Collins JudithHon JUDITH COLLINS (National—Papakura): Who knew tax could be so sexy? Who knew it could be? We've just heard a very political speech from the member who's resumed his seat Mark Patterson and I liked a couple of the nice things he said about me. He acknowledged the fact that I had worked on this bill that I had actually brought it forward through Cabinet and had got it approved that we would work through it and that the Hon Stuart Nash had taken it over. And I say too I'll give some credit to the Hon Stuart Nash because in Opposition he was very good in working with me on this although I do recall the Labour Party howling at one stage that there were hundreds of millions more dollars that we weren't trying to go after and why weren't we leading the world in this rather than waiting for the OECD and all the other countries to sign up to it. And that's because this is not a New Zealand - unique issue; it's an issue which every country is dealing with. And so we thought it was very sensible to go along and sign up to the OECD international treaty in Paris where at that stage 73 countries had signed up to it—and I understand even more have signed since then—to actually enable the sharing of information and also the complementary in many cases duplicated legislation that is necessary for this to be of any effect.Although we are New Zealand and therefore an extremely superior country in my opinion we are a teeny weeny little country and we do not have the clout and the power or the reach of many of these multinational global companies or incorporations. We would be wrong to think that we are talking only about companies that are based at some stage in some other country; we are talking about New Zealand - based companies here as well. And people would be wise to remember that we have many New Zealand companies that are operating overseas in many different markets that make profits in many different markets that make losses in some markets and many of those markets might just be here in New Zealand. So it is not anything new that companies corporations will in fact shift their losses and their profits so that they have the most efficient use of tax legislation and tax rates. There is an entire industry around this. It's tax advice really.Having said that that doesn't make it something that we should encourage. I think we should as a country make sure that we get our fair share of tax. And the reason for that is this: I've often thought it's only the truly rich and the truly poor who don't pay tax. Everyone else doesn't get a choice. Those who earn salaries wages all have to pay their tax. Those who have investment income have to pay their tax. That's one of the great things with GST of course. It doesn't matter how wealthy somebody is they still have to pay GST. And I think it is really important that we understand this is not actually a bill that we should be engaging in political point-scoring on because none of this would be of any use unless other countries signed up to it.That is why when the member who has resumed his seat who did make a couple of very nice comments—acknowledgment there; not all of them were appropriate though—wanted to sort of say This is New Zealand First and the Labour-Greens Government"—whatever. No it's not; it's actually global. Everyone in the OECD pretty much has signed up to it although as I recall the United States did not at that time although they did do a very similar agreement with us. We were one of the first countries that they did a special deal with so that we could in fact share information and they would share information with us. And that is what's crucial here. So information is king when it comes to this sort of legislation.Is it going to be effective or not? I hope it will be. I hope it will be effective and that it will be effective in this country as it will be effective in other countries because if any of the countries signed up to it who have said that they're committing to it choose not to enforce it not to do what they need to do they will actually be the weak end of the whole deal and in fact they will let this system not work as well as it should do. It only really works if everyone's in it; otherwise all that happens is people just move offshore. And nobody wants that to happen. Nobody wants us to lose iconic New Zealand companies because they've got a better sweetheart deal somewhere else.I always think it's good to remember in the New Zealand story that huge big global multinational GlaxoSmithKlein or GSK as they're known now started in Palmerston North New Zealand with milk powder. That's the story of New Zealand business and where is it now? Not really here. Not based here anyway although GSK is here but not to the extent that one might expect. It is in fact now very much multinational very much based out of the UK and Switzerland and all sorts of other places because actually that's what companies do; they will in fact go where the best deal is for them and their shareholders. And they'll also look at not just tax because that is very important but also the business environment. So this legislation although it's extremely worthwhile and our officials from the Inland Revenue Department worked very hard on this and will no doubt continue to work hard on it and were seen in the OECD—and I got this straight from the OECD—as having contributed in a very positive way towards the work and basically the model law that was put together and signed up to as a treaty the point really is that none of this will work unless it is (1) respected: endorsed by companies and corporations in New Zealand; and (2) treated exactly the same way by other countries so that there is not just de facto base erosion and profit shifting that go around between countries that have signed up to this and then suddenly don't actually enforce it. That's the weak link in this; it needs everyone to do it. And I think that this is a bill that has potential but we don't actually know how much that potential is.So when we talk about "Is it $200 million? Is it $500 million?" all the advice I got was around the $200 million mark that we would be saving New Zealand but actually we don't really know because you don't know what you don't know. And until you start counting you don't actually know. And even then it's only going to be effective if the companies or businesses themselves respect it and actually comply with it without having to be checked constantly. They're not going to do that unless they know that the Inland Revenue Department will in fact be looking at this and whether or not there is a commitment from the accountants and the other tax advisers towards this. But my experience in law is that whenever there is a new rule put in place it gives a lot of extra work to lawyers and accountants to work out how to get around it. And clearly that sort of thing will happen. So whether or not this is the answer for all tax issues around the multinationals—I'd say the answer is no. What it is is a step in that direction. It is a step towards making sure that countries and particularly countries who don't have the resources that even a small country like ours has are able to get at least their fair share—or at least some of that fair share—of the tax that they're owed.I think it is always amazing. And I will allude to one of the comments of the previous speaker who alluded to the fact that some companies apparently make a tremendous amount of revenue and seem totally incapable of making more than say I don't know $50000 profit. I don't know if it's got anything to do with named companies like Apple or others but I've often thought "If they can't make money here I could take it over because I could certainly make money with that sort of income" and I think most people would think that too. We just don't believe it when we're told constantly that huge global international companies with massive reach more power than any Government that New Zealand has ever seen and more power than any Government will ever see suddenly can't make a bean. Well they should sack everyone then and start again because clearly there's something wrong. So I think New Zealand is taking the right step. I'm pleased to see such love and peace breaking out in Parliament today to support this bill. I think it's a good piece of work and I give full credit to our officials at the Inland Revenue because it's actually their work not only in New Zealand but also in the OECD. We who have been Ministers and who are Ministers can go along on their coat-tails. It's a good piece of work—nice to see everyone agreeing."