Foss Craig: Taxation (International Taxation Life Insurance and Remedial Matters) Bill — Second Reading 
Foss Craig: Taxation (International Taxation Life Insurance and Remedial Matters) Bill — Second Reading 
[Volume:656;Page:5424] 
CRAIG FOSS (National—Tukituki) 
: 
 In speaking on the Taxation (International Taxation Life Insurance and Remedial Matters) Bill I acknowledge the two earlier speakers and particularly the Minister for finally getting this bill to the House for its second reading tonight. That is a relief. There are 824 pages in this bill. I am not quite sure but I think the bill was about 700 pages long when it had its first reading. The Minister in his speech has just announced that a Supplementary Order Paper will be tabled during the Committee stage. So what are another few pages to add to the 824? I reinforce and continue the earlier speakers’ thanks to and acknowledgment of the Minister and of the Labour Party spokesperson on finance the Hon David Cunliffe for their hard work. 
I also thank the Finance and Expenditure Committee of which I am the chair for its hard work. I am only as good as the rest of my team from across the parties on that committee and I fully freely and openly acknowledge their cooperation. This bill was introduced by the previous Government but we did have to stress our own time frames. We paid strong attention to making sure process was followed although we tried to get things through as quickly as possible while also having regard to the complexity of the legislation before us. As previous speakers have noted this bill was carried over from the last Parliament. It was introduced in July 2008 and in between times we had an election and a change of Government. We had a lot of stress and strains late last year and early this year before getting to the point where the select committee opened the submissions process in December I think of last year and extended it to—just from memory—the end of February 2009. There were numerous submitters—60-odd—to the committee and many written submissions. 
I also acknowledge the many officials who have worked on the bill. There were times when the room was overflowing with officials whose areas of expertise were the various areas that this bill covers. 
I would like to read a bit of the commentary on the bill. I know we will touch on this issue during the Committee stage but the commentary reflects very well the feelings of the committee as we did our best to move through this bill and get it back to the House. I do acknowledge that the Minister also acknowledged and generally agreed with this point but if members will excuse me for a moment I do want to put it on the record. The select committee in its report back on the bill notes: “The proposals contained in the bill are significant and complex and cover a wide range of taxation issues. The size of the bill and the depth and breadth of the material it covers have made our consideration more difficult than it might have been otherwise. In trying to meet the report due date for the bill”—which was very tight given the complexity and size of this bill—“we and our committee consideration processes have been put under considerable pressure. We do not consider it desirable to put a number of very distinct and significant proposals into one bill simply because they relate to one area of law. In future we would prefer to see such proposals introduced to the House as separate more manageable bills. If such proposals are not divided sensibly the House might wish to accord significantly more that the usual consideration time to committees charged with considering such bills. Ministers should remain mindful that if departmental advisers are appointed to advise committees on such bills they will need to meet committee deadlines and information needs under pressure.” 
I do take that point and note it and I put it on record in  
Hansard 
. I know that it is stated in the commentary on the bill but it does reflect the sentiments of all committee members. We took that on board. We got the bill back into this House and yes there are some quite significant changes compared with the bill as it arrived at the committee during the last Parliament. But—and I acknowledge that the Minister did tend to agree with this; famous last words—I do reiterate the points the committee made on page 3 of the commentary on the bill. That was a unanimous view from the committee. 
I also note that because of the complexity of the bill when we tried to deal with some of the changes we did something unusual—at least unusual in my memory in this House which is of only the last 4 years. As well as our normal independent adviser for taxation issues we appointed an independent drafting adviser because as members can imagine with 800-odd pages of legislation once we nailed it down to maybe the second or third level we needed to be sure as much as possible that the drafting followed the committee’s intent and was robust. Having said that there is a Supplementary Order Paper coming I understand. But I do acknowledge our independent drafting adviser. We will follow that process with other taxation bills as they arrive at the committee. 
There are significant changes to the bill originally sent to us. As the previous speaker noted the tax changes for small business have all been taken out of this particular bill. They were made part of the Taxation (Business Tax Measures) Bill which was put forward in February of this year and those measures were passed in March 2009. They were given some urgency because of the need for fiscal stimulus and measures to assist New Zealand as we move through the recession. Those measures have all been taken out of this bill as they have been dealt with in other legislation. 
One of the key changes to the bill is simply to the application dates. When this bill first came into the House the application dates were 1 April 2009 mostly. It became patently obvious as the time for submissions was extended that such dates would make life very difficult for the areas businesses and sectors that this bill affected—and of course there were many of them including the Inland Revenue Department as it tried to manage with what would have turned out to be retrospective application dates if they had not been changed or if the committee had not considered it necessary to alter them. I acknowledge that on 24 March we received a letter from the Minister. He made some wise suggestions as to how we might deal with the application dates for various sectors. I acknowledge industry officials who were constrained in their lobbying if you like when bringing to the attention of various MPs Ministers and the press the need to change some of the application dates. I acknowledge their professionalism because there was a fair bit of tension not only in the fiscal sense and revenue sense but also in a technology sense as various areas particularly those in and around the insurance industry had to start to redo their accounting or start to use a different accounting methodology. 
Previous speakers have gone into a bit more detail than I will in this short speech. Although the bill is very complex and very wide-ranging there was constant reference to the need to try to make it as taxpayer-friendly as possible. The question we asked was always whether this bill was better than the existing legislation given the policy direction the Minister was trying to put in place. We will have to see whether this legislation stands the test of time but given the expertise of the officials the depth of their work and the time spent on it I am confident that we may well get there. I certainly hope so. 
The Minister outlined the principles in and around this legislation. I want to quickly touch on them before I sit down. When the select committee was looking at the dates it kept in mind that the key principles of the legislation were firstly providing taxpayers with as much certainty as possible given the processes and time frames of Parliament; secondly providing benefit for taxpayers as soon as possible—this bill is taxpayer-friendly—and thirdly protecting the tax base by providing anti-avoidance measures. This Parliament and this Government particularly must keep a careful watch on the fiscal situation and particularly on the deteriorating revenue situation. 
I have one more point. The “associated persons” part of this bill got a lot of press coverage all of last year and in the lead-up to this one. It was quite interesting that one particular submitter made a very strong submission and tried to turn every MP into a trustee of a trust arguing that therefore we were all associated persons in relation to I think his wife’s—or someone’s wife’s—property. Actually the absurdity of that brought attention to that point which was noted. It was a very strong submission but in fact officials and advisers acknowledged later that that absurd situation already existed and that this particular bill improves on the current law.