Nash Stuart: Taxation (GST and Remedial Matters) Bill — In Committee Speaker Recalled In Committee Procedure Third Reading 
Nash Stuart: Taxation (GST and Remedial Matters) Bill — In Committee Speaker Recalled In Committee Procedure Third Reading 
[Volume:669;Page:16124] 
STUART NASH (Labour) 
: 
 It is interesting that the Minister Peter Dunne has stood up and told us a couple of times about the process the Taxation (GST and Remedial Matters) Bill has been through to get to this stage. There are just a couple of things I will say with regard to the process Mr Dunne has outlined. 
The first is that this is the standard sort of practice Labour members expect any tax bill to go through and that I think New Zealanders would expect any tax bill to go through: it is signalled it goes out for consultation consultation comes back in a bill is drafted it goes through the first reading it goes to a select committee and in the select committee we have a robust debate. Mr Dunne has said that the bill has gone out to all the tax consultants and he talked about chartered accountants the Law Society etc. Well those esteemed experts in this area have had about 5 or 6 months to look at this bill to make changes to add suggestions to delete things and to have quite a lot of input. If that is the case then why should Labour MPs have only 2 days—6 months versus 2 days? The reason I am a little bit upset about this time period and the reason we are so opposed to it is that we are representing New Zealanders in a democratic Parliament in a democratic country. If the people of New Zealand are not given an opportunity to have a say about how legislation is drafted then that breeds a level of mistrust. That is what it does. 
When did the Budget come out? The Budget was out in May. The Tax Working Group concluded its work in January. Mr Dunne is right: these changes were signalled they were out there. So why was the bill not drafted beforehand? This bill could have gone to a select committee in November it could have been referred back and it could have been passed by now if the Minister had put a little bit of oomph into it. This is symptomatic of the Minister’s handling of this portfolio. We have seen it time and time again and it is just not good enough. We see it with regard to the supposed review of child support. That review was going to be done in the first 4 months of the Government’s term. Now 2 years later the report has only just been released. I tell Minister Dunne that this is sloppy. He could have had something drafted. The Minister mentioned that this matter was out there in January. It was signalled in May. Labour knew about it. As I mentioned we do not necessarily oppose all of this; we just would have liked time to consider it. We would have liked time for our independent tax expert to sit down and brief Labour members of Parliament. 
I turn to new clause 78B on Supplementary Order Paper 187 which deals with notification requirements for multi-rate portfolio investment entities or PIEs. They were set up post-KiwiSaver but the Act that brought them in had provisions that were open to abuse. Portfolio investment entities are used a lot by people who are saving for their retirement. I wonder whether Grey Power was consulted about this measure. I will read out subsection (3) of section 31C that is inserted by new clause 78B: “For an investor … who invests in a PIE that calculates and pays tax using the provisional tax calculation option under section HM 44 of that Act the PIE must notify the investor—(a) by 31 May after the end of the tax year if the PIE is not a superannuation fund or retirement savings scheme and has an income year ending before 31 May; or (b) by 30 June after the end of the tax year if the PIE is a superannuation fund or retirement savings scheme and has an income year ending before 30 June; or (c) within 2 months after the end of the PIE’s income year”. 
There are tax implications around this and we are struggling to get our head around them. My colleague the Hon David Cunliffe said that we are having to cross-reference the bill with Supplementary Order Paper 187—which is larger than the bill—to find out the actual effect of these changes. It is very difficult to do that on the hoof. It is difficult to do that with any legislation let alone tax legislation—more so with tax legislation. That is why for example we were very disappointed when the debate on the substantive part of the Supplementary Order Paper was closed down after only three-quarters of an hour. We did not have the ability to debate it and in our own minds understand the implications of it. Mr Chairman you will be well aware as will many members of Parliament that after tax legislation is passed we always get a number of emails from normally concerned constituents who wonder whether the change has implications for them and why it was done. If legislation goes through the select committee process we have the ability to reply to those emails and concerns in a very timely manner. That is the way in which Labour members like to conduct their constituent relations. 
As my colleague the Hon Trevor Mallard noted Supplementary Order Paper 187 was tabled on Tuesday. A 70-page Supplementary Order Paper which as mentioned is larger than seven of the nine pieces of tax legislation to go through the House during this term of Parliament was tabled on Tuesday. Members of other parties have not had the ability to sit down as a group to discuss it because this is the time of year when we are off attending school prize-givings and a whole raft of functions in our electorate. In fact that is what we should be doing at the moment. We should not be sitting here under urgency near Christmas. We should be out there dealing with our constituents. 
Paul Quinn 
: Do you have an electorate? 
STUART NASH 
: Wait till 2011; Mr Tremain knows about that! The bottom line is that the difference between Labour list MPs and National list MPs is we continue to work very hard for our constituents. We work extremely hard whereas Mr Quinn apparently according to some publication I read should not even be here. 
I go back to the tax legislation. I know what will happen about this change to portfolio investment entities. Members of my caucus will send me the Opposition spokesperson on revenue—probably tomorrow being Saturday or on Sunday because we all work Saturdays and Sundays and maybe even on Monday—emails to tell me that they have had emails from constituents who are really concerned about the changes to the tax legislation around portfolio investment entities that are outlined in section 31C(3) in new clause 78B. In fact I think the changes go through to new clause 80C. It will have been reported in the business press that there is a change to the tax law around portfolio investment entities. That is all they would have heard. If there had been a select committee hearing process I could respond straight away to my colleagues and explain the reason for the new clause. I could say that it was discussed at the Finance and Expenditure Committee it had gone through the whole robust process and we had accepted it in order to improve the integrity of the tax system or to make it easier and more transparent for taxpayers or whatever. If an amendment has gone through the select committee process there is always a good reason for it. 
As has been commented on earlier Labour supported the original bill through the select committee. It was a fantastic atmosphere because we all agreed that we wanted to do the right thing. We asked a whole lot of questions. We worked well. There was not one provision in Part 2 that I can remember that we argued against or took a political line on. We all agreed with it. I put to the Minister that he had time his officials had time to draft legislation after this issue was signalled to get it out to the appropriate consultants and the appropriate experts to get it drafted in another bill—not a Supplementary Order Paper—and to get it before the select committee instead of rushing it through under urgency on a Supplementary Order Paper. All we ask is that tax legislation is not rushed through in this manner because it gives us no confidence. 
Not only does it give us no confidence but it gives the people of New Zealand no confidence. They will read that tax legislation has been rushed through the House. They will read that a 71-page Supplementary Order Paper that contains a whole lot of amendments to a 57-page bill has been rushed through the House. Those who engage in these matters—the sorts of people who would have submitted to the select committee—will ask why it was rushed through under urgency and why they did not have the ability to comment on it. My colleague Trevor Mallard alluded to the fact that Federated Farmers had not been asked about it. As I asked earlier was Grey Power consulted over it? I suspect that it was not. A lot of people who would have presented to the select committee were not consulted about the portfolio investment entities changes or any of the changes.