Shaw JamesJAMES SHAW (Co-Leader—Green): The Green Party will also be supporting this bill's referral to a select committee but as with the Labour Party we have got a number of reservations more about what the bill does not contain than what it does contain. The previous speaker Mr Bishop referred to some of the things that the bill does do—in particular in relation to starting the moves towards tightening up around multinational tax avoidance—and of course we know from the last 8 weeks or so that multinational tax avoidance is one of two very big public events in relation to the tax sphere. The other one of course is around foreign trusts. This bill is the bill that would have addressed the laxity around New Zealand's foreign trust regulatory regime and our transparency regime had the Government not 2 years ago killed off the Inland Revenue Department's proposed review into how we regulate foreign trusts in New Zealand. I just want to take a moment to talk about some of the context that has led up to this bill being introduced into the House and some of the things that we would like to see in the bill as a result of that time line. Back on 15 August 2013—oh dear he has got his green book out—the department warned the Government about the high risks from New Zealand trusts. Mr Assistant Speaker I am just going to quote here. It said in that report that our foreign trust rules were being perceived as a tax haven and were damaging to our international reputation. It said that foreign trusts were being used by people to avoid paying tax not just in New Zealand but in fact anywhere in the world. It said that New Zealand's current regulation was not good enough and that the regulation made it difficult to enforce compliance with the rules and the department questioned the adequacy of our disclosure and record-keeping requirements and its ability to realistically reform the industry and to make it comply. So there were a number of concerns there. On 2 December 2014 of that same year Ken Whitney of the Antipodes Trust Group wrote to Minister McClay on behalf of the foreign trust industry concerned about the Inland Revenue Department's view of the industry—Dr David Clark: Who was that?JAMES SHAW: That was Ken Whitney of the Antipodes Trust Group on 2 December 2014. In that email he claimed that he had spoken to the Prime Minister and that the Prime Minister had assured him that there were no plans to change the status quo but that he should speak to the then Minister of Revenue Todd McClay. The very next day Minister McClay expressed concern to Inland Revenue Department officials that their report might include removal of the foreign trust regime and an official from the department responded saying that they will bear this in mind in how we write the report." Then on 12 December of that same year the Inland Revenue Department produced another report on foreign trust rules and it was sticking to its guns Mr Assistant Speaker. It said that New Zealand's foreign trust rules—you are looking at me a bit funny Mr Assistant Speaker.The ASSISTANT SPEAKER (Hon Trevor Mallard): No you said "Mr Assistant Speaker" so I was just making sure that you had my very undivided as opposed to divided attention.JAMES SHAW: Feel free to divide your attention Mr Assistant Speaker. It said that New Zealand's foreign trust rules were damaging to New Zealand's international reputation so the department had a second report saying that in fact its recommendations for reform were even stronger than they had been in the previous August. A few days after that Todd McClay met with representatives of the foreign trusts industry unaccompanied by Inland Revenue Department officials in Auckland at the offices of the Antipodes Trust Group company. That group sought from Minister McClay "a commitment from the Government as soon as possible that it will not conduct a public review of the foreign trust tax laws …" but that it could keep on with its base erosion and profit shifting work which has actually made it into this bill. So in other words it specifically said "Please don't proceed with the review of the foreign trust industry but feel free to continue with your base erosion work." which is exactly what the Government has done as a result of that meeting. So in this tax bill it has included some measures around multinational tax avoidance and has started to tighten up that regime and has not included anything around the foreign trust review that it was planning. That group said that its view was it would "severely damage" the industry if that work was to proceed. Then on 22 January 2015 there was another letter sent to the Minister proposing another meeting and expressing how pleased the group was that the foreign trust industry was yet again meeting with the Minister who then promptly met with OliverShaw one of the other companies involved in this. In May 2015 the Minister of Revenue wrote to the foreign trust lobby group that he had been meeting and conversing with reinforcing the earlier promise that the Government had no plans to review the foreign trust tax rules and I just want to point out again that that is in stark contrast to both of those reports from the Inland Revenue Department expressing real concern about foreign trust regulation and about how actually it ought to be included in the review and thus some of those reviews would have made it into the tax bill that we are debating tonight. Mr McClay concluded: "I trust that this provides you and your industry with the certainty needed to continue to do business in New Zealand." Then on 19 May 2015 the same Inland Revenue Department official informed her staff that there would be no review of foreign trust regulation in New Zealand. The Panama Papers which Mr Robertson referred to have changed all of that of course. They have started to shine a light into a dark place.The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I am now going to interrupt the member after the member I think worked out that I have been thinking about it for some time. In a first reading members can make passing reference—it is quite a broad debate but members can make passing reference—to what is not in the bill. I have let the member run for some time because members previously including the member immediately before him spent quite a lot of time on what was not in Mr Robertson's speech rather than focusing on the bill. But I am now going to ask the member to move from making passing reference to the bill to making only passing reference to what is not in the bill.JAMES SHAW: Certainly Mr Assistant Speaker. Well the conclusion of my passing reference to what is not in the bill is that we are 2 years behind on foreign trust law reform and that ought to be in this bill. In 2013 the Green Party introduced a piece of non-controversial legislation that would have imposed a more rigorous registration and disclosure regime and we are hoping that we will be able to introduce that into this bill in later stages of the bill's passage through the House. Those measures would help to restore international confidence in New Zealand's international reputation as a well-regulated and transparent place to invest and trade. So I will explain given all of the absence of proper reform around foreign trusts why we are supporting the bill through the House and certainly to its next stage. It is because it does go some way as I said earlier to closing down some of the look-through company abuses that have been occurring and some of the profit sharing from multinationals which has been recommended by the Inland Revenue Department. It is compromised of course because the National Government is not prepared to go as far as the department wanted nor as fast but it does move us in the right direction. The Government has of course known about multinational tax avoidance for many years but has been dragging its feet so it is good to see in this bill some progress around that. Budgets in 2016 in the UK Canada the United States and Australia all saw new measures to close some of the biggest loopholes in multinational tax avoidance around the world but Budget 2016 in New Zealand saw no new measures at all to deal with that trend in New Zealand and in fact there is a wall of funding—a cliff top—that we are about to go over in a year unless the Government addresses this in terms of the Inland Revenue Department's ability to investigate and enforce. The Australian Government expects nearly A$4 billion in taxes from multinationals. We could be doing the same thing if this bill was tighter than it is and we will be looking for ways to tighten it up even further. The bill is highly complex and it will require thorough scrutiny by the select committee but it is promoting some changes that we believe will have a positive impact on tax avoidance by multinational companies and tax abuse through look-through companies as well. So it is a step in the right direction. It does not go as far or as wide as we would like to make a meaningful difference to the billion dollars or more of lost tax revenue through multinational tax avoidance in New Zealand but it is a step in the right direction and for those reasons the Green Party will be supporting this bill through the House. Thank you."