Cunliffe David: Taxation (GST and Remedial Matters) Bill — In Committee Speaker Recalled In Committee Procedure Third Reading 
Cunliffe David: Taxation (GST and Remedial Matters) Bill — In Committee Speaker Recalled In Committee Procedure Third Reading 
[Volume:669;Page:16180] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I will begin by continuing the theme that my colleague Trevor Mallard picked up. That is to say that it looks like a random number generator has wandered its way through the pages of this Supplementary Order Paper so incoherent are the commencement dates of the various clauses. To give just a few examples the amendment to insert new clause 2(7B) covers sections 74(7G) 79B(1A) 79B(1D) and 79B(3) which are treated as coming into force on 1 April 2009 whereas sections 74(7BAB) and 82 inserted by new clause 2(8) are treated as coming into force on 6 October 2009 and sections 34B and 34C inserted by new clause 2(9B) come into force on 20 May 2010. These are not even the same dates of subsequent years. They appear to be randomly distributed. Sections 19B 28B 30C 36B(1) 36B(3) 64C 67B to 67F 73B and 83B all come into force on 1 October 2010. Section 74G however comes into force on 1 November 2010. Why single out one section to come into force 1 month later? Then there is a whole swag. I will spare members opposite the experience of reading through all the provisions but they start at section 21B and proceed through sections 51B(1) 57BA 69(1B) 74(1B) and a bunch of subsections of section 74 right on through to section 75(1)(b) and down to section 94B. There are about 24 of those provisions that enter into force on 1 April 2013. That is just in the head note—just in the head note. When one goes through the bill what is interesting is that the random number generator appears to have gone amok because interspersed through the bill are a range of starting dates some of which appear to be covered although others are not.  
If we turn to page 6 of the Supplementary Order Paper we see the date is 1 April 2011. Flicking through the date in subsection (2) of section CX 63 on page 8 is again 1 April 2011. Running through we get the amendment to insert new clauses 34B to 34F with dates of 20 May 2010. Moving over to the amendment to insert new clauses 38B to 38D the date is 1 April 2011 including the amendment to insert new section FB 10B. The date is 1 April 2011 for new clause 41B. This is really interesting: within the same clause new clause 41G “Elections to become qualifying company” we have a range of different starting dates. There are different commencement dates within the same clause. That is hard to credit. New sections HA 5(1B) and HA 5(5) inserted by new clauses 41G(2) and 41G(3) respectively have 1 April 2011 but new clauses 41G(4) and 41G(5) which follow are not specified. The next clause new clause 41H which inserts new section HA 7B “Grandparenting requirement” from the grandparenting Act has the date of 1 April 2011. Sections HA 10 HA 11(4) and HA 20 have the date of 1 April 2011. But in the next clause new clause 41J the date is 1 April 2010.  
The point is that there is no transparent logic as to why these different dates would have been selected. I can go on. New section HZ 4D inserted by new clause 57BA which runs from page 42 to page 44 has the date 1 April 2011 and so on and so forth. These apparently random numbers carry on throughout the Supplementary Order Paper. There may be some logic to this. I am sure officials have thought about it I am sure they have their reasons and the Minister Peter Dunne is an experienced Minister. I am sure that if it was purely random he would have noticed. But the point is that the Supplementary Order Paper is not transparent to the Committee. These questions could have been asked in a select committee if the Supplementary Order Paper had gone to a select committee but of course it did not. Where we are left as a Parliament is having to make observations. There may be logical answers but the Minister seems unprepared to reply to them and thereby—just like the Opposition—the public the industry and any listeners to this debate have no idea why an assortment of apparently randomly selected commencement dates have been sprinkled through the bill like confetti or hundreds and thousands. I have seen more order on a child’s sandwich. That is an example of the sort of thing the Committee has been wrestling with since 9.30 this morning. This is very very bad lawmaking.  
That brings us of course to the title of the bill. It should have been called the “Taxation (GST and Minor Matters Unanimously Agreed by the Select Committee) Bill” because every party in the House was going to agree to it. 
Hon Trevor Mallard 
: Clearly the work wasn’t thorough enough in select committee. 
Hon DAVID CUNLIFFE 
: Well my colleague has been doing a bit of late revisionism and he has found a few hairs that he wants to split—and good on him. It is great to have his laser-like focus at this stage in the proceedings. Of course as in any bill I say to Mr Mallard there are things one would change—but we pick our targets. Suffice it to say that there was sufficient agreement on this bill for all colleagues around the House to feel that it did more good than harm. Hello! We now get a 70 page Supplementary Order Paper dropped on the Committee almost without notice bigger than the original bill and filled with very very substantive provisions and the consensus is destroyed. The Minister has single-handedly shot the process in the foot and with it the parliamentary consensus that it would have enjoyed.  
So we could call it the “Bad Process Bill”. We could call it the “Pulling Division from the Jaws of Unity Bill”. We could call it the “Newton’s Law of Holes (What Ministers Should Always Avoid) Bill” because the Minister fell into the trap of keeping on digging when in earlier parts of the debate he was confronted with the process choices he has made. Instead of saying: “OK you guys have got a point. We didn’t provide it earlier and it hasn’t had all the scrutiny it could have had but it should still be passed.” no the Minister ran the following line: “Well we announced our intention in general terms in the Budget.” Fine. “We consulted with the industry on some matters contained in the bill.” Fine. “We therefore didn’t need to put it to a select committee.” Not fine because by the very same logic no tax bill would ever go to a select committee as almost all tax matters are highlighted in the Budget and almost all tax matters have been consulted on at some point with the industry. That is exactly why we have a generic tax policy process that involves public submissions because—let’s face it—many of those in the industry represent vested interests. They do not represent Kiwi mums and dads and Kiwi mums and dads are entitled to know at the very least why this bill affects them.  
Why does it affect them? Well here is the next possible title: the “Big Bottom Line Bill”. There is $2.2 billion of tax revenue at stake in the loss attributing qualifying company avoidance stakes which is governed by this Supplementary Order Paper. There is $2.25 billion as opposed to a total corporate tax take of only $9 billion. That is over a quarter yet it is supposedly amenable to discussion by a late amendment in the Committee of the whole House without public scrutiny through a select committee. That is why this bill should be called the “Newton Law of Holes (Please Stop Digging Minister) Bill”.  
Perhaps it could be called the “Green Light to Avoidance Bill”—or at least a very soft amber light because although it is true as the Minister said that the look-through company regime is just marginally tighter than the loss attributing qualifying company regime “marginally” is the operative word. Out of the $2.3 billion - odd of potentially avoided tax this regime recovers only $130 million for the Crown. That is $0.13 billion not $2.3 billion. So the question has to be asked—and it is probably the primary substantive question in this bill—as to whether the Government could not have done better. Could officials not have been asked to go further to work harder and to be provided with more resourcing so they could get that $130 million up at the time of the public’s greatest need to something closer to a shut-down of those much maligned exemptions?  
Finally we just might call this bill the “Weak Excuse For Weak Law Bill”. The excuse was that it was so urgent that we just had to bring it in before Christmas. But it was not urgent enough to take the amendments to the select committee a month ago. That has got to be the weakest excuse of all given the magnitude of tax flows at stake in the substance of this bill. Well it is at times like this that one is confronted with the age-old choice: was this a stuff-up or was it a conspiracy?