Cosgrove ClaytonHon CLAYTON COSGROVE (Labour): As a member of the Finance and Expenditure Committee (FEC) I will say firstly something positive about this bill given we have dispatched a number of tax bills—and in fact I have almost lost count of how many tax bills the committee has dispatched over the life of this Parliament. I will say that this is a better-quality bill in terms of how it is put together than bills we have dealt with in the past. I recollect—just as a brief sidebar—the brightline test which was a complete shambles of legislation. I had never seen a tax bill where every accounting firm in New Zealand—the big five" and the rest—came in and said: "This won't work." I recall other tax bills that we have dealt with through the FEC such as the former Minister of Revenue's bill around car-parks and computers and all that sort of thing.I just say in passing that the thing that has always worried me about these particular bills speaking from my 18 years in this place and having been on the FEC a few times for a few of those years is the way Ministers' offices are dealing with these bills and some of the quirky colourful bizarre and sometimes idiotic ideas that emanate from the bowels of the bureaucracy. In the past they would never have hit a Minister's desk. They would never have hit a Minister's desk or if they had hit a Minister's desk they would have had a lot of robust thinking and policy work around them. I mean no disrespect as such particularly to the IRD but when you lose people like former Deputy Commissioner of Inland Revenue Robin Oliver whom I had the pleasure to hear submissions from when I was chair of the FEC—the advice that one received around these bills the process and the quality of the legislation was extremely high. But I say that this bill is an improvement on some of the legislation that has been rushed through in an ad hoc way where as I said even the "big five" accounting firms have in the past been derisory in their views of it.Clause 3 is self-evident. I do not think the ratings for the show this afternoon in terms of parliamentary listening will go through the roof as we progress through the Committee stage of this bill but I will pick up on a couple of things that other colleagues have said. There is a principle around when you are setting tax rates. When you have a tax system the tax system has to be simple and transparent—simple so that people can deal with it and transparent so that it is easy to understand you can work within the system and hopefully the system can work for you and is accountable. But as other colleagues have said when the Government chose to reduce tax rates one of the things that I think it forgot was this issue of equity.There was an opportunity in terms of equity and fairness as this bill was put together to examine and look at the whole of the tax pie—to look at who is paying what and as my colleague Iain Lees-Galloway said where the major burden of tax lies. He pointed out that 13 percent of our tax take is corporate. Some would argue that that is particularly low. The Government has made much of cracking down—or attempting or at least talking about it or blowing a lot of hot air in respect of cracking down. I notice these multinational companies that in the Government's view do not pay their fair share of tax. You know we wait with bated breath to see those proposals. I would have thought I might have seen them with the previous Minister of Revenue Peter Dunne who I think holds the record as I had said before as the longest-serving revenue Minister in the Commonwealth.The CHAIRPERSON (Lindsay Tisch): Order! Back to clause 3.Hon CLAYTON COSGROVE: We may have seen some of those—well it is quite germane and I will tell you why it is germane Mr Chair. It is germane because when you put it together in Part 1 clause 3 you are confirming a set of tax rates and the question is: are those tax rates fair? It is germane when the Government has purported as I say to make much of its so-called attempts to see whether multinational companies should pay their share of tax. That is not contained in this piece of legislation nor in this clause.Those who pay the tax—the middle class those working people and even those at the top and the corporates—do expect some accountability for the tax that they pay. For ordinary working folk or for every New Zealander they expect that that tax is utilised in such a way that they can for instance line up at a doctor's or line up at a hospital and have their injuries or their illnesses dealt with. We have debated day after day and week after week in the life of this Parliament that we see degradation of the health system and those people will be asking today as we confirm these rates: "Well am I getting the best bang for my buck? If I've been on a waiting list for 6 or 12 months where are my tax dollars going?".The same argument may be made in respect of our police force. In terms of those people who have been impacted on either through burglary or through assault or other crime they may be listening to this debate today—or as their local police may say to them: "Well we're under pressure"—The CHAIRPERSON (Lindsay Tisch): Order!Hon CLAYTON COSGROVE: —"of resources." Those people Mr Chair are listening to this debate—The CHAIRPERSON (Lindsay Tisch): Back to the annual rates.Hon CLAYTON COSGROVE: —but it is germane—about clause 3. It has to be germane if I am sitting at home today and listening to a debate about clause 3 in which this Committee is confirming a set of tax rates that within that financial year will raise revenue and that revenue will be deployed amongst a variety of portfolios. It is germane for those listeners sitting at home to ask the simple question: are they getting the best bang for their buck out of these tax rates which we confirm today? I do not quite see how it can be anything but germane to the debate—whether it be in respect of health or the ACC or people who are impacted on in respect of law and order. All those portfolios are funded ultimately out of the revenue.The Minister sort of shakes her head. She is the Minister of Revenue and she must at least know that clause 3 sets a rate of tax that will then generate income for the Government and that that will be deployed in other portfolios. If she shakes her head then there is something really wrong and maybe we should sort of suspend the debate and maybe her officials should go and have a wee chat to her to explain the basis of raising taxes.It would be interesting and it would have been interesting as I think other colleagues have said if the Government in proposing clause 3 had put out there in a transparent way the total tax pie so that we could have a clear debate as to who pays what. I say that in confirming these rates it will be interesting whether the Minister or her officials are prepared to stand up and answer some of the questions that we have put to them in terms of whether they think these tax rates are fair; whether there is a fair distribution across the board; whether they think that in the case of say corporates on the 13 percent rate they believe they are paying their fair share; or even—as a germane but side issue as the debate continues—what their practical plans may be for eliciting further taxation from multinational companies which they themselves as members of the Government say are not paying their fair share.If they are not paying their fair share—OK I think we could get a reasonable amount of consensus across Parliament on that. The question for the Government as we move through this narrow clause 3 is what is it actually going to do about it? Presumably it could make an alteration to these rates. If it was gaining more taxation out of say multinational companies which it believes are not paying their fair share then that may provide some equity some fairness.So it will be interesting to see whether the Minister will take a call. If she disagrees with my analysis that setting annual rates then allows you to tax people and that tax is then raised by the Government and then deployed into portfolios like health education welfare etc. etc. then I am prepared to take a lesson from her. I know she is extremely exquisite—Hon Member: Erudite.Hon CLAYTON COSGROVE: —and erudite—I was talking about her arguments—in providing lectures for people. She has made an art form of it in this place—the lectures that is. Some of those lectures have sort of been her downfall but hey she is here now. She has got back on the black leather in the Cabinet room so we should celebrate that fact. But I will be interested if the Minister is prepared to respond."