Prosser Richard: Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — In CommitteeText is incorporated into the Bound VolumeProsser Richard: Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — In Committee[Sitting date: 25 March 2015. Volume:704;Page:2596. Text is incorporated into the Bound Volume.]RICHARD PROSSER (NZ First):I rise to take a brief call on behalf of New Zealand First and on behalf of my colleague Fletcher Tabuteau as we debate in the Committee of the whole House the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill.As we have outlined previously New Zealand First does support this bill albeit with some minor reservations. I want to focus on one part of the bill that we do not believe has received as much attention as it warrants in terms of its importance to a very specific and very important sector of society—that is our returned service people our veterans. I am talking about clauses 8 to 11. We have a concern that this bill—rather than being remedial as it is intended to be and correcting certain anomalies—as it is constructed will have the effect of compromising the potential income of some veterans. This would be our single greatest concern and I am sure the Minister in the chair the Hon Anne Tolley will take the opportunity to rise as she is wont to do in order to allay this concern because we are certain it is not the intention of the Government to in any way compromise the financial position that our veterans may find themselves in.We understand that the intent of the bill is remedial with regard to veterans’ support payments that it is intended to tidy up parts of the Income Tax Act 2007 so that income replacement payments under the Veterans’ Support Act 2014 are treated the same way for tax purposes as are payments provided by ACC and that they are taken into account as regards social policy calculations so that they do not trigger the application of rules relating to auto-enrolment and the compulsory employment contributions to KiwiSaver. This is admirable and it is only proper and right and we wholeheartedly support that. However we do hold a concern as my colleague outlined earlier in this debate that it may in fact have the opposite effect under certain circumstances and we would very much appreciate the Minister taking time to address this.The Veterans’ Support Act 2014 was legislation that adopted most of the recommendations of the 2010 Law Commission review of the War Pensions Act 1954. The commission made 170 recommendations and the Government adopted 132 of them which is admirable we believe. The Act required reviewing because it was outdated. It was designed to deal with the physical risks and effects of deployments but it did not cover the psychological or environmental risks and ongoing repercussions faced by veterans—by service people who would become veterans. It focused on disability compensation but did not provide for rehabilitation.So the 2014 Act sought to address these anomalies but as is all too often the case the law of unintended consequences saw it falling foul of some unforeseen traps in other pieces of legislation notably tax law which is what we are dealing with in this bill. New Zealand First’s concern then is around the benevolent margin and it is this I would very much like the Minister to provide some further assurances on.The War Pensions Act was a form of workplace injury compensation in the days before ACC and some veterans qualify for compensation payments under the both that Act and ACC while others qualify only under the older scheme. The RSA submission to the select committee stated: “The benevolent margins for veterans which so obviously was a part of parliamentary thinking when ACC was established has not in fact been delivered as intended. Sometimes the letter of the law does not always manage to quite capture the spirit of its intention.” I very much hope the Minister will undertake to ensure either by way of amendment or directive to clarify the position of that intent.The 2014 Act provided that “Veterans who are under the age of retirement and unable to work because of any medical condition are able to receive a higher rate of income compensation than is available under the 1954 Act and surviving spouses or partners children and dependents continue to receive the same types of compensation as under the 1954 Act.” We very much want to be reassured that the higher rate of compensation provided for under the 2014 Act is able to survive the changes to tax law brought about by this and preceding Acts because if there is one group of people in society who deserve the best deal possible it is our veterans to whom we all owe a collective debt of honour.In closing I reiterate that New Zealand First will continue to support this bill. I look forward to the Minister’s very erudite contribution which we hope will be reassuring as well.