Dunne Peter: Taxation (International Investment and Remedial Matters) Bill — In Committee 
Dunne Peter: Taxation (International Investment and Remedial Matters) Bill — In Committee 
[Volume:677;Page:454] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I am going to take a call at this point because I have another commitment very shortly that will mean I am absent for a little while but I will come back. I want to respond to the points that have been made by the two members who have spoken. I have read Labour’s minority report with some interest. It is a fairly brief report and it is really a thinly disguised argument for a capital gains tax which is a separate issue altogether. We are not going down that path. 
Hon David Cunliffe 
: We don’t disguise our call for a capital gains tax. We say it openly. 
Hon PETER DUNNE 
: Well it is a very little paragraph. You want a capital gains tax—or the Opposition wants a capital gains tax—and this side of the House does not so that is really a policy divide. But I want to come to the points that— 
Hon David Cunliffe 
: You used to like it. 
Hon PETER DUNNE 
: I have never been in favour of a capital gains tax. The member can check the record going right back. I have never spoken for a capital gains tax.  
Let me come back to this bill and the questions from Mr Cosgrove and from Mr Parker to some extent as well. I would like to refer them back to the regulatory impact statement which sets out a number of the conditions that are being applied to the changes in particular in regard to the approved issuer levy to make sure that it is tightly focused and to make sure that the benefit is borne by the New Zealand borrower who currently suffers the tax burden rather than the offshore lender.  
Mr Parker I think it was asked how much revenue was potentially being forgone through this measure. The best estimate stated in the regulatory impact statement is based on the last 3 years’ movement in the bond market—about $5 million. So it is not a large sum of money.  
Mr Cosgrove then went on to ask why we were just zero-rating the approved issuer levy and why were we not abolishing it— 
Hon Clayton Cosgrove 
: No no why are we taking the framework? 
Hon PETER DUNNE 
: Yes effectively and the short answer is—and this is a slightly flippant answer but there is good historical precedent for it and I know the member wanted me to quote history—many many years ago we struck a zero rate for stamp duty. We still actually have stamp duty on the books in New Zealand. I do not think it is a particularly good argument in the approved investor levy case but it is just a signal that there are some precedents. The point is that this is a new area of change. We are operating on the basis of the Capital Market Development Taskforce recommendations. It was considered prudent at this stage to simply shift the rate from 2 percent back to zero.  
We will obviously keep a clear eye on how this works out in practice once the change is made. But frankly we see it more as being about tidying up the process making it neater and clearer as the member acknowledged and simply getting round what we think has been an impediment that has imposed costs on New Zealand businesses has not raised a great deal of revenue historically and frankly is probably seen more as a disincentive than as a positive.  
I do not have time to go into all of the other issues that were raised in terms of things like financial transaction taxes and everything else that Mr Parker spoke of. They are way beyond the scope of the bill; they are not on the radar screen at this point. What we are focused on in this measure is the further progressive tidy-up of our international tax rules.  
I conclude by quoting—and this time I will try to get it right—the phrase of Dr Michael Cullen when this matter was first on the table.  
Hon David Cunliffe 
: “We won. You lost. Eat that!” 
Hon PETER DUNNE 
: No Dr Cullen paraphrased  
Star Trek 
 when describing New Zealand’s international tax rules. He said: “New Zealand boldly went where no country chose to follow.” That is a very good summary of the position we were in. This legislation effectively is a further part of the winding back of that to get us to a more realistic and credible position and I am grateful for the support of the Opposition.