Wong Pansy: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee Procedure 
Text is incorporated into the Bound Volume 
Wong Pansy: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee Procedure 
[Sitting date: 14 December 2004. Volume:622;Page:17820. Text is incorporated into the Bound Volume.] 
PANSY WONG (National) 
: 
 This is more than a bill about mechanics. We in the National Party would like to take many more calls because we want to invite the Minister in the chair David Cunliffe to explain further why he describes the bill as pure mechanics. If he had read the bill he would know that it introduces issues that are a lot more substantial that that. 
My colleagues have talked a lot on the taxation rates so I will leave those provisions aside and come back to the other parts of the title. The title contains the phrases “Annual Rates” and “Venture Capital”. Submitter after submitter from the venture capital sector told the Finance and Expenditure Committee that the bill will not work. It will not introduce any more venture capital investors into New Zealand because they like a limited-liability partnership mechanism. Also the list of countries that the provisions apply to in terms of relief of taxation on capital distribution is too restrictive for it to be effective. The provisions in the bill relating to venture capital are nothing more than further Labour Government feel-good legislation. Once again what the Government introduces sounds good and looks good but does nothing. Why should Parliament continue to spend time debating legislation that is without substance? 
I also want to touch on another provision which is hidden under the miscellaneous provisions and that allows individuals to deduct expenditure relating to applications under the Resource Management Act that fail or are withdrawn. Recently we have seen Meridian Energy withdraw its large Project Aqua. Members should guess how much was written off by that State-owned enterprise. The amount was $38.7 million—because the Labour Government refused to simplify and make substantial amendments to the Resource Management Act. It is not good enough simply to allow people to deduct expenditure without tackling the core problem relating to applications under the Act. 
The miscellaneous provisions also include a provision introduced to close off the loophole relating to Australian unit trusts. While supporting the provision National wishes to point out that investors will continue to look for overseas investments that give them a tax advantage. It is not very effective for this Government to continue to introduce legislation to close off loopholes while the tax rate remains high because that is the main incentive that drives investment consultants or investors to look for loopholes. At the same time as the Inland Revenue Department is busy chasing investors in order to close those loopholes these high tax rates continue to give investors the incentive to look for overseas or internal mechanisms. The most effective way for the Labour Government to address these issues is to bring down both the company and the personal tax rates so that the Inland Revenue Department does not have to continue to chase individuals or entities and to spend a lot of time and energy closing off loopholes. 
I will come back to the issue of the high tax rate which continues to bring in high amounts of taxes to feed the Labour Government’s appetite for spending.