Bayly AndrewANDREW BAYLY (National—Port Waikato): Thank you Mr Speaker. Well another dying act of a dying Government in the final days—a new bill. What a great day we've had. Basically we've rammed through two water services bills and now we're ramming through this Taxation Principles Reporting Bill. Hey we've only got three more days left—or four maybe if you count the last day.The first question is: why are we doing this? Why are we doing this? No one's asked for this tax bill. It has come about through the good work and the enthusiasm of the Hon David Parker sitting over there. He had these wonderful ideas when he was Minister of Revenue until very recently. I was very disappointed to hear that he had relinquished his post because he had a deep departure over that goods and services tax on fruit and vegetables. I understand why he did that—man of principle.But talking about principle I know the genesis of this taxation principles bill was that he is a student of this man called Thomas Piketty who of course wrote Capital in the Twenty-First Century published in 2013. Was that the one you were relying on Mr Parker? I'm looking over there. I'm pretty certain it was. You know the whole premise of his work is that the return on capital—and he kept talking about return on capital—if it's greater than economic growth that leads to inequity. That's the prime proposition of Mr Piketty.So it was an important work. In fact and I mentioned this in my first speech on this bill the Washington Post did a review of this piece of work. It said when it was published that Piketty's work was a landmark"—sorry I'm just going to do a little bit of a quote here—"in economic literature that significantly improved and expanded upon Karl Marx's ground-breaking scholarship in Das Kapital." So here we are. Mr Piketty is going to help New Zealand even though we don't have communism. Let's hope even Mr Parker doesn't want communism—maybe socialism but not communism in New Zealand. That is what has driven this.He did accept when I spoke to him in the Finance and Expenditure Committee that he actually had a hand in writing some of this. Again I've got to say I compliment the Minister. There aren't many Ministers that sit down at the typewriter probably at about 10:30 at night when everyone else has gone home sit down and start writing about vertical equity and horizontal equity because he knows that that is the most important thing for New Zealanders.So what this bill does is it changes the way that the key principles have overseen the tax system across many jurisdictions. I talked about it earlier about Adam Smith's 1776 book which became a hallmark a fundamental plank to how tax systems were set up in countries. There were four elements. The first one is equity and fairness the second one is certainty the third one is convenience of payment and the fourth one is effective tax administration. Subsequent reviews in New Zealand—some commissioned by National some commissioned by Labour—have all reinforced those four principles because they are simple but hey that's not good enough for our good man Mr Parker who came up with these additional ones and then more importantly more significantly introduced a new term called "economic income". As I said before economic income by definition is the way that entities account for changes in the value of a given asset in the market. It generally recognises unrealised gains in addition to recognising realised profits. So New Zealand has a system. It's all about taxable income made up of accessible income and deductible expenditure. What we've now introduced in this tax reporting bill—IRD will have to sit down once a year and write a report saying that we want not only to talk about whether our system is capturing those key things and how it's going about that but also now moves it into the area of unrealized gains. Of course that is what the Labour Government has been pushing now the last election probably the election before that and it certainly will in this election. The issue that they want to impose: a capital gains tax in New Zealand. This is a quiet surreptitious way of introducing it into the system of the IRD to make sure it's reporting on this very issue.Now tax policy is the responsibility of the Government of the time. The current Government the Labour Government has chosen to take itself down a certain tax path and that is what it does and we respect that as the Government. If we are lucky enough to be elected in October we will choose to go down a different path which is we want to make sure that more people keep more of their money in their back pocket and that is simply what people choose to support when they come to election time. That is called democracy. This is something that is trying to embed in the system something that the Labour Government wants to make sure is continuously captured around unrealised capital gains or in other words a capital gains tax. We do not accept it. National does not accept it. We do not believe this bill is necessary. We will repeal it. It's a waste of time. But anyway the Labour Government's going to ram it through tonight anyway."