Bayly AndrewANDREW BAYLY (National—Port Waikato): Thank you Madam Speaker. Well here we are the day after the Budget and we're talking tax. I can see Dr Deborah Russell at the back there just slathering away to tell us about this Taxation Principles Reporting Bill. So it is with pleasure that I talk on this bill. I'm not quite sure why we might be rushing this through under urgency on a Friday when the House normally doesn't sit but I suspect it might have something to do with what's going to happen in October—and it's called an election. This is about I think Mr Parker pursuing his long-held dream of being able to tax people even more. And of course he made the statement—and I quote and I hope it's right. I wrote it down Mr Parker: You believe we should collect as little tax as possible." Well we've just finished 10 minutes ago putting through a new piece of legislation driven of course by the Hon David Parker to tax New Zealanders more if they have a trust. And of course that was his own making—he shoved up the top tax rate even though Labour said they wouldn't be doing that they wouldn't be increasing taxes but hey presto they did and they did it yesterday.Rachel Boyack: The top tax rate increase was in our manifesto.ANDREW BAYLY: Yeah but not pushing up the trust rate was it; not pushing up the trust rate. The trust is a new tax. That's what the bill was about—about five minutes ago if you'd been listening right? That is a new tax. Anyone owning or a beneficiary of a trust will pay 39c. Even someone with disabilities as Penny Simmonds talked about is now going to pay 39 percent. So in terms of this issue we do not need a tax principles bill.We do support a good tax system that is fair simple transparent administratively easy and adequate to service a country's revenue needs. In fact my personal view is that what Adam Smith wrote back in 1776 wasn't a bad piece of advice about tax. Hon Michael Woodhouse: Was he a nice bloke? Did you know him well?ANDREW BAYLY: No I didn't know him well! But in the wealthy nations that most economists love to talk about he said there were four principles: equity and fairness: similarly situated taxpayers should be taxed similarly; certainty: the tax rules should clearly specify how the amount of tax is determined when payment of tax should occur and how payment is made. And of course one thing about certainty that he didn't talk about is when you have rapidly changing Government policy where you change tax rates all the time pushing them up—inevitable if you have a Labour Government. The third thing is convenience of payment—facilitating the required tax payment at a time and in a manner that is most likely to be convenient for the taxpayer is important. Good stuff—an effective tax administration effectively saying that the cost to collect the tax should be kept to a minimum.Those are good principles. I know the Hon David Parker loves Thomas Piketty and so I was just having a look at his fine book published in 2013. Capital in the Twenty-First Century is the grand title of it.Hon David Parker: Fantastic book.ANDREW BAYLY: There he is—Mr Parker—saying it's a fantastic book. Anyway the big proposition that Mr Piketty was saying is that the return on capital RC is greater than economic growth and that leads to inequity. That's the principal part of his economic theory that was published in his report. So I thought I'd just see what people thought about it and I came across this. The Washington Post said at the time the book was published—they did a review of it—that Piketty's work was a landmark in economic literature that significantly improved and expanded upon Karl Marx's ground-breaking scholarship in Das Kapital. If I remember rightly Karl Marx had a bit to do with Russia didn't he?Hon Michael Woodhouse: Yes he did. Well kind of.ANDREW BAYLY: Sort of—sort of.Hon Michael Woodhouse: He wrote the manuscript for communism.ANDREW BAYLY: That's right. My good colleague the Hon Michael Woodhouse says he wrote the manuscript for the new Russian State. Hon Michael Woodhouse: That cost about 60 million lives.ANDREW BAYLY: Well don't talk about the lives that were lost. Didn't it also go on to say that his prose was rather dense and rather repetitive? Sounds like the Hon Dr Parker.But I think the big issue about these tax principles is that what we've seen is the Labour Government prepared to use the IRD to undertake an investigation into certain families' wealth under a very special clause that was inserted by the Labour Government. So the first point about that is whether in fact that is proper. The clause is a very invasive clause. There's a general principle about doing investigations about the protection of privacy and there are significant concerns that the Labour Government has used the IRD to provide some evidence about how they would then implement their own policies.The second thing is that this bill is Mr Parker's attempt to use Parliament to pursue Labour's own tax concepts and I think that is not right. I'm also concerned about the short report back by 27 July. Why the dickens does a bill like this which only runs to four pages have to be reported back by 27 July? The issue is that we have an election coming up on 14 October and of course this is what's driving this. This is wrong and we will be opposing this bill. The reality is that we do believe in a fair tax system but this is going to require a bureaucratic rambling on of reports from time to time but I think the real essence of this is what it will say in the first time. We accept the principles as we set out before that a good tax system should be fair simple transparent administratively easy and adequate to service a country's revenue needs. New Zealand has a tax system that in the main is the envy of the world. And we have now got a Labour Government and a Minister that is continuously tweaking it. And I'll tell you what—on his issue about making it consistent and not complicating it the mere fact that Mr Parker raised the top tax rate to 39 percent has created in its own right the issue that we have to address in the bill that's just been before this House which again will be rammed though. That's what's going to happen. But luckily they pulled back on the KiwiSaver tax—of course that's going to get rammed through if they win the next election. We had the app tax. We've had all these other taxes come through all the stuff around property and all that sort of stuff.Look tax policy is the domain of Governments. Everyone understands the issue around having good simple tax policy. We simply have a divergence on the way it should be implemented. Labour have chosen to go down the route of choosing to tax people more. If that's their thing that's obviously what happens at an election. National believes that people should retain as much as they can of the income they earn so that they can pay for their lives look after their children—Hon Phil Twyford: How about fairly distributing the burden?ANDREW BAYLY: The question was: what about fairly distributing the burden? Well the issue is that if you don't have a wasteful Government that blows money in ways that are unbelievable—even in this Budget announced yesterday there's a $7.1 billion increase just because the Government cannot balance its books even though its tax revenue went up by something like $11 billion projected—Hon Phil Twyford: What about distributing the burden?ANDREW BAYLY: The issue is that if you stop wasting money and spend it on the right people if you fix up the holiday pay for the nurses and the teachers if you paid them more and you looked after people then you wouldn't have to waste money like what's happening right now under this Government and shove up the taxes. All David Packer wants to do is he wants to push up the tax for New Zealanders."