Foss Craig: Taxation (International Taxation Life Insurance and Remedial Matters) Bill — In Committee Third Reading 
Foss Craig: Taxation (International Taxation Life Insurance and Remedial Matters) Bill — In Committee Third Reading 
[Volume:657;Page:6654] 
CRAIG FOSS (National—Tukituki) 
: 
 I was half expecting from the previous speaker the Hon David Cunliffe an apology for the state of the economy that we inherited from his previous Government. He started off on tax but we will come to that. [ 
Interruption 
] Here we go! The caffeine has kicked in lunchtime has kicked in on the other side of the Chamber. 
From speeches made in the third reading of this very large Taxation (International Taxation Life Insurance and Remedial Matters) Bill it seems obvious that some members are looking forward to the end of the process of this bill going through the House. I again acknowledge the commitment and the contribution of members throughout most of the debates on the bill. I forgot earlier to make a special mention of the independent advisers to the Finance and Expenditure Committee and their assistance with this bill. Therese Turner did a great job in our committee. The committee depends very heavily on her advice on aspects in and around tax. We used an independent drafting adviser Mr David McLay. I want to go on record to acknowledge his assistance and drafting expertise. [ 
Interruption 
] He is no relation of my colleague behind me Todd McClay. I acknowledge his assistance with this substantial bill even though we have 50-odd pages of further drafting fixes. 
Much of the bill consists of remedial and technical matters particularly the amendments contained in Supplementary Order Paper 224 and the back sections of the bill which we talked about in the commentary on the bill. I will quickly touch on the last two speakers’ contributions. The first half of the previous speaker’s speech addressed most of these points but I reiterate that the interaction between the committee the Minister the officials the Inland Revenue Department and the private sector around the application dates caused a great deal of angst in many sectors as I mentioned earlier and I acknowledge the way that process panned out. Although there was a bit of tension at the time very good solutions were found. On the changes to international taxation provisions a quote was given to us saying that the changes remove the “grey list” structure that New Zealand has. The previous Minister of Finance said that the “grey list” was basically where New Zealand went boldly where no other taxation authority dared to follow. Now we are trying to remedy that situation. The active-passive proposals and other proposals in this bill are very forward looking and they lock in a more global and outward-looking New Zealand as an exporting nation. 
One of the other speakers spoke about the life insurance changes just before but I note that there was a difference in this bill. Going back to the international taxation provisions given that the bill was so large and given the assistance we needed to get our heads around a lot of the issues we inserted a signposting section into the Income Tax Act 2007. That is section EX 18A inserted by clause 116B of the bill which is a bit of a road map for the uninitiated who may for some reason happen to read the Act. It is a plain language direction as to the intent of that particular clause which is more than would normally appear in an Act. It will be interesting to see how that pans out in other taxation bills that I am sure will come before the Finance and Expenditure Committee and the House. 
On the changes to the associated persons provisions the Minister noted earlier that they were initially born in 1973 I think it was. We had many absurd examples of how people could be associated under the original proposals of the original bill of August 2008. It was pointed out time and time again that the absurd examples could already be used. Common sense prevailed and the original intent of that 1973 provision has been followed through on and clarified in this bill. I say that with all due respect to our committee and officials who made some quite fundamental changes to the bill as it appears in that particular part. I acknowledge the work that went into that because eventually quite a simple test went through with an on-off switch to test in a pretty quick way whether people are associated. 
Changes were made in this bill to the rules on portfolio investment entities to reflect changes that had been made mostly under the previous administration. Again the committee made a few changes there. I know that further discussion is continuing on the issues around the rules on film production and Government funding and I acknowledge the good intent of the Minister and officials in making sure that no unintended mischief has been created. I commend all members following through on the intent of the provisions on payroll giving. I am interested that one party is voting against this bill. I think that is the Green Party and I thought its members would applaud the provisions on payroll giving charities and allowances and the ones that make it easier to give to charitable causes whatever they might be. 
I commented earlier on the commencement date. Tax threshold changes were in the original bill and as I said earlier they were picked up from the February legislation on small and medium sized enterprises. 
I look forward to hearing from other speakers on this taxation bill. I will take only a small amount of time. I am very tempted to respond to the second part of the previous speaker’s speech as he started to get political but I think I will just let it lie on the table. I look forward to other speeches.