Tabuteau Fletcher: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — First ReadingText is incorporated into the Bound VolumeTabuteau Fletcher: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — First Reading[Sitting date: 13 October 2015. Volume:709;Page:7167. Text is incorporated into the Bound Volume.]FLETCHER TABUTEAU (NZ First): It is my pleasure to stand up and actually support this taxation legislation but it does seem to be my instinct to dig in and critique some of the detail so those on the other side of the House will forgive me—I do support it but there are a few things that you should be cognisant of and perhaps be mindful of as we move into the select committee process.I just want to start off with a reality check. This Government the supposed advocates of business in New Zealand only just now thought that this would be a good idea. It has been 7 years—we are getting into the eighth year—and despite its simplicity the analysis actually shows us that the US tax system has fewer pieces of tax rules than the New Zealand one. We in New Zealand are overburdened with rules on taxation. So the reality and the intent of this legislation are right: there is a need for simplification and transformation in that sense is a very good thing.The bill describes itself as legislation that will simplify and improve the settings for the administration of the tax system. It asserts that there will be decreased compliance costs. One of the reasons it suggests that is because businesses will be so happy with the Inland Revenue Department that they will just naturally be more compliant and self-regulate on their tax compliance issues. But this first phase does not look like it is actually aimed at big business. The reality is that this seems to be more about the individual and unfortunately it does not seem to be much about simplification either. It is really about the end-user and the reality is that the rules themselves are changing under this legislation.In the picture that is painted a future Inland Revenue Department will interact with New Zealanders more openly but the reality is—and let us be very clear about it—you do not need legislation changes to interact with your clients in a more open and communicative manner. Sometimes it is not the legislation so much as it is the standards that are set from the top down—perhaps the standard set by this Government and how it pervades the practices of all Government organisations.I had a couple come to visit me recently about a visit to the Inland Revenue Department. They went on to tell me just how initially helpful the Inland Revenue Department was. In the conversation they had an issue and the lady from the Inland Revenue Department disappeared out the back. She then came back out with a combative attitude and was really dismissive and argumentative. She almost immediately told them that they had not laid their claim properly and that it was all their fault.This is the conversation that this bill is purportedly having about simplification and making it easier for the end-user. But the reality is that you do not need a bill to make that happen. You need leadership and you need an organisation like this to be shown what it is to be a good leader in this kind of environment. It is one small example but it is an important one. Sometimes we do not actually need a law change. The couple did make a good point to me. There was a certain double standard there. That is not what this Government or certainly the Inland Revenue Department needs when it comes to dealing with New Zealanders.New Zealand First has continually had and still does have quite a large concern about omnibus pieces of legislation brought to this House by the National Party. The reality is that there always seem to be a lot of these unintended consequences and that is a very generous way of describing the situation. There have been examples brought to this House around tax actually where the purported intent of it had nothing to do with the outcome. In fact New Zealand First ended up defending our veterans on their tax compliance and supposed changes there. All I am saying to the other side of the House is to just be careful. This is a big piece of legislation. It is an omnibus bill; it is a three-part piece of legislation and it can get complicated and we need to be mindful of that. That is why New Zealand First is actually supporting it to the select committee.When I first made notes on this bill the health and safety legislation had not passed but one of the significant parts of this legislation is around health and safety. So there was a huge presumption that part of this legislation—that the Health and Safety Reform bill was actually going to pass and that the legislation there would already be in place for the legislation in this bill to take effect. It is a huge presumption and it is not necessarily a democratic way of looking at our legislation.One of the technical points: in looking to make deductions from employees without successfully informing them that this will be happening—or more formally to dispense with requirements to issue notice to the defaulter—the Inland Revenue Department decided because of time constraints that consulting with employees was unnecessary. None of the options was discussed with businesses which would have to be a party to the deductions from their staff members’ salaries. The question was not asked—I do not believe it was asked—but the reality is this Government needs to be mindful in this particular situation that this could possibly undermine the common law principle of natural justice. So this is just another unintended consequence that this Government needs to look at in this bill.New Zealand First does support the principle of the elective opt-in system for the collection of tax on employee share schemes. Here we were advised that employers and tax specialists agree with one another. This is fair to both the employer and the employee. Unfortunately in this part we have again an example of oversight and unintended consequences. The current KiwiSaver Act 2006 has no remedy for minors who are signed up to KiwiSaver unintentionally. This bill actually seeks to fix up this oversight in the other piece of legislation but it does not address the fact that minors can still be signed up accidentally and there is nothing to be done about it until the problem arises.The process known as co-location—and this has been spoken about a little bit tonight from this side of the House—and the management of private information and the secrecy necessary does raise more questions. The Inland Revenue Department sharing office space with other Government departments often in literally shared office spaces will likely lead to the unintended consequence of private information being shared with those unauthorised recipients that has been so frequently spoken of this evening. New Zealand First is highly concerned that the proposed solution to this is the watering down of current privacy laws so that breaches of New Zealand privacy will occur without consequence or risk of sanction.With regard to the strengthening of enforcement and employment standards New Zealand First has always said that more and more Kiwis are being exploited in the workplace especially new Kiwi citizens and this Government has just stood by and literally watched. There is without doubt a high level of non-compliance with employment standards. What is being discussed in this legislation is—in the support work for this legislation—sound. New Zealand First is worried that if this is the only approach to this problem—the only solution—then it is too little too late.I would like to just conclude by saying the Minister himself said that the department is regularly granted additional investigation funds and my point here is that we agree with him in this instance. A dollar given to the Inland Revenue Department has resulted in $7 collected for large corporate tax avoiders and we commend that and we need to focus more on that. What we are seeing here is an attack on individuals. The analysis suggests we might get $700000 of tax savings from this legislation. The priority to me seems to be slightly backwards and the focus is definitely wrong. Let us go out big and make sure tax compliance is fairly applied to big business as well as to individual citizens of New Zealand. Thank you.