Foss Craig: Income Tax Bill — In Committee Third Reading 
Foss Craig: Income Tax Bill — In Committee Third Reading 
[Volume:641;Page:11289] 
CRAIG FOSS (National—Tukituki) 
: 
 It is a pleasure to follow the previous speaker but I just need to make one thing clear: I and Mr Tremain did in fact lead two protests around the issue of apple access. In May 2005 I was dressed as Trevor Chappell bowling underarm throughout Wellington at the front of the march and Mr Tremain was dressed as Brian McKechnie. We bowled and hit all sorts of apples all over Wellington while leading the march. I still recall the look of horror on the faces of the two MPs who were later kicked out of Hawke’s Bay electorates but who are still with the Labour side as we unmasked ourselves as leading the march. Funnily enough 2 or 3 months later they were kicked out because although we were supporting our province and what is very important to our region they had long since abandoned it. 
An earlier speaker Dr Lockwood Smith made a very very interesting point when he was talking about Supplementary Order Paper 136 in the name of the Hon Peter Dunne. He asked the Minister to clarify a few points and I think the intent of what we are doing here is worthy of reiterating. Yes we are having a broad debate about various taxation policies etc. but the commentary on the bill needs to be read again: “The Government agreed to promote a remedial amendment to the Act to correct any provision that was found to produce a different result from that which would have been produced under the Income Tax Act 1994 provided that no policy change was intended.” Basically the committee said: “We strongly urge that such a process is adopted for the bill.” 
The National Party is voting for this bill but there is a huge question mark over that Supplementary Order Paper and Dr the Hon Lockwood Smith spent a lot of his speech asking various questions of the Minister. Yes they were somewhat technical but we have officials who are able to assist there hopefully. I think it is very very important—in fact essential—as we progress and go to a vote later on that those questions are clarified and clarified pretty soon. 
I recall going through the bit on page 5 of the commentary at the Finance and Expenditure Committee. In the first write of the bill the word “charities” was taken out and replaced with the term “public benefit gift”. I think we were in general agreement that that was somewhat politically correct and I guess it is a credit to the committee officials etc. that we put back the words “charitable or other public benefit gifts” because we all understand what “charitable” means. Members across the parties were in agreement there. I still cannot quite define what that other term means. 
Interestingly I recall that around the time when we were looking at that issue at the select committee National actually announced its policy on removing the cap on charitable giving. Subsequently because that was such a good policy about 2 months later in the Budget Labour took it on almost verbatim word for word. So to the previous speakers who have again called for us to announce our policy outside our own time frame I say that they should keep hoping. It is interesting to see the anticipation from various retiring members from the Government side of the Chamber and the interest that they have in our taxation policy because I guess it will affect them personally as they wonder what to do with their quite substantial parliamentary pensions and how to manage their assets. 
The previous speaker was talking about the research and development changes etc. and about the various so-called incentives that have been provided. We are actually on a slippery slope here back to Muldoonism I think. Many submitters to the Finance and Expenditure Committee now spend thousands and thousands of dollars on lawyers and accountants because they are submitting and pleading and telling us why they deserve the latest tax credit and why they should have the latest tax bribe or in fact why one should be invented for them. They almost spend more time on trying to minimise their taxation affairs than they do on actually getting on and adding value to the economy. That is “Productivity 101”. I would like to remind the House of an absolute law in many fields which we can apply to tax here. It is a law that I think has been long forgotten in the Beehive: the attraction of tax incentives is totally and positively correlated with the level and the complexity of taxation. It is pretty simple; it goes without saying. 
The Reserve Bank Treasury and all sorts of submitters have told us how complex the legislation has to be now in order to accommodate the various personal tax rates the new change to the company tax all the things in and around the fair dividend rate and portfolio investment entity regimes and the KiwiSaver regime which started on 1 July and then goes privately on 1 October. Some submitters have gone as far as saying it is an administrative train crash that is about to happen but I guess we will wait and see whether that occurs.