Wood MichaelMICHAEL WOOD (Labour—Mt Roskill): What an interesting thing it is that on the Taxation (Annual Rates for 2018–19 Modernising Tax Administration and Remedial Matters) Bill—a bill which the Opposition has determined they will vote against on the basis apparently that it is a deep injustice that we are retaining the income tax rates that remained for most of the term of the previous Government—that the lead Opposition speaker could only manage five minutes. I was expecting a little bit more—some more well-developed arguments around what the alternative proposals might be getting into the detail of the bill a bit more but we on the side of the House will be very happy to provide that for the benefit of the House and those people who are watching and engaging in this debate.I doubt that there is a member of this House who hasn't had a constituent or met a voter who hasn't complained to them about the impact of secondary tax. It's a very very common complaint that we hear from people. And of course it's an interesting one because the nature of secondary tax is that we have the system set up in order to avoid a situation in which a taxpayer might underpay the tax and be faced with a very big tax bill at the end of the year.And the sort of logical and measured explanation and response you can give to someone who is complaining about secondary tax is Well you can seek a refund at the end of the year if you go through the process and you work with IRD and it'll all sort of end up where it should be in the wash." But of course the reality for many taxpayers—and we're talking about people often on low and middle incomes who perhaps are doing multiple jobs to try and make ends meet—is that actually it's pretty tough from payday to pay date and those people would much prefer to actually be getting paid the correct amount of income and paying the correct amount of tax at the time rather than waiting for a refund process that they might feel a little bit uncomfortable about engaging with in any case.The outstanding news about this bill is that in most cases we will be able to do away with the need for taxpayers to engage in that process. That is extraordinarily good news. I want to pay tribute here to the Minister Stuart Nash because I know that he over many years has been someone who has pushed and campaigned on this issue in order to make sure that we have a tax system in which taxpayers pay the right amount of tax and don't have to go through that process of seeking a secondary tax refund. And here as Minister he has brought this bill to the House and we are going to achieve that outcome.Mr Bayly is right: we're able to achieve this outcome because there has been a significant investment in the IRD's capacity through the Business Transformation project—that's both as a result of the investment in the technology and also the processes that IRD is setting up internally. And credit goes to many people in the previous Government for putting the initial investment into that process but most importantly to the good people at IRD including the commissioner who have been driving that process through.It's also interesting because on the Finance and Expenditure Committee we see this process going through the different bills that come before us. So in the previous annual rates bill which we actually only finished up with in the House relatively recently a big focus of that was around the provision of payday and investment income from employers. I was speaking at a payroll conference last week about this actually—we're asking employers to provide payday information to IRD far more regularly. Actually the reason for that is that if we have more timely and more accurate information then we can do this kind of stuff because the way in which we are dealing with the secondary tax issue is by ensuring that IRD have the correct information which means that the commissioner can look at a taxpayer's situation and recommend effectively what will be a tailored tax rate to that person to ensure that they are paying the correct tax rate given the different jobs they might be doing at any one point in time. The person will have the right to respond to that and not take that tailored tax rate if that is what they wish to do but it gives the ability to give that tailored tax rate and for many people and many situations do away with that secondary tax scenario. So that is an enormous step forward for many taxpayers and for IRD and I commend everyone who has been involved in that process. Many many New Zealanders will be very happy with us indeed—it's great news.A couple of the other key things in the bill that I think are worth talking about—and these were some of the issues that we spent time on at the Finance and Expenditure Committee. One I do want to talk about a little bit is the short-process rulings changes in this piece of legislation. What we have at the moment is a scenario in which larger taxpayers can go through a process of what is called getting binding rulings where they have a significant tax problem or question and they can seek a binding ruling to give them certainty about how they arrange their tax affairs. But the reality is that for smaller and medium enterprises that is an extraordinarily difficult and time consuming and costly and complex process to go through. So it doesn't really work for them. It works for the bigger players but not the smaller businesses who we actually want to be assisting as