Cosgrove ClaytonTAXATION (BUSINESS TAX EXCHANGE OF INFORMATION AND REMEDIAL MATTERS) BILLFirst ReadingDebate resumed.Hon CLAYTON COSGROVE (Labour): Just to deal with that last aside I am sure the people in the Far North were very gratified to have the Minister of Police in their sphere in their presence radiating warmth and radiating esprit de corps and humanity to one's fellow man and woman as she is known for. Could I deal with some of the points that Parliament's version of Bear Grylls—the previous speaker Andrew Bayly—made in his contribution. I think he may well have been on ice in the North Pole for a tad longer than was necessary and that may have had some effect on his anatomical processes from time to time but putting that aside he touched on the bill—which of course Labour will support in the first reading—in respect of its provisions around provisional tax and making payment of provisional tax easier for small businesses. I do commend the Government for that although as usual it is a day late a dollar short and late to the battle when the war is almost won. It was very interesting to see the timing of that proposal. At the time well before this Government turned its mind to provisional tax—I was revenue spokesman actually—Labour actually wrote and released a policy on provisional tax.Hon Annette King: I think you should table it.Hon CLAYTON COSGROVE: It is a policy that I am happy to table for the members' interest. It is a policy that was released publicly; a policy that also had the benefit of being highly detailed and highly costed. Not only that but we engaged professionally the former Inland Revenue Department (IRD) deputy commissioner Robin Oliver to go through that policy and vet it for us. Those who know Robin Oliver will know that there is probably no one in our recent history—in respect of knowledge of the IRD processes and policies—better matched than Robin Oliver and his history with the IRD. So we went to the best Mr Oliver and his associates and asked them to vet it. Our policy of course was about flexible tax for business. It was about giving businesses more control over their lives making the tax system work for them. Essentially businesses could pick their own tax rates—still having to pay ultimately the same or appropriate level of tax—but marry the tax system and the provisional tax to their cyclical business whether it be seasonal or whatever. Not only that but we said we would scrap harsh late-payment penalties in respect of provisional tax and raise the level at which provisional tax kicks in from $2500 to $5000. The day we announced it and I have this on very very good authority the Mr Fix-it" of the Government Steven Joyce I am told because there was somebody in the room who told me called the IRD officials in over the head of the Minister of Revenue and basically said—and I will not use colourful language—"How the hell are we going to deal with this? Go and do something."Chris Bishop: Oh that's not true.Hon CLAYTON COSGROVE: Oh yes that is absolutely true. It was not Chris Bishop who told me I have to say. To be fair to him it was not Chris Bishop who told me. The Government ran around like headless chooks desperately trying to put a policy together and to be fair it came out with one. But it was several months late. It is not as robust as our own policy. It does not give business the full flexibility of the policy that I and colleagues and Andrew Little put forward but it is something to deal with. So again ours was a policy that had been vetted by the former Deputy Commissioner of the IRD. It was very detailed and would give a lot of control back to small businesses. So the Government's policy is not a bad effort but it was—as usual the Government had a look at the polls did a few focus groups and said: "Hang on we've been beaten to the punch here. We'd better come out with some sort of half measure that maybe makes us look as if we're in control and we can empathise with small business and small business will say this is great." It was a day late and a dollar short as per usual. Then we look at the provisions around the foreign trusts issue which a number of members have talked through. I know other members have dealt with this point but it is interesting that again the modus operandi that I just described in respect of its provisional tax announcements was almost exactly the same modus operandi that it exhibited around the foreign trusts issue. The National Government procedure is: "If the proverbial hits the fan we basically deny deny deny deny." The Panama Papers came out with a lot of commentary around New Zealand's international reputation being tarnished if not put in jeopardy in respect of being a world-class taxpaying nation that does the right thing and meets its obligations and is transparent. So the Government sort of reels the issue out on a pole like a bit of raw meat to wait and see whether the vultures peck and peck and peck. Then you know if it is going too far the Government reels it in and then the Government decides it had better actually do something because the polls tell it of course that the public is taking an interest in this that other embassies and jurisdictions around the world are taking an interest in this and that Government members' feet are starting to be put to the fire. So after the denying and the Government saying there was no issue there was no damage to our reputation and our legislation was world class and robust we then moved to a flip-flop which was: "Hang on we had better have an inquiry. Take Mr Shewan—ask him to do a report." That is a big change—a big U-turn. It was poll-driven—who was the politician who talked about "poll-driven fruitcakes"?Hon Annette King: Lange.Hon CLAYTON COSGROVE: Lange—that is right. Yes well it is very apt today: "Feet put to the fire big issue—poll it focus group it and then when the pressure is on we had better be seen to do something." Then we had the Shewan report and then we had the measures described in this bill. Well the select committee will have to go through and test quite robustly the level of quality of these legislative instruments to try to meet the mark because of course it was the Prime Minister the Minister of Finance and others who said that this was not necessary—it was absolutely not necessary. Day after day week after week press conference after press conference and doorstop after doorstop the New Zealand people were told that none of this was necessary—no need for a report no need for any action no need for any legislation. And now what have we got? Well we have had a report we have had an inquiry and we now have legislation and a finding by Mr Shewan that our disclosure rules in respect of existing foreign trusts are "inadequate"—inadequate. So that is where it sits. We will support the legislation through the first reading but it will be interesting to tease out from officials and from the Minister of Revenue and others as to the level of quality of these legislative tools and whether they will actually meet the mark in terms of ensuring that New Zealand's reputation is preserved and enhanced so that we are not seen—we are not perceived and there is no suggestion—to be somehow doffing our hats as a foreign tax haven. I look forward to the debate I look forward to the scrutiny of the legislation but I do say to the National Government that the sort of modus operandi of doing nothing; deny deny; then have a poll; then turn around and do a U-turn; and then maybe be seen to be doing something probably did work in its first 3 years possibly did work in its second 3 years but it certainly ain't working in these 3 years."