Bayly AndrewClauses 1 and 2ANDREW BAYLY (National—Hunua): Thank you very much Mr Chair. While the title's self-explanatory albeit rather long the Taxation (Annual Rates for 2018-19 Modernising Tax Administration and Remedial Matters) Bill 2018—anyway I'm not going to go on about the title; it is as it is. I think the much more significant issue is around the commencement date and obviously clause 2 sets those out and there's a myriad of them going over a couple of pages. But I think the context for the commencement date of this legislation is actually quite important because while some of the matters covered in this bill and it is an omnibus bill cover aspects such as fixing up old pieces of legislation etc. the key part of it is around what's going to happen with the new tax arrangements with the IRD as the IRD is rolling out its new system. As I've spoken about before I think the key issue in the context of this discussion around the commencement date is that we've had one million taxpayers who have had a relationship with the IRD and we have all their contact details and principally their emails their addresses and their phone numbers so that if the IRD wants to contact them they've got the option of an email or they can actually send a letter or in the last situation that can actually call them and that's good—that's fine and dandy. The second thing is though we've got one million of these taxpayers who have up to now been principally serviced by 30 personal tax summary intermediaries (PTSIs) and they've always had the relationship with the intermediary not with the IRD system or the IRD department itself. And that information needs to be transferred across to the IRD and no doubt that is taking place. Whether that will have occurred at all by this commencement date for this component 1 April is another question and something I'd like to hear from the Minister. But there are 30 of those PTSIs in place and some are big and some are small. But the most worrying component is the million taxpayers who've never had any dealings with the IRD—or actually in fact with anyone—because they've never really had to file a tax return and that's the issue that worries me about the commencement date in this piece of legislation because the IRD the department has actually estimated that about 1.67 million people will get a refund. And that's great. But if you can't send the refund to the right people or the right address or whatever that's going to sit in abeyance held by the IRD and there's an obligation to pay that to taxpayers.But the more important side is on the debt the issuing of the—well the situation where about 263000 taxpayers are going to get a bill for the first time will get a bill for tax for the current year. But of those it's estimated about 115000 will be receiving a tax bill for the first time. And I think here is the issue about putting this in place. We've got a computer system that's coming into play now. It was due to start the transfer from FIRST to the new system called START on 23 April. That's already been delayed. There's been some testing of that system as I understand but using a sort of a batch system but the metal is going to hit the road from 1 April. And when you put that in the context of when these refunds should be paid back by the IRD to taxpayers—normally by about June; in just a few months' time—the capability of the IRD to be able to do that is of concern. And I think just going forward in terms of that tax liability that's going to be incumbent on taxpayers to meet if they're not aware of their obligations—and many don't read papers don't read emails and don't have contact and are simply out of the system—they will be building up penalties and we know they become very significant: 1 percent after the first day and 4 percent rising thereafter. And those over time become very very significant. So I think the question around the capability to service this—we know that there's a bigger call centre; over 300-odd people but is it enough? And are there enough people in the IRD to be able to handle the incredible amount of additional information that's going to come—not monthly from employers but from now on out weekly because most people pay salaries and wages weekly—a big concern.