Williams Arena; Watts SimonARENA WILLIAMS (Labour—Manurewa): Thank you Madam Chair. This is my first call on this part and the first opportunity to discuss Simon Watts' big new OE tax the tax that will apply to overseas young New Zealanders who have gone off for a year to work in London in the pub people who have gone overseas to Australia to get some work experience someone might be continuing on with their Master's studies—they will be penalised by what the Minister has introduced in this part Part 5 of the bill which we are debating today.And I thank him. I thank that Minister for engaging so fulsomely with our questions today and he has answered very helpfully to my colleague Lawrence Xu-Nan and so he has blown that wide open for me to ask him plenty of questions about Part 5 and I will do so now.From 2025 overseas New Zealanders will be penalised and charged extra for their student loan debt because of this change and those returning to New Zealand will face penalties at the border for just trying to come home: for visiting their mum for coming home and seeing their friends and family for attending a wedding—they will be stopped when they try to come into the country. There is in fact extra money for it in the Budget for compliance enforcement costs.And why is that? I want to ask the Minister the first question I have here which is: why is that debt which he disclosed in his previous answers—90 percent of the outstanding student loan debt—with overseas borrowers? Is that because the enforcement powers that IRD has are not adequate to actually recover the overseas debt owed by overseas borrowers? Is the Minister aware that according to the IRD's annual report for June 2023 it received just 198 payments totalling $16421 from overseas borrowers? Is the Minister aware that IRD cannot recover that debt from overseas borrowers and is this a cynical measure to tell young Kiwis who have gone overseas that they are the rule breakers whilst the rest of us continue to pay and do not receive the tax relief that he says is going to occur from this saving?I want to ask the Minister: has he considered the effect on New Zealand's broader economy when we make it harder? We make it harder with these provisions for young New Zealanders who have done the work who have trained in our universities who have upskilled and who have gone overseas for further work experience to come back into New Zealand and invest in New Zealand—to make homes for themselves to get jobs in our local economy to bring their skills home. Is this just one more barrier to those businesses that are crying out for skilled people to get young New Zealanders back into the country? Minister I look forward to the answers to those five questions.Hon SIMON WATTS (Minister of Revenue): Thank you very much Madam Chair. Allow me to make a call in response to that question. Well look there's two aspect here at play and we'll cover the first aspect relevant to this section of the bill which is the increasing of the interest rate. The purpose of increasing the interest rate for a period of five years is to partially cover the loss in value of the scheme as a result of inflation. That's what we're doing that's why we're doing it and as I said it is a temporary adjustment to deal with the loss in value and that will achieve that outcome.In regards to the second portion on this side of the House we make no apologies for the majority of New Zealanders who pay their taxes and do the right thing. What we have invested in in regards to increasing compliance and enforcement costs is to target those people that are not meeting their responsibilities. And we do not make any apology for the fact that if you owe money and you're not meeting your responsibilities then the Inland Revenue will use their powers available to them to collect that money. Because guess what! A dollar that they collect is a dollar that we don't need to find from somewhere else. It's a dollar owed to this Government and it's not appropriate for the majority of Kiwis to pay their fair share and a very small element who don't to be able to get away with that. That is not the way in which we see things and that is why we're making the changes.