Cosgrove Clayton: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — In CommitteeText is incorporated into the Bound VolumeCosgrove Clayton: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — In Committee[Sitting date: 24 May 2016. Volume:714;Page:11148. Text is incorporated into the Bound Volume.]Hon CLAYTON COSGROVE (Labour):I want to pick up where Mr Robertson left off in his eloquent address and analysis of this bill—but in all seriousness the point that he made should be made again for the record of the Committee.The Finance and Expenditure Committee did take quite a bit of time to work through a scenario that essentially some of us felt at the time was providing less of an incentive if you like to comply with the law—that is the penalty was less than it ordinarily should have been.Those of us who were around in Parliament back a wee way can remember inheriting in 1999 an Inland Revenue Department (IRD) that had significant difficulties.John Perham I think—if I recall his name correctly—was charged as the Commissioner of Inland Revenue at the time with trying to rectify many of those difficulties where there had been in the 1990s significant breaches of information. I do not think the IRD at that time had electronic fingerprinting if you like—or footprinting as it was—in terms of traceability of personnel who were accessing information. I know that the then member Rodney Hide along with some of his cohort was quite vigorous in illustrating some of the problems that had occurred and as I recall some prosecutions came out of that.It did test the select committee and we tested officials in terms of whether there were enough safeguards around these issues to protect taxpayer information.Regarding tax systems as I have said in other debates there are a number of principles: transparency simplicity and community confidence in them—but also that information is incredibly secure.One of the things that I think—I am reflecting on Mr Robertson’s analysis of the various terms in clause 74 and the huge precise definitions around those terms. Some of us struggle with the fact that the IRD and its Minister have taken great care over those terms—which is fair enough—but it seems there was a lesser duty of care around those other arrangements in respect of co-location. However we have given the analysis and the recommendations the benefit of the doubt.I think it is incumbent upon the IRD—to put on the record of this Committee—to take extra care.If you are going to be co-located and there is even the slightest chance of taxpayer information being inadvertently shared—and I make the point that I believe that since the IRD has cleaned its act up from the 1990s the IRD staff are pretty well exemplary in their conduct. They take a great deal of care in terms of the security of taxpayer information. However if you do move into a co-location scenario things can happen. I like Mr Robertson—and I am sure the Minister would share the view—do not believe that these things are intentional but there is a tenet of law that says that the greater the penalty the more carepeople are likely to take because the circumstances they may find themselves in if they are prosecuted are far more heavy-duty than they may ordinarily be. That is a basic principle. So I think that as we go through this we would be grateful for some assurances from the Minister around taxpayer security given the co-location issues and I think it would be important to get that on the record of the House.I think the bill is—I would not call it transformational but certainly it updates many of the IRD systems. It is linked to the so-called Business Transformation programme and I would be remiss if I did not ask the Minister while we have got his attention whether he could perhaps give us a quick brief on the expenditures in—to be fair to him—the mess that he inherited with the Business Transformation programme which I think we are going from what was it $1.6 billion—Grant Robertson: $1.9 billion.Hon CLAYTON COSGROVE: —$1.9 billion and then it went down again and then it went up again. I am mindful of Novopay—without getting into that—and I am mindful of the difficulties the Police are having as espoused today with the PricewaterhouseCoopers issues and their payroll systems. We do have a track record in this Parliament I have to say on the National side not on the Labour side if you go right back to INCIS of IT programmes just going right off the rails.I would be grateful if the Minister could give us a continued assurance that we are not going to have money spent like water because there is a large amount of discretion provided to the department—it is the expert it hires the contractors and it signs the contracts not the Minister. With that discretion comes a huge amount of responsibility and we would like to ensure that the dollars are accounted for.I do not know whether I can enlarge on the eloquence of Mr Robertson especially in respect of clause 74 but at this point I like others—subject to those assurances from the Minister—support the bill.