McAnulty Kieran; Russell Deborah; Edmonds Barbara; Leary Ingrid; Watts SimonHon KIERAN McANULTY (Labour): Thank you very much Madam Chair and thank you to the Minister of Revenue for that response. Could he please indicate to the House how that response then correlates with the advice through the regulatory impact statement which actually suggests that the duty being placed on some operators may actually lead to turnover being transferred from those registered operators that would be hit by the duty on to operators that are unlikely to comply?Hon Dr DEBORAH RUSSELL (Labour): Thank you Madam Chair. Just as a brief break from gambling—I know that my colleagues have a lot more to ask about this new tax but I want to direct the Minister's attention to something that is sitting in the original bill but if we're looking at the bill as reported back by the Finance and Expenditure Committee I want to direct the Minister's attention to clause 86—oh it's clause 86 on page 86 which is a happy coincidence. What it relates to is the KiwiSaver Act and the particular new clause is about information sharing. Now it's pretty important these information-sharing permissions that are given to the Commissioner of Inland Revenue and to KiwiSaver providers. The Commissioner of Inland Revenue knows a whole lot of information about each of us and KiwiSaver providers know a whole lot of information about each of us and ideally they need to be able to communicate with each other in order to ensure that KiwiSaver deductions are properly directed to where they ought to go that the savings are attached to the person's name and all those sorts of things. So there's some pretty important administrative stuff there which creates good reason for providers and the Commissioner of Inland Revenue to be able to talk to each other.So what this clause does is in the midst of all the—there's a set of information which the commissioner is enabled to share with KiwiSaver providers and vice versa. It's in section 220B of the KiwiSaver Act and it says that The Commissioner and a provider may … communicate to each other by electronic means" standard information: person's name date of birth tax file number contact information transfers from one scheme to another. But this clause in the tax bill inserts a new situation in which the commissioner and providers may share information which is it says "information relating to the administration of the estate of a person who is a deceased member of a scheme." So that's a pretty important thing to be able to do.The curious thing is and which is something for the Minister to address that when I looked at the commentary on the bill—so this is the bill as introduced and of course the commentary is a pretty important guide for select committee members for members of the public who are trying to understand what a bill does and for the people in the tax and KiwiSaver communities that we rely on to help us get our tax law right. But if I look at the commentary on the bill it says in terms of the summary of the proposed amendment that it would allow the Commissioner of Inland Revenue to communicate information about deceased KiwiSaver members' estates to KiwiSaver providers. That's what we're told the amendment is supposed to do but in actual fact the amendment does something a little bit wider than that. So the commentary directs us in that particular way and that's pretty useful for the commissioner to be able to do that but of course the amendment as put in place right through this doesn't allow just the commissioner to communicate to KiwiSaver providers; the effect of the amendment is to allow KiwiSaver providers to communicate back to the commissioner as well. So in actual fact the effect of the amendment is wider than what was put in the commentary to the bill. So that just means that people may not have been aware of what the actual amendment did and perhaps you know would've looked at the commentary and thought "Well this is a pretty benign amendment."—and indeed it is a benign amendment but it's not the amendment that is described in the commentary to the bill.So I think it is benign but I would just like to hear from officials as to if I've got that right from the Minister if I've got that right and I guess just a confirmation from the Minister that this is indeed a pretty benign amendment and indeed a good one.Hon BARBARA EDMONDS (Labour—Mana): Thank you Madam Chair for the call. I want to take the Minister back to the offshore gambling proposal because there's a couple of new questions that I want to ask the Minister in relation to (1) harm minimisation but then actually (2) around the definition of an offshore gambling operator. When I had a look at the regulatory impact statement that IRD drafted for this particular proposal IRD officials suggested there were four particular options in how you can capture the tax from offshore casino websites. Of the different options option 1 was in relation to status quo which is basically allowing them to tax just with GST. Option 2 was to tax consistently with New Zealand casinos and that's because for casinos based in New Zealand their tax is GST they have a 4 percent casino duty on gross betting revenue and 28 percent on income tax profits. Then option 3 was taxing consistently with gaming machines which the Hon Kieran McAnulty has touched upon and then option 4 was to align with tax rates imposed in other countries.Now if I remember correctly the Hon Nicola Willis during the campaign said that she would be looking at income tax on the profits of these offshore gaming providers. So it's quite clear because the Minister has gone with option 4 that it means that this particular option which the Minister has brought to the House is not consistent with previous statements made by members of Parliament.But if I go to option 4 and this is where my question to the Minister lies in relation to the offshore gambling operator definition at paragraph 48 officials go through what the disadvantages are of that option 4 to align with the tax rates imposed in other countries. It talks about how the disadvantage of option 4 is that it may be perceived as "less fair" by some gambling stakeholders compared to options 2 and 3: "This is because 12 percent would be less than the 20 percent gaming machine duty which applies to gaming machines in pubs or clubs." Again I'm not going to touch on that because the Hon Kieran McAnulty briefly spoke about that but it's actually a couple of lines down where it says "Also as the proposed 12 percent gaming duty would be more than the 4 percent casino duty New Zealand casinos may seek policy changes to apply a lower 4 percent duty on gaming conducted through their offshore websites on the basis that they see this as being part of their casino rather than a separate type of gambling activity." So that's a really key point. So if they're based in New Zealand but they operate an offshore gambling website a casino has a 4 percent duty on their gaming conducted through their offshore website. This new tax brings in a 12 percent tax. So then I look to the definition of what is an "offshore