Sio Su'a William: Taxation (Tax Administration and Remedial Matters) Bill — In Committee Third Reading 
Sio Su'a William: Taxation (Tax Administration and Remedial Matters) Bill — In Committee Third Reading 
[Volume:675;Page:20771] 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 I am a rugby player. I love playing rugby—rugby league. When I played in better times when I was a lot fitter and stronger I used to love selling the dummy pass. I was good at it. I was good at selling the dummy pass. As long as I had somebody to my side I could show the ball and flick it—pretend that I was flicking it—and I would suck in the other side and always get a score. I used to love that. But I hated it when somebody else did it to me. 
I am using that analogy because I suggest to this Committee that when it comes to the economy and taxation restructuring we have been sold many many dummy passes by this Government. I mean there was the tax switch where the top 10 percent of income earners received over 40 percent of the tax cuts. Somehow— 
Dr Rajen Prasad 
: Dummy pass. 
SU’A WILLIAM SIO 
: Yes—dummy pass again. We were told that those wealthy people would invest their money jobs would be created and somehow the rest of the nation would receive the benefits of the tax cuts that had gone to the rich. Well the reality is that we have high unemployment a high cost of living and families who are struggling. 
We can look at GST. Before the election in 2008 we were sold another dummy pass. We were told that GST would not be increased to 15 percent. Then it was increased to 15 percent and we were told that no one would be worse off. Well the reality is that the highest 10 percent of wage earners pay 7 percent of their after-tax income as a proportion in GST while the lowest 10 percent of earners pay an additional10 percent more than that in GST as a proportion of their after-tax income. 
With the Taxation (Tax Administration and Remedial Matters) Bill the proposal by the Government to abolish gift duty is another dummy pass that we have been told about. Supposedly the proposal is because gift duty generates only $1.5 million but the reality is that the Government is doing this because the duty imposes a high level of compliance costs on the private sector. That is the Government’s wording. We have been told another dummy pass: somehow again this is good for the private sector. 
But let us be quite clear. Why is the gift duty imposed? It is to prevent tax avoidance and structuring. So when we remove gift duty it opens up our economy to tax avoidance and structuring. When we listen to the New Zealand Institute of Chartered Accountants we hear that the institute outlines that a number of tax-avoidance opportunities will arise in the absence of gift duty. Those opportunities include the ability for people to split incomes with those on lower incomes the ability to transfer incomes to loss-making entities the ability to transfer assets in order to meet minimum thresholds for financial arrangement rules and foreign investment fund rules the ability for those with a tax liability to divest themselves of the means to pay and then to claim hardship and the ability to make charitable donations via others so that a higher tax rebate may be claimed. That is mind-boggling. We have been told that this legislation will be good yet you have— 
The CHAIRPERSON (H V Ross Robertson) 
: Order! 
SU’A WILLIAM SIO 
: Sorry. The New Zealand Institute of Chartered Accountants has outlined that tax-avoidance opportunities will arise as a result of the removal of gift duty. We have the regulatory impact statement by the Inland Revenue Department officials who say that “it is not possible to … determine the extent to which gift duty alleviates issues such as income tax minimisation”. In other words the removal of gift duty will give rise to tax avoidance. 
Not too long ago I asked a question of the Minister of Revenue: “What was the total amount of company tax if any written off by the IRD for each month since January 2009?”. I will tell members the answer I received. In January 2009 $9.8 million worth of company tax was written off. In March 2009 $30.7 million worth of company tax was written off. In May 2009 it was $8.9 million in June it was $38.8 million in July it was $12.2 million and so the list went on to June 2011 when it was $11.758 million.