Pugh Maureen; Russell DeborahPart 2 Amendments to Income Tax Act 2007CHAIRPERSON (Maureen Pugh): Members we now come to Part 2. This is the debate on clauses 4 to 64B Amendments to Income Tax Act 2007; and Schedule 1 and new Schedules 1A and 1B and Part A of new Schedule 1C as proposed by Amendment Paper 20. The question is that Part 2 stand part.Hon Dr DEBORAH RUSSELL (Labour): Much as I've enjoyed the previous debate this is where the really interesting stuff happens and it's heavy stuff—but thank you. So there are two sort of sets of things that we need to debate in Part 2. The first is the bill as reported back from the Finance and Expenditure Committee. It's the Taxation (Annual Rates for 2023-24 Multinational Tax and Remedial Matters) Bill. There are a number of issues in that that we will want to go through in some detail—in part because they introduced some pretty interesting tax changes and some which perhaps could have gone a little further. The select committee did agree with what is sitting in this version of the bill but more could be done in that space and we'll be bringing some of those issues to the fore during the debate on this part of the bill.It's also important that we actually as a committee really understand what's in this bill. So it's a chance for the people who have been on the select committee to talk through some of the issues for the benefit of obviously other members. I'm looking forward to the contributions from Catherine Wedd over there but also from other people.But the real thing that we will want to spend a great deal of time on is the Amendment Paper that was brought to the committee at this committee of the whole House stage by the Minister of Revenue. It has a number of substantial amendments in it and a particular set of issues that we really do need to talk about. So I just want to start to highlight some of those issues so that people at home know why it's worth tuning in after the dinner break. So in terms of the issues that we all want to spend a great deal of time discussing there is a set of amendments to the bill that put interest deductibility back in place for landlords. So we'll want to spend a bit of time discussing the reason for those going back and some of the technical details. This has not been through a select committee process. Those changes are substantial. In some calculations it's going to cost the Government $2.9 billion to do that. That's an awful lot of money. So I think this committee needs to examine that really really closely.The second set of changes are around restoring the brightline test to two years. That brightline test was originally introduced by the then National Government and set at two years even though Treasury advised that it should be set at five years. The incoming Labour-led Government put it up to five years and then 10 years. There's a whole set of good reasons for doing that so I'm going to want to examine very closely as to why the National Government has decided to reverse those changes. They're actually quite significant changes. I think there's some really good philosophical reasons as to why the brightline test should stay at a substantial length of time in conjunction with keeping interest deductibility changes in there too—it should have stayed that way.The third set of changes are removing depreciation deductions for buildings. This was—let's see depreciation deductions were removed a few years ago; then as a COVID relief measure they were put back in place. The National Government has now decided to take them out again. So I do want to have a think about why they should be taken back out again and have a bit of a think about that.There's some really good changes around the disposals of trading stock at below market value. Now that happens to be something that I think many of us on this side of the Chamber agree on—that it's actually a really good change. I'm very pleased to see that the Minister has brought this one to the committee. Nevertheless we're going to want to have a look at the detail of that see how it's actually going to work; we want to examine the rationale for it. So we'll be spending a bit of time on that.Then we've got the offshore gambling duty. Now this is an entirely new tax. It doesn't matter that it applies to people who are offshore; it is nevertheless an entirely new tax. So in an Amendment Paper to a bill which has a constraint on it that this bill must go through by 31 March or the Government will have failed in its duty the Government has nevertheless introduced an entirely new tax. We need to have a look at the detail on that. This is the one and only chance we have to examine that entirely new tax in detail. So we will be spending a bit of time doing that.There are some other transitional rules we do want to have a look at. So there's going to be a lot to discuss in this bill and I'm sure the Minister is looking forward to what's coming at him.