Hodgson Pete: Taxation (GST and Remedial Matters) Bill — In Committee Speaker Recalled In Committee Procedure Third Reading 
Hodgson Pete: Taxation (GST and Remedial Matters) Bill — In Committee Speaker Recalled In Committee Procedure Third Reading 
[Volume:669;Page:16132] 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 Parliament is the shop window of democracy and since this morning the Opposition has been parading its distress at the process by which we are passing taxation legislation. If anyone is listening to this debate they may well be confused as to why we are resistant to the process. The answer lies in the complexity of the legislation. No legislation—except in exceptional circumstances—should bypass a select committee but taxation legislation in particular is astonishingly difficult. It is famously difficult. Parliamentarians are ordinary people. There are no tax experts amongst us so we seek to give tax legislation the scrutiny that is needed with the assistance of experts. That is how taxation law is made and how it has always been made.  
For those folk who are listening I will give some indication of the complexity. We are looking at Part 3 of the Taxation (GST and Remedial Matters) Bill. There is a large Supplementary Order Paper that is as large as the bill itself—in fact slightly larger. It has been put into the mix without going through a select committee so the bulk of the legislation has not been subject to a select committee. I will quote from the bulk—the Supplementary Order Paper—which contains bits of amendments. Almost randomly I will quote from new clause 80B in the Supplementary Order Paper in reference to new section 42B in the principal legislation. This is the chapeau: “Returns by look-through companies and owners of interests”. Let us read the English that follows: “This section applies to persons who have effective look-through interests for a look-through company and to their look-through company.”  
Now let us see what an owner of a look-through company looks like. I will briefly go back to Part 2; I am sure the Chairman will allow me to do so. Here is what an owner of a look-through company is: “A person who has an effective look-through interest for a look-through company has a deduction to the extent to which a deduction results from the application of subpart HB (Look-through companies) to them and the look-through company.” I will read that again. Here is what the owner of a look-through company is: “A person who has an effective look-through interest for a look-through company has a deduction to the extent to which a deduction results from the application of subpart HB (Look-through companies) to them and the look-through company.” 
Hon Trevor Mallard 
: It is more a mirror than a look-through. 
Hon PETE HODGSON 
: My non - learned accountant colleague Trevor Mallard suggests that it is more a mirror than a look-through. I think that is a prescient remark.  
We must take that prescient remark and return to Part 3 where new clause 80B inserts new section 42B(1). I will read to the Committee another bit of English; we have read it out before but we will have it again. It states: “This section applies to persons who have effective look-through interests for a look-through company and to their look-through company.” We can see—I am not sure what we can see. That is really the point. I could go to any other part of this legislation and take it out of context. That is what I am doing; I know it is unfair but that is what we are invited to do. We are presented with the amendments not with the parent legislation or the amendments in the original amendment bill. That is the whole point. Supplementary Order Papers are out of context. That is how they are designed.  
The explanatory note of a Supplementary Order Paper is non-explanatory. It is a codified English of what is going on clause by clause. I will give the Committee a random example of the explanatory note but only briefly because it is not part of the bill: “New clause 42BAB amends section HG 12 of the Income Tax Act 2007 consequential to the introduction of look-through companies.” Members get the point.