Edmonds BarbaraBARBARA EDMONDS (Labour—Mana): Kia orana tatou katoatoa to the House; thank you Madam Speaker. There are times when the House comes together and tonight the very first bill that you saw on the Order Paper which was in the name of Andrew Bayly was an opportunity for the House to come together to support some residency changes to superannuation which had consequential tax amendments. This bill is clearly not one of those times. I'd like to reference the comments by the member Dr Deborah Russell which can be easily summarised as This bill is a mistake"—a mistake—and one more time it's a mistake. The explanatory note of the bill makes reference to the cost of living and as Dr Deborah Russell had said tonight for those on a medium income—she'd actually practically crunched the numbers—it's $8 a week. For those on a higher income of $200k it is $23 a week. This side of the House does not support this bill as it disproportionately benefits those on higher incomes more than those on lower incomes who tend to have greater need. This is probably something for the member who's sponsoring the bill to listen to: inflation is not uniform across income groups. That is a basic economic and tax principle. That's why you have transfers if you want to help the cost of living and you should be targeting it. That's why you have Working for Families tax credits. That's why you have the winter energy payment: to reduce expenses by targeting lower-income families. Lunches in schools the removal of school donations—but the member sponsoring this bill wanted to challenge us to say "Did you actually look at the bill?" Well for a number of years before I became an MP I was actually a tax adviser to actually some of the members on the opposite side of the House. So I technically reviewed this bill. If this bill had come before me when I was an adviser in a Minister's office I would have put a bright red line through it—bright red—because fundamentally it is a poor bill. I'm surprised the Opposition which claims to be the most fiscally responsible economic manager cannot see how much this fiscally is inflexible. As covered in the explanatory note it appears that this bill aims to improve the progressivity of the tax system—hence reference to the three-year automatic changes in living costs. Well this bill is absolutely poorly targeted. Ongoing indexation as proposed in this bill would absolutely constrain the Government's ability to be fiscally flexible. It doesn't take into account the pure fiscal cost which increases when incomes and population grow. In layman's terms: what are you going to cut to pay for this? If the goal as covered in the explanatory note is to reduce taxes for households to help with living costs then again inflation indexation is a poor way to do so through the tax system. That's why you target again through transfers such as Working for Families; such as the winter energy payment; or for families the Best Start payment. The last mechanism in how you do it—in my opinion the actual technical review of this bill—is absolutely unprecedented. I cannot in my tax career think of a time where you would give an unfettered level of authority to the Commissioner of Inland Revenue and to the Minister—or ultimately to Cabinet—to have unfettered discretion in changing thresholds. There is a reason why tax is imposed by Parliament. This bill gives that discretion effectively to the Minister and to Cabinet. All it comes back to is supply. The reason why you come and impose the tax in Parliament is for supply so that whoever is in Government has the ability to fiscally manage it. You're saying it shouldn't come through Parliament through this: that the Commissioner of Inland Revenue should be able to just do it; that the Minister should be able to just report to the House and do it. Again if this bill had come across my desk I would have totally scratched through it. Give me another example of where the Commissioner of Inland Revenue has an unfettered discretion or authority to be able to change tax thresholds in such a way. Give me an example member sponsoring the bill since you wanted me to have a look at the technicalities of this bill.Hon Simon Bridges: It's a statutory order.BARBARA EDMONDS: Have a look at the bill. Have a look at the Income Tax Act. You're looking at section YA 2—that is the definition of income. Even I know it's the definition of income. So I suggest the member sponsoring the bill have a look at the Income Tax Act as it currently is set out and give me an answer as to whereabouts you see that unfettered discretion for the Commissioner of Inland Revenue."