Tremain Chris: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — Instruction to Committee In Committee 
Tremain Chris: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — Instruction to Committee In Committee 
[Volume:630;Page:2029] 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to speak on Part 3 and to talk about further progress towards improving the position of business in New Zealand. I specifically want to talk about the provisional tax alignment dates with GST. Nothing is surer than the fact that we need legislation like this to take our businesses forward. Although our OECD rate still puts us at No. 21 out of 30 countries we need a raft of legislation like this to take us up that ladder and put us into the top half of the OECD if not higher. There is no silver bullet that will take us up that list so it is fantastic to see bills like Wayne Mapp’s Employment Relations (Probationary Employment) Amendment Bill coming in and having a major impact. Those members in this Parliament who have employed people in their life will know that legislation such as that enabling a probationary period will have a major impact for employers and employees in this country. It is interesting to quote one example. Recently I was at the Wattie’s factory in Hawke’s Bay. It is the fourth-largest Heinz factory in the country. People there made significant compliments about that legislation and said that the company closed a factory in Australia because employment legislation over there had got out of control. So I compliment the Minister on bringing in this bill. 
I particularly want to talk about the provisional tax period and the alignment with GST. I want to focus on clause 161 because I think it is important. The aim of that clause is to reduce the tax impediments for businesses and to make changes to the way that provisional tax and GST are paid and the way that provisional tax is calculated. It is a major step forward for business in New Zealand. 
 Perhaps I can use an example. It is a pity that the former member for Tauranga is unable to be here tonight because I want to use the example of a company that has a turnover of around $200000. Under the current situation it would be looking to pay provisional tax in July of $22000 in November of $22000 and in March of $22000 adding up to the $66000 that would be required for provisional tax. That does not allow the company to account for any unexpected major changes that may have occurred throughout the income year. For instance let us say the company was involved in a court case that happened late in the year in January and it incurred a $40000 fine. That is an expense that a company would be unable to predict. It would have had to pay provisional tax on the basis of its estimated income throughout the year without understanding how that $40000 would impact on the business. Right now being able to pay on the GST basis would allow the company to take in that additional cost later in the year and account for it so that the company would be far better able to predict its income tax liability throughout the year. I think that is a good step forward and it would certainly help the former member for Tauranga with his case that is before the courts. 
The other important provisions in Part 3 are sections 185C and 185D inserted by clause 189. Again I compliment the Minister on the subsidy for payroll agents. That is a step forward for small business. Many small businesses struggle with the compliance costs around meeting the ongoing issues of employing people paying PAYE and dealing with accident compensation. I think that this is indeed a step forward and I would like to compliment the Minister. 
The question was put that the amendments set out on Supplementary Order Paper 19 in the name of the Hon Peter Dunne to Part 3 be agreed to. 
Amendments agreed to.