Tremain Chris: Taxation (International Taxation Life Insurance and Remedial Matters) Bill — First Reading 
Tremain Chris: Taxation (International Taxation Life Insurance and Remedial Matters) Bill — First Reading 
[Volume:649;Page:17828] 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to take a call on the Taxation (International Taxation Life Insurance and Remedial Matters) Bill with the intent of bringing the debate in the House back to the issues at hand. Having listened to a number of serious personal attacks in the debate on the Appropriation (2008/09 Estimates) Bill I am keen to bring the debate in the Chamber back to a piece of legislation that National will be supporting tonight. 
This bill is enormous. It is not quite comparable with the volumes that Sir Ivor Richardson had brought to the House late last year whereby we rewrote the entire taxation Act. It became a doorstop for many of my accounting friends around New Zealand including those in Hawke’s Bay. This bill brings in some new policy in areas that National supports. We have policy out there that a number of New Zealanders particularly in the voluntary sector have been very pleased to see. Tonight I will just briefly cover some of the things that are in the bill. 
Firstly we are seeing a reform of tax rules for controlled foreign companies and for life insurers and a whole lot of base maintenance measures in the form of a widening of the “associated persons” definition. Secondly we are seeing quite a few tax simplification measures in the form of a number of tax filing threshold changes. That is good because we will see a reduction in compliance costs. For a number of small businesses out there the changes will mean that the threshold they need to reach before they are required to file certain tax returns is higher than it is currently and that will mean they are left out of that regime. That will lower their compliance costs and that is a good thing. We will also see changes that allow payroll deductions for charitable giving and for payment of volunteers which again I think is a good initiative. There is also an assortment of technical changes including remedial and tax rewrite amendments. The bill confirms the changes to the international tax rules that were previously signalled. The new rules are intended to take effect in the 2009-10 financial year. 
The key question though is whether this bill will make a step change towards lifting New Zealand towards Helen Clark’s goal of getting us into the top half of the OECD. As we count down the days to the general election we have to ask ourselves whether there is any policy on the legislative agenda that this Government is trying to drive through that will initiate innovate and get us up the OECD ladder which this Government promised to do at the commencement of its reign. One would think there was an opportunity to continue to do that. However tonight we have heard four key Ministers speaking in the appropriations debate take personal pot-shots across the Chamber when they had the opportunity to speak to the appropriations and to talk about their supposedly wonderful policies that they keep telling us about. But no they did not use that opportunity. 
We need to ask ourselves whether this Government is using its last days to address the key issues that New Zealanders are currently facing. And there are some key issues. Just a couple of days ago there was an official announcement that we had moved into a recession. We are seeing interest rates as high as they have ever been in a decade; they are seriously high. We are seeing a lot of New Zealanders rolling out of fixed-interest mortgages and into mortgages with higher interest rates and that is hurting. We are seeing high food prices and we are seeing a 5 percent inflation rate at the domestic level which is huge. We are seeing mortgagee sales for the first time in many years. There are a lot more than we have seen for a long time. We are seeing that the situation generally is a lot harder for New Zealanders. One therefore asks at this point in time what this Government is doing to improve the lot of New Zealanders. 
It was great therefore to be at the National Party conference last weekend and to hear a range of policy rolled out that will genuinely have a positive impact on the lives of hard-working Kiwis whether it be putting a cap on bureaucracy making sure that every item of Government spending is being used effectively or our education policies. We looked at the Trades in Schools programme that we are planning to roll out and our Youth Guarantee policy which is a fantastic policy aimed at keeping 16 and 17-year-olds in education for longer. Our policy of national education standards is a fantastic policy which we will be able to add to. Not only that; wonderful policy in terms of infrastructure was rolled out over the weekend adding to the $1.5 billion spend that had already been announced by John Key earlier in the year. We saw a robust transparent infrastructure policy that is aimed at helping to take New Zealand out of the tough times that we are currently facing. We have to understand that in business and in Government when the times are tough we have to invest in order to get the economy out of the doldrums and to help take it forward. 
None of those sorts of issues has been addressed or will be addressed in the speeches from Government members tonight on the appropriation legislation and this taxation legislation. 
The bill addresses some minor issues that will help in the area of volunteers and in the area of compliance costs by lowering the thresholds for small businesses. As KPMG said about the bill the amendments change business and investment tax results. It says that some of the changes are welcome and even overdue and others will adversely impact on taxpayers. There is a range of amendments as I have discussed but few will make the step change necessary to get us up the OECD ladder—to achieve the goal that Helen Clark set many many years ago. 
I want to focus on two amendments in the bill: firstly the implementation of one of National’s core policies which was announced last year and which deals with payments to volunteers—I do want to talk about that one—and secondly the tax simplification and the changes to the various thresholds. With regard to payments to volunteers that is a policy that John Key rolled out earlier and it has been picked up by the Labour Government. Labour has taken that great policy and we now see it being rolled into legislation. National is in the process of rolling out a range of innovative policies which I have talked about before—a raft of different policies—and the volunteer policy is one we are seeing delivered here tonight. 
Volunteers are a hugely important part of our community. If I look at my own seat in Napier I suggest that if those volunteers were not there the community would almost grind to a halt. Volunteers are a key part of any community and I acknowledge the volunteer sector. Craig Foss and I were privileged to hold a volunteers’ luncheon recently. We were able to acknowledge the hard work of 40-odd volunteer groups and everything they are doing in the community. It is great to have them there. It is good to have policy that supports them. National has always recognised the value of volunteers and has announced policies to support them. In this legislation we are seeing some of that policy coming to fruition and I think that is a good thing. I tell listeners out there that in the 2009-10 tax year these initiatives for the volunteer sector will be in play. 
Here are some examples of what will happen. Firstly all payments that reimburse volunteers for actual or reasonable expenses will become tax free regardless of the amount of the payment. That is a good initiative. Secondly honorarium payments will be tax free up to an amount of $500 per year. That is a good situation. It will help to increase the number of people who are involved in voluntary work. There will be opportunities to reduce compliance costs for community groups and also there is an opportunity to investigate a venture capital fund for community organisations. The removal of the cap on personal tax rebates for charitable donations is I think one of the most important things in this legislation. It will encourage more charitable giving from business and individual taxpayers. It will encourage more payments to the volunteer sector. I think that is good policy. 
I appreciate that my time is up. In summary what we are seeing here is a taxation bill that makes some amendments. National Party members do not see it as a step change that will have a big impact on New Zealand’s wealth or get us up the OECD ladder. There are some things in it that National supports particularly the changes to compliance costs and the changes in terms of the voluntary sector.