Bayly AndrewANDREW BAYLY (National—Port Waikato): Thank you Madam Speaker and yes we are talking on the third reading of this tax bill that has been pushed through under urgency. I think it sort of started with the Government making an election promise that they were going to increase the top marginal income tax rate and that's the prerogative of the Government. Where we have ended up though is something quite significantly different. We have ended up with a bill that does include that but much more significantly—I think for all the tax advisers or the accountants and all those who have a trust—and as my colleague quotes 240000 of them are all set up—they are a legitimate corporate structure so there shouldn't be any aspersion that they're not there for proper legal means. But where we've ended up with this bill is some of the most Draconian information powers that have been assigned to the Commissioner of Inland Revenue on the pretext that the Minister is concerned that there may be tax avoidance through some trusts and giving rise to these amazing rights. Of course the Minister of Revenue also has the dual role as Attorney-General and these are so Draconian that in fact the Attorney-General had to write to himself actually subsequently outlining the Draconian nature of the information disclosure requirements. So the Minister of Revenue the same David Parker then had to go and make an amendment through an amendment on the Table after the bill was put on the Table just a couple of hours later. So this bill is much different from what was on the election campaign. There is no doubt that it is clear that this Government will be increasing the trust tax rate over time and they've gone on a search and destroy mission to try and find that information.So what sort of happened and what's the result? The bill was presented to the House basically midday yesterday. Less than 24 hours later what the primary object of this so-called bill was was to raise money as laid out in the departmental report over the next five years or raise about $440 million per annum but in the first year it will raise about $90 million—$90 million of additional tax. What most of New Zealand doesn't realise: we are already in the grips of an economic crisis. So in the time that we pass this bill to make $90 million of additional revenue to the country this Government has borrowed about $110 million in a single day. In the last 24 hours that we have spent debating this bill all the money that's going to be gained through additional tax revenue this year has been used but hasn't even paid for the additional debt that we've created in the last 24 hours. I think the intent of this bill to raise some additional money—I can understand why the Government wants to do it but in the context of where New Zealand sits in its economic cycle where it sits with a level of debt we have at the moment this is not going to do something significantly to change the perilous financial state that we're finding ourselves in. In fact what we should have been debating today is about how we're going to grow the economy and not about penalising the more successful members of our community. The rationale behind it—it's interesting. The Minister yesterday said Look there are other countries around the world that have a higher tax rate than us" and he quoted Australia and the UK. It was almost like a badge of honour that because they're higher it's not a bad thing if we go higher.Hon Member: Yeah they're better apparently.ANDREW BAYLY: Yeah. I could say to the Minister every country around the world is trying to decrease its tax. As my colleague the Hon David Bennett highlighted the changes around reducing company tax rates is an example around the world—everyone is seeking to try and reduce those rates because they know they have to remain competitive. And here we've got a Government for some reason thinking "Hey it's not a bad thing to increase them." It's interesting and I've heard some of the speakers from across the House talk about it but in the IRD report they actually talk about it. So this is not a political statement; the advisers are talking about "If you do this there will be difficulty in attracting foreign investment into New Zealand". New Zealand needs foreign investment. It needs the right type of investment but it needs foreign investment desperately to help for infrastructure growing our businesses—all those sorts of things. The other thing is we need to attract highly talented people. A lot of those people will come to New Zealand and help us to grow this economy. Of course they will look at the situation in New Zealand. I heard some absurd comments from members of the Government yesterday saying "Well you know they'll come here if they want to and if not they can go somewhere else." Actually New Zealand is part of a competitive situation just like we are trying to attract new companies to New Zealand and immigrants will look at our tax structure. We actually want to be attracting those types of people that can earn that type of money because they're the people who will also contribute as much as the other types of immigrants we have coming to New Zealand to make sure that New Zealand can grow its way out of this financial hole that we now find ourselves in by a much quicker route and faster route. So there's some big parts in this bill and I'm not going to cover them all here because there are other speakers. But I think the biggest issue around the first bit which is raising the minimum tax rate to 39 percent is that it strikes at the integrity of the tax bill. I listened and we have got two PhDs in the House both so-called tax experts and both of them yesterday—I'm looking at Dr Deborah Russell and Dr Duncan Webb—who dismissed and said "Hey this is not a complicated bill. All you have to do is pass this bill even though it affects seven or eight other pieces of legislation. Hey it's easy. We just do it and it's no problem." Well actually that's not how tax systems work. Having been on the Finance and Expenditure Committee for the last six years every year as has been noted we passed a number of tax bills trying to make sure that we maintain the integrity of the tax bill. We've got a fantastic system in New Zealand. It's the envy of the world. But we continuously try and make sure that we capture as much income and there's no leakage out of that system. This bill strikes at the integrity—and again you don't have to listen to me; it's written by the officials in the report highlighting this as a major major issue. The reason why it's becoming even more paramount is we have now got the highest differential—if this bill is going to go through and I presume it will—between the top tax rate of 39 percent and a company tax rate of 28 percent. That's 11 percent differential. What that means: that is the highest level of differential between those two rates for the last 20 years. That is the potential unfortunately—and every country has the same issue; it's not New Zealand. But that is the potential for the erosion of our tax system. That is what the officials have opined about and spoken about in the report. I think it's a massive issue and no doubt we will be back at the Finance and Expenditure Committee in a certain time fixing this bill up. It's already sort of catered for in the bill because in the bill there is a requirement that actually there's going to be further consultation on integrity issues during the course of 2021 where further measures—and it just uses the words "further measures"—around improving the tax integrity will be implemented and will be effective in the year of 1 April 2022. That just tells you everything about this bill and it's had so little consultation the tax community is going to be in an outrage. There's so many people going to be affected by it who have legitimately had their own structures and I just think we are rushing through something that could have been done at much less haste. If the Government wanted to achieve it that's fine but we're going to end up with some significant problems."