gambling operator" for the purposes of these new provisions. If we look to the definition it says "offshore gambling operator means—(a) a registered person located outside New Zealand who conducts any offshore gambling; and (b) for any return period" under which the liabilities basically fall". So my question to the Minister is just to make really clear for a casino operator that has a physical presence in New Zealand—and we have a couple of them—if they have an offshore gaming website how do these new rules apply to them? Are they taxed at the 4 percent or are they considered an offshore gambling operator so therefore they're taxed at the 12 percent?I think that's just an important point to clarify with the Minister. I just want to know because it's quite clear that they're disadvantaged because they'd have to pay more tax. But actually is that not the purpose of basically charging the offshore providers? Are you treating them the same as these offshore providers who have got no presence in New Zealand or are you treating them as if they're present in New Zealand so therefore they are outside the scope of these new rules and therefore not an offshore gambling operator?Madam Speaker if I can I'll provide the next lot of questions to the Minister as part of this. So the other part of the question that I had for the Minister is around officials in their regulatory impact statement which I've asked previously and who did they consult with and the Minister confirmed it was with DIA. So I actually want to ask the Minister has he spoken to or consulted with anyone by himself or with his staff that is separate to officials in relation to these particular changes? And really quickly the reason being is that the only provider that is actually named—CHAIRPERSON (Barbara KurigerI just want to note that some of the questions that are now being asked—I've got a note here and having watched from previous speakers we've just got to be careful that we're not going over some old ground. So I'll call the Hon Barbara Edmonds on that basis. Thank you.Hon BARBARA EDMONDS: So the thing for me is the question is to the Minister—not officials who they consulted; it's to the Minister. Has he consulted with anyone personally by himself? Has he spoken to any operators any of the Problem Gambling Foundation? Has he met with them? And then the last bit of that particular question is—and the reason being is—in this regulatory impact statement only one operator is named and I think it's quite public who that is and because they were referenced in this paper. So I'd find it interesting to know whether anyone else spoke to that operator.INGRID LEARY (Labour—Taieri): Thank you Madam Chair. I'd like to pick up where my colleague Dr Deborah Russell left off on section 220B "Information sharing" because I have new questions on that. Actually I don't take the situation as being quite as benign as perhaps my colleague does because this is about information sharing and personal information. My colleague has talked about how this new information sharing clause opens up the commissioner to be able to access information of a deceased estate and it talks specifically about administration of the deceased estate. I want to know what information the commissioner is able to get. Is it just the names of the administrator of the estate or will the commissioner have access to the actual will of that deceased estate? Will the commissioner be able to access the bank accounts of that deceased estate? And has the Minister had any advice from the Privacy Commissioner about the ramifications of this? Because while Dr Deborah Russell says that there's an intention that is mentioned in the report and that it seems to be going in a particular direction we cannot rely on the application of this to be done in the way the report provides; it needs to be applied in the way that the words of the legislation allow.The second element I have on this is really just a technical one because it talks about this relating to a deceased member of such a scheme. Now there will be some schemes where membership of that scheme automatically expires when the person deceases. We know that because for many intents and purposes people are no longer legal people once they have died. And certainly privacy laws would impact that as well because we know that the privacy of deceased people changes significantly as does reputation of deceased people. There is a lot of statute law in New Zealand that says that. So that may have a bearing on the advice that the Privacy Commissioner hopefully has given to the Minister. But I'd like to just ask the Minister if when he responds to my colleague's questions about the extension of those powers—she has suggested it's benign; I'm suggesting that perhaps this is a bit of an overreach and that it definitely needs some kind of New Zealand Bill of Rights Act or privacy input into it. Has he had that advice has he considered the impact of the change of legal status that could be potentially had by somebody who was a member of that scheme who then changes to become a deceased member and has the Privacy Commissioner actually given him advice about that? Because if we don't get advice this could be quite a dangerous overreach around information sharing. So the other part of that is: did he consider doing a New Zealand Bill of Rights Act assessment on it?And my third question is also on the amendments to the Child Support Act. What I didn't get to ask in my contribution was whether he had considered bill of rights advice. And had he asked for a New Zealand Bill of Rights Act assessment on that as well given the retrospective nature? Three questions here.Hon SIMON WATTS (Minister of Revenue): Thank you very much Madam Chair. Just in response to a number of questions both in regards to information sharing but also the gambling duty. The members Ingrid Leary and the Hon Barbara Edmonds I think referred to the information sharing components. The reality of this clause is primarily one around efficiency. The amendment allows Inland Revenue to communicate about deceased persons with KiwiSaver providers and they may not otherwise have been made aware of. I don't think anyone thinks that that isn't a sensible thing. This was discussed by the select committee. The select committee didn't propose any amendments in that regard. In regards to this again I'm not going to go over ground that has already been gone over but we are comfortable with where that has landed. In particular when the Finance and Expenditure Committee did look at this they also acknowledged that the ability for Inland Revenue to be able to get the information back from KiwiSaver providers was also an important aspect in ensuring efficiency within the broader system.The gambling duty questions are—I think I've said this a number of times in regards to my responses already; I'll say it again. The regulatory impact statement in clauses 45 and 47 as have been highlighted by members provides the overview and explanation in regards to the questions that have been raised. There's probably nothing further that I'm going to say without repeating myself."