Foss Craig: Income Tax Bill — Third Reading 
Foss Craig: Income Tax Bill — Third Reading 
[Volume:643;Page:12753] 
CRAIG FOSS (National—Tukituki) 
: 
 It is a pleasure to speak on the third reading of the Income Tax Bill volumes 1 through to 5. I follow some very good and informative speakers and I follow some quite hopeless ones. I was very interested to see that the Minister of Immigration spoke on this bill. I do not think he has spoken on the bill in its earlier readings—perhaps he did; I am open to be corrected—and perhaps that gives us yet another clue as to the various changes in the upcoming Cabinet reshuffle. 
The Minister of Immigration got up and started to accuse the National Party speakers of not talking about taxation then wandered into talking about broadband himself. I do not know quite what is going on there but he did give a very nice accolade to his master Dr Cullen. Obviously the Cabinet positions have not been settled yet. 
The bill is five volumes and 3031 pages long—I think a couple have sneaked in since last time I looked—and yes this is its third reading. The bill has been 15 years in the making. Yet I note in the commentary that time constraints have prevented some issues from being addressed which personally I find quite amusing. Two items in particular that will not be addressed by the rewrite are legislation surrounding KiwiSaver and changes to the foreign investment taxation rules and regulations which are covered in the commentary on page 2. 
As a member of the Finance and Expenditure Committee I note that hardly a week goes by without there being yet another change Supplementary Order Paper or amendment to existing legislation or bills currently before our committee that cover KiwiSaver or the various foreign investment tax rule changes that were announced last year. I think it would have been quite a good measure to allow a bit more time after the 15 years to get those changes incorporated into this simplification of existing law. 
I acknowledge the chair of the Finance and Expenditure Committee Mr Shane Jones who helped us get through this process. I wonder who will be our next chair as Mr Jones also nudges someone aside in the upcoming Cabinet reshuffle. I acknowledge my fellow committee members and the former members of the committee as previous speakers have acknowledged. We have gone through I think four or five Parliaments during this rewrite as well as Governments led by both the major parties. 
I acknowledge Sir Ivor Richardson in particular. He is a mountain in New Zealand parliamentary legislative history and an absolute rock. Whenever he spoke to our committee there was silence. Everyone paid a lot of attention to him and to his writing and various opinions. 
I was very pleased to hear the Minister of Revenue say earlier that the tax rewrite committee will be staying together to make sure there are no issues surrounding what we end up passing here. I think that is a very good idea. We could extend that idea not only to other legislation but perhaps to various rewrites of other legislation. Perhaps we could address some termination clauses in much of the legislation this Houses passes. 
There was much collaboration across parties and also consultation with interested parties and experts from many Government departments particularly the Inland Revenue Department of course. I note though that the collaboration and cooperation seen around this legislation rewrite could serve as a lesson. Would it not be nice to have such an approach by the Government of the day whoever that might be to fundamental changes to various New Zealand laws such as the Electoral Finance Bill which is currently being bulldozed through various select committees by the current Government and which is probably one of the most Draconian pieces of legislation this country has ever seen? 
What is missing from this bill? There is no mention of indexation. Yes the Income Tax Bill is a rewrite of existing legislation but it does not really allow for a framework of indexation. In fact as my colleague Mr Chris Tremain the MP for Napier said earlier when he pointed out the absolute deceit of Dr Cullen in Cabinet papers essentially what Dr Cullen is doing is pumping up the economy inflation and interest rates. That therefore drags people into a higher tax bracket and gives Dr Cullen more money to spend and spray around in election year. 
Perhaps we could rename election year as the year in which the Labour Government talked about tax cuts because it is the only time that tax cuts seem to have even been on the agenda. As we recently witnessed last term with the infamous “chewing gum” tax cuts—as miserly as they were at least they were something—as soon as the election was out of the way and the Government had just scraped in the tax cuts were snatched off the table. That was outrageous. Funnily enough the Government has moved on to run even greater and higher surpluses—or to translate it has continued its overtaxation. 
Of course the Income Tax Bill we are talking about here which is having its third reading does not mention Australian tax law although it does touch on various international relationships. But it would be very interesting to talk to some of those 500000 Kiwis who are enjoying Australian tax law and tax rates. It is also interesting that the two major parties in Australia both the incumbent and the challenging Labor Party endorse the philosophical righteousness and the correctness of taking only as much revenue from hardworking workers—Aussies and Kiwis over there—as is needed to run the Government in the best possible and most efficient way. They see the multiplier; they do not see the static. They are not stuck in the mud like the current Government over here. They see not taking as much in tax revenue from Australians as being an investment in Australia. Their aim is not to keep the punters down and control them as the current Government here constantly tries to do. 
I would like to raise another very very important matter. Tax is very complex and taxation law is very complex. Indeed we have five volumes of it here. New Zealand income tax is even more difficult and complex because we have so many tax rates. Many many taxpayers need to contact the Inland Revenue Department to ask questions about various tax matters. Funnily enough the department runs various tax helplines and 0800 numbers for people with questions about GST and income tax etc. People can call a certain number in a certain area if they want to ask about tax law. 
I asked the Minister of Revenue how many phone calls broken down by year and number called had been made to those various helplines over the past 5 years. It was a pretty simple question. I imagine that data is held by the Inland Revenue Department because it seems to manage to give us average waiting times for all the people who have called for example. 
I asked the Minister how many people are calling each number. It was very very surprising to me and I am sure to other members that when the Minister replied he was not prepared to answer the question. He did not think it was in the public interest to do so. He did not think it was in the public interest to know how many people are calling which helplines to ask about income tax. 
Here we are after 15 years passing a bill about income tax. I think that is absolutely outrageous. I have a lot of respect for our Minister of Revenue but on this issue I am afraid he let me down. I will be asking further questions about it because the answer I was given was absolutely outrageous. There will be further questions and further commentary about that issue. How can it be? How can the Government know whether the income tax law is working if it does not know how many inquiries the Inland Revenue Department is getting—according to the Minister? 
I quote from the intention and objective of this bill: “The objective of the rewrite project is to make the legislation clearer so that taxpayers can more easily determine and observe their income tax obligations.” I suggest to the Government that it opens up the lines of communication otherwise it will be in further trouble. 
I would also like to address a matter that a previous speaker the Minister of Immigration muscling his way into the finance portfolio alluded to earlier. He talked about New Zealand debts being at a prudent level. He said that gross debt was 20 percent and that our net debt was zero. He is wrong; debt is about 17.5 percent gross and is positive about 3 or 4 percent net. He said that is prudent; it is imprudent. 
Dr Cullen will get up and rave on about borrowing for tax cuts and about how outrageous it is. Dr Cullen is borrowing for tax cuts. He issues Government bonds. Government bonds are 70 percent owned overseas. The Government does not need to borrow that money so how is he funding the corporate tax cuts he announced in the last Budget? How is he funding the $1 billion of corporate tax cuts he announced in the last Budget? He is borrowing. We should not let him get away with it. He cannot have it both ways. The Government is not prudent; it is imprudent. 
There is one other point I want to make before I sit down. Minister Cunliffe who spoke previously asked where National’s taxation policy is. If the Government were to announce the 2008 Budget tomorrow then National would be announcing its policy not far behind. When the Government announces its 2008 Budget we will give more details of our policy. We are supporting this bill. Thank you very much Mr Deputy Speaker. 
Bill read a third time.