Bayly AndrewANDREW BAYLY (National—Hunua): Thank you Mr Assistant Speaker. This is a great opportunity to talk on the Taxation (Annual Rates for 2019–20 GST Offshore Supplier Registration and Remedial Matters) Bill in its second reading. I think this Government is going to be known in time as that rapacious tax gatherer—rapacious tax gatherer—because since this Government has come in to play they have introduced three lots of fuel excise tax. I see the Minister of Transport is over there and he was the last one to do that. There's also the regional fuel tax which has particularly affected people in Auckland—only one and half million New Zealanders—the brightline extension to five years—Hon David Bennett: How many? ANDREW BAYLY: —one and half million or maybe a bit more Mr Bennett—the ring-fencing of losses which I'm about to talk about; GST on mobile roaming; WorkSafe levies; and a tourism tax. So this bill is a further enhancement of a higher-tax structure in New Zealand because the primary purpose of this bill is to reinforce the higher than necessary tax rates in New Zealand. This is the difference between this coalition Government made up of Labour New Zealand First and the Greens who want to impose more tax at a personal level on ordinary New Zealanders. We in our last Budget wanted to bring about a personal tax rate of $1060 per person on average and what this bill does is reinforce the continued high tax rates without any amelioration of people. Hon David Bennett: Shame. ANDREW BAYLY: I think that is a shame as Mr Bennett says. It's a lost opportunity. I think it doesn't recognise the fact that sometimes it's better to give New Zealanders more money back in their pockets and that's why we will not be agreeing with this bill. The other thing about this bill though is that since this Government came into power they have campaigned on a remit of not introducing new taxes but since they've come into power they've introduced already $2.3 billion of additional taxes and then in the very first thing after the Wellbeing Budget what did they do with taxes? The first two bills they pushed through in urgency—which requires no select committee oversight no public intervention and no submissions from anyone—was to bring forward the fuel tax excise tax and you'd have to say that that was totally unnecessary. It raised a mere $30 million but for some reason the Minister of Transport thought We must rush that through in urgency." The second thing was the tourism tax which is going to raise roughly about $80 million a year. Those are the first two things they did in urgency. That is not what a wellbeing Budget's about and it's certainly not transformational. Anyway—ASSISTANT SPEAKER (Adrian Rurawhe): And during the Budget debate you can talk about that. But it would be good if you spoke to the bill. ANDREW BAYLY: Good—thank you. So that is the tax tonight and that's why we're not supporting this bill. But there are some elements of this bill that are good and I just want to now turn my mind to those. I think on the issue around how we're dealing with capital-raising costs for companies who are raising financing there's been quite an issue about whether in fact you could deduct some of the capital-raising costs for businesses. So this is a good thing for businesses because it was unclear and sometimes capital-raising costs are quite significant. But the other major thing that was dealt with—and of course it was started under the National Government—was this so-called Amazon tax that deals with the issue of overseas suppliers providing goods and services to New Zealand. This bill finally brings that to a conclusion. We of course introduced it—and when I say "we" the National Government was dealing with this—and it's good that the Minister of Revenue has taken this forward and that we're seeing it here in this bill. The Finance and Expenditure Committee did make some changes around this issue. Basically overseas suppliers—and that might be a digital platform; it might be anyone such as a US supplier of services or goods to New Zealand—will now have to register for GST and not only receive that GST but remit it back to New Zealand if their gross sales exceed 60000 a year. That is a good thing. Part of the debate in the select committee was around when this thing might come in to play. There was quite a lot of debate and one of the issues that a number of the digital operators—platforms like Google Alibaba and those sorts of people—made strong submissions around was when they could reorientate and reprogram their systems to be able to comply with this arrangement. As a last change to the bill that the select committee considered that date was pushed out to 1 December whereas at one stage it was going to be 1 October. I think that's a good thing because we do want our overseas suppliers to have the systems in place to be able to comply with the New Zealand requirements now. Also what is means is it's a good thing for our retailers in New Zealand who now are not disadvantaged—particularly on low-value items worth below $1000—and I think that was a very good thing. The main issue that we do have with this bill is the ring-fencing of rental losses and this is quite a significant thing. The bill proposes to limit the ability to transfer any losses that you may have made on a property and to offset that against your other income. That's the traditional approach and that's been the approach for a long long time. What this bill has done is limited it to only carrying forward those losses and applying them against future sales of property and that is a significant restriction on people. What I don't think people realise is that 42 percent of all houses in New Zealand are owned not by rich people actually but by mums and dads because they see it as a wonderful opportunity to make some money and they understand it; less so than what they might otherwise for the stock market unfortunately. But they have chosen to make an investment in rental property. They own 40 percent of all properties and what this now means is that they cannot offset any losses against their current income. The whole excuse for doing this was to make sure that we were evening up the market and we were going to make it easier for first-home buyers and of course everyone wants to see first-home buyers in the market—everyone. Everyone across the House here wants that. But what this will mean is that for those people they are now going to be incurring higher costs. It's estimated that this will haul in another $190 million in tax for the Government but of course who are paying that tax? They are the mums and dads of New Zealand who own these rental properties. Of course they will pass on that cost to their tenants and that is the missing piece in the logic of this proposal because passing on $190 million in costs to renters—and that's 630000 households in New Zealand—would imply that their rents are going to go up by $300 a year. When you put that in the context of rents that are already under this Government increasing by over $50 a year that is a further—Hon Paul Goldsmith: A week—a week. ANDREW BAYLY: Per week. That's right—$50 per week. That is an outrageous imposition on renters. Of course who are going to be adversely affected by that? It is certainly the people who are starting out in their careers who haven't yet assembled the money and it is the more vulnerable members of our society. This thing will hit those people the hardest and that's why we're are implacably opposed to this particular clause. Even Treasury the hard nuts of economic management wrote and said—and I quote—"Rental loss ring-fencing will reduce after-tax rental returns for some landlords. This could encourage the transfer of housing stock from investment housing (i.e. rental housing) to owner-occupier housing putting pressure on the remaining rental stock." Of course they go on to say what that means about rental pressures and what this is doing is it's going to be a bad thing for those people who choose or have no other choice but to rent from the market. I think that is a particularly bad thing about this bill. We will be opposing it. There are some other goods aspects in this bill which I'm sure my colleagues are going to cover. But on that basis we will be opposing the bill."