McNair Craig: Taxation (Annual Rates GST Trans-tasman Imputation and Miscellaneous provisions) bill — First Reading 
McNair Craig: Taxation (Annual Rates GST Trans-tasman Imputation and Miscellaneous provisions) bill — First Reading 
[Volume:609;Page:6658] 
CRAIG McNAIR (NZ First) 
: 
 New Zealand First will support this bill to the Finance and Expenditure Committee. Tax legislation is among the most important and relevant legislation that we debate in the House. Because New Zealand First believes so strongly that tax legislation is very important because of its effect on every New Zealander and the impact it has on the economy we will seriously consider submissions on this bill in the Finance and Expenditure Committee. The bill confirms the annual income tax rates that will apply for the 2003-04 income year. The annual income tax rates to be confirmed will be the same as the rates that applied for the 2002-03 income year. 
In terms of Part 1 which deals with annual rates of income tax for 2003-04 and to protect our nation’s tax base New Zealand First wants to reform the taxation system by simplifying tax processes clarifying tax legislation ensuring that the taxation laws of New Zealand are upheld and that all—large or small—pay their taxes. However our long-term objective is to see New Zealanders paying less tax. 
New Zealand First is opposed to any increase in general taxation. Following the achievement of intermediate growth goals and focused social expenditure we want to aim to reduce personal income tax levels. We also want to reduce tax compliance costs by monitoring evaluating and amending as necessary the measures introduced during our time in Government. Priorities remain—the streamlining of taxation analysis in preparation of returns processes in making the tax system as neutral and equitable as possible. 
I turn to the amendments to tax pooling provisions in Part 2. Four amendments are proposed relating to the tax-pooling provisions recently enacted. The most significant amendment is a change to the imputation provisions to allow taxpayers who through an intermediary deposit an amount in a tax-pooling account with the Inland Revenue Department to receive an imputation credit when the amount is deposited and not when that amount is allocated from the pooling account to the company’s income tax account. The amendment should remove a disincentive for taxpayers to pay tax through a pooling account. 
New Zealand First wants to do everything it can to help business in this country. We also believe in introducing an accelerated depreciation regime for specified industries and selected approved investments so as to assist business development. That is just one thing that we want to do. I look forward as the New Zealand First representative on the select committee to considering the bill. As I said we will support the referral of the bill to the select committee because we believe that taxation law is something that affects all New Zealanders. One does not have to be a rocket scientist to figure that out. Obviously we disagree with a lot of the Government’s rules and regulations placed on small businesses and the taxpayer in general so we want to look at this bill in its entirety. We look forward to hearing submissions on it. 
GORDON COPELAND (United Future) 
: 
 United Future also is pleased to support the first reading of the annual taxation bill. As the Minister said it involves some major policy initiatives and I would like to touch on a few of those. The first one is to do with GST and the zero rating of financial services which will reduce costs for banks and other financial organisations and lead in turn to reduced fee charges to customers—something that will be greatly welcomed. AsDr Cullen has done I want to touch on the trans-Tasman imputation system which is now being introduced. This is an initiative that I strongly support. It strengthens closer economic relations between the Anzac partners and will free up investment flows between our two nations. It is clear to me that New Zealand’s economic and defence future will remain strongly linked to that of Australia. Together we are just 24 million people—way way smaller than the state of California. We can continue to seek mutual advantage in doing many things together and by working together. Free and open labour markets already exist between our two countries and unlike Dr Cullen at least in his reported comments I would not rule out a future Anzac currency union. However before that can happen we need to continue to harmonise tax law. 
I also want to mention United Future’s absolute delight that this bill also sees an increase in the threshold for child tax credit and the threshold for parental tax credit. We warmly welcome these changes which we have worked hard with the Government to bring into being as well as the principle of consumer price indexation that they embrace. We hope that the Government will continue down this track. It is a small beginning but it is a beginning. I hope that the provisions will become a permanent feature of family assistance in the new measures to be announced in next year’s Budget. 
Raising kids is an expensive business but it is the most important business. Our beautiful children are our future and I know that all of us in Parliament of whatever political persuasion want to give them the best possible future. 
I want to comment too on the new rates of withholding tax for employer contributions to superannuation funds. I commend the Government for this initiative. Michael Cullen mentioned that the Greens had been talking to him about this issue. Well so has United Future. I do not expect that on its own it will be enough to boost superannuation savings in New Zealand. The reality is that savings rates in New Zealand are going backward and we are steadily becoming more and more indebted. For many New Zealanders the old Negro refrain is a reality: “one day older and deeper in debt”. Certainly as a nation we are also becoming steadily more and more indebted. Nothing short of behavioural change is now called for. I call on all parties in this House to exercise their collective wits to see how that might best be achieved. Our future prosperity or its lack demands no less. 
Lastly I want to say a word on the new deferred taxation rules. These are being brought in to prevent elegant tax evasion schemes. In my career before coming into Parliament I have seen the lengths that people will go to in order to evade tax. In principle when evasions are discovered it makes sense to close the loopholes—provided we do not go down the path of retrospective legislation with arrangements that are a matter of avoidance and therefore legal. It helps me always to keep in mind for example a nurse doing long hours in an intensive care ward and paying her full whack of tax. It is simply fair play to ensure that others do not rort the tax system. With those comments I have pleasure in signalling again United Future’s support for the first reading of this bill.