Clark David: Taxation (Land Information and Offshore Persons Information) Bill — In CommitteeText is incorporated into the Bound VolumeClark David: Taxation (Land Information and Offshore Persons Information) Bill — In Committee[Sitting date: 09 September 2015. Volume:708;Page:6441. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): I join my colleague Mr Robertson in requesting that advice because members opposite do seem to know a lot better than others or they think they do if we are to take this bill at face value. As I have suggested in my previous contributions on different parts of the bill I think that this is actually about providing convenient loopholes. I really do. I find that the most plausible explanation for the higgledy-piggledy mess that we have here.I want to draw attention to some of the information supplied in the commentary on the bill that goes through the information exemptions under the regulations. For those watching eagerly at home or listening to their wirelesses those listening to wirelesses will hear the rustle of paper as I flick through. Those watching on the big screen will see there are pages of exemptions and amendments and definitions and so on required by this legislation which I contend would not be required—would not be required—if it was the case that this was just a simple register of offshore buyers plain and simple. We would not need complex descriptions of when a person meets the test and when they do not and I refer here to Part 2 clause 9 which amends section 3 of the Tax Administration Act—page 11 for those with the tracked changes copy of the bill and on to page 12. It defines what an “offshore person” means.It means—and I will read it out for those who have not been following the debate—“(i) a New Zealand citizen who is outside New Zealand and has not been in New Zealand within the last 3 years: (ii) a person who holds a residence class visa granted under the Immigration Act 2009 and who is outside New Zealand and has not been in New Zealand within the last 12 months: (iii) a person who is not a New Zealand citizen and who does not hold a residence class visa granted under the Immigration Act 2009:”. Then a series of regulations that will be created lies under the description of “a body corporate or an unincorporated body of persons” and trusts unit trusts and so forth.We have this complex system for describing it in the legislation and then a requirement for regulation that sits under it precisely because the Government has exempted the main home and is trying to exempt various categories of person from having to fulfil this requirement because it is not actually interested in collecting a full database of who is buying and who is not buying. It wants to appear to be doing something but the only logical explanation for where we have got to as a Parliament with this kind of weak legislation these half measures is that the Government is doing this quite deliberately.I want to look specifically at the types of person who would qualify under a trust if I can find the right page—as I search madly through the many many pages of description of who is in and who is out—to find the definition of that “offshore person”. A person will be described as offshore—generally speaking a non-individual when we talk about trusts and others—if it is a body corporate incorporated outside New Zealand or 25 percent or more of its shares are owned by a body corporate incorporated outside New Zealand. You can see that these little tests that we have got along the way are going to require advice from accountants and others who will be advising people who are trying to get through loopholes in any case. You have got here a whole support structure for an industry of persons who are dedicated to foreign speculation and supporting foreign speculators in New Zealand. That is precisely what we were told this Government wanted to counter.Here we go: under clause 9(3)(b) referencing section 7(2)(b) to (f) of the Overseas Investment Act offshore person means a partnership or other unincorporated body other than a trust if 25 percent or more of its partners or members are offshore persons according to those sub-definitions. Then we have got various subcategories of 25 percent and whether their voting power is exercised in which way and where they live. A trust is an offshore person if an overseas person or persons constitute 25 percent or more of its governing body or have a beneficial interest in or an entitlement to 25 percent or more of the trust property or are 25 percent or more of those who have the right to amend or control the amendment of the trustee or are 25 percent or more of those having the right to control the composition of the trust’s governing body. There are layers upon layers of definition of a trust of who would be in that 25 percent. An overseas person means a unit trust if the manager or trustee or both are overseas persons or if they have a beneficial interest in or an entitlement to 25 percent or more of the trust property and so on and so forth.In clause 10 there are rules around the nature of the bank accounts that can be set up. Whether they are non-bank deposit takers or what people would consider regular banks has to be specified in the law. There is a whole bit of the legislation in Part 2 I think dedicated to the penalty regime that must be set up to try to catch those people who do not wish to comply and want to find their way through the loopholes in the legislation and exactly what kinds of ways through the legislation they can construct and not construct. So overall what we have got is legislation that does not achieve and is designed it seems not to achieve the kind of register of interest that an ordinary person at home would have expected from this kind of legislation.The whole Parliament sits here and spends a considerable amount of time putting this through officials report to committees we have advice from members of the public from the chartered accountants as volunteers or as society members and the Law Society puts in submissions pointing out the much more logical way things could be done—then over on the other side of the House we have a Government that is either too arrogant to take that advice or too out of touch or somehow thinks it will get away with this and people will not notice that it is making law that simply obfuscates and does not achieve what it is designed to achieve.It is part of a suite of similar half measures. Treasury estimated I think that $5 million in tax might be collected—and that was in the other accompanying measure—but if a much more simple system was set up $30 million to $40 million in tax would be collected. It saw that there are holes in this suite of legislation that you could drive a bus through. Then in the commentary on the bill we have got advice around becoming an offshore person—for anyone who wants to become an offshore person there is advice in the commentary. The penalties of course are specified as I have already said.I want to draw my contribution to a conclusion by saying that this is the kind of legislation that we might expect from a Government that is trying to make it look like it is doing something when in fact it is trying very hard to do nothing at all.