Bayly AndrewANDREW BAYLY (National—Port Waikato): Thank you Madam Speaker and a pleasure to be talking on the Taxation (Annual Rates for 2023-24 Multinational Tax and Remedial Matters) Bill first reading under Budget urgency. Gee all this speculation about what Mr Parker would be doing in tax—Wellington was awash with rumours of what he might be doing: pushing up the top tax rate making the first tax rate free pushing out the trust tax rate. Gee there was a lot of speculation. Finally we heard yesterday the first part of Mr Parker's programme of tax reform and no doubt in the next few weeks we're going to hear some more from Mr Parker—no doubt picking up on Mr Piketty's reforms of the tax system that he so keenly observes and follows.Hon David Parker: More phantom policy from the Opposition.ANDREW BAYLY: Oh phantom—ha ha! I'll tell you what one of our policies which is not a phantom policy Mr Parker is that we want people to keep more of what they earn. That's why we want to stop them paying more tax so people like Mr Parker so that Government that wasteful Government over there can spend it on all these useless projects that they've been doing over the last six years. We just would like a Government that would actually take people's money and spend it appropriately. Anyway I'm slightly off the point Madam Speaker.ASSISTANT SPEAKER (Hon Jenny Salesa): It'd be great to come back to the bill thank you Mr Bayly.ANDREW BAYLY: Yeah that's what I thought you might say. Anyway that Budget yesterday gee. Of course we oppose this bill. We've got to oppose this bill and of course most New Zealanders were opposed to this bill because there's not a single cent in this bill for the hard-working mums and dads who are out there struggling every day. It's fine if you want to put your children on a bus or something but you know in Pukekohe not many people want to put their kids on a bus because it doesn't go anywhere. So we oppose this.Of course this bill reinforces the annual tax and the current tax rates and of course National has contrary to the Minister's assertion that we've a phantom—we have made it very clear that we want to change the tax rate reduce it so that New Zealanders keep more of the money rather than going into the Government's coffers.Of course that deals with the greatest theft of them all inflation which again has been stoked by this Government's wilful and unleashed spending which—even Mr Robertson couldn't contain himself yesterday.Tama Potaka: How much?ANDREW BAYLY: Well that's right—blew out the Budget yesterday. Anyway I think the interesting bits about this—there are probably a couple of bits I do want to cover off on. The first one is the Global Anti-Base Erosion rules that Mr Parker spoke about. We were concerned and I've been particularly concerned that Mr Parker was going to go down a headlong approach that previously the IRD had been looking at which was New Zealand imposing a digital services tax. Of course that had been what had been talked about—what IRD had talked about. We are at least grateful that somehow we've been pulled back from the brink of that because countries such as France went down this route of imposing a digital services tax and it resulted in retaliation from the US particularly Mr President Trump who immediately said he'd slap a great deal of duties on a number of French products and as a result even a large economy like France pulled back. England tried it and have also now agreed to scale back such an approach of imposing a digital services tax.So what this bill does which is a far more pragmatic approach is to say look we will work collaboratively with the OECD and come to a view and work collaboratively so we impose rules alongside all or most of the other countries in the world to deal with the issue of large multinational digital companies and I think that's right. A couple of aspects in the bill that we will no doubt canvass in the select committee stage first of all is the reference to the OECD rules; it's just going to be referenced. The OECD rules are about 76 pages long and have a whole lot of commentary going up to about 220 pages. We are concerned that that would mean that we would lose sovereignty over those types of rules so we would probably be of the making that they should be much more specific Mr Parker.So that's one of the big issues about it but there is a backstop in these provisions which means that if there wasn't sufficient progress by the OECD then those rules we would revert back to digital service tax on our own. That would be a pretty risky undertaking unless we did it well because the big issue about the overseas base erosion issues is that companies such as Fonterra Air New Zealand which meet the €750 million threshold might actually get captured by these rules. So we want to make sure that that is very very specific and well-tailored.But the second big thing about this bill is increasing the trust tax rate to 39 percent and of course this is an issue of Mr Parker's own undertaking. He made this problem because Labour contrary to what they said they weren't going to do shoved up the top tax rate to 39 percent. Of course even the IRD at the time they did that last year in the RIS—in the regulatory impact statement—said this is likely to lead to problems with people using trusts. Of course Mr Parker—and it's now clear in the documentation that the Minister's made the decision to increase this trust rate up to 39 percent. It certainly doesn't appear to be the recommendation of the IRD. Because Mr Parker shoved up the top marginal tax rate to 39 he was forced to do this—he was forced to.So now the big issue is if this all goes through and I presume because Mr Parker's got all those people over there and they're going through—what's he going to do with the company tax rate; Mr Parker? Are you going to shove up the company tax rate? Are you going to shove up portfolio investment entities (PIEs)? Now we have the biggest separation since 1986 between the top tax rate of 39 and the bottom tax rate of 28 percent for company and PIE rates. I reckon—let's hope it doesn't happen but if Mr Parker was the revenue Minister in the next Government imagine what would happen. I reckon we'd see company tax rates going up. Yes that would—Hon David Parker: More phantom policy coming from the imagination of Mr Bayly.ANDREW BAYLY: No it's not phantom policy because that's what's going to happen right? That's what's going to happen.So having now created this problem for himself he was sort of forced to do this and the big issue—and of course he sort of talked about making some adjustments. I don't know what the adjustments—it's not clear in the bill what trusts would be excluded but there are four examples where this will be much worse for a lot of New Zealanders. The first example is where beneficiaries of deceased estates get given money in their trust and now it appears that that money has to be paid out within 12 months. In many cases when people die let's say mother dies of cancer or whatever let's say those dreadful situations—and this happens unfortunately. People often quite diligently and appropriately leave their money in their trusts until the beneficiaries their children get of a certain age. Of course under this 39 percent rule they will now be paying 39 percent on that money. That is wrong Mr Parker.Second option is where a trust is established for disabled people and you deliberately want to build up a capital structure—and I am listening to my colleague Penny Simmonds who's our disability spokesperson. That money will now be subject to 39 percent—that is wrong Mr Parker. And there are issues about people just using trusts to protect their assets; they are now going to be subject to 39 percent—that is wrong Mr Parker. These are the types of rules—there are more examples but I'm running out of time. This is the type of blowtorch we'll be putting on in the select committee because we need to protect ordinary New Zealanders against the Labour Party.