Bayly AndrewANDREW BAYLY (National—Hunua): It's a pleasure to be talking on this the Taxation (KiwiSaver Student Loans and Remedial Matters) Bill second reading. And of course it was wonderful watching that member Damien O'Connor give his speech—and he read the whole thing entirely. I'm just wondering why Mr O'Connor has had the pleasure of talking about this bill. Does that mean that there are no other people in the Labour Party or whatever from the Government side who are available to give this speech who actually attend and have been a member of the Finance and Expenditure Committee for some years? I just find it startling that we have to rely on a person from the West Coast who represents the agriculture industry to front up in a speech that he has never had anything to do with.Hon Dr David Clark: Has to be a Minister. What does the member mean? It has to be a Minister.ANDREW BAYLY: And so—and there we are we've got Dr David Clark in the front there. I thought he was an associate finance Minister; maybe he could have stood up and given us a good resume of this bill.Anyway contrary to that last little flick from the Minister talking about nine years of neglect and how they're fixing up the tax policy and gee they're doing a wonderful job! Well for just a bit of history normally all parties when they're in Government pass about three tax bills every year. When we were in power we did it; you're in power you're doing the same thing. This is one of a series of bills that we put through this House to make sure we have a robust excellent tax system and I'm looking at those officials on the right-hand side. New Zealand has one of the best tax systems in New Zealand and this is part of the ongoing process of doing that.So this bill is wide ranging—this bill is wide ranging. It's got five key points. First of all it's got the KiwiSaver and I'm going to return to that because it's quite significant.We've got a number of student loan changes and there are essentially five of those which I might just try and recap. The first one's giving Inland Revenue the ability to write off student loans taken out before 2000 if there are extenuating circumstances; clearly if people are trying to avoid their debt they will have to pay it back but there are occasions when it needs to be written off for valid reasons. The second one is limiting changes to the borrowing repayment obligations prior to April 2013 and it's all to do with residency issues. Allowing employers to be notified of employees' loan balance near the end of the repayment period so that we don't see employers deducting their last student loan repayment and then for the person to have to go to IRD and get that money back—so making it simpler. Also treating overseas-based borrowers with serious illnesses and disabilities as physically in New Zealand.One of the key things that were discussed in this whole process was a very good amendment put up by our good candidate for Wellington Central Nicola Willis to do with some good issues around people with congenital diseases and I think it's excellent. I know Mr Lawrence Yule—or maybe Nicola—is going to talk about that shortly and that is very much a part of what we're talking about here.Renaming the student loan repayment issue: everyone talks about it being a holiday and we were very clear and keen—all members of the Finance and Expenditure Committee—that we got the language right.We do not want people taking perpetual holidays in terms of making contributions to their KiwiSaver because it's essential that everyone in New Zealand puts money into their KiwiSaver and saves for their future. There were a whole lot of changes to employee share schemes and particularly where young start-up companies because they can't afford to pay market wages because they don't have the cash what they do is they often offer shares to those people their employees. So when you go through capital changes and takeovers and that sort of stuff what that would traditionally trigger would be that those type of schemes would have to account for that capital gain.So this bill very appropriately deals with that and gives a lot more flexibility around those people in terms of when these businesses evolve over time and take on new shareholders. I think it's an excellent proposition and it's about supporting our capital markets in New Zealand which need lots of support.There are a whole lot of changes around granting overseas donor status and there are a number of new charities brought into play. There was an issue around the jurisdiction and the determination of the commissioner. So often the commissioner is approached by people seeking clarification for a tax matter and she will—the current commissioner who does an excellent job—often give determinations. What this bill has is an ability to make sure she doesn't get locked into those determinations. So there's appropriate give and balance in the system that she can give them but if she retracts them people who have sought advice are not then detrimentally affected by it. Again a very appropriate solution to an issue.There were also issues around withdrawal of these non-binding rulings which I spoke about. There are attribution rules which are when people use a company to basically undertake services it only has one source of income. These are referred to as attribution rules. Again this bill deals with that quite comprehensively.There are thin capitalisation rules which is where companies—overseas companies traditionally—use this approach where they borrow more than what would be traditionally acceptable in terms of financial leverage and they use that because the borrowing costs become tax-deductible. It's a way of minimising their profits in New Zealand. There are again some very good changes in this bill to deal with that issue.The other major thing and Parmjeet Parmar has a lot of expertise on that is around research and development and again making research and development much more accessible.Now I want to turn back to KiwiSaver. This is the travesty. We just heard the Minister before talk about KiwiSaver and wax lyrically about what they are doing what this bill does for KiwiSaver. This is a travesty because that Government—that Government that seems and wants to talk about representing the poor of New Zealand the dispossessed and being seen as the caring Government—has basically taken and expropriated about $42 million in the 2018/19 tax year and again a similar amount probably $75 million roughly from those taxpayers who have inadvertently been paying too much tax on their PIE investment income.A PIE normally would be some form of KiwiSaver investment account where you've legitimately put it with a KiwiSaver or where you have an authorised fund manager to manage your funds. In this situation there is about $75 million in an account held by the IRD. I put up an amendment to say the Government should be paying that money back to these people often the ones on the lowest amount of income. This Government—this Government—refused not only for the 2018/19 year but for the 2019/20 year the current year. Originally we heard: Oh we can't do it. We can't do it because the system doesn't allow for it." Well actually the commissioner confirmed that she could do it; the systems do allow for it. So then I questioned the Minister of Revenue in the House here and then I heard: "Well it's a major legislative barrier." Well actually I wrote this amendment; I wrote the legislation that would enable it to happen.All that needs to be done is attach it to a piece of tax legislation and guess what we have in front of us—guess what we have in front of us! A piece of legislation. So we heard the Minister say "Oh we're going to make this effective from the 2021 year going forward." That means the Government has basically stolen about $75 million from the lowest-paid investors of this country taxpayers and they're going to keep the money—they're going to keep the money. That is wrong. The whole principle of tax is that you should pay your fair share and no more.I found a wonderful lady who had come from Uruguay who was an economist. She had inadvertently been overpaying on her PIE investment funds. She had tried to get the right rate from the investment fund; they refused. It was only until she changed provider and then she got the right rate. She cannot get her money back from the IRD. It is outrageous—it is outrageous. It is wrong. This bill should be addressing that issue."