Foss Craig: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — Second Reading 
Foss Craig: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — Second Reading 
[Volume:629;Page:1900] 
CRAIG FOSS (National—Tukituki) 
: 
 First of all I thank the Finance and Expenditure Committee. Having been an MP in this House for 6 months—180 days are almost up—I can say that I have very much enjoyed being part of the committee. I endorse the sentiments of the previous speaker in respect of the willingness of everyone to try to make good legislation even though inherently we may not agree with the legislation or regulation. It would be great if the public could see more of what actually goes on in and around such a select committee rather than perhaps the somewhat ugly picture they get of this debating chamber sometimes. I am also indebted to the officials who contributed to the bill. They provided expert advice to the committee and followed us around the country as we heard submissions etc. I think the public would be surprised at how much effort goes into making this good legislation. 
The National Party supports the bill. The bill is a step in the right direction—perhaps a small step; a big toenail. It is tentative and yes I have to concede that it is business-friendly thus the National Party is endorsing the bill and helping it along the process. I guess it is also part of dragging current tax regulation and thinking into the new millennium. That can only be a good thing but boy we have a long way to go. There were many submitters on the bill from Federated Farmers down to individuals who have a stake in the future of our economy and in the goings-on of their own financial affairs. The committee is indebted to their expertise and the sacrifices they made in coming. It is a very technical bill in places. National supports the bill in the direction it is being taken. 
One point I raise—and I am quite happy to be corrected—is that I believe that the Minister of Finance talked about this bill being of benefit to industry etc. by hundreds of millions of dollars. I am quite happy to be corrected but I do not think that is quite the case. It is a cash-flow issue between various payments of various taxes. It is a cash and funding issue or an opportunity cost issue of the non-use of various funds that are paid on say GST payroll tax and fringe benefit tax. I am happy to hear more on that one later. 
The bill also deals with asset thresholds. I applaud the movement from $200 to $500 for the thresholds but I argue why we should stop there. Many submitters argued that we should go further and I acknowledge previous speakers who have at least considered the issue. They should be bold be brave. Yes consideration was given to perhaps moving that threshold to $1000 and to what the fiscal costs would be but we did not look at the benefit of having trust and faith in investing and lessening the tax base growing New Zealand’s economy and therefore creating more tax in the second place. We should have faith in New Zealand’s taxpayers. Every quarter Statistics New Zealand releases numbers. The surplus is bigger than forecast by another billion dollars or so. Billions and billions of dollars are coming in and more money is being siphoned off the private sector yet the private sector is struggling and here we are tinkering to say the least with existing tax regulation. I think we need to be much bolder and to go much further. 
That boldness would not extend of course to something like the payroll tax which has been discussed in recent forums. I suggest that that same payroll tax is not the bold measure we need to take New Zealand forward. In fact it would do quite the opposite particularly for those workers whom the Labour Party alleges to represent and care about. I hope that the Minister of Revenue and the Minister of Finance get together and find a similar line on that issue. 
The previous speaker mentioned New Zealand’s productivity and the difference between capital productivity and labour productivity. We need to have that discussion because New Zealand’s productivity has hardly moved. It has moved on the basis that we have worked longer hours. The Government is essentially regulating to incentivise capital productivity over labour productivity—making it more expensive and therefore harder to employ people—but I do not think the public are aware of the implications of where that will take us. Again I ask the Ministers to have faith and back New Zealanders—back them to make the right decisions for themselves. 
I would like to touch on the returning migrants clause. Again yes it is a step in the right direction. But let us look at the underlying assumption. Why is it necessary to incentivise Kiwis who have long since abandoned New Zealand by offering them a zero percent tax rate for 3 or 4 years? Does not that speak absolute volumes about the existing economic tax and fiscal conditions of New Zealand? I would like one day to go to the place where there is no need to offer incentives for Kiwis to come home after 10 years. In fact I would like them to stay here in the first place. Ten years is the limit that people have to be overseas before they can apply. How do we incentivise those 600-odd a week who have fled across to Australia over the last 6 years of this Government? By merely trying to match what Australia is offering all we will do is cement ourselves and our distance behind Australia. We have to be bolder we have be more aggressive and we have to have much more lateral thinking. I for one do not agree with what I read that the Minister of Finance said recently that Australians should treat New Zealand as the fourth state. 
Hon Dr Michael Cullen 
: I didn’t say that. 
CRAIG FOSS 
: Again I am happy to be corrected. 
We touched on asset schedules throughout the bill. There has been discussion on the straight-line percentage base. I think most people out there got the point. But again companies out there have forests of books bookkeeping asset schedules etc. to the nth degree of some asset they started to write off 4 or 5 years ago. It is just pointless. Again it is a useless compliance on business. Businesses are wasting time not doing what they are supposed to be doing or trying to do which is adding value to the New Zealand economy. 
The bill also touches on share lending. Again it is a step in the right direction. It is the beginning of the process of developing the repo market for equity securities. Well done on that part but again we have so much further to go. The result is that essentially it incentivises one asset class over another. Everyone even the submitters agrees there is a lot more work to do on that particular part of the bill. I look forward to contributing to part of that work as part of the Finance and Expenditure Committee—particularly once we touch on the areas that are not even addressed in the bill of derivatives credit derivatives etc. that have a massive impact on the true value of various companies. 
The bill also touches on flip-flops. That term has been bandied around in this Chamber recently. The flip-flop leases the 9 to 5 leases and the various ways in which the bill is trying to address them and fix them are very technical. In fact I think most of the submitters were talking about these particular issues. I fully confess I am no expert in that field. Again it is a step in the right direction but we are tinkering with existing law. We are applying band-aids. We are tinkering with flip-flop leases. We are tinkering with asset thresholds. We are tinkering with payment dates. We need fundamental change. I look forward to the day when Mr John Key is Minister of Finance and we start to address fundamental change. Also a previous speaker touched on the racing industry policy. I hope he acknowledges later on that this is an outright steal of National Party policy. It was a plank that we went to the previous election on. 
I would also like to say that in the middle of preparing for this 10-minute speech I attended the welcome on the parliamentary steps for the petition that has just arrived. It really brought home to me that New Zealanders are dying New Zealanders are suffering as the Government cannot find funds to assist them. It brought home to me that it is people people people. Yes this is a law; this is tax tax tax and we have to get it correct. But it is the people who are important and I hope we keep that fully in mind as we go forward and try to make New Zealand a better place. 
I will be supporting this bill. The National Party supports this bill. It is a tentative step in the right direction.