Williams Andrew: Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill — First Reading 
Text is incorporated into the Bound Volume 
Williams Andrew: Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill — First Reading 
[Sitting date: 29 November 2012. Volume:686;Page:6984. Text is incorporated into the Bound Volume.] 
ANDREW WILLIAMS (NZ First) 
: 
 I take a call on behalf of New Zealand First on the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill. New Zealand First will not be supporting this bill as we do hold a number of reservations concerning it. Although New Zealand First does support good policy and does support moves to improve taxation we do believe there are some reservations concerning this bill in regard to two factors—the first being new farmers having reduced autonomy by having purchased herds and secondly due to debt stacking. 
Firstly on the new farmer situation herd scheme valuations began in the late 1980s and the idea was to effectively treat livestock as a capital asset. Under the herd scheme changes to the value of their livestock were not subject to tax. In 2003 and 2009 many farmers left the herd scheme predicting that livestock values would decrease. They did not want to pay a higher tax rate than what their livestock was actually worth and that is understandable. This Government this National Government has since announced that farmers cannot elect to exit the herd scheme. The National Party—you know it is surprising considering that a big chunk of its support comes from the likes of Federated Farmers as we heard earlier in the Local Government Act 2002 Amendment Bill debate—likes to pride itself on individual responsibility but it will not allow individual farmers this fundamental control over their assets. Under this new piece of legislation herd scheme livestock that is sold to an associated party will also be required to remain under that same scheme. So someone’s new asset will be subject to a scheme that was either accepted or rejected by a previous owner. We in New Zealand First do not believe that that is fair and once again we feel that the Government is doing a disservice to its very constituents the farmers of New Zealand by adopting this and that has been the feedback from many farming circles in respect of it. 
Secondly in regard to debt stacking KPMG has also come out and advised that it has concerns about the debt-stacking aspect to this bill. It says: “For mixed-use assets held by a close company the concern is that all interest deductions in respect of the asset will be allowed (under the general interest deductibility provision for companies) and/or the debt might not be in the company itself. Therefore an interest apportionment rule is proposed to address situations where debt is in the company or its shareholders’ hands.” It goes on to give examples of debt-stacking complications and how it would not necessarily work. So when you have the likes of KPMG on the one hand raising some doubts about the debt-stacking side of this and when you have some in farming circles saying that they do not feel it is right that they cannot withdraw from a herd scheme that is somewhat historic and that they do not want to be in any longer—but this Government is requiring them to stay in it—then we feel that there are some errors in the way this legislation has been brought to the House. 
But perhaps it is symptomatic of a wider rust or rot in terms of this bill because we have heard about some of the other bills where the Government is focused on tinkering around the edges such as taxes for paper boys and paper girls in this country. You know it is attacking those who can least afford taxation changes while at the same time giving huge tax relief several billions of dollars to its rich mates the wealthy and the top 10 percent earners of New Zealand: the $5 million Telecom man who got $4000 or $5000 a week in tax relief and the Prime Minister who got $1000 a week more in tax deduction. Those sorts of things are all very well but then National goes and attacks its very own supporters the farmers of New Zealand with their herds and other aspects which is not right. This is at a time when New Zealand has record unemployment. We have got massive overseas debt and rising the balance of payments is appalling and predicted to rise even further and the manufacturing sector is in crisis and indeed in meltdown. What does this Government do through all this? It just basically tinkers around the edges with the taxes such as this bill and really does not get on with the bigger picture of growing the pie in New Zealand growing the economy growing the opportunity for jobs and employment and giving younger people an opportunity in this country to actually leave university or leave school leave education and get into a worthwhile career. It tinkers around the edges with silly little bills like this herd management scheme. New Zealand First will not be supporting this bill. We oppose it.