Woolerton R Doug: Taxation (Annual Rates Savings Investment and Miscellaneous Provisions) Bill — Second Reading In Committee 
Woolerton R Doug: Taxation (Annual Rates Savings Investment and Miscellaneous Provisions) Bill — Second Reading In Committee 
[Volume:636;Page:7118] 
R DOUG WOOLERTON (NZ First) 
: 
 If anybody except the dedicated financial investor is still listening I will be surprised but if they are I suggest to them that they are now understanding the complexity of the issues that this bill addresses and they are starting to see the issues that we had to deal with and the sorts of things that happen in the investment world. 
Following on from Mr Copeland I think that if people in other countries for whatever reason will pay out dividends incorporate that into capital and pay out on what they call the capital account then it is totally acceptable for us to work towards some sort of regime that will in part capture a fair amount of that. That is what is called the fair dividend rate that is what is encompassed in Part 2 and that is what we are doing. All over the world there are different tax regimes. People talk about our wonderful neighbour Australia which taxes the heck out of people who invest in overseas countries—to a far far greater degree than we do here in New Zealand—yet I hear it lauded as a wonderful bastion of free enterprise go-go business and all of the rest of it. It is absolutely acceptable that something like this is done because of the situation this bill faces as far as the investment areas are concerned. 
To have a fair dividend rate of 5 percent is absolutely fair. All of these things are a compromise and I think it is as good as we will get into the foreseeable future. Likewise with the portfolio investment entities it is no secret that some of us would have liked to have seen some newer more innovative players come into the market in this area. I know that the Minister Peter Dunne’s Supplementary Order Paper is trying to address some of that. 
But it is no surprise because of the things that Dr Lockwood Smith has mentioned that those who have become default providers in the first instance in this area are in the main some of New Zealand’s biggest investment companies. They are the ones with the computer horsepower and all of the sorts of things that enable them to look after the individual mum and dad investors who—what shall I say without being mean to them—do not have the expertise to look after their own taxation or the time I might add to go through all of the calculations that that entails. The portfolio investment entity will do it for them. It is right that that happens. There is no hidden agenda here. Most New Zealanders will be thankful that those companies actually have the computer horsepower and those sorts of things to do all of these calculations. 
People are talking about the hidden misdeeds of this Government and saying that it is heading in directions that may be secretive and that it has other agendas. The Government is simply understanding and accepting that people who invest through a managed fund will not by and large run off to the accountant to do all of these things themselves. These people are not with due respect sophisticated investors. 
Part 2 takes care of a lot of these things. I think the fair dividend rate is the proper way to go. Although it is a compromise it is something that will do the job admirably. In respect of the portfolio investment entities although we would like to have seen some more innovative companies involved it is no surprise that they have ended up being the bigger companies in New Zealand.