Coffey TamatiTAMATI COFFEY (Labour—Waiariki): I'm happy to take a call on this particular bill the old Taxation (Neutralising Base Erosion and Profit Shifting) Bill—this wee bit of light reading right here. I am happy and also sad too. I am sad because I look up to the gallery and I see some of our members of the public—young people—sitting there wondering What the heck is going on down here? What are they talking about?" I feel for you as I look up there and I think to myself that you've been sitting there patiently now for nearly an hour and a bit trying to wrap your head around what this bill is all about so my kōrero today is directed to you to try and help you to understand what it is that we are talking about down here.I too am a simple Māori boy from the Bay of Plenty so when I got presented with this Taxation (Neutralising Base Erosion and Profit Shifting) Bill I was a little bit daunted by the fact you see—because it hasn't actually come from us and if you haven't heard it already a hundred times from the other side of the House they are the ones that came up with this. But you see the thing is they had nine years to actually do this—to get this bill through the House. They had nine long years to do it and what they did was that they kind of introduced this bill in that Parliament's dying days which is why we're standing here right now doing the first reading of this particular bill. They could have done it sooner but they chose not to and—you know I don't want to speculate as to why they dragged their feet so much on it.It isn't an easy bill to get your head around. You see if you're not a financial adviser and if you're not an expert in taxation you probably won't get it that easily. But all you need to know is that we're down here perusing it looking through it grafting over it and trying to get to the bottom of it and at the end of the day this is a bill that is about fairness as some of the other speakers have talked about. You see it's about fairness because we have this taxation system in New Zealand and it really rarks people up when some people are paying tax and some people aren't.You see it's kind of a contract that we enter into. There are two certain things they say in this world: one is death; the other is tax. You see when young people that I speak to get their first job and they see the amount of tax that they have to pay—they first of all see the amount that they get and then they see a little chunk taken out as tax—they say "Hey that's kind of the deal." We all pay tax you know? It really rarks people up when they hear stories about these big companies—big companies—that are earning lots and lots and lots of money and aren't actually paying any tax. Well when I say "not much tax" they're paying tax but it's a tiny bit of tax.Figure this one out: in 2014 Facebook paid $43000 in tax. There are plenty of small businesses all around the country—small and medium sized businesses—that pay way over that all right. Google paid $233000 worth of tax. It really rarks people up.You see I'm a small-business owner in provincial New Zealand. It's really really hard. What we do every week is we take our balance sheet and we enter in the totals that we've made for that week we take out our expenses and we take out our tax as well. Well you know when you start aggregating that and you have a look at your annual report at the end of the year you notice just how much tax you actually have paid. So when you compare the amount of tax that we pay as a small business in provincial New Zealand when times are really tough—and we think that we're doing an honest service for people in our community by providing jobs and by providing a service—it grates on me that companies like Facebook—Barbara Kuriger: I raise a point of order Madam Speaker. I think it's in line with being in this House that we actually speak to the House and the current speaker is actually spending most of his time speaking to the gallery.The ASSISTANT SPEAKER (Poto Williams): I would have to agree with that.TAMATI COFFEY: That's OK.The ASSISTANT SPEAKER (Poto Williams): Please if you would direct your debate to the House.TAMATI COFFEY: To you; to Madam Assistant Speaker? I will do that—to the whole House. There we go. As a small-business owner as I was saying in provincial New Zealand it really gets on my goat that companies like Facebook pay $43000 in tax every year and we as a small business pay quite a bit. We pay quite a bit. It's unfair and so what we want to do is try and balance things out.When I say that I'm a simple boy from the Bay of Plenty I had no idea that there were all of these measures that companies—big multinationals—were embarking on and were doing that were allowing them to get off scot-free. Now in an article that was published by Stuff on 3 March 2017—this is such a highbrow conversation that they actually had to at the bottom of the article put in the jargon; they had to translate exactly what it was that they were talking about. There are four things that this bill will change in terms of making sure that multinationals pay their fair share. One of them is transfer pricing. Now I'll spell that out just a little bit. According to their definition it refers to "the prices multinationals set when they charge their local subsidiaries for centrally-provided services such as accounting and marketing. Multinationals can divert money to lower-tax jurisdictions by overcharging for such services."There's also this other thing that big multinationals use: permanent establishment. According to this particular definition it says that they are "rules [which] determine whether a company has a taxable presence in a country. Changes may make it harder for foreign firms to claim that they don't have a permanent presence in New Zealand if they use intermediaries to enter into contracts here on their behalf." It's a little bit to wrap your head around. "Hybrid mismatches relate to rorts such as the 'double Irish' that involve companies exploiting differences between countries' tax laws—often differences in semantics—to avoid a profit being taxed in either country."The final one to wrap your head around is around interest deductions which "can be used to channel profits from New Zealand subsidiaries to multinational parents. Unnecessarily large loans or loans at artificially high interest rates can mean cash is unfairly transferred through untaxed interest payments rather than through dividends on locally-taxed profits."Now these are all of the things that the previous Government went through in terms of trying to figure out how we were going to approach this issue of multinationals paying their fair share. But there were a few questions that arose out of this. There was a fear that maybe if we entered into this arrangement if we made multinationals pay their fair share then maybe what it would do is discourage them from investing or doing business here in New Zealand. Now don't get me wrong: I quite like my Apple iPhone. I quite like Google. I use it probably every day and I would be pretty miffed if they decided to walk. But it was decided that in terms of firms that operate here we need to stick true to our values and actually ensure that a fair amount is paid in terms of tax.A multinational should not be allowed to achieve a competitive advantage over other businesses by exploiting loopholes in our tax system. Now as I said as a small-business owner we're always looking for an even playing field; making sure that everybody is on the same level. When you think of companies getting a competitive advantage because they know how to speak like a tax expert and a financial adviser it really rarks you up.Also the question was raised about how much additional revenue the Government would actually raise from putting in these particular measures. Well it was estimated that the current measure would raise approximately $200 million per annum. Let's just think about that for a second and the kind of services the kind of things that we could spend that money on whether it's in health in education and in housing. That money would go a great way. You could have four flag referendums for that price—no you probably need a few more. Anyway my point is that $200 million extra in the Government purse would I'm sure do a lot for New Zealand and the kinds of changes that we could make in our communities.This is a great bill albeit a little bit heavy on the jargon and a little bit specialised in terms of kinds of advice it offers. But if there's one bit of assurance I can give out there to mums to dads to working-class people that pay their tax and pay it diligently every year and another piece of advice that I could give out there for small businesses—and when I gave my maiden speech I actually stood here and I said that I would be a voice for small businesses—it is that this particular bill is a good thing for us. It is going to even out the playing field. It is going to take away some of these very jargonistic very highbrow ways for big companies to avoid having to pay their taxes. For that reason Madam Assistant Speaker and members of the House I commend this bill.Bill read a first time. Bill referred to the Finance and Expenditure Committee."