Goldsmith Paul: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — Second Reading 
Text is incorporated into the Bound Volume 
Goldsmith Paul: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — Second Reading 
[Sitting date: 02 August 2012. Volume:682;Page:4278. Text is incorporated into the Bound Volume.] 
PAUL GOLDSMITH (National) 
: 
 We had to listen again to that great Australian Russel Norman talking about economics. Circa 1955 Eastern Europe was the feeling I had there. Here we have supposedly the Government taking the tax off the high-income earners. We have got a tax system now where three-quarters of earners are paying no more than 17.5 percent in personal tax and a big chunk of that group would be paying no income tax after Working for Families is taken into account. But that is not good enough for Russel Norman. I just wonder what he would be really wanting to have as the top tax rate. He would probably want a 75 percent top tax rate like Francois Hollande or something like that. Perish the thought for the country if that man became Minister of Finance in a future Government. 
The Labour research unit has obviously got its lines very well organised. Everybody over there talks about tinkering. That seems to be the word that they have been told to get across—“tinkering”. Well this bill the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill which we are talking about here at its second reading is all about tax maintenance. The last thing this country needs right now is to be lurching all over the place with madcap new taxes as proposed by the Labour Party at the last election. The last thing we need is a capital gains tax. It has still never been explained to me how sticking a new tax on the productive sector like small companies farms and all those sorts of things is going to somehow improve economic growth and entrepreneurialism in New Zealand. 
Then Labour was going to undermine the GST system that we have here which is the envy of the world. Our GST system is consistent right across the board. Everything is done the same way. There are no exceptions. They were going to undermine that by fiddling around with fruit and vegetables. No doubt if they had the chance they would return the top tax rate up to 39 percent or 40 percent and open up a gap between the top rate and the trust rate which Michael Cullen did previously which grossly distorted the system led to a whole lot of avoidance schemes and undermined the integrity of the system and yet they have not learnt from that. I am sure if Russel Norman got his chance he would be widening and confusing all the tax rates leading to an undermined system. I heard in the last speech that we are now going to start taxing water and he is thinking about how best to manipulate the currency. I can just imagine him watering the milk and trying to do a good idea there. 
This Government got the basic tax settings right back in earlier Budgets where we did the tax switch focusing on lifting tax off work and income and putting more of it on to spending and getting that alignment right so that the economy is focused on making work. It never ceases to amaze me in the Finance and Expenditure Committee that we talk about smoking and most of the members understand that if you actually tax something you discourage it and so they are all happy to put the excise taxes up on cigarettes—fully understanding and believing that if they do that it will discourage people from smoking. But they never take the next logical step and understand that if you increase the taxes on working you will discourage people in that area as well. They do not seem to follow that logic. I just encourage them to think about that as we go on. It amazes me. 
Look at where we have got to on tax. We have a competitive tax system internationally which is tilting the economy away from borrowing and spending and towards saving and investment. It is a simple tax system. Two-thirds of the cost of the income tax went into reducing the bottom two tax rates. That is something that Russel Norman never mentions. As I said three-quarters of the earners are paying less than 17 percent in personal income tax. We have got a company tax rate at 28 percent which is internationally competitive. A family with two children in this country can earn up to $50000 a year and effectively pay no tax when Working for Families is taken into account—$50000 a year. So I hardly think this is a land where lower-income earners are oppressed and are carrying an unfair burden. This is a land where we have got a very good and very equitable spread of the burden of taxation. 
Drilling down to some of the specifics of this bill that we have before us at its second reading the main purpose of it is to simplify tax filing requirements for individuals and support businesses in handling their tax obligations electronically. We have seen here that we have introduced a number of supports giving people in the business sector more flexibility about how they use online and electronic media in the course of managing their tax affairs. Another area is closing up a loophole that has emerged in the last few years where people have started cherry-picking their tax returns. If they realise that this year they have got a return due they pop it in but if they have had 3 years before where they actually had to pay a little bit of extra tax they are not paying that. So this bill goes in a logical sense to say that if you are going to pick one year actually you have got to cover the last 4 years and we will even it out. During the course of the select committee we did hear a number of arguments about that and have made some changes so that under the 4-year rule you will not now incur use-of-money interest or penalties from the previous date due. We thought that was a little uncalled-for and that change has been recommended by the committee. 
The application date for changes to the profit distribution plan is another area of this bill. It was interesting to see Mr Parker defender of the big corporates on that score. But we did listen and deferred the implementation of that provision from 1 July to 1 October which has given those companies more time to make the changes necessary. The application date and savings provision for the proposal to charge GST on late payment fees will be deferred again from 1 April to 1 January. Again furthermore GST will not be charged on late payment fees if the underlying charge is exempt. So some of those things are all on the whole good solid maintenance of a tax system that is working well and that is all about National being firmly focused on lifting New Zealand’s economic performance and taking this country to the brighter future that its people deserve. Thank you.