Clark David: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — In CommitteeText is incorporated into the Bound VolumeClark David: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — In Committee[Sitting date: 12 April 2016. Volume:713;Page:10381. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): I want to pick up where my colleague Grant Robertson—The CHAIRPERSON (Hon Chester Borrows): As opposed to repeat it you are just going to pick it up are you?Dr DAVID CLARK: Yes pick it up Mr Chairperson. The clause 26 references that my colleague referred to and I trust he may speak further on this lead into other important aspects of the student loans aspect of this bill. As we have canvassed we are required under this part of the bill to record a borrower’s name or any other name by which the borrower is known a borrower’s date of birth a borrower’s tax file number a borrower’s last known address and contact details and any other relevant information.The CHAIRPERSON (Hon Chester Borrows): You are the third speaker to debate this issue.Dr DAVID CLARK: That is not the end of the matter; that is the precursor. That information then goes on through to other parts of the bill and is required as background for a number of other calculations that we find in subsequent clauses. That very information is used as background to inform calculations that say that the borrower must pay tax equal to the larger of two amounts and those two amounts are calculated using various formulae. In clause 30 to do with shareholders in close companies we have a calculation of the amount of earnings they might have as compared with ordinary earnings.That is a level of detail into which the bill delves. In new clause 11 of schedule 3 inserted by clause 30 there are requirements for borrowers who are settlors of trusts. We read that “This clause applies for the purpose of determining the amount that is included in the adjusted net income of a borrower for an income year when the borrower is the settlor of a trust (the borrower’s trust) …”. That amount is calculated again using a calculation in subclause (4) of new clause 11: “(a + b) ÷ c”. Again it is of the nature of where the income is either greater than zero or calculated by this trust greater again—so we have there calculations that build upon the information collected earlier in order to ensure that the borrowers pay their fair share. That is what it boils down to in plain language. It is about making sure the borrowers have complete transparency in the calculations that are made and that it is then calculated in terms of their fair share built upon what they earn via their various means or where their income sources come from.That is sensible. Nobody here I think will dispute that. But until we had these Panama Papers there was a saying that there are two things in life that are certain: death and something else that they seem to have forgotten on that side of the Chamber. It was about collecting taxes. Now we have a debate in this Committee about exactly whether these clauses should apply and how. We delve into the detail and we see that the principle underlying it is about making sure people pay their fair share according to the various interests they have. These interests are disclosed and known to the tax department because there is a high burden of proof on the taxpayer to declare all of their information including things such as other names and other relevant information which is a catch-all clause.That feeds through in fact into all of these subsequent clauses in the pages that follow. Those calculations add up to in many cases a greater amount than were the borrower simply a borrower simple with no other business interests with no trusts that they were the settlor for with no close companies that they were responsible for and so on. That is how the calculation is made. Were it the case that these people had foreign trusts where their interests were not disclosed that would not be captured in these clauses unless it was captured under “other relevant information”.That is why in this bill I commend the fact—and I am sure my colleagues will too—that we are collecting this wider set of information. It is a good principle of tax law to collect all relevant information to ensure that people pay back their fair share. I have been a student loan borrower as many others in this House will have been and I have not resented the fact that I had to pay that loan back. That is something that in my time was the expectation that I went in with. I do think that over time—