Edmonds Barbara; Leary Ingrid; Penk ChrisHon BARBARA EDMONDS (Labour—Mana): Thank you Madam Chair. I do have a new question and it's relating to the drafting of the revised track version of the bill and it was because of a comment that the Hon Dr Deborah Russell had said around the tax trust rate as 33 percent. Now as members will know this particular bill is looking to increase that to 39 percent which remarkably the Government is now supporting.So my question is: given that clause 3 basically confirms the Schedule in Subpart BB of the Income Tax Act—so that's what clause 3 does in this particular bill. When I look at the report back from the committee it says that We confirm that the trust tax rate is currently 33 the bill increases it to 39 percent." Obviously we talked through the submission process. And then it talks about "We recommend amending clauses 39 and 62 of the bill to insert proposed section HC 40 and update the schedule of basic tax rates in the Income Tax Act." So these amendments would mean that for the 2024-25 and later income years they come into force. And it has a de minimis which the committee has agreed to.So my question is to the Minister. Given that there is a change to a tax rate which we've covered in Part 2 which is the way that it's been drafted within the bill should that not be as part of Part 1 given we are confirming the annual tax rates and if not can the Minister explain why it's not in Part 1? Does that leave a potential grey area? We're confirming in Part 1 the current tax rates which are in Subpart BB of the Act but then in Part 2 of this bill we're saying that this is what the rates should be. It's just a clarifying question for the Minister if he can please answer in response.INGRID LEARY (Labour—Taieri): Thank you Madam Chair. I'm really grateful to be able to continue the very shortened call that I took the first time we sat in committee. If you cast your mind back Madam Chair I believe you were in the Chair with a different Minister. So for the benefit of this Minister in the chair I would like to quote from the Minister of Revenue because I want to ask a question about something that he very directly brought into this debate. If I recall correctly—and you may Madam Chair—there was quite a reaction to this part of the debate; there was a lot of noise from both sides of the Chamber it was clearly something that there was some contention around.What I would like to quote is from the Hansard that time when the Minister said "On this side of the House this Government and this coalition Government are absolutely committed to reducing wasteful spending cutting expenditure and not taxing New Zealanders more." He went on—and I'm not going to use the committee's time to read the full quote but just to come to the end of it and say "the ideological point … how we get ahead as a country is not through taxing more it is through growing our economy and reducing wasteful spending." He brought the notion of wasteful spending into the debate and I'm really interested to know given that taxation and expenditure are kind of like two sides of a balance sheet—so we've got money coming in in taxation we've got money going out as expenditure there needs to be some relationship between them. Yet the Minister has brought in this notion of wasteful spending without giving us any indication about what his definition is of that. I'd like to know that because that has a direct bearing on the relationship between the expenditure and the money gathered in and what is an appropriate amount in these taxation rates.There are questions that I have in my mind—for example we've seen policies around school lunches potentially being cut we've seen the Public Service's cuts to the MPI staff to cut from the Ministry of Health. Just today I've been dealing in my own electorate with the real prospect of two staff from the Ministry for Ethnic Communities being cut. This is relevant Madam Chair because if I am reading this correctly this is an indication from Government members that they believe that kind of expenditure is wasteful. Certainly the Minister was talking about the relationship with wasteful spending. I cannot for the life of me understand why Government members would think that spending money on school lunches for example would be wasteful. I know we've heard an allegation that some of the food does not get eaten but we've also seen evidence that that food often goes out into the community and goes home and that actually only around 6 percent of the food doesn't get used. So I don't see any wastage around that. When I think about ethnic communities I know that the staff in Dunedin have been supporting our ethnic communities to be able to overcome unconscious bias to be able to get into employment in the private sector. The ethnic communities have played a very important bridging role between Government agencies and ethnic communities—that goes to productivity. If I look at the Minister's quote again he talks about growing our economy. So for me having a bridging function from the Government which helps to support growing our economy which means getting more people from ethnic communities able to be employed in the private sector or in the public sector overcoming unconscious bias being able to support them to be able to have job interviews and get placements and so on that doesn't seem like wasteful spending.So I'm really keen to understand what this Minister in the chair if he can speak on behalf of the Minister of Revenue means by wasteful spending. What is the appropriate amount of waste or is it a zero tolerance of waste that he would see as informing that balance sheet between money in and money out taxation and expenditure? And can he comment on the things that I've raised because if they are not wasteful as I believe they're not then how can he justify them? Or what was the Minister who was in the chair referring to when he talking about wasteful spending because he definitely brought it into the debate? I cannot see wasteful spending in the things I've raised so perhaps the Minister could enlighten me as to some examples of wasteful spending and also what that would mean for the relationship between taxation in expenditure out and how you sort of work out that algorithm. I'd be very keen to hear that.Hon CHRIS PENK (Minister for Building and Construction): Thank you very much Madam Chair. Just briefly in relation to the question posed by the Hon Barbara Edmonds the trustee tax rate being increased to 39 percent for the year 2024-2025 exists in subsequent parts to this bill because Part 1 deals with the annual rates for the year 2023-2024.With all due respect I don't accept the argument of the member Ingrid Leary that a passing reference to the phrase "wasteful spending" opens us up on this bill to every matter of Government expenditure. We've talked about the impending public holiday which doesn't likewise invite a discussion about the existence of the Easter Bunny. I think with all due respect it's a relatively narrow debate in terms of the tax rates as set certainly in relation to Part 1 for the current year. I'm grateful to have had this opportunity to discuss this."