Foss Craig: Taxation (International Taxation Life Insurance and Remedial Matters) Bill — In Committee 
Foss Craig: Taxation (International Taxation Life Insurance and Remedial Matters) Bill — In Committee 
[Volume:656;Page:6007] 
CRAIG FOSS (National—Tukituki) 
: 
 I also want to speak on the payroll giving provisions of Part 2 of the Taxation (International Taxation Life Insurance and Remedial Matters) Bill particularly in respect of clauses 448 to 484. I want to speak about this matter because some good changes were made in this particular area at the Finance and Expenditure Committee although it could be said that all the changes made to the bill by the committee were good. We made quite a few suggestions and had wide discussions about improvements to the original bill that arrived at the committee some time in late 2008. I will touch on some of those issues. 
As we went through this particular part as originally drafted—and the previous speaker did pick this up—we learnt that only those people who file their PAYE returns electronically would be able to participate in the payroll giving provisions of this bill. We had a wide-ranging discussion about that. We erred on the side of keeping it simple because we noted that a growing number of employers were submitting returns electronically. Although only 19 percent of them did file returns electronically that figure constituted mostly the larger employers. Therefore a large proportion of the working population of PAYE taxpayers was actually being picked up by that. We had some issues in and around that matter and as I said the trade-off we made at the end of the day was to keep the electronic filing as in the original draft of the bill but with some caveats added to it which I will get to in a moment. 
One of the things that concerned members about this particular measure in the original bill—and I acknowledge that the suggestions from various advisers have been picked up by officials and this issue is addressed in the amended bill—was that in good faith an employee may want to set payroll giving up with an employer who files returns electronically. But we were very concerned that if something untoward was to happen—if the business was to go under if the charity itself turned out not to be a charity or if all sorts of other mischief happened—the employee in that instance should not miss out. So we tried to work that issue through and quite a few recommendations came from that to the point where we recommended that donations be held in trust for an employee until such time as they were remitted to the donee organisation. Even though it is an electronic process there are quite a few checks and balances to go through in the process before the monies get to the intended organisation. In the good faith that is payroll giving in the context where it comes from we wanted to make sure that employees had faith in the system and the ability to know that it would be working on their behalf. 
There was a problem however arising from the fact that the charities concerned must have charitable status. But we learnt as one submitter pointed out that when we check with the Inland Revenue Department we find if members can believe this there are actually 1330 donee organisations with names beginning with the letter ‘A’. So of course quite complex issues could arise there. The question was where the burden should lie in terms of checking the status of organisations. We did a bit of a test on the Inland Revenue Department’s website and it was found to be wanting. We did gain a commitment from Inland Revenue Department officials and this is in the commentary on the bill also that they would upgrade the ability for employers—in this instance—to go to the appropriate place on the Inland Revenue Department website and quickly look up an organisation without their systems going down and to have transparent timely and robust information available at all times. That was an example of good committee action good committee discussion and the committee as a whole making the recommendation there—a fair balance and I think a well-intentioned one. I think the previous speaker alluded to that. 
Most members in this House I am sure would agree with the intent at least of payroll giving. I will be speaking to other parts of this bill later on.