Tremain Chris: Income Tax Bill — In Committee Third Reading 
Tremain Chris: Income Tax Bill — In Committee Third Reading 
[Volume:641;Page:11286] 
CHRIS TREMAIN (National—Napier) 
: 
 I want to take up from where the previous speaker left off. When he started his speech he was talking about one of the two members from Hawke’s Bay—the respectable and hard-working member from Tukituki Craig Foss. He is the electorate member I would add in that regard. Mr Foss in his speech talked largely about the Income Tax Act and the structure and the framework within which the tax system works within New Zealand. He talked about that structure collecting some $52 billion within the New Zealand economy. Much of that tax take—probably a disproportionate amount of that money I would say—comes from the Hawke’s Bay and much of it is due to the apple industry. I am pleased to be able to say that that industry pays its fair share of tax under the auspices of the Income Tax Act. I am also proud to say that that industry is on the precipice of being able to pay larger tax through higher profits from the actions that Mr Foss and myself began 2 years ago when we helped to lead the Apple Access Group protest to Parliament to shake the shackles from this Government for prompt action and to get it to take finally an action against the World Trade Organization. 
Finally there has been a result and finally there is an opportunity for our apple growers from Hawke’s Bay to take their produce across the Tasman. There is potentially an extra $15 million in revenue across the Tasman. There has been a huge contribution and I think it is excellent. Businesses in the Hawke’s Bay like the pack-houses Apollo Pac Ltd and Crasborne Group Ltd under the auspices of the income tax legislation are now on the precipice of being able to take on that Australian market to pay more taxes. But the point I want to make is that exports such as from those fine apple producers make up only 29 percent of the GDP in this economy now. It is one of the smallest percentages of GDP in the OECD in terms of exports so there is no doubt that we have to increase those exports. In fact in this country we have only 125 companies that export $25 million or more in product. 
Two fine companies in my own electorate are Vectek Electronics Ltd and Future Products Group Ltd. They are doing an amazing job in that regard despite the difficulties they have within the current tax regime. The Future Products Group is doing an amazing job. Can I tell members that story. This company started from two people and now has a contract on the west coast of the United States of America to put in 500 McDonald’s McCafé franchises. That is an amazing success story. 
But these companies in growing to the export market face some significant difficulties. Obviously we have a small domestic market and our geographical isolation is difficult. It is imperative that we have a best-practice benchmark economy. The way we charge income tax is critical to these organisations. I thank the officials for the hard work they have done on the rewrite of the income tax legislation and Therese Turner and Sir Ivor Richardson have done a fantastic job on the review of it. But philosophically these companies are still paying too much tax and individuals in this country are paying way too much tax. They are not in a great position to try to provide a benchmark economy. 
We have seen recently an income tax drop from 33 percent to 30 percent. That is a good thing. But in saying that I point out that partnerships and sole traders missed out on that opportunity and they are the biggest contributors in terms of numbers of business organisations in this country. They did not get the tax break but they got the sting in the tail of an employer contribution to KiwiSaver which they will now have to pick up over the next 4 or 5 years as well as having no tax deduction. 
In summary I say that we need a best-practice benchmark economy. In terms of the rewrite of the tax legislation this bill has tried to make the legislation clearer more concise and more easy for tax practitioners to understand and I think it has done that. In that regard the National Party supports the tax rewrite.