Cunliffe David: Taxation (GST and Remedial Matters) Bill — In Committee Speaker Recalled In Committee Procedure Third Reading 
Cunliffe David: Taxation (GST and Remedial Matters) Bill — In Committee Speaker Recalled In Committee Procedure Third Reading 
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Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 The Minister’s comments deserve a direct reply. Let us be fair: the Minister is quite correct that the general intent of the policy was made known in the Budget. He is also quite correct that an early draft form of legislation was made available to the industry— 
Hon Peter Dunne 
: Publicly. 
Hon DAVID CUNLIFFE 
: —and publicly—and that is not in dispute. What is equally not in dispute and the Minister would not disagree with this either is that the matters that resulted from that process were not presented to a select committee were not subject to parliamentary scrutiny and did not have access to the independent tax advice of the Finance and Expenditure Committee’s independent adviser.  
I think the Minister is in grave danger here of setting a precedent that could undermine the generic tax policy process more generally because he seems to be inferring to the Committee that it is somehow OK it is somehow acceptable if the Government announces a policy intent— 
Hon Peter Dunne 
: I think the member is inferring; I might have been implying. 
Hon DAVID CUNLIFFE 
: —thank you; “might be implying”—and somehow consults with the industry it gets a form of leave pass and can bypass the select committee. That of course is not acceptable. It is not acceptable to the public first because the select committee is the opportunity for the public to make submissions and be heard. This is more frankly something that smells rather of a kind of smoke-filled room—a closed-room dialogue between a number of parties that have deeply vested interests. That is not acceptable in the New Zealand constitution. It is not acceptable in good parliamentary practice. This is a change of practice for this Minister and it is not OK for the House. We have made that point repeatedly.  
I need to raise several issues specifically about clauses in Part 3 of the Taxation (GST and Remedial Matters) Bill. Again I say it is not easy for members of the Committee to cross-check the provisions on Supplementary Order Paper 187—recently received—in the name of the Hon Peter Dunne with the underlying provisions of the bill to which they cross-refer. The interface with the portfolio investment entity regime such as in new clauses 78B 79B and 80B through to 82E is a matter of some interest. There have been allegations that portfolio investment entities had been subject to similar abuse to that of loss attributing qualifying companies. Where is the analysis I ask the Minister that shows how consideration has been given to managing that boundary? Going forward I ask whether similar issues might occur under look-through companies and whether the removal of some of the arbitrage from loss attributing qualifying companies has removed the possibility of arbitrage between portfolio investment entities and look-through companies.  
Those are the sorts of matters we would expect to see addressed in a regulatory impact statement or an options analysis. But we do not have one because the Government that championed the Regulatory Responsibility Bill has followed its own procedures in less than 50 percent of the legislation that it has put through the House. Perhaps that is not surprising because the Government set a 5-year record this week for the highest proportion of legislation going through under urgency in at least the last 5 years. I have not been able to go back and check earlier than that. We have rushed legislation that violates the Government’s own regulatory— 
Hon Judith Collins 
: Good hard-working Government! 
Hon DAVID CUNLIFFE 
: “Crusher” has become a tax policy expert. That worries me deeply; it worries me as deeply as the process. Without good scrutiny as my colleague Brendon Burns said before we will pass this in haste and revise it at leisure.  
The Minister has made the point that he has dividend amendments coming through. There will be tax bills—at least two—next year. What would have been wrong with putting these matters to the select committee in such a way that it could subject them to the proper process?  
Hon Judith Collins 
: What’s he got? He’s got poetry! Ha ha! 
Hon DAVID CUNLIFFE 
: The Minister of Police who is also the Minister of Corrections may not care about the tax loss but the tax loss that is being addressed through this bill is larger than Vote Police—larger than Vote Police. That might explain why she has put only 30 new cops on the beat rather than the 1000 she promised. So there is a big gap between that Minister’s rhetoric and her reality and there is a big gap between the Government’s rhetoric about regulatory responsibility and the actual practice in which less than half the bills it has passed this year have been through a proper process. That should shock New Zealanders—it should shock New Zealanders.  
The return requirements for multi-rate portfolio investment entities appear in clause 80C and they are deemed to occur at a 31 May date—31 May of the year after the end of the tax year. We are worried about arbitrage opportunities.