Foss Craig: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — Third Reading 
Foss Craig: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — Third Reading 
[Volume:630;Page:2107] 
CRAIG FOSS (National—Tukituki) 
: 
 I rise to speak to the third reading of the Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill. My apologies for the length of that title to those who may be listening to the radio at the moment. It has been a pleasure and I congratulate all those who have progressed the bill this far. It is the second major bill that I have been involved in while I have been in this Parliament and I have learnt a lot from some of the more seasoned hands on the Finance and Expenditure Committee. I reiterate the earlier comments that our chair did a pretty reasonable job although I do wonder about the amount of patsy questions he seems to ask in the House. 
The National Party supports this bill. I personally support this bill but it is not bold enough. Quite frankly it does not go far enough and I look forward to building upon it using it as a platform for further and fundamental change and fixing the New Zealand system under the next Don Brash - led Government with Mr John Key as finance Minister. I look forward to being part of that action. 
This 353-page bill is allegedly business-friendly. How 353 pages can simplify taxation law I am really not sure to be honest. Essentially it just tinkers with existing law regulation and our statutes. 
I would like to run through some of the key points that the bill addresses. The bill deals with depreciation rules and schedules as the previous speaker just alluded to and in particular changes the economic life frames of buildings and certain aircraft. It also changes the low-asset thresholds from $200 to $500. My party argued quite intensely on the committee that those thresholds should be higher as recognition of the investment that many companies are trying to make that add value to New Zealand as opposed to forever worrying about the cost. The fiscal cost of going from $500 to $1000 would be $400 million I think Minister Cullen said the other night. Quite frankly I think that is a very good investment to make in the New Zealand business scene. 
The bill also aligns the payment dates for provisional taxation and GST. On its own it is a minor business-friendly measure but tragically that measure has been delayed from 1 April 2006 to 1 April 2007. It also provides for a subsidy for payroll agents. Mr John Key spoke to that earlier and did a very interesting take on it. Goodness gracious after another 353 pages of taxation law more payroll agents will be employed all over the show and it will probably be New Zealand’s biggest growth industry over the next wee while. Again tragically the implementation and application of that measure has been changed from 1 April 2006 to 1 October 2006. 
The bill also touches on the fringe benefit tax particularly around flip-flop leases and 9 to 5 leases—they have various names. We had an awful lot of submissions on that particular point of the bill. Personally I found it fascinating that most of those submissions came out of Auckland for some reason. I do not know quite why that was but it is a major deal there. However I will be quite upfront and profess that I do not fully understand flip-flop leases and nine to five leases. 
The bill also starts to deal with corporate migration and the treatment of assets when a corporate is no longer essentially tax domiciled in New Zealand. OK it is a fair enough step in the right direction but I think we need to have the discussion and debate as to why those corporations are choosing to leave New Zealand in the first place. I think that as we speak we will see more and more of those corporates leave. 
The bill also provides tax exemption for new migrants and for people returning to New Zealand. The threshold is for them to have been 10 years away. Most New Zealanders leave in their early twenties so after 10 years away they have spent over a third of their life overseas. They have established themselves they have paid good tax overseas and they have started to put down their roots. For an increasing number of New Zealanders one really has to ask why they would return. 
The bill also touches on foreign trusts particularly in regard to reporting across the Tasman and the sharing of information. Again I can see the logic behind it and it is fair enough but another debate that I believe we need to have in this House and across New Zealand is the increasing Australianisation of all things New Zealand and the de facto adoption by New Zealand of Australia’s various laws and statutes. I point out that as we get more Australianised by the day Australians are still not eating our apples. 
The bill also addresses trans-Tasman imputation credit streaming. It is a reflection of reality and starts to reflect some of the listings on the New Zealand Exchange and the Australia equivalent cross share ownership. It is a good move in the right direction but a small one. 
The bill also addresses reverse takeovers and again that is a small step in the right direction. Basically it is recognition of the reality of international commercial life and of some of the cut and thrust of companies that are much much larger than any of those we see in New Zealand. 
As the Minister of Revenue and as my colleague Lockwood Smith particularly spoke about earlier the bill addresses what has been known as the unacceptable tax shortfall penalty and a Supplementary Order Paper was tied up with that. National endorses the direction that that is trying to take tax regulation in New Zealand but I think we have quite a long way to go. 
A few Supplementary Order Papers are linked up with this bill and appear under it on top of it and inside of it. I will touch on one: Supplementary Order Paper 380 which has been and gone surrounding the wine equalisation tax. I just raise the flag that what all of my sources say and everything I hear is that the implementation from the Australian side of that is actually becoming quite difficult. Quite frankly the Australians are being Australians and are looking after Australia first. Perhaps there is a lesson there. 
A Supplementary Order Paper sponsored by another member is very good and beneficial to our racing industry. Essentially it is a cut and paste of the earlier National Party policy apart from a couple of key dates and it is a good move in the right direction. I congratulate Mr Lindsay Tisch on the formulation of that policy. 
But what is bold about this legislation? What is new? What will thrust New Zealand forward and help us at least to move from No. 21 in the OECD rankings? What will stop us from sliding down those rankings? What will raise the productivity of labour here—and I definitely do not mean “Labour” because I think that is pretty much a lost cause? What is needed? We must ask that question because bold and dynamic thought is needed and required. We hear from the Prime Minister and the Minister of Finance lately about the “economic transformation” required for New Zealand yet they do not seem to be able to explain from what to what and how. They must stop tinkering around. It is interesting that this Government has surfed on the back of 6 years of fantastic economic growth but that it had very little part in formulating and starting it. We see from the headline in the New Zealand Institute of Economic Research consensus forecasts that a soft landing is settling in right now so perhaps there will be some questions to Mr Cullen on the economy as he was begging for today in the House. 
But why do we need this bold change? Well quite frankly at the moment the Inland Revenue Department is collecting about $42 billion in revenue out of a total of $60-odd billion of revenue in this economy every single year. Why do we need bold change? Because the dollar has been skyrocketing through the roof and the damage has been done. There is a crippling cost of working capital for our industries because of the Government’s “spend-athon” and “tax-athon.” Why do we need bold change? Because there are policies such as Working for Families that essentially create 102 percent marginal tax rates for some who are desperately trying to move off welfare. Why do we need bold change? Because over 600 New Zealanders are leaving for Australia every single week. What is the best that the Government can come up with as an alternative to that? We hear about the payroll tax but the payroll tax—it is nuts by the way—can be implemented only if it is fiscally neutral. Let us be bold fiscally aggressive and innovative. Boldness is what New Zealand needs. Why have the key planks of this business-friendly bill been delayed by 6 months for payroll tax and 12 months for GST? 
As I conclude I point out that these 360-odd pages need to be managed by the Inland Revenue Department. I would like to share with members a little something that I discovered in the Inland Revenue Department’s statement of intent because it may come as a surprise to some people. This is the desired future according to the Inland Revenue Department so listen carefully: “Taxpayers and other customers meet obligations of their own accord—and Inland Revenue makes this easy”. The final goal states: “The community regards Inland Revenue as professional approachable effective and efficient.” Well I certainly hope so but with all this new tax legislation I do wonder.