Foss Craig: Taxation (Business Tax Measures) Bill — Second Reading 
Foss Craig: Taxation (Business Tax Measures) Bill — Second Reading 
[Volume:652;Page:1932] 
CRAIG FOSS (National—Tukituki) 
: 
 Good grief what a difference an election defeat makes! Suddenly we have members on the other side of the House in favour of tax cuts. The cuts are maybe not big enough wide enough or deep enough at the moment but those members are in favour of giving back—or at least not taking in the first place—the excess revenue that while they were in charge they did not need to take in the first place. But now that we are in a recession they are actually trying to expand the measures. So I do welcome that road to Damascus experience. 
I would also just like to note that the previous speaker David Cunliffe talked about some mythical place called “the Hawke’s Bay”. It is “Hawke’s Bay”—full stop. It is “Hawke’s Bay” not “the Hawke’s Bay”. 
Hon David Cunliffe 
: That’s pedantic even for this House. 
CRAIG FOSS 
: It is pedantic I know and I will come to other pedantic matters in a minute. But I note that we are on the second reading of the Taxation (Business Tax Measures) Bill and I will refer to what I said in my first reading speech. I noted that there had been cross-party support indicated for this bill and I am very pleased to acknowledge that that was followed through on. The Minister the Hon Simon Power also alluded to that. I freely and totally acknowledge the full cooperation of the members of the parties involved on the Finance and Expenditure Committee not only for facilitating the process of getting the bill quickly back into the House for its second reading but also for the way in which all members enabled the committee to work through the process. We all across the parties recognised the urgency of getting some cash flow back into the economy and I am more than happy to be on record as saying that. I thank members again for following through on their early indication of support for the bill. 
The bill has been reported back without any substantial amendments. There had been robust discussion about the bill and various parts in it but most debate and discussion was about whether particular rates should be higher or thresholds lower etc. Again I acknowledge that there was good and fulsome cooperation and very good advice from officials on the way through to get the bill to the stage we have now. 
But there was some discussion in the committee that I am sure the previous member who spoke David Cunliffe will be very interested in. He just talked about being pedantic and there is a clause in the bill that gave rise to strong robust debate—clause 21 in Part 1 under which section RZ5 is replaced. There was very strong discussion—and it was an interesting point—around the words “instead of” in new section RZ5(3)(a). The use of the words “instead of” was quite controversial—and I tell members I am looking at the track-changes version of the bill. There were various discussions about the words “instead of” and members were quite interested in the knowledge of some on the committee about those words. It was originally alleged that the words had never been seen in any other bill or other legislation but the committee did in fact discover or become aware of another bill in 1959 and numerous bills since containing those words. I do not mean to be facetious but the word pedantic was talked about a minute ago. However I will stop there and allude again to the good intent of everyone on the committee. 
I note that the previous speaker talked about some other measures Opposition members perhaps will want to discuss at the Committee stage. We will wait with interest to see what they might be. I suggest that if members go through the commentary they will probably get a good clue as to the direction that other members might be suggesting for different improvements. Members made the point that one thing talked about in the commentary—and I will talk to this—is that many of the measures here formed part of the larger Taxation (International Taxation Life Insurance and Remedial Matters) Bill which was introduced in July last year. But in the commentary we note that yes it is acknowledged that a number of initiatives in this bill reflect proposed changes in previous legislation or in Inland Revenue work streams or discussion documents—and as we know the previous administration was very very good at those. That is the key difference between the previous administration and this new Government; we are focused on action not words on implementing not discussing and on not having another review. 
Actually this particular bill did not form part of our 100-day plan but it may well have. Again I appreciate the fact that members opposite are voting for it but it took their getting into Opposition to expedite the bill and to try to make the tax-friendly parts of it even more so and it took them 9 years to even get around to thinking about it. A National Government that had gone through the period of economic commodity-driven growth the Labour Government had gone through would have brought these measures in probably as a matter of fact. In fact if these measures had been in place sometime in the last 9 years at the height of the commodity-driven surpluses businesses in New Zealand right now would be in a much better position to work their way through the current recession which unfortunately we did go into a year or so ago. 
Other members have talked about the recession. Even since the introduction of this bill a month or so ago global and domestic conditions have deteriorated—unfortunately. But this example and a suite of other measures are part of the programmes the National Government is bringing in to help us through the recession and they are but small steps to a greater whole. I just want to touch base on some of those other measures because this bill particularly targets small to medium sized enterprises at the smaller end. But personal tax cuts were announced and put in legislation prior to Christmas and a programme was announced yesterday to particularly help larger enterprises with 100-plus employees. Personal tax cuts which formed part of our plan have been implemented. Infrastructure spending on housing schools and roads has formed part of our plan and is being implemented. The Minister of Education has announced about $41 million I think of new spending or sped-up spending in the education sector today—there is action and activity not just more discussion papers. A part of this plan also has been the introduction of amendments to improve the Resource Management Act which are mostly just to reduce compliance costs and speed up the process. There is the ReStart package which was announced prior to Christmas to help people through redundancy. We have also had the plans announced in the last few days by the Hon Paula Bennett about the 9-day fortnight and the issues around that. These things must all be looked at as a whole; they are but part of our solution and our measures to be put in place to help New Zealand weather its way through the sharpest edges of the recession. We do not just want to discuss to have discussion papers and to have proposals as the previous Government did. The 100-day plan also had many many actions that will assist small businesses to get through this recession. 
It was very interesting to hear Dr Bollard today speak on the Monetary Policy Statement and to hear his comments around the official cash rate reduction. He acknowledged as many other forecasters and commentators have now acknowledged the seriousness of the current state of the books of New Zealand—of what this Government inherited. Putting aside for the moment the debacles in and around the accident compensation scheme housing—and the list goes on and on—the bottom line is that the underlying costs and liabilities are up across the board and the tax revenue is down. But Dr Bollard noted today that the fiscal impulse the stimulus measures coming from the lower interest rates the fiscal actions and stimulus that this Government has put in place—not just talked about putting in place—plus the official cash rate announcements today and a lower currency mean that he is very hopeful that New Zealand will start to lift its way out of this recession in early to mid-2010. That is fantastic news because this Taxation (Business Tax Measures) Bill brings in measures that will assist New Zealand to come out of recession quicker sooner and better than many many other countries around the world. I congratulate my colleagues and the Minister of Revenue on bringing in this bill. I am looking forward to voting for this bill. Thank you.