Hughes Gareth: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — First ReadingText is incorporated into the Bound VolumeHughes Gareth: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — First Reading[Sitting date: 08 December 2015. Volume:710;Page:8648. Text is incorporated into the Bound Volume.]GARETH HUGHES (Green): Kia ora Mr Assistant Speaker. Ngā mihi nui ki a koutou. Kia ora. I rise to support this bill. The Green Party supports it going to a select committee. It is in one sense a non-controversial bill but there are some concerning aspects within it. Really what we are debating tonight should be three separate pieces of legislation not this omnibus bill because it deals with incredibly different parts. The first is the new Netflix tax the second is new information and contact detail disclosure from the Australian Government to the New Zealand Government when it comes to student loans and the third is the brightline test—the capital gains tax when you do not want a thing called a capital gains tax.We will be supporting this bill. We want to hear the discussion around the select committee. We want to hear from the diverse group of experts and people involved in these three different areas. When it comes to the new Netflix tax I remember John Key’s promise at the last election of no new taxes. I guess you could make an argument that this is a new tax. I guess you could make an argument that it is extending an existing tax into an area that is not currently being taxed.David Seymour: Well which one is it?GARETH HUGHES: There is David Seymour I guess voting for increased taxes tonight I am sure. There is a legitimate debate here because New Zealand retailers do feel like they are not on a level playing field. The Inland Revenue Department reports that it is missing out on around $180 million of revenue per annum. So the question is why the Government is going after only this part which is $40 million of that $180 million of revenue.The Green Party supports our domestic retailers—we have called for this in the past—but we would also note some questions around the compliance cost. Obviously the reason this has not been enforced by previous Governments was that the $400 de minimis threshold which is not being looked at in this legislation was always seen as a challenge. Sure the Government would love that extra revenue from the GST receipts on those products but what is the point if you are actually spending more getting that revenue? So I guess the Government thought it had found a bit of a workaround with having the onus on the provider of goods and services—I am thinking of Netflix of Amazon.The question here is whether we are simply going to drive these providers of services to New Zealanders—who obviously they want because they are subscribing for example to Netflix. I am a Netflix subscriber myself. Will we in fact see a perverse effect that these companies because they feel they are not on a level playing field to other maybe smaller competitors under that $60000 GST threshold will in fact leave our market? What we could in fact see is our New Zealand customers and consumers poorer as a result.A second concern is whether we have got that $60000 threshold right. Should it be lowered? I have seen suggestions of $10000. I think it is an interesting debate to be had around the select committee table.Thirdly—and I think this is quite an incredibly worrying clause—is around the misrepresentation of receipt of remote services. It has quite an innocuous title but what we see here—in fact in the commentary on the bill the officials give the example of Luke. Luke is using a virtual private network to mask his IP address. Tens of thousands of New Zealanders use virtual private networks every day. In this House and in parties opposite me it is no doubt being used. It is quite a common and legitimate form. It is concerning when you see penalties in the order of $25000 to $50000 and commentary in public around concerns of whether using a virtual private network itself without trying to use it to circumvent these new GST requirements will in fact be illegal. Those questions have been raised; I have not seen them answered. It would be deeply concerning because there are many legitimate uses for masking an IP address.On the student loan front we have seen the Government previously pass laws in this House to arrest you at the border if you are in default. Now we see it about being able to go to your door when the Australian Government passes on your contact details. We do have concerns around this. But if I may offer a suggestion to the Government if it wanted to support student loan borrowers overseas—there is $3.2 billion outstanding—and it actually wanted to see that income come in what it would be doing is negotiating with the Australian Government for those tens of thousands of Kiwis overseas particularly in Aussie to pay off their student loans via their income tax in Australia.I can understand why it is good for our Government—maybe there are transactional costs for the Australian Government. But if we were serious about getting some of that $3.2 billion outstanding the most convenient way is to make sure those Kiwis working and paying tax overseas in Australia could be putting compulsory repayments into their student loan. It has been ignored by successive Governments hands have been thrown up in the air saying that it is too hard but this would be the single most effective thing the Government could do.Sitting suspended from 6 p.m. to 7.30 p.m.