Clark DavidDr DAVID CLARK (Labour—Dunedin North): I am very glad to take my first call on the Committee stage of this bill—Grant Robertson: The first of many.Dr DAVID CLARK: —the first of many I hope—as I have some things to say that have not yet been said and 20 minutes straight would no doubt be the ultimate in contributions. I do not think I have yet had the opportunity to do such a speech in this House. I rise to the occasion.I want to just start out by commenting a little on my colleague Clayton Cosgrove's earlier speech where he talked about the Government's fast follower status in terms of small business policy and provisional tax. That is one of the things that are being implemented here and it is one of the reasons of course that Labour supports this policy and will be supporting this bill through the House. There are things that we are worried about there are things that we are concerned about but you will have noticed from Mr Cosgrove's upbeat tone we on this side of the Chamber will be supporting the legislation.The one thing he did not comment on during his contribution—and perhaps it is an excess of modesty which is his natural area of habitation that prevented him talking about it—was his own work in producing that small-business tax policy and making sure that Labour really led on it. So I want to take my hat off to my colleague Clayton Cosgrove for his contribution to this policy outcome that we have here today. As I said his modesty probably prevents him from claiming that himself because he is indeed a modest man!The big concern I have of course is that this bill does not go far enough. It is very reluctant window dressing that we have here. We know that this bill came hot on the heels of the Panama Papers and the immediate response of the Prime Minister of the time was a concern about the damage they would do to the local tax industry—$24 million. He quoted that straight away—bang—before anything else. He was not worried about the tax-haven status—no. It was raised in the media but he immediately said: No this could damage our tax industry in New Zealand." And in fact that is true—true. It did not cost as much as the flag debacle but $24 million was the number that sprang to his mind immediately.Of course ordinary New Zealanders are worried about our status as a fair dealer in the world. I disagree with the comment of the Minister in the chair Alfred Ngaro that we have got nothing to worry about—or the implication in his speech that we have got nothing to worry about. We do know that we slid down the Government Defence Anti-Corruption Index recently off the back of a number of scandals in New Zealand and one can only assume that there have been more scandals overseas that rearrange our place higher up the pecking order. It is something that we should never ever lose track of because that reputation for being a fair dealer in the world is what brings New Zealand to the international-trade table. It is why we are an important player in international relations far above what our size in terms of population would suggest. A big portion of that is our international reputation for fairness.But we have here some loopholes in this legislation. There are some changes around anti - money-laundering but there are some really really serious exceptions that I think need to be patched up. The biggest of course is the exemption of real estate agents and lawyers. When we see an out-of-control housing market—and my colleague Clayton Cosgrove talked about the brightline test and the 2 years of capital gains that would accumulate and be easily cashed in on by those willing to wait out a 2-year period as opposed to Treasury's 5-year period recommendation. That is just the start because here in this bill we have an exemption for real estate agents and lawyers.If there was going to be a route for money-laundering if there was going to be a way into hot money in the international scene in terms of avoiding tax it would be in real estate. I do not think there is much debate around that. That is something the commentators broadly agree is a way that people park money offshore. People put it into real estate they wait for the capital gain and when they sell the asset it is the proceeds of a house sale and becomes clean money again. The lawyers involved in those transactions are exempt under the legislation that we are passing today. I would like the Minister to stand up and make a contribution as to why that exemption should still stand. I would like to hear the Minister explain just why real estate agents and lawyers should be exempt from the anti - money-laundering changes being put forward in this legislation.The report that was put forward that examined all of these changes recommended much more widespread action. It recommended that anti - money-laundering legislation be upgraded and that we have legislation compliance across the whole range of sectors. Of course the problem is huge. A few years ago—I think it was 2012—an ex-McKinsey chief economist estimated that the tax havens of the world were harbouring $21 trillion. That was in 2012—$21 trillion.This is no trivial issue. This is no trivial issue on the world stage. It is the reason why economies are struggling to keep their infrastructure up. When we have big holes in tax systems—when people are hiding their money and not paying their fair share—we have the increasing inability of Governments in the modern world to be able to afford to keep their infrastructure in the state that it ought to be. So of course we support the measures in this bill as far as they go because we believe in creating a fairer tax system and they go some way towards creating a fairer tax system. At least some of the people will be required to comply with anti - money-laundering legislation. But this Government does not want to take it further.Another interesting point is—and I refer members to Part 1 subpart 2 clause 8 which amends section 3 of the Income Tax Act. There we see reference to the Foreign Account Tax Compliance Act (FATCA) legislation that was passed through this House not so long ago. Members will recall that this was legislation we passed here through the House when Todd McClay was the responsible Minister. Now of course Judith Collins has taken over the revenue portfolio. That legislation required New Zealand banks at the expense of their customers to collect information on every customer so that they could ascertain whether they were a tax resident for US purposes. This was in order for the US to maximise its coverage of tax havens and to ensure that its taxable citizens were paying their fair share. In that piece of FATCA legislation there were some reciprocal requirements albeit weak—or at least language that talked about the opportunity for New Zealand to get similar information out of the US.One thing I would also like to ask the Minister once he has told us why lawyers and real estate agents should be exempt from anti - money-laundering provisions in this bill is whether that FATCA legislation as it is amended here still means that New Zealand will be getting the same kind of information that was expected out of the US in future—in particular in the context of a new President of the United States. I am very interested to know whether under the Trump administration the progress that was made on the FATCA legislation limited though it was will still stand. Will we still be able as New Zealanders to insist on tax disclosure out of the US to show where New Zealand citizens are guilty of operating in a dishonest manner in respect of the world's taxation systems? The Minister may well be able to tell us whether that legislation has been adequately amended in this bill to provide for our future.The bigger issue of course is the "BEPS" work—the base erosion and profit shifting work—being done by the OECD. That piece of work in my view is moving far too slowly for New Zealand's interests. It is designed so that we can minimise tax loopholes so that we can reconstruct tax systems in the West to ensure that everybody pays their fair share. But of course in the meantime the US is doing stuff like the FATCA legislation which ensures that its interests are served. It is demanding that Switzerland turn over tax records. It is demanding that European countries are transparent with information or it will charge them for not doing so or will make life difficult for them. And we have a President in the United States who is making demands of many Western countries in future. I want to know what this Government is doing to make sure that that transparency is going two ways because I do not think it goes far enough.The keeping of a register colleagues have already talked about. It is not being progressed in the way that it ought to be. We have exemptions for lawyers we have exemptions for real estate agents and I think the Minister needs to tell us whether the FATCA legislation—the small progress that was made—will stand under the new regime and with this legislation and why these other parties should be exempt from anti - money-laundering legislation."