Bayly AndrewANDREW BAYLY (National—Hunua): Thank you Mr Speaker. It's a pleasure to be talking on the Taxation (Annual Rates for 2017-18 Employment and Investment Income and Remedial Matters) Bill tonight. We seem to be trading quotes so tax always reminds me of this quote: it's from Matthew chapter 13. It says Whoever has will be given more and he will have an abundance. Whoever does not have even what he has will be taken away from him." I believe that sort of sums up tax to some extent.I thought as the previous speaker David Seymour noted and I think across on the other side this bill does cover a lot of ground and a couple of areas that no one's traversed previously I just thought I would highlight. The first one is around employment share schemes. One of the important things about this bill was to look at modernising and improving the tax treatment around employment share schemes. It particularly affects young innovative companies that don't have cash often to reward their employees and it's therefore an important part of the fabric of promoting a vibrant economy in New Zealand.Of course what the bill does is actually make sure that the tax treatment on shares given to employees is tax-neutral until the time that they have effectively fulfilled the requirements to get the shares issued and to be paying tax at that point in time. The corollary applies with regard to the employer so to make sure that the employer pays the tax at the right period and therefore matching it up on an equivalent basis. I think this is important because it clarifies the employment share schemes. There's been a lot of debate about it. We had a lot of debate in the Finance and Expenditure Committee about it but I think we landed in a good position with it.The other thing I just want to note is that one of the issues is with the demerger of companies and many New Zealanders hold shares in listed companies where they end up by demerging. What I mean by that is—you might take Fletcher Challenge and if you go back many years ago when they split the operation into a whole lot of subsidiary entities the shareholders in the head company all ended up with equal allocations in the subsidiary companies. Now the situation that applies at the moment is where New Zealand shareholders own shares in Australian companies that demerged Australian shareholders are appropriately treated and are not disadvantaged by tax. But under previous rules or current rules New Zealand shareholders if they are issued shares in a demerged entity that is effectively deemed a dividend and what this bill does is address that situation to make sure we are not disadvantaged.But I do want to put on record that new section ED 2B inserted by clause 45 of the bill—this deals with Australian companies and I think one of the outstanding issues relating to this is that we need to put in place equivalent arrangements for companies in New Zealand listed on the stock exchange who demerge and New Zealand shareholders should also be able to benefit from an equivalent treatment. This has not been treated in the bill and it's one of those matters that is probably going to be picked up—and I hope it's going to be picked up—the next time similar taxation legislation comes before the House.But I just want to turn to the last thing which I believe is a travesty. This is the issue of Supplementary Order Paper (SOP) 13 which was callously introduced after the committee—after a long long period of time where this committee worked collaboratively to work through this complicated tax bill. Only after it was completed was an SOP going to seven pages—we're not talking about a minor SOP. We're talking about a significant change where this SOP was presented to the House after we had completed our report which meant that it could not be referred back to the committee. I actually proposed a motion in the House that this SOP should be returned to the committee for a full debate. Unfortunately the coalition Government voted that down and so what we now have is this bill that has this significant addition to it which as some of the speakers have reported extends the brightline test from two to five years.What the issue is is the unintended consequences that I believe that this SOP represents. It represents the fact that with 40 percent of the New Zealand households or houses owned in New Zealand that are owned by New Zealand mums and dads from now on unless they are selling their house as a result of a dissolution of a marriage or as a result of inheriting a property or if it's not their home—if any investment property or whether it's a property they bought for their children or if for any other reason they bought a second home which could be for the most valid of reasons it will mean that now they are under the rules of this new SOP of five years. So that means that if someone gets into financial trouble for some reason they are now subject to this five-year brightline test. I think the unintended consequences are significant and I'm very very disappointed it's come through into this bill. Thank you."