Wood MichaelMICHAEL WOOD (Labour—Mt Roskill): It's always a very hard act following on from Andrew Bayly—the Scotch terrier of the New Zealand Parliament—a man whose level of excitement builds and builds and builds around certain issues when we approach a tax bill. It's like a little Scotch terrier at the ranchslider when a van pulls up on the driveway and boy does he get excited.Can I say that Mr Bayly's performance in respect of the annual rates in this bill is also like a Scotch terrier or another small kind of domestic animal at a ranchslider. I'm sure for all of us in this House who have had a small dog or a cat: they're at a door; you open it. They say they want out. They're out; they want in. The National Party is just like that when it comes to rates of tax because they want it all at the same time. They want to cut taxes but they also say they want to reduce debt but they also say that they want to spend money. They just can't pull together a credible fiscal approach.Of course that is what this Government is delivering and this bill is a part of it. It's about signalling a stable tax regime that is able to fund the services and the infrastructure that New Zealanders demand. Every member on this side of the House can stand up based on this bill and the tax rates that it sets and based on the appropriations set out in the Budget this year and show the investments that we will make show the surplus that the Government is running and show our critical fiscal approach. Those members want to have it every single which way.My challenge to Mr Bayly and any other Opposition speakers who get up and speak in this debate and spend half of their time talking about the annual rates—a small portion of this bill—is at the same time as doing that to identify where the cuts would come because you simply cannot have one without the other and maintain a credible fiscal stance.This is an important bill. The annual rates bill comes to the House every year and as well as setting the annual rates for the year ahead it is generally also an opportunity for the Government of the day to deal with a range of other matters within the tax system. This bill deals with a number of quite significant matters. It was a complex bill as all of the bills which come to the Finance and Expenditure Committee are—particularly the tax bills.I do want to on that note acknowledge members of the committee across the House for their diligence and application in terms of considering this bill and the submissions that were received and the advice that came in from officials. The committee works well on these bills and as a result we have an improved bill at the end of the process. Can I also acknowledge the officials who gave good advice to the committee and the quite large number of submitters who gave the committee the benefits of their views and who in quite a few cases in respect of this bill were able to effect changes that as I say have improved the bill. I would also like to acknowledge the Minister of Revenue the Hon Stuart Nash a very busy Minister of Revenue. He's carried on picked up the torch from another very busy Minister from the previous administration the Hon Judith Collins—certainly busier and more active than her predecessors in the previous Government. We would all acknowledge that I am quite sure.There are a number of other important measures brought in by this bill. The bringing in of low-value goods coming in from overseas into the GST net is one of the most important and it's important because it does what I think most of us agree we want to have within our tax system and that is to have a fair system in which people are treated equally. The situation that we have had for a long time is that these goods most commonly now purchased by people online are able to be purchased without the application of GST whereas for the same good if one was to walk down to the local bricks and mortar store and purchase that good—or service for that matter—GST would apply. That is not a level playing field and so organisations such as Retail New Zealand and others have for many many years been calling for a level playing field in this area.So I think this bill makes an important advance in that area. It creates a level of fairness within our tax system. It certainly does support the revenue base as well—I think to the tune of around about $190 million when it's implemented from memory. But actually the most important thing is the fact that it creates a level playing field within the tax system.The select committee did carefully listen to submissions that were received in respect of this part of the bill and there are a number quite a few in favour. Some of the online market places it would be fair to say submitted against this part of the bill. That's probably no big surprise. There were some in principle objections from them that I don't think the committee was persuaded by and then there were also some technical objections primarily focused on the ability to implement the collection of GST in an orderly fashion before the bill is implemented. It's on that basis that the committee is recommending in its report that the implementation date is pushed back by just a couple of months to 1 December and I think that's a good example of the committee process working well: members across the divide in the committee supporting the principle of the bill but listening to the submissions and making sure that it is implemented in a way that is going to be orderly and not cause too many problems.There are a number of other smaller changes to this part of the bill that were made at select committee. We've dealt with some matters in respect of contracts that may have been entered into before the application date to make sure that people aren't sort of caught between the two regimes.One of the other important matters that people who buy goods online will be familiar with is how you deal with discounted goods. You might have a good that is originally put up by a supplier but then is funnelled through a market place—someone like Alibaba for example. The market place applies a discount to that good—which price do you apply the GST to? The clarification is that it is the market place price—the price that you actually purchase the good from. But these are the important sort of questions that come up through the select committee process that we're able to clarify in the text of the legislation.The other very important provisions that the Minister talked about in this bill are the provisions around the ring-fencing of losses on rental properties. This was a very clear policy that has been signalled for a long time. It was part of the approach certainly that the Labour Party at the time of the previous election took to addressing runaway house prices and the housing crisis which has locked so many young first-home buyers out of our housing market. Ultimately it's about shifting to a more rational market which isn't driven by irrational exuberance in which first-home buyers do have a shot and aren't going to be out-competed by people who are fundamentally in the market to invest and in some cases to speculate.It's important to note that people will still be out to carry those losses forward. They will still be able to offset them against other residential property investments. They simply won't be able to offset them against other forms of income. The important point about that is that effectively what the current regime means is that those people who are investing and able to offset that income have an advantage over and above the first-home buyer who may be competing for the same property. That is something that this Government is simply not prepared to countenance.I am very proud—and I acknowledge the Hon Phil Twyford who's in the House with us at the moment—about the fact that in the wake of that significant housing crisis which pulled homeownership rates down to the lowest since 1951 we are finally seeing a turn-around with higher numbers of first-home buyers coming into the market under this Government. The same criticisms that have been made about this provision in respect of the ring-fencing of losses on residential properties—those very same criticisms—were made I remember when the brightline test was extended to five years by this Government. In actual fact what we see is that combined with other measures from this Government has started to support more first-home buyers coming into the market. That's a good thing and I think this House should certainly be supporting it.The final thing I want to touch on is the changes to the care and management powers within this piece of legislation. These are captured in Supplementary Order Paper (SOP) 193 and these as Minister Stuart Nash outlined enable either the commissioner by exemption or the Minister by regulation-making power to address effectively small errors that may make their way into the incredibly complex tax legislation that go through this House which ultimately take a long time to rectify through the legislative process.I want to highlight this SOP and those changes because to me it's an example of how our Parliament and our select committees work well. These changes came before the select committee in the previous annual rates bill. They're quite significant in a way because they do give powers to either the commissioner or the Minister that previously would have been the preserve of the Parliament. The select committee was not entirely satisfied by the protections at that time and asked for further work to be done. I give credit here to the Minister and to officials who took that message on board and came back with reworked changes in the SOP to come into this bill which I think have met the satisfaction of the select committee in terms of ensuring we have that flexibility to deal with obvious errors in tax legislation while ensuring that there are also checks and balances within that to ensure that we don't have major changes being made that might disadvantage taxpayers or that are against the will of this Parliament.This is a good bill. It deals with complex issues and ensures the fairness of our tax system. I commend it to the House.