Wang Kenneth: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — First Reading 
Wang Kenneth: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — First Reading 
[Volume:626;Page:21222] 
KENNETH WANG (ACT) 
: 
 I stand on behalf of ACT New Zealand to speak on the Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill. I would like to make some comments on the condition of the tax system in New Zealand overall as well as to look at the specific bill. 
As the Labour member just mentioned the aim of this bill is said to be to reduce compliance costs and simplify the process particularly to benefit small businesses in New Zealand. I seriously doubt that that will happen. Specifically the bill deals with provisional tax calculation and the payments system tax depreciation rules and streamlining the taxation of fringe benefits. I seriously doubt that benefits resulting from the bill will really be delivered to businesses and to the people working hard in the front line supporting our economy. 
I would like to draw members’ attention to a report in the  
National Business Review  
at the end of April just before the 2005 Budget was released that research and polling showed that 63 percent of New Zealanders—an overwhelming majority—wanted tax cuts. [ 
Interruption 
] That is quite right. Unfortunately the Minister of Finance ignored that overwhelming wish of New Zealanders and delivered nothing to satisfy it. Everyone knows what he delivered: a pack of chewing gum. 
Let me come to the bill. Regarding provisional tax the current situation for business owners particularly small-business owners is that they suddenly have to pay a huge amount upfront in provisional tax. It looks as if this will be a lot more affordable when it is divided more frequently and streamlined with their GST calculations. But one must ask from day one from the start why they have to pay so much tax. After all the current tax rate of 33 percent is the highest of any OECD country. 
The ACT party promotes a tax rate of 25c in the dollar applying to all businesses no matter whether they are big or small. That for a start would simplify the system and reduce a lot of compliance costs not to mention that it would also reduce the tax burden. 
Another thing the bill talks about is tax depreciation rules. Increasing the low-value asset threshold will assist some investors to claim expenses costs more quickly and easily and to get their investment back better. But overall the cost of complying with those regulations is still high—let alone the cost of complying with fringe benefit tax. 
Fringe benefit tax was introduced in 1985 and I can bear witness to the difficulty of simply trying to comply with fringe benefit tax regulations. I challenge any member of this House to tell me all the details of those regulations. If any members can tell me all the regulations that are in place today I will give them a prize but I doubt if anyone knows how much burden the current fringe benefit tax system places on business owners. 
The bill itself does not do anything positive to help our business owners to get on with their businesses. It just shifts the burden from one corner to another. 
ACT strongly opposes the bill because it does not address the problem. We strongly draw the House’s attention to the fact that ACT has constantly promoted a flat tax of 25c in the dollar for all businesses. We would heavily reduce the current compliance costs in place for all New Zealand businesses.