that everybody wants to hear policy. [ 
Interruption 
] Would Labour members like me to read this to them again? I am more than happy to start from the top of this policy document. They were not listening earlier but now I have their attention and they are more than interested in listening to what I have to say about our community groups policy. If they had been listening at the beginning of the speech they would have heard me say that National produced this discussion document before the Government put together this legislation. 
I turn again to the payroll giving section which I started speaking about earlier on. It is a very very good initiative. It is about employees and employers working hand in hand to give to charities and organisations and it is a better vehicle for getting money to them. What is does is quite interesting. There is an onus on the employer in terms of the employee giving. It is fantastic that we have this vehicle whereby people can give through their payroll if they want to but there are some catches in this legislation. 
One of the catches is that people can give through payroll giving only if their employer does electronic returns. So there is an onus on employers to be electronically set up with the Inland Revenue Department and not every employer is. Those poor people out there who are still on dial-up—because this Government has not got its act together on broadband across New Zealand—will not be able to log on to the Inland Revenue Department site because access is too slow. For them access to any website with graphics will be slow and the Inland Revenue Department has a lot of graphics on its site so employers with dial-up most probably cannot offer payroll giving to their staff. 
I ask Chris Tremain to hand me National’s broadband policy. I would not mind reading it out right now; as I said Labour members are not actually listening. National’s broadband policy will allow people to do online giving. I will quickly tell members how. If employers are on dial-up they cannot offer employees this option because they will not be able to dial up to do electronic banking. National has said that we are slipping right behind the rest of the world in where we are on broadband and that we can do much better. In fact National is talking about taking broadband to 75 percent of the country and installing— 
Chris Tremain 
: Fibre to the home. 
KATRINA SHANKS 
: —fibre to the home; that is it. Fibre to the home will mean fibre to businesses and that will mean everybody’s access is much much faster and there should not be any excuse for 75 percent of New Zealand not to have broadband. 
That will mean that all those businesses that cannot dial up into the Inland Revenue Department and cannot offer payroll giving—I see we have some Young Labour members sitting up there. It is good to see that you made it here tonight. Did you enjoy the National Party conference? That is what we want to know. 
Mr DEPUTY SPEAKER 
: There is to be no discussion with people in the gallery. 
KATRINA SHANKS 
: I am sorry Mr Deputy Speaker. I wanted to welcome them into the House tonight. 
I come back to payroll giving. There are some drawbacks in the payroll giving system. The first is that the employer has to be able to file electronic returns with the Inland Revenue Department. The second is that the tax credit is calculated on a set rate which I suppose makes it easier to work out but it also means that there has to be another part of the form that will allow payroll giving. 
The one thing do I wonder about is how this will be policed. Once the donation has been taken out of the employee’s account how do we know that the money has then been handed over to the organisation it is meant to go to? I am worried about how this will be policed and I am worried about the fact that there is more onus on the employer. But overall I think it is a good initiative.