McClay Todd: Estimates Debate — In CommitteeText is incorporated into the Bound VolumeMcClay Todd: Estimates Debate — In Committee[Sitting date: 28 July 2015. Volume:707;Page:5399. Text is incorporated into the Bound Volume.]Hon TODD McCLAY (Minister of Revenue): I want to speak in the debate at the moment around revenue. I do want to say that when the Hon Clayton Cosgrove was speaking I did particularly enjoy his interventions. The challenge was that very little—in fact nothing—he said there was correct. It was very unusual because he is a wise man. He does get very excited when it comes to speaking particularly when David Bennett interjects. I would say it reminded me of when I saw him earlier today down at the gym beside the cycle. His little legs were going as fast as they could there was sweat on his brow and there was a very very serious look on his face. Then I suddenly realised he was just trying to get up on the seat. It was very much like his speech here in the House because he was very excited but there was not very much relevance in it.The Government has under way a very large and ambitious project for the Inland Revenue Department to transform and modernise and to modernise and simplify tax administration in New Zealand. It is as straightforward and simple as this: our desire is to find ways to make it easier for New Zealanders to comply with their tax obligations to reduce the administrative burden upon them when it comes to paying tax and to modernise the tax system so it works for them and certainly so it works for the Government and it works for the Inland Revenue Department.This will be broken down into a number of chunks. We have just had two green papers that we have put out where we had more than a thousand interactions with the public. Very significant when it comes to taxation was members of the public and businesses telling us what they thought we may do to improve tax administration. A very important part of this was around provisional tax—making provisional tax simpler and making it easier.We put out a green paper and we said to the public: “We want to hear from you. Put in a submission.” and after the submission date closed all of a sudden the Leader of the Opposition came out with a policy around provisional tax. He said: “PAYE for businesses.” The problem with that was it was less a policy and more of a late submission on our green paper because actually that was what was in the green paper. In the green paper it said: “What about PAYE for businesses to reduce the burden upon them?”. It is good to see that the Leader of the Opposition Mr Little put in a late submission supporting the Government’s proposal. We thank him for that. I have another green paper on tax coming out soon. If he just waits he could actually put in a submission on that as well. If he only asks we can extend the deadline if he cannot get the work done.But do you know why I think Mr Little did that on that Friday? It was because earlier in the week Mr Twyford had made a great error of judgment. He had got some dodgy numbers he had put a few names together and he had decided to beat up on a very important constituent group in New Zealand the Chinese community. But actually he did not beat up on the Chinese community; just on a whole lot of people with Chinese-sounding names. At the end of that week I think that this announcement that the Leader of the Opposition made around provisional tax which I had already released some months earlier was to divert attention away from the horrible horrible things that Mr Twyford had said about Chinese New Zealanders—well actually New Zealanders with Chinese-sounding names.The other part of business transformation that we are going to look at during the course of this year is secondary tax because the system does burden hard-working New Zealanders. You will see some changes around the PAYE system and GST announced this year that will make it easier for people to comply with GST and actually our focus will be around small to medium sized enterprises as well as others. We want to reduce the economic burden upon them. Business transformation as I said to the Finance and Expenditure Committee will go across a number of parliaments—it has been here for two already—and I have extended an invitation to the committee to make Inland Revenue Department officials available to it to work through some of the detail so that actually Parliament as a whole can focus on what is best for our business community and taxpayers. Maybe that will help Mr Cosgrove with those fast little legs going to get it right when it comes to business transformation and the work that we are doing.The other important thing that has just happened is around property tax compliance. We heard from Mr Cosgrove about all the problems in the current consultation. Again actually unfortunately he is wrong. As a Government we have given the Inland Revenue Department a lot of extra money in successive Budgets to focus on property tax compliance and that move brought in hundreds of millions of dollars of additional tax from people who should have been paying it based upon the properties that they bought and sold.Well indeed we announced a brightline test to focus more clearly on this to make it easier for people to understand their obligations. That is out for consultation as well. Mr Little should send his policy in now rather than make a late submission afterwards but we are working in the right direction.