Patterson MarkMARK PATTERSON (NZ First): Madam Deputy Speaker thank you. Unlike the previous speaker Ian McKelvie it is a pleasure to get up and speak on this Taxation (Neutralising Base Erosion and Profit Shifting) Bill not the less because I don't often get the opportunity to speak on matters economic. That normally falls upon our spokesperson in these matters Fletcher Tabuteau who genuinely does love this stuff and is a bit of a thought leader in how we can make our systems more fair and our economy work better for everyone; in fact such so that I understand that he is affectionately known as the Professor" within this Parliament—a term that he I think is rather chuffed with. I also enjoy the tax debates from afar listening to Deborah Russell—Dr Russell—when she gets up here and talks about The Wealth of Nations and Adam Smith and almost makes it sound like required bedtime reading.So here's my chance. And I'd like to say that the purpose of this bill is to strengthen the integrity of our tax system protect our tax base by introducing measures that address the issue of base erosion and profit sharing by multinational corporates in New Zealand. And I'd also like to put some context around this.The following bill that we are going to be debating after this is the Overseas Investment Amendment Bill. And this is a sign of this Government going through the gears to make sure that overseas investment is channelled in such a way that it advantages New Zealand—that it is to our advantage and not to the disadvantage of our citizens. And this bill is very much in the same light—making sure that we level the playing field so our own New Zealand businesses get to compete on an even footing. This is absolutely core New Zealand First practice and principles. There's no reason why a dairy owner or a dairy farmer shouldn't be playing on the same level playing field as a foreign multinational. If it's good enough for them it is good enough for everyone.It's important to acknowledge the work of the officials. This is highly complex legislation. We know that jurisdictions around the world are grappling with this very same set of issues and that our officials have in many cases I understand been in front of the game when it comes to grappling with this issue.We also do acknowledge the Opposition because the Opposition did start this process—after eight years of denying it was a problem finally rumbled into action. There must have been a focus group somewhere that said it was problem so they rumbled into action. And it was probably no coincidence that it was when the Hon Judith Collins came back from purgatory and took over as the revenue Minister that we finally got some action on this very serious issue. And what an excellent Leader of the Opposition she will be very shortly.We know there is global concern about aggressive tax practices used by multinationals who pay very little tax anywhere in the world. And this is—as we've heard before—known as base erosion and profit sharing (BEPS). There's various mechanisms that we can—Hon Member: Profit shifting.MARK PATTERSON: Profit shifting even maybe. The OECD and the G20 have recognised this issue—as my colleague Kiritapu Allan alluded to before—in 2015. And it is a very complex multifaceted issue. And there is no silver bullet but that does not mean that we should not start.Most multinationals it's worth saying that do operate in New Zealand do act responsibly. They are valued and contributing corporate citizens. But some of our companies do not. Many companies that are household names to all of us and that we probably use on an everyday basis make tens or hundreds of millions of dollars of revenue maybe more but pay tens or hundreds of thousands in tax. There's only two scenarios there: either they're totally incompetent—which is clearly not the case given their global presence—or they are using the rules to their best advantage. There's nothing necessarily illegal about that but it is a loophole that we must look to close. This is about the social licence to operate. And we as farmers get that thrown at us all the time about our social licence to operate. And we know what that's about and it's only fair that these multinationals do the same.New Zealand businesses often miss out on lucrative opportunities because they are not competing on level terms and they are required to pay their tax—and also I might add other multinationals that do play the game fairly and do try to be good corporate citizens are disadvantaged by this as well. We have heard that there could be—well we've heard two representations of how much this could be costing the Inland Revenue: somewhere between Mr McKelvie's $200 million and Kiritapu Allan's $500 million. I've heard estimates of even more. But this is money that we need. There is so much call on the Government's coffers after periods of neglect over the last nine years. We need that revenue and we need it to be secured fairly and for the best interests of the country as a whole.So it is important to address these BEPS but this is not a vindictive measure. It is about levelling the playing field and we continue to welcome multinationals but they must be compliant—they must contribute.The message this Government is sending is very clear: we are open for business on the global stage but we must address the issue of the BEPS so as to allow a level playing field and so our multinationals who choose not to and aggressively look to minimise their tax are brought into line. Members across the House have spoken to a particular point of reasonable fairness. We must ensure we move down this path and we make sure that we cannot allow certain companies to avoid their obligations.I'd like to congratulate Minister Nash on bringing this forward. This is—as we said earlier—a very complex set of rules and regulations and legislation that we're bringing. It has been wrestled with over many countries. Particularly we're sharpening the structured arrangement definitions: we've replaced the definition relating to the hybrid and branch mismatch rules to correct that technical error to better reflect the recommendation made by the Finance and Expenditure Committee which is well-led by Mr Woods and of course Mr Tabuteau is the deputy chairman. And I believe that this committee has worked very constructively together on this bill.There are four main changes as I understand it—the interest limitation changes. There are also changes to the time bar for transfer pricing issues. And in this we are aligning our thinking with Australia which is a thoroughly sensible move. We have to act globally on this issue. The IRD powers to request information to offshore groups—and it gives Inland Revenue the powers to be able to request information that is held offshore by group members of large multinational groups with a New Zealand presence. And that is the—I'm just trying to find the other one but that's three—there are four but we'll have to leave that to the subsequent speeches to cover off.So just to reiterate in conclusion New Zealand thoroughly endorses the change made by the Finance and Expenditure Committee. This brings me back to the earlier remarks we made: that this Government has made a clear commitment to the transformation of our economy—a transformation of the way we work together to improve the lives of all New Zealanders. This is a Government that is formed a little differently and does things a little differently but it's fair to say that we do expect to bring forward the human face of capitalism to reinvigorate the economic landscape of New Zealand and having every company pay their fair share towards that is an absolute fundamental.With this in mind it is a genuine pleasure to be part of a Government that is showing clear and decisive leadership on this issue. We are committed to being responsible not just fiscally but socially and environmentally and with the passage of this bill we believe that we are well on the way to walking the talk on these issues. I commend this bill to the House."