Adams Amy: Taxation (Consequential Rate Alignment and Remedial Matters) Bill — First Reading 
Text is incorporated into the Bound Volume 
Adams Amy: Taxation (Consequential Rate Alignment and Remedial Matters) Bill — First Reading 
[Sitting date: 28 July 2009. Volume:656;Page:5172. Text is incorporated into the Bound Volume.] 
AMY ADAMS (National—Selwyn) 
:  
He mihi tenei ki te tangata whenua a e tautoko ana i tenei reo o Aotearoa. 
[ 
This acknowledgment is to the people of the land and I endorse this language of New Zealand 
.] 
I am pleased to rise today and take a call in support of the Taxation (Consequential Rate Alignment and Remedial Matters) Bill. As speakers before me have already discussed it is appropriate in this debate to take a moment to reflect on the wider tax basis and the reason for this bill because we all accept that this bill brings into place consequential and necessary steps as a part of that tax programme. 
It is worth reflecting back to the state of the economy that this Government inherited when we came into power on 8 November last year. 
Chris Hipkins 
: Here comes a piece of fiction! 
AMY ADAMS 
: Whether or not the Labour Opposition wants to acknowledge it—its members had their heads in the sand for 9 years and we are not expecting that to change—we had an economy of declining growth. Our export sector which will lead us out of this recession had been in recession for 5 years under the previous Government. We had a rising current account deficit high inflation and rising unemployment. The very simple reason for that situation is that the Labour Government was absolutely fundamentally incapable of celebrating success. It could not bring itself to do it. It refused point-blank to do anything that would incentivise hard-working New Zealanders and that would reward people for hard work. It was anti-profit and anti-business. That is a big part of the reason we inherited the economy we did after that Labour Government squandered 9 years of lost opportunities. 
The National-led Government will not make that mistake. This Government understands that it is the hard-working taxpaying New Zealanders who keep this economy going and that they deserve to be supported. That is why this Government delivered personal income tax cuts after a mere 6 months in Government not after the 9 long years that the Labour ex-Government—and I emphasise “ex-Government”—made hard-working New Zealanders wait for their tax cuts. It could not accept that people should be incentivised for being productive or rewarded for getting off their backsides and going out and helping to build an economy create jobs and create wealth. Members opposite think that “profit” is a dirty word but we do not and we will support taxpaying New Zealanders. That concept might seem radical to the Labour caucus but the National Government supports people who work hard create wealth and create the standard of living that New Zealanders aspire to. In a nutshell that is why this Government acted quickly to bring in personal tax cuts and why we now have before us the Taxation (Consequential Rate Alignment and Remedial Matters) Bill. 
As we have already heard the major policy item in the bill simply aligns various tax rates with the new primary rates for active income that were recently set for personal and company taxpayers. The main areas that that change applies to are the resident withholding tax area and the portfolio investment entity area. We are ensuring that we do not allow overtaxation where the appropriate rate for personal income has been reduced and that those taxpayers are able to elect an appropriate equivalent rate for both their resident withholding tax and their portfolio investment entity income. Similarly we see consequential changes in the retirement scheme contribution rates and secondary employment rates among others. Just looking at the portfolio investment entity rate for a moment we see that it is important that those who choose to invest through a vehicle like that are not put at a relative disadvantage to taxpayers who invest directly. 
The other things I want to touch on briefly are some of the consequential matters that have not perhaps received as much discussion time. They are obviously not the main focus of the bill but are worthy of mention. I want to mention one in particular because I have had some involvement with it in a past life—that is the change to the beneficiary income allocation rules. Put very simply the beneficiary income allocation rules require that for trust income there is an election as to whether that income can be retained within the trust or allocated to the beneficiary who would then pay tax on that income at his or her own rate. Up till now the income must be allocated within 6 months of balance date. This bill will enable those trustees to make a decision to allocate the income to the beneficiary not within an arbitrary 6-month time frame but at any time up until the tax return for that trust is required to be filed. It may not be a world-moving tax change but members should believe that it is a very sensible and practical change that will enable trusts properly to allocate their income as they work through their trust return processing. They can see what their returns for the year were and they can work out the most beneficial way of setting out their incomes. I definitely support that change. 
Another taxpayer-friendly change is very simple. It enables taxpayers to make minor corrections in their returns. Again that is very simple and taxpayer-friendly. There is every reason to support the bill and I am very pleased to see that support across the House. 
I have gone over some of the main parts of the bill. The bill is worthwhile it is necessary and it aids the general overriding tax policies of clarity and consistency. For that reason I am very pleased to support this bill. I commend it to the House.