O'Connor Greg; Russell Deborah; Boyack Rachel; Watts SimonPart 3 Income Tax Act 2007 and Tax Administration Act 1994 amendments commencing 31 July 2024 CHAIRPERSON (Greg O'Connor): Members we come now to the debate on Part 3 which is the debate on clauses 25 to 32 Income Tax Act 2007 and Tax Administration Act 1994 amendments commencing 31 July 2024". The question is that Part 3 stand part.Hon Dr DEBORAH RUSSELL (Labour): Thank you Mr Chair. I appreciate the opportunity to take a call on this. Part 3 looks incredibly dull and I'm sure the Minister would agree that it looks pretty dull too. It really is a series of clauses which replace one number with another. For example clause 26 amends section LC 13 of the Income Tax Act and it just says "In section LC 13(5) replace "$44000" with "$66000". In fact all the ongoing clauses pretty much look like that. So it's a whole series of replacing one number with another number. But however dull it looks it's actually kind of important because what it's doing—and I had hoped the Minister would explain this himself but perhaps not—is it's setting the new amounts for independent earner tax credit the in-work tax credit and the minimum family tax credit. And then following on from that clause 29 amends an amount in Schedule 1. Part 3 then goes on to a whole lot of stuff that's in the Income Tax Act.Then there's a whole lot of stuff amending various sections in the Tax Administration Act as well. But hiding in between these seemingly dull-looking changes which do just substitute one for another are some pretty important policy decisions that the Government has made. This will be one of our few opportunities to debate those policy decisions as to why they chose particular amounts. So I'm just going to go to first of all the independent earner tax credit and in sectionLC 13(5) we're replacing $44000 with $66000. Now that is a pretty technical change but I think that for the benefit of the committee and for the benefit of people watching and for the benefit of people who actually want to understand what is going on with our Income Tax Act it would be helpful if the Minister could explain exactly what that clause does and why that amount of $66000 has been chosen. There will be some policy thinking behind it. I would like to have an explanation of that policy thinking. So Minister it would be great if you could just explain that clause to us.RACHEL BOYACK (Labour—Nelson): Thank you Mr Chair. Look it's a great opportunity to take a short call on the Taxation (Budget Measures) Bill.Hon Member: A short call.RACHEL BOYACK: It will be a short call but it would be wonderful to hear from some members opposite about the questions that they might have for the Minister. I mean they wouldn't have had an opportunity I don't think to take this through their caucus. I will just repeat the comments that I made at the beginning of my call on Part 2 which was that the reason that we do put these questions forward for the Minister—and the Minister is obviously able to seek guidance from his officials—is because we don't get the opportunity to have the full scrutiny through that select committee process. So this is an important part of the House's role to scrutinise this bill. Now one of the things that I'm quite interested in is the overlap that we will see between the tax credits in terms of the threshold—the minimum family tax credit—and to ensure that the Minister can guarantee that every family will be better off regardless of where they fit in the margins in terms of the interaction between those different components of the tax system for families. And so the question in particular is whether if a taxpayer would receive more from the independent-earner tax credit than the in-work tax credit because obviously we have different parts of the system that interact the IRD would actually proactively go out and change it for them or at least advise.One of the things we're mindful of with how the IRD operates—and there were some really good changes brought in under our Government to allow the IRD to be more proactive with people when perhaps they were on the wrong tax rate or if they needed to get a special tax rate. One of the things is that regular interaction that occurs between the IRD and the other systems that are in place and whether there will be a system devised in this situation so that when the IRD identifies those families who have an interaction between different parts of the tax system that means they might actually be collecting the wrong benefits through that tax system how do they know that? And is there advice that's then provided to those families so that they can update their tax records and interact with the IRD in order to make those changes?So as I said at the beginning of my call we do hope that the Minister will be able to engage in as Dr Deborah Russell has said a bit of a dry section of the bill but it is actually important that we hear from the Minister. He has his officials here to advise him so that he can provide that advice to the committee—just reminding the Minister and the committee as well that the discussions that are had on the Hansard in the House can be very important for interpretative matters perhaps in the courts or in times when clarity is sought around what was the intent of the Minister and what was the intent of the House when this particular piece of legislation was put forward? So I'd be really encouraged to hear from the Minister now. Thank you.Hon SIMON WATTS (Minister of Revenue): Thank you very much Mr Chair. Part 3 is very routine and standard in nature and I think as one of the prior members has noted a little bit dull. I wouldn't quite go as far as that; tax legislation is never dull but there is very little that one can say about this section. It is simply effecting the changes in terms of the changes in rates. In regards to the question around policy around why $66000 versus any other number those are policy decisions that the coalition Government have landed upon and there's not much further that I can say other than that these are the rates that we've landed on and this section effects those changes."