Bennett DavidTAXATION (NEUTRALISING BASE EROSION AND PROFIT SHIFTING) BILLIn CommitteeDebate resumed from 20 June.New Part 3 Parameters of ReviewHon DAVID BENNETT (National—Hamilton East): Thank you Madam Chair. Thank you for the chance to speak on this bill. I'd just like to reflect on the previous sitting of the Parliament and just to echo the words I think Willie Jackson probably made his finest speech in this Parliament with his contribution to that last bill and I agree wholeheartedly with him. I think that for the newer members of Parliament—you've just witnessed one of the special times that you see in this Parliament where you actually see some redress being done. It may not be full redress but at least partial redress is done in this Parliament and that is a good thing for members of the House. I'd just like to congratulate the many people that have travelled here today and wish them all the best.I realise that we're getting on to the bill Minister Nash but actually taxation could not be far from the thoughts of the very people that have received a Treaty settlement because through having a lower tax rate they will no doubt be able to get more income and build their equity and their base. One thing that we should always aim to in our country is for lower taxes and that would make us a much stronger country. Madam Chair is looking at me wondering where this is going to but we have an amendment that's in the name of the member for Hunua Mr Bayly and that amendment seeks to have in Part 3 a review of the base erosion rules.Now basically the base erosion and profit shifting rules that we're looking at here today are to ensure that people pay their tax in New Zealand and don't try and shift their tax obligation overseas through transfer of funds through dividends and through interest and suchlike.That really becomes so important in the corporate tax - paying world where you see the environment that we're going into. The amendment seeks to have a review and essentially the really important part of that is in clause 55(2)(b) where it says that relevant changes in taxation policy in relevant OECD countries;" are important and it would continue to consider those other countries as part of the review. That is so crucial for New Zealand and for the iwi that have just been in the gallery because if we look at what's happening around the world in the OECD there is a major transition to lower company tax rates: France are moving to 25 percent—even with a left-wing Government they're still moving to a 25 percent tax rate; the US the biggest drop of all are moving from 35 percent to 21 percent—Simeon Brown: Forward-thinking!Hon DAVID BENNETT: Forward-thinking it is. Australia are taking their company tax rate down to 25 percent whereas in New Zealand we're stuck at 28 percent and there's no hope that that's going to go down. If anything we will be going to the polls at the next election with a proposal from that Government to increase the tax rate.The review is important Minister because that review says that it would compare New Zealand tax rates against other tax rates. The reason that's important for base erosion is that if there is a much higher tax rate in New Zealand the incentive would be for companies to transfer and to look at ways of base erosion in New Zealand to take advantage of lower tax rates overseas.One of the important things in the New Zealand economy that we need to make sure of is that our rules are consistent with overseas rules so that we're not encouraging behaviour that would actually mean that the New Zealand Government misses out in total. The way we're going with tax rates in the corporate world in New Zealand is that we are creating a difference between what a company would pay in New Zealand tax rates—that is significant—and what a company would pay in another country and that will be the incentive for base erosion. So this review is really important because that will identify any points in which the New Zealand tax rates are out of kilter and therefore would encourage base erosion.So Mr Bayly has done an excellent job in putting this forward and I just want to remind people again of that US tax rate: 21 percent; Australia 25 percent; France 25 percent; the UK about 20 percent 19 percent; and New Zealand 28 percent."