Smith Lockwood: Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill — Instruction to CommitteeCWH In Committee 
Smith Lockwood: Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill — Instruction to CommitteeCWH In Committee 
[Volume:613;Page:10091] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I appreciate the Minister of Revenue’s explanation but what troubles me somewhat over the commencement clause is that as a member of the Finance and Expenditure Committee I have checked back over my notes that I took during the hearings and I find that the committee did not focus particularly on the issue of the commencement dates. What worries me somewhat is that an amendment on Supplementary Order Paper 169—that is clause 2(5) amending clauses 52(1) and 54(1)—changes one particular aspect with regard to commencement dates. In the bill as introduced that commencement date of 26 July 1996 applied to clauses 52(2)(i) and 54(2)(i). What I have been trying to check in haste is whether the two references in the original bill and the two on the Supplementary Order Paper are identical—whether clauses 52(2)(i) and 54(2)(i) in the bill as introduced are the same as clauses 52(1) and 54(1) mentioned in the amendment on the Supplementary Order Paper. It would seem to me that in fact they are not the same because clause 52(1) is a new provision inserted by the select committee as distinct from the previous reference to clause 52(2)(i). Whether clause 52(2)(i) was simply an error— 
Hon Dr Michael Cullen 
: It was taken out. 
Dr the Hon LOCKWOOD SMITH 
: But when one looks at— 
Hon Dr Michael Cullen 
: It’s been replaced by clause 52(1). 
Dr the Hon LOCKWOOD SMITH 
: The Minister says it was taken out but when I look at what was struck out I cannot see mention of clause 52(2)(i). I see clause 52(2)(ii) but I do not see clause 52(2)(i). Likewise in the bill as introduced I do not see clause section 54(2)(i)— 
Hon Dr Michael Cullen 
: If I could help the member. It was 52(2). The committee changed it to 52(1) because of the change to the clause. It’s just a technical change which does exactly what was previously intended given the fact the number has now changed on the clause itself. 
Dr the Hon LOCKWOOD SMITH 
: But the thing is though the bill that the Committee is working off should show what the select committee did. If the committee struck out clause 52(2)(i) that should be evident on the face of the bill. Yet I cannot see where the committee has done that. I can see where the committee has struck out clause 52(1) and clause 52(2) but the bit of subclause (2) that is struck out is paragraph (ii) not paragraph (i). 
Hon Dr Michael Cullen 
: Because there was no clause 52(2)(i). It was meant to be 52(2). 
Dr the Hon LOCKWOOD SMITH 
: I appreciate the Minister’s explanation. So the bill as introduced was actually wrong in that regard. 
Hon Dr Michael Cullen 
: Yes. 
Dr the Hon LOCKWOOD SMITH 
: OK. I accept the Minister’s explanation that the bill as introduced was actually wrong. 
Then we come to the substance of that issue. What is being referred to in those clauses is the branch-equivalent tax account of a company which is quite complex tax law. I would not mind betting that 99 percent of members do not understand it and I do not claim—I have to be quite honest here—to understand exactly what this new clause 52(1) does. That provision is being backdated to 26 July 1996. The select committee did not particularly focus on this issue. I want the Minister’s absolute assurance that what is now spelt out in the amended legislation before the Committee with reference to new clauses 52(1) and 54(1) contains nothing that will in any way be negative for a company that falls into the branch-equivalent tax accounting system. The measures are obviously retrospective. I accept the Minister’s argument that retrospective measures are normally considered satisfactory if they are favourable for taxpayers but there are a number of them; we do not often see as many retrospective measures in a taxation bill as there are in this one. It worries me but I guess I have some comfort in that if there were too much in the bill that was negative that would have been drawn to the attention of the select committee. The committee did not particularly focus on it and I want to be absolutely satisfied that none of these retrospective measures especially those relating to international taxation are negative in any way at all because our reputation with international companies is hugely important. We must not be passing retrospective legislation that has negative elements in it. 
Hon Dr Michael Cullen 
: I can assure the member on that.