Seymour David: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — First ReadingText is incorporated into the Bound VolumeSeymour David: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — First Reading[Sitting date: 08 December 2015. Volume:710;Page:8653. Text is incorporated into the Bound Volume.]DAVID SEYMOUR (Leader—ACT): I rise on behalf of the ACT Party in support of the Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill. This is a bill that takes in a number of very interesting matters of taxation policy and when I think about them—Grant Robertson: Tell us about them.DAVID SEYMOUR: Well for the honourable member I was thinking of doing just that—and I thought about what Adam Smith once said about an income tax. He said that it would be an intolerable intrusion into the affairs of men and women to impose an income tax and 300 years later is not this bill a demonstration of Smith’s prophecy? In order to have a brightline test on gains made from sales of housing within 2 years—it all sounds very noble to begin with that we are going to suppress the price of housing when in reality the real problem with housing is not on the demand side but the supply side. In reality due to a failure of local government we have built 40000 houses in the last decade and 50000 in the decade preceding it.It all sounds very noble but it is not going to work to have a brightline test and an effective capital gains tax on housing. But then we get to the implications of taking that sort of policy approach misguided as it was to begin with. One of them is that if the State wants to tax people for property transactions then it must come to Parliament and ask for the power to withhold the proceeds of a sale—either 10 percent of the sale value or 33 percent of the projected capital gain—in order to enforce that tax. Otherwise in the case of foreign residents this tax would be unenforceable and impractical and is it not a reminder that every time we come to the House with noble ideas about collecting revenue on behalf of the State to achieve various social outcomes it always results in having to extend the power of the State and intrude further into the affairs of people?I regretfully vote for this measure. I think we are going completely in the wrong direction. But it is a Budget measure and voting for Budget measures helps me to keep Grant Robertson over there where he belongs and these fine people over here where they belong and that is very very important. If I ever have any doubt that that might be very very important then all I have to do is listen to the economics of Fletcher Tabuteau. I have to say I wish I had had the dinner break with Fletcher Tabuteau because it must have been quite the dinner break. I thought that his economics were a little bit unorthodox before but after that speech I can see that he is three sheets to the wind.GST on online services is a challenge or at least reflects a challenge that all nation States face in a globalising world. There are transaction costs to collecting taxes. There always have been and there always will be. That is why Adam Smith said that it is an intolerable intrusion into the affairs of man to collect an income tax. As the world globalises as people start to consume music from internet-based virtual multinationals as people begin to order T-shirts from the other side of the world—some of them even big enough for Grant Robertson—people find that it is harder and harder to collect taxes. Yet there is a way that we can pursue broad-based low-rate taxes in New Zealand and that is to identify large-scale high-volume low-number holders of monopoly powers—in so far as internet providers such as iTunes for instance or Netflix—where it is very easy to target the provider for taxes.I had hoped to inform Mr Robertson about my beliefs with regard to the student loan section of this bill. Alas I am somewhat out of time but what I would say is that the rationale for taxpayers to fund education is that it is a public good. Education is not a public good when the person with that human capital leaves the country. So anything that this Government can do to ensure that the returns on that capital are captured back to the New Zealand taxpayer has got to be a good thing. So on balance despite the rather intrusive residential land withholding tax aspects of this bill I commend it to the House. Thank you.