Collins JudithHon JUDITH COLLINS (National—Papakura): Thank you Mr Assistant Speaker. So some of that speech was OK. It was OK because—well it eventually ended but it was actually quite a good rendition of some of the issues around secondary tax and I say that as the person who was the Minister of Revenue when all of this work was put together apart from the increase in tax rates which is why we're not supporting an increase in tax rates. But we are however very supportive of all the work around the business transformation because it was actually a National-led Government that gave the funding to the Inland Revenue Department that allowed inland revenue to undertake the Business Transformation project. I'd like to acknowledge the former Ministers of Revenue before me particularly the Hon Michael Woodhouse and the Hon Todd McClay for the work that they did in this area as well.I would as well like to acknowledge particularly not only the inland revenue people and the experts who worked so hard on Business Transformation but also the private sector and particularly the tax accountants and tax lawyers who I've had so much to deal with as a lawyer but also as the Minister who worked so hard to make sure that the issues around Business Transformation and a simplified tax system were able to be put into a bill. Even if it is as Dr Russell has referred to a dense bill it certainly is a very thorough bill and we are very supportive of the Business Transformation parts. Unfortunately it has a fatal flaw around tax rates.Let's just have another little explanation around some of these issues. For instance one of the issues that Dr Russell hasn't canvassed is the issue around the aim which is actually another name for a situation where small business in particular finds provisional and terminal tax really difficult to deal with. Many people who have been in small business or families who have been in small business will know that provisional and terminal tax payments as they are now are actually what seems to cause so many small businesses to fail in their second or third years and that is really all about the fact that people are having to prepay their tax when they haven't even earned it or received it.There are not many people who are in a business where they know exactly how much money is going to be coming in the door so there are often penalties to revenue if they don't pay enough tax before they've even earned it. Then there's the other problem which is a penalty really if a business takes money or capital out of the business to put aside for tax worrying that they need to have enough money for tax and that means they often don't have enough capital invested in their business. This is something that is crucial for business and particularly small business because larger businesses do have different ways of dealing with it. There are actually entire businesses set up around having tax prepaid by particular organisations that do this and then they charge for it. But small businesses find it much more difficult to cope with.So one of the issues was how can we give taxpayers a system where they can in fact pay on almost a PAYE or pay as you earn system like salary and wage earners. That is pretty difficult when you're trying to deal with small businesses. A tremendous amount of work has gone into this from revenue but also from the private sector that works very very well with revenue. It's great to have such a good relationship between the private sector and inland revenue around how we can actually have small businesses—say a dairy owner for instance—being able to pay their tax on a monthly basis along with their GST because GST is paid either on a monthly or a quarterly or a six-monthly basis and people are able to allow for that because they know what it is they're supposed to pay.So in order to do this this requires a business to be set up on a system like Mind Your Own Business or one of the Vero products and some other products which work well with inland revenue. Those products as long as they're kept up to date can actually feed straight through to IRD and work out what people's taxes are on a monthly basis or whatever. That means that people's profit and loss is being calculated on that sort of basis. Some people might find that concept quite sort of Orwellian but the trouble is if you don't do that then you end up with the same system of people having to predetermine or pre-guess really what their tax is and then getting themselves into all sorts of trouble as they don't pay enough or they pay too much.So this is crucial I believe for helping small business in New Zealand helping particularly with cash flow and with capital because we are very much remiss when it comes to having enough capital in New Zealand for business. It is really hard for a small business to get money from a bank. It is really hard. What a small-business owner will need to have most likely is a security over their home. Their home is often the one that gets sold when things go wrong and those are the things—whether it's that they haven't paid the tax or something like that. This is a really good way of helping avoid that problem.Of course it doesn't solve the problem if a business is just not successful; we understand that but actually many successful businesses and business owners get themselves into trouble because of this problem and I think just having this change will help. I do know that there are still some small businesses where people do everything very much on the basis of a handwritten or even a typed-up on the computer Excel spreadsheet sort of system. That will still work for small businesses where there is no particular uncertainty around what their profit and loss is going to be. However we like to hope that more businesses are actually growing than that and we would like to hope that with people having to pay businesses having to collect tax for PAYE for their staff the student loan payments that they already do for their staff the family support payments they already do when it comes to child support any debts that are garnished against their wages—all of these things are payments that small businesses calculate collect and provide to the Government for free.People should always remember that with small business: they are incurring and business generally are incurring a tremendous amount of cost in terms of time and in terms of being able to get things right because if they get things wrong there are penalties on them. They do all this and provide this service for the rest of us in New Zealand for free. That is something I've always thought and I remember saying to revenue at one stage it would be really good if revenue was able to send out a note every now and again to people at Christmas-time or some other time saying Thank you for collecting tax for us for free." I reckon that would be a good—I never quite got that done; I was only in the role for about eight nine or 10 months before the election. But I actually think that would be a nice thing and I might suggest that to the current Government. Or not; we'll wait till we're back in charge in which case I'm sure we'll do it.But you know it's good to remember that. People forget that. So when we hear people slamming business slamming this slamming that remember who by the way is collecting this tax. They collect the GST they collect the PAYE they have to pay their own tax and they have to calculate what that all is. They do all these things and they sit there and no one thanks them. Well I want to thank them and I think this side of the House certainly wants to thank those businesses who comply with their obligations under the law. I just think we should be doing that because no one asks anyone at inland revenue to work for free. No one asks us to work for free. These people work for free for us. In many cases it's taking them away from income-earning work so that they can help us with our work.So it is actually a bill where most of it's good. That's why it would be wrong to vote for a bill where we're putting up tax rates against the very people who by the way are collecting tax so that we can actually continue as a Parliament that we can continue getting things done and services for it—Hon Andrew Little: They're selling goods and services and collecting tax as a result. There's nothing unusual about that. Good grief.Hon JUDITH COLLINS: —so people are—I wish Andrew Little would speak more clearly so I could hear him I really do.Todd Muller: He's mumbling again.Hon JUDITH COLLINS: Mumbling yes. It's the beard Andrew.I think it is important that we do remember that. This party will not be party to increased taxes against the very people who help do what we have to do and I think it is really important that we do that. This is one of the things that we want to be able to do which is to give more people more of their own money back and by the way along the way to thank them for what they do for their country and for their community. Thank you very much."