Tabuteau FletcherFLETCHER TABUTEAU (Deputy Leader—NZ First): Thank you Mr Assistant Speaker. It's a pleasure to rise on behalf of New Zealand First and this Government especially in a timely reply to that member Amy Adams' contribution on this Taxation (Annual Rates for 2017-18 Employment and Investment Income and Remedial Matters) Bill. I just want to take the opportunity to address the contribution from the previous speaker. She spoke about it being a stealth capital gains tax. What she failed to ignore in her contribution was that it was that previous party when they were in Government that introduced what they then called at the time a brightline—what did they call it?—a brightline test.Mark Patterson: It wasn't a tax.FLETCHER TABUTEAU: It wasn't a capital gains tax then. No no when they introduced it it was a brightline test and they vehemently denied any kind of argument that this was a capital gains tax. But no today that member on behalf of her party spoke about a new capital gains tax despite the evidence in front of her today—the evidence that has been sitting there for several years. For several years they brought this legislation through and this is not new. In fact the Minister of Revenue was very pointed in reminding the House and the New Zealand public that actually it is only the time period that has changed under this legislation.Let's be very clear: nothing else in this Supplementary Order Paper (SOP) 13 has changed apart from the time period in this legislation. We are simply extending that period.Then the Minister—the previous speaker I should say—seemed to get her facts muddled up which is a polite way of saying it.Kieran McAnulty: Is confused".FLETCHER TABUTEAU: Confused. So the idea when they introduced it—I say "they"; I say that when the members opposite the National Party introduced it—they said that this was to address and they acknowledged it at the time although there was no housing crisis the speculation in the market. The National Party spoke about this brightline test addressing speculation in the market and yet the previous speaker got up and told this House that this will not fix speculation. But that's why they introduced the brightline test in the first place.She spoke about the select committee process. Officials at the time spoke very clearly and in their report outlined why the two-year brightline test would not work. It is in the report at the time. They said it would not work it would not change behaviour and actually on top of all of that no extra revenue would be collected by the Government with the introduction of the brightline test.Let's continue to call it a brightline test shall we? Under the new analysis the officials have told us that in terms of revenue collection yes there now will be a revenue collection of approximately $50 million after the first two years rising over a period of time as about 2000 transactions are caught up in this SOP this brightline test. So I'd put it to that member who spoke previously that this will address the negative aspects of speculation. So when they introduced it they acknowledged that this wouldn't affect investment. A good person who wants to invest in property and have a rental property and rent it to New Zealanders is building rental capacity in the market. Now let's be very clear today in front of the people of this House that this will not change that. Investors will continue to invest in property because they will not be caught up in the speculation and flipping nature of the current speculative property market. So good investors who want to rent properties to Kiwis will not be caught up in this—we need to make that absolutely very clear; in fact quite the opposite.What we will discourage will be that flipping—so you know to buy a property at a price and then flip it on with extra costs. It won't stop it. People can still do that if they wish and in fact some of the confusion in the original submissions in the Finance and Expenditure Committee was around what the tax was attached to. So just for the purposes of the contribution today the tax was on the profit made. So if you know someone bought a property on the Wednesday flipped it on the Friday and made $100000 they would pay the tax on that $100000 not on the entirety of the value of the property. I had a whole other contribution prepared but I couldn't let I will class it as misinformation go by without being addressed from that previous speaker. Look this is more than just the SOP and so with the short time I have left I will just make the point that we have—we're trying to address four main issues here and I think for me one of the biggest issues is around the Inland Revenue Department's Business Transformation process. The previous Government committed very large sums of money—very large sums of money—to kind of modernise Inland Revenue. Now this Government has committed to that because we will acknowledge it's the right thing to do. We need to modernise the whole taxation process. We need to enable the good transacting of information in a timely transparent manner. That is what the Inland Revenue Department is trying to do with their transformation process and that is what this House is trying to do with this remedial matters bill. So we're designing good policy so that the Inland Revenue Department can work on good practice. That is a dual combination that is incredibly important for the people of New Zealand who when you think about it—it's a continual struggle in terms of tax and compliance. Yet it needs to be fair. We need to be working in the best interests of New Zealanders but everyone needs to pay their way. So this transformation process enabled by this legislation very much does that. So in that it will be a success.Specifically we're talking about reforming the administration of the PAYE system in particular the provision of employment income information. I was going to touch on that in detail later on but I just wanted to acknowledge the contribution—the to-ing and fro-ing—in select committee because there was a good level of debate about that reporting period. I acknowledge the National Opposition members on the committee who were worried about small business and compliance in terms of reporting that PAYE material. There is now flexibility built into this legislation so that small businesses are not caught up and unduly and perhaps unfairly penalised for non-compliance in the now. So that was a good robust part of the debate.The second part relates to the collection of investment income information. The third part is changes to the taxation of employee share schemes and I acknowledge the Minister who touched on that. It's about equity. Essentially we don't want businesses to be able to use the share scheme to kind of offset tax obligations in terms of remuneration of employees and use that as a method simply for tax avoidance purposes. So here we are now balancing the playing field with that.I'd like to say actually that when business made their submissions everyone understood—whether it was in the previous party's time in Government or in the recent discussions—the intent there and what we were trying to achieve. Business itself said "Yes slightly more complex and it might put a little bit of pressure on us but if you do it this way we'll be happy to report." So what do you know that's the way we're doing it.The fourth part there was of course the annual rates 2017-18—nothing's changed there from the previous year so not much to be said. The other one was the Supplementary Order Paper which I have touched on in quite significant amounts. Unfortunately I have to conclude but I'll say that this piece of legislation fits in with this Government's intent to very much work smarter not harder; to make the whole process not only for the Inland Revenue Department but for the people of New Zealand who are obliged to pay their taxes—to make that whole system more streamlined easier. Let's avoid mistakes and let's create a fair and transparent system. Thank you Mr Assistant Speaker."