Parker David: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
Text is incorporated into the Bound Volume 
Parker David: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
[Sitting date: 18 September 2012. Volume:684;Page:5326. Text is incorporated into the Bound Volume.] 
Hon DAVID PARKER (Labour) 
: 
 I want to ask the Minister of Revenue about clause 106 of the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill which as I understand it is part of the provisions of the Budget that picked the pockets of paper boys. Remember that line that we had? This is the provision that rather than exempting a certain level of income that could be derived by paper boys and paper girls by babysitters and the like the Government came along and said: “We are so broke as a country we are going to disincentivise young people getting part-time work by taxing them more.” My understanding if I am correct is that clause 106 of the bill is the clause that gives effect to that by saying that instead of the previous exemption there is a limited exemption of up to $200 of income per annum. 
Hon Clayton Cosgrove 
: The Uncle Scrooge clause. 
Hon DAVID PARKER 
: The Uncle Scrooge clause as Mr Cosgrove describes it. 
I would be interested if the Minister could take a call and explain the justification for this and explain why we have become so miserable in New Zealand that the only level of exempt income is limited to $200 per annum. This is in stark contrast to Australia where the first so many thousand dollars of income is not taxable whoever earns it rather than the miserable $200 per annum limit that we have under this bill. We had this Government come into power on the slogan: “Wave goodbye to higher taxes. Not your loved ones.” It was going to close the wage gap with Australia and decrease the number of people moving from New Zealand to Australia. In part that was because it said it was going to reduce the tax burden in New Zealand whereas this bill and this provision in this bill does exactly the opposite. It increases the tax burden on people who are already earning very small amounts of money. I would be pleased if the Minister took the next call and indeed told the Committee that the Government is not going to proceed with that change to the income tax law that effectively increases the taxation of young people who have got their small amounts of earnings often irregular amounts of earnings and who often do not have security of income from week to week because their hours can change and the— 
Hon Clayton Cosgrove 
: The big tax reform. 
Hon DAVID PARKER 
: —big tax reform is going to take more money off them. 
 I would also ask another question following up from what the Hon Clayton Cosgrove asked in respect of when you file returns. My understanding of the provisions in this part of the bill is that you are obliged to disclose if you have received income. If you have not received income then you are not doing anything wrong to say that you have not received income. But if you file a tax return that says that you have not received income when you have that would be an offence against the tax legislation. [ 
Interruption 
] 
One of my colleagues interrupts me and says: “What if you cannot remember?”. Well that would be a matter for the court as to whether it believed you. It would not be for the Minister or for the Prime Minister to pretend to judge a claim by someone as to not being able to remember whether they had received income or not. That would not be a decision for the Inland Revenue Department. It would not accept my word if I pretended that I had not received income even though I had received cheques in an envelope. I do not think I would be believed particularly if I had asked for them or if I had asked for the income to be split into more than one payment. I would think that it would be very unlikely for the Inland Revenue Department to believe me when I said that I had not received income. If I filed a declaration to that effect I think I would be held to account for my declaration. 
Hon Clayton Cosgrove 
: And signed it. 
Hon DAVID PARKER 
: If I had signed a declaration to that effect I would be held to account for it. If I later denied that I was liable for the truthfulness in my declaration because I could not remember I would be doubted. I think that if that were any normal person the Inland Revenue Department would not give them the benefit of the doubt and it would say that that is a question that should be put to a jury rather than the Inland Revenue Department the police or whoever it is that prosecutes these things—rather than them taking the decision as to whether it believes the unbelievable story. 
Dr David Clark 
: What if there were sworn affidavits? 
Hon DAVID PARKER 
: Well if there were sworn affidavits from people who were involved in the payment of those amounts to me and they said I knew I received them then I would expect that that would make it even less likely that I would be believed if I denied that I had received that income. That seems to me to be so obvious that I am surprised to be asked the question. But I can understand why there is a level of doubt about that because that of course is exactly the standard that John Banks and the Prime Minister are expecting us to believe in respect of other aspects of the conduct of affairs in this country. That level of double standard is— 
Hon Clayton Cosgrove 
: Despicable. 
Hon DAVID PARKER 
: —despicable. It is despicable that someone can stand up in this House in respect of other legislation and say that they have no responsibility for a lapse of memory. They do not have to account to Parliament or to others for the lack of credibility. They do not have to respond to the statements by other people that cast into doubt the unbelievable statements that they are making anyway. 
I would ask the Minister to take a call and explain the point of principle that is different in respect of taxation legislation and explain why if I received income and failed to properly declare it for income tax purposes there should be a different standard in respect of income tax from that which is applied to political donations in other parts of the law. We know that different standards are being applied in respect of different areas of the law because we have seen it in respect of the investigations into the Hon John Banks in respect of campaign donations that he received and that the evidence shows pretty clearly he knew he received yet he claimed they were anonymous. If that is permissible in respect of donations for political parties that are meant to be subject to a limit or even when they are not within the limit they are meant to be publicly disclosed why is it that we have a different standard in taxation legislation where people are held to account for the honesty or otherwise of the statements they make as to the receipt of income? 
This is relevant to Part 3 because it is Part 3 that imposes obligations on people to return their levels of income and as Clayton Cosgrove said earlier to keep copies of these documents. If they are submitting them electronically they still have to keep an original copy that bears their signature. Why is that? Because they are held to account for what goes in under their signature. If that is good enough for taxation and if that is good enough for the tax system why is it not good enough for rules that are meant to keep New Zealand free of corruption to keep political operators from being unduly influenced by donations and to keep a level playing field between candidates so that one person cannot cheat on the system by spending more in their election campaign than the nominal limit while someone else complies with the rules? 
One of the ways you do that of course is by having proper disclosure as to the amount of donations. In terms of avoiding corruption and avoiding the allegation that people are effectively selling policy for money they are meant to disclose whether they know who the money is coming from. In respect of the tax system it is clear that you have to make those disclosures. The sorts of excuses that are being used by the Prime Minister John Key and by John Banks in respect of political party donations would not stand the tests in respect of this tax legislation. I ask the Minister to take a call and to explain what is the point of principle that says we should be stricter in respect of our tax rules in the enforcement of electoral declarations. In fact in some ways the declarations are not quite as clear because all you are doing is saying “This is my income.” 
The other declaration that Mr Banks swore—