Goldsmith Paul: Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill — Third ReadingText is incorporated into the Bound VolumeGoldsmith Paul: Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill — Third Reading[Sitting date: 18 June 2014. Volume:699;Page:18690. Text is incorporated into the Bound Volume.]PAUL GOLDSMITH (National):It is very kind of you to give me this call on the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill Mr Assistant Speaker. I must begin by saying you do have to hand it to David Parker—I would never have believed how many social ills financial ills and general problems in the community could be solved by a capital gains tax. But he is relentless. At every single opportunity he never misses the opportunity to talk about all the problems in the world that will be solved by the introduction of a capital gains tax notwithstanding the fact that half the capital gains are inflation anyway and it is a bit unfair to be taxing that and the fact that we have had endless numbers of detailed royal commissions and detailed studies on taxation in this country. The last one under the Labour Party the McLeod Tax Review drew the clear conclusion that a capital gains tax in New Zealand is not warranted particularly if it exempted the family home as is being suggested here. It would add all sorts of tax compliance and difficulties in the taxation system more broadly.This Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill does not introduce a capital gains tax. What it does cover is employee allowances thin capitalisation rules black hole expenditure deductions and foreign account information-sharing agreements as well as a number of other things to tidy up our taxation laws. We did a lot of detailed work in the Finance and Expenditure Committee and I do want to pay tribute to the work of the members of the select committee on all sides of the House including Mr Peters who was very diligent in some of these matters—less so in others.The review of the employee allowances in particular was given—[Interruption]—well yes indeed—a fair amount of attention. The Government listened to a number of the concerns about some of the details in this area and a significant number of changes were made particularly around when an employee is expected to work away from their normal workplace for up to 2 years. Employee-provided accommodation will be tax-exempt—that was one area. Another area was further clarification when accommodation is provided with regard to shift work involving periodic sleepovers and fly-in fly-out workers in remote areas. So there was a lot of detail that the committee went through and I think that the overall result is much better as a result of that consultation.The other area that we heard a lot of submissions on was the Foreign Account Tax Compliance Act which is the result of obligations contained in the intergovernmental agreement with the United States. A lot of submitters were very concerned to discover their tax obligations as US citizens or people who had been born in the US—who had never lived there but happened to be born there; they had been in New Zealand all their lives. They were worried that they were suddenly going to be drawn into the United States tax ambit. I suppose the important thing to say in relation to this is that this legislation does not change anybody’s tax obligations if they are a US citizen or a US tax person—they have always been there and they remain there. What this bill does is allow for New Zealand banks to pass information on certain people who are US citizens on to the United States. So it is an information-gathering exercise and there are thresholds over which people have to stand before that information is passed on.Again the select committee looked at that very closely. The Opposition was most concerned about reciprocity in this and the intergovernmental agreement that has just been signed with the United States is reciprocal. That is important because we would expect to uphold the US tax system in New Zealand and likewise we would expect to have the same level of assistance from the United States in the way that we collect our taxes.So all in all this bill is one small piece in the great work of building a more competitive and productive economy in New Zealand which is one of the overall goals of this Government. At the end of it all increasing New Zealand’s international competiveness is what sustains our living standards in New Zealand and what provides us with the opportunity to have the growth the jobs the health care and the education system that we need. We do not get any of that if we do not have an internationally competitive economy. The Business Growth Agenda which is at the heart of this Government’s response to lifting New Zealand’s competiveness includes having an efficient tax system. This bill goes some way in clarifying some areas and ensures that taxpayers are treated as fairly as possible in the intricate details around employee allowances. On that basis I commend this bill to the House. Thank you very much.