Robertson Grant: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — First ReadingText is incorporated into the Bound VolumeRobertson Grant: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — First Reading[Sitting date: 13 October 2015. Volume:709;Page:7163. Text is incorporated into the Bound Volume.]GRANT ROBERTSON (Labour—Wellington Central): I really do want to acknowledge the member who sat down David Bennett for doing his level best to actually talk about a tax bill. We know in the Finance and Expenditure Committee that he is the guru of taxation in the National Party. He sits there like some sort of maharishi figure at the front of the Finance and Expenditure Committee guiding us—silently—towards our understanding of the tax system. That speech really typified the depth of knowledge. The level of analysis that he brings to the committee is sharp—razor-sharp analysis. His fellow committee members sit in awe—either that or shock we cannot tell—when he is chairing the committee on a weekly basis. Chris Bishop has not even been at the committee for the last two bills. He cannot cope with it. He cannot cope with the aura that is around the chair of the Finance and Expenditure Committee a man of remarkable expertise in these matters. Really there is little else to say after hearing David Bennett’s speech because he covered it all but perhaps I can fill in one or two minor gaps—for instance all of the clauses of the bill—and then we will see whether Mr Bennett has any further contribution after that.This is a bill that the Labour Party will be supporting. It has got a good title—the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. First phase simplification is definitely something that the chair of the committee is able to help us on. We understand that the bill has in particular three goals: easier communication in terms of the whole tax system simplifying the tax rules and the sharing of information. It is quite remarkable when we look at the bill and the explanatory notes that have been provided for us that one of the main things this bill attempts to do in terms of improving communication is to remove references from the Income Tax Act the Goods and Services Tax Act and the Tax Administration Act that restrict interaction with the tax system to paper-based transactions. So just reflect on that for a moment: there are multiple clauses in these three Acts that currently mean that you can communicate with the Inland Revenue Department only via paper-based transactions—not even electronically not even winding up the party line on the telephone and asking whether you can be put through to the department but paper-based transactions. That is what we are left with in these Acts. So we congratulate the Minister of Revenue and the Inland Revenue Department on bringing this particular part of the legislation through to us. We think that the goal of removing any legislative barriers to receiving and sending electronic communications is an important step towards bringing the Inland Revenue Department and the tax system into the 21st century if not the 20th century.There are a number of changes within this section. One that we will be looking out for is around clause 74 which establishes this communications framework and actually facilitates flows between the Commissioner of Inland Revenue and an individual taxpayer. It does transfer some obligations that are currently with the Minister to the commissioner. It is always important I think when we are moving something from the Minister where we have accountability mechanisms through the House here and so on to a commissioner that we are careful about what those particular provisions will entail. The other interesting bit is that electronic signatures can now be accepted. For Mr Bennett’s benefit electronic signatures are like writing a signature but are sent through the computer on the interweb. So Mr Bennett we will practise in the committee writing our electronic signatures so we can all see that. So the Inland Revenue Department will be able to accept electronic signatures after this. That is important. It is all very well to facilitate electronic communications and digital communications between taxpayers and the department but if at the end of the day you still had to print them off and sign them by hand that would be ridiculous. This is another important provision that we have in the bill.There is a large set of simplification measures around tax rules including around the employee share schemes which I know the Minister spoke about in his contribution. Simplifying tax rules is something that I think we would all want to facilitate and encourage. I would join with my colleague Clayton Cosgrove in noting that the last two bills that have been before the select committee have not really met that standard if we are honest with ourselves particularly the brightline test bill which was as my colleague has said opposed by virtually all of the submitters all of the large tax accountancy firms all of the large law firms and the New Zealand Law Society. They all said that one of its main flaws was its failure to adhere to the idea that a tax system should be clear and simple. In fact it reached the point where the senior partner of Ernst and Young one of the largest tax firms in Wellington said that he was “professionally confused” by the Government. He was “professionally confused” by the legislation that the Government was putting forward. He thought it was contradictory but fundamentally he thought that it failed that test of simplifying tax rules. We like the rhetoric here we like the goal but we will be watchful and mindful given what has happened in those two pieces of legislation to make sure that it actually is simplifying the rules as called for.The third matter is around the question of the sharing of information. I do want to just spend a little bit of time on this because—a lot of MPs would have had this—members of the public are hugely frustrated when they deal with one Government agency fill out a big series of forms do that go and visit another Government agency the next week and have to fill out all the same forms all over again. It becomes an absolute waste of time whether it is done electronically or whether it is done in person. So getting past that getting ourselves to the point where people can simply have data that is entered and used in a number of different settings would be very useful. However with all approaches to sharing information like that there are risks. I note that there are changes in this legislation to the sharing of biometric information. A lot of the material that is kept by the Inland Revenue Department is around voice recognition. How do we make sure that that is stored securely? There are clear and obvious risks. We have had information sharing from Government departments that has been unintentional in recent times. Information has been shared with random passers-by on Lambton Quay by some public agencies in recent times.So if we are going to enhance and increase the amount of information that is being shared then we on this side of the House do want to be absolutely sure that we have got the right rules and regulations built around that and that there are safeguards in the sharing of that information because although we have many constituents who are concerned about having to fill out multiple forms we equally have people who come to us very concerned that information that is personal to them is being shared when it is not necessary. I do see in the drafting of the bill that an attempt has been made to define “necessary information” for the tax system to operate. Again the responsibilities for that now fall to the commissioner. The current commissioner is somebody who we know will be able to withstand any pressure around the release of information but we need to make sure that the rules are there to facilitate that.There are a number of other miscellaneous matters in the bill in particular around KiwiSaver with a number of amendments there. Again there is the question of sharing information about KiwiSaver members for account maintenance purposes between the Inland Revenue Department and the scheme providers. Obviously this would be useful but equally we are then seeing information moved from effectively the public sector to the private sector. We need to make sure that there are the appropriate rules built around that. There are a couple of curious changes related to KiwiSaver. One of them is around a provision that would allow minors who have been incorrectly enrolled into KiwiSaver to opt out before their 19th birthday. I will certainly be asking the officials at the committee just how many people have found themselves unwittingly enrolled in KiwiSaver as a minor. It seems somewhat unusual if that is the case and I am wondering whether perhaps there are many people who have found themselves in this situation. Then there is a question of people being enrolled as children by their parents—perhaps they were upset about being enrolled in KiwiSaver. I kind of find that hard to believe but we have actually—[Interruption] Well that is right but we have legislation here that will deal with that.Overall we look forward to the debate on this bill. We look forward to the astute stewardship of David Bennett who will be able to answer all of the questions that I have raised today on the question of the details in tax legislation. If he cannot he will do what he always does and ask Chris Bishop.