much as we can.So the short-process rulings is a sort of truncated simpler way in which those businesses can try and get some certainty get a ruling from IRD about a particular tax problem or question to give them certainty about their investment or how they're going to be making decisions within their business. That was very much welcomed from the community when this bill went out to submissions but the feedback that the select committee did receive from many people was that the initial threshold in the bill was perhaps a little bit too low. It was available to businesses with a turnover of less than $5 million. In response to those submissions—which were really well argued at select committee—we've agreed to increase that to a $20 million threshold. So that's going to give many more businesses access to that short-process rulings facility and that is going to make life a lot better for them.There are also changes in this bill around KiwiSaver and look on this side of the House we are just immensely proud of KiwiSaver and every single advance in KiwiSaver from its establishment through to this point has been led by members on this side of the House.Kieran McAnulty: Did they support it?MICHAEL WOOD: Well this is one of the interesting things. The member Kieran McAnulty asks if the Opposition are supporting it and the Opposition have tied their colours to the mast on this bill: they are voting against it. But what are we doing for KiwiSaver in this bill? They're voting against it; Mr Bayly told us that. We're giving Kiwis more flexibility to engage in KiwiSaver by introducing new contribution rates of 6 percent and 10 percent and that is going to give people—at the moment say you are contributing at maybe 4 percent you've got to double it and go right up to 8 percent now if you want to increase your KiwiSaver savings. This is going to give many more people a kind of a staircase to increase their contributions to grow their savings and have greater security in their retirement years. That is a really good thing. This bill also does allow over-65s to join KiwiSaver and that's a good thing as well. We know many people continue to work past that traditional cut-off date and we think that those people should have the right to be improving their savings for the time at which they do retire as well. One of the changes select committee made in this area is that at the moment we've got a five-year lock-in provision. We've sort of envisaged a situation where maybe someone starts contributing to KiwiSaver a little bit after they're 60 they retire after less than five years—we do want those people to be able to access their KiwiSaver. So provisions that were enacted at select committee will remove that five-year lock-in period for people in that situation. So what we've had through this process if I can really summarise is a good bill coming to this House that makes many improvements to our tax system. We had a very good process at select committee and strong support from officials from the Inland Revenue Department—I want to acknowledge and thank them. We had submissions from across the community which certainly grew our understanding of the issues within the bill and enabled the select committee to engage with officials and make a series of very practical improvements to this bill. I really want to thank everyone who's been involved in that process. From my point of view this was a bill as is often the case with the Finance and Expenditure Committee where we as a committee were able to engage with the issues and we took a good bill and turned it into a really good bill. And I want to thank the Minister of Revenue for his support in that area.One area I will touch on is that the Commissioner of Inland Revenue's care and management powers which were in the original bill are not proceeding in this bill. This is an excellent example of the way that our parliamentary democracy works. There were some concerns that were raised at the select committee around how these powers might work: they effectively allowed the commissioner to address anomalies that might be there within the bill. There were some concerns around where the appropriate delineation of powers between the Parliament and the commissioner were. As a result those changes are not proceeding in this bill and the discussion was that there'll be further consultation and dialogue around this. Now the committee in the next tax bill which will be coming back to the House sometime a little bit later in this year has received a revised set of proposals in this area which are currently going out for public consultation. And I just want to point out what a good example that is of how our system works in this Parliament—that actually at the select committee stage we have the ability to engage on these issues; we have Ministers who respond really well to these issues; and we can actually look to adapt legislation to deal with concerns to listen to submitters and get the best possible legislation at the end of this day.So this is a really really good bill. It makes a lot of changes that are very very positive to taxpayers. The parliamentary process has worked. The Minister is to be commended for steering this bill through the House and for the significant workload that he has in terms of bringing tax legislation to this House to make life better for taxpayers. And I certainly commend this bill to the House on this its third reading. Thank you Madam Deputy Speaker."