5. Question No. 5—RevenueNICOLA WILLIS (Deputy Leader—National) to the Minister of RevenueQuestion No. 5—Revenue5. NICOLA WILLIS (Deputy Leader—National) to the Minister of Revenue: Has Inland Revenue advised him why some people who haven't lived in New Zealand for several years have received the cost of living payment and will Inland Revenue be investigating what specific errors have led to these payments being made?Hon DAVID PARKER (Minister of Revenue): Yes to the first part of the question and to the second part of the question no because this cost of living payment is made on the basis of the best information that Inland Revenue hold. That is high quality data but it is and will always be out of date at the margins. Inland Revenue are continually refining their data sets including for this payment. Inland Revenue increasingly rely on sophisticated software to automate previously manual transactions. This saves the Government and taxpayers millions and millions of dollars every year on administration costs with staff numbers at Inland Revenue down by around 2000 people. Benefits to taxpayers include automated assessments refunds and other payments worth hundreds of millions every year and the use of automated data sets which we strive to continue and improve as well as it saves money and will continue to. People who know that the details held by Inland Revenue are out of date should update them.Nicola Willis: Has the IRD advised him on how many non-eligible people have received the payment and if so what is that number?Hon DAVID PARKER: As I said yesterday and the member quoted in her primary question no because you can't know in a particular number sense what you don't know.Hon Paul Goldsmith: Oh. Old Rummy. Old Donald Rumsfeld's back.Nicola Willis: How can he be confident—SPEAKER: Order! Order! Mr Goldsmith I've been quite generous to the National Party today as a result of an outburst from the other side. Does the member want that reversed? Nicola Willis start again.Nicola Willis: How can he be confident that these issues aren't more widespread when no investigations have taken place?Hon DAVID PARKER: Because I'm confident that the Inland Revenue Department data sets are robust and are amongst the best data sets in the world. I also know that Cabinet considered and rejected the alternative which would have cost a lot more money which was to run an application process for the about 2 million people that are eligible which would have cost a lot more than the money that would have saved and would have missed out a lot of eligible people. As the New Zealand Herald editorial today said The only practical solution … was a broad and largely unvetted package. … Anyone 'embarrassed' or 'outraged' by the over-reach of the scheme [can] return the payment or forward it to a charity—and update their [IRD] records … As a former Inland Revenue deputy commissioner has pointed out there were problems with all alternative approaches and the scheme despite its flaws was the most immediate. Something had to be done and doing nothing would have been worse."Nicola Willis: Could the Minister explain the specific problems in the data sets which would have led to New Zealanders who have left the country five six or seven years ago receiving the cost of living payment?Hon DAVID PARKER: Well in that case it must be that the Inland Revenue Department has a New Zealand address for that taxpayer rather than an overseas one.Nicola Willis: Are people living overseas who have received the cost of living payment required to pay it back?Hon DAVID PARKER: The payment is made on the basis of the automated data sets. We encourage people who think that they are not eligible to pay it back but they're not obliged to pay it back because it's been legitimately paid to them. The cost of the alternative which would have been an application-based process would have been more than the cost savings made through that process and as I said wouldn't have got the payment out to the 1.3 million people who've already received it.Nicola Willis: Why is the Minister saying people who received the payment in error aren't required to pay it back when section 7AAA of the Taxation (Cost of Living Payments) Act says as a matter of law they are required to pay it back.Hon DAVID PARKER: That's not the advice that I've received. The advice that I've received is if the payment was made legitimately on the basis of the screening that Inland Revenue have there is no obligation on the tax department to chase it nor the taxpayer to pay them back—though we would encourage them to do it. If someone of course is aware that they were not entitled to it and in some ways encouraged the payment to be made then that could amount to a fraud on the tax department. In that case it would be theoretically payable back. Whether that would be practical if someone was overseas would be an issue for the commissioner to assess and of course the commissioner takes those decisions independently of the Government.Nicola Willis: Can he confirm the Minister of Justice's statement this morning that the cost of living payment was designed "Essentially overnight." and is that the real explanation why this scheme is so riddled with errors and costing New Zealanders so much wasted money?Hon DAVID PARKER: The system is not riddled with errors and the cost of administration of running an application-based process would have cost more. I would again note that alternatives such as tax cuts that others have proposed—that would give some people $2 a week CEOs tens of thousands of dollars per annum and overseas landlords thousands and thousands in tax cuts every year—would have been far far worse and would not have provided as much to the middle-income people that this payment is directed to."