Robertson Grant: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — First ReadingText is incorporated into the Bound VolumeRobertson Grant: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — First Reading[Sitting date: 08 December 2015. Volume:710;Page:8654. Text is incorporated into the Bound Volume.]GRANT ROBERTSON (Labour—Wellington Central): That contribution from Alastair Scott who has just resumed his seat will go down in the annals of parliamentary history for its enthusiasm—perhaps brightened only by Mr Scott’s tie which I am a great admirer of. As he is a constituent in my electorate I fully approve of his purchasing goods such as that inside the boundary of Wellington Central.The Labour Party is supporting the Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill on its first reading and referral to the select committee. As has been noted by a number of other speakers before me it essentially covers three areas and I am going to work my way through those now. The one I want to focus on for the first part of my contribution is indeed the idea of the imposition of GST on what are called intangibles—remote services sold over the internet. Mr Deputy Speaker I am sure that you along with many other New Zealanders have got a Kindle and that you download those books to read over the summer break—those murder mysteries things that you think about in the dead of night and that you might want to do to your colleagues; that kind of thing Mr Deputy Speaker. Downloading those books on to your Kindle is the type of purchase that the Government tonight in this House is proposing that GST be put on. It is proposing that it be put on an e-tailer who sells into New Zealand more than $60000 worth of product a year.That is a reasonable suggestion—one that has been a long time coming. It has been suggested for some time. I know that people like Spark will be very pleased with that. They have been looking for a more level playing field in their competition with Netflix and other providers of that ilk. So they will be happy. Those who are not so happy include the retailers and the booksellers and in fact Booksellers New Zealand’s chief executive officer Lincoln Gould said that there was nothing for small business and its communities in this bill. He has been joined by Retail New Zealand and its criticism of the bill which as it says does nothing to deal with supporting the small businesses the main street retailers who currently work on an unfair playing field when it comes to this. Mr Tabuteau has already given the example of a book that if you did download it to your Kindle would attract GST but if you then ordered the book in hard copy from Amazon and had it mailed across the world to you it does not attract GST. So the Government has set up this unfair playing field because it has done the thing it always does. It has gone after the very very easiest thing—the thing that does not take too much effort and it has left alone the issue that New Zealanders and in particular small businesses and retailers across New Zealand wanted solved.The Government has done worse than that. It has told the booksellers the retailers of New Zealand that it would be on to sorting this out. That is what it told them at the election last year. The retailers were told in November that there would be a discussion document available on this very issue of how to deal with goods that cross the border not just the intangibles. What happened when Todd McClay made the announcement of this piece of legislation? He announced that the discussion document scheduled to come out in November of this year will now come out in April of next year—another delay of 5 or 6 months while the Government kicks the can down the road as it does on so many issues. Any issue that might require a little bit of challenge a little bit of confronting themselves it kicks the can down the road. A discussion document in April—I will wager with you Mr Deputy Speaker that that will not come out in April. It will be later next year. The can will get kicked further down the road because this Government never faces up to the tough issues. If the Government is serious about creating a level playing field for New Zealand businesses especially small businesses it needs to have the courage of its convictions and put up a regime that actually creates that level playing field and not tinker around at the edges.The second part of the piece of legislation in front of us today is around the question of the residential land withholding tax. This is as some other speakers have noted part 3 in a horrendous trilogy from the Government of stuff-ups in taxation legislation. If it is a trifecta Mr Scott it is paying very very poorly. What we learnt at the Finance and Expenditure Committee last week during the Inland Revenue Department’s hearings is that the brightline test which we have already been told is going to bring in $5 million—a pathetic sum of money relative to the trading of houses in New Zealand—costs $5 million to implement. So $5 million comes in and it is actually going to cost the Inland Revenue Department $5 million to implement it. It is cost-neutral—genius taxation policy! It is cost-neutral and it fails to actually get to the root of the problem of property speculation.It will be interesting to see once again all of the tax experts come to the select committee as they did for the first version of the brightline test to say to the Government: “Your policy doesn’t make sense. It’s got no coherence.” One of the senior partners in the largest accounting firm in New Zealand came to the select committee and said he was “professionally confused” by the Government’s approach in this area. And they will be back. They will be back again to say: “Here you go confusing the picture even more.” So this really is throwing potentially good legislation after bad. There is very little in the Government’s approach of trying to look like it is dealing to speculation that has been good. This particular piece of legislation deals with those offshore who will be making purchases. It appears to set up a tax that makes some sense in that context but it follows on from very very poor legislation. And once again it is an example of taxation legislation that is simply inadequate for the problem that it seeks to address. It kicks the can down the road of a difficult issue. It gives the appearance of doing something. If it were not for some of my colleagues I would call this “Clayton’s legislation” but that may give the Government the wrong idea about what kind of legislation it is. But it is the kind of legislation that you do when you are not really doing legislation to address the problem.The third part of the legislation that is in front of us today is that dealing with student loans. To give Mr Seymour his dues he was about to launch into his views on the funding of tertiary education which he one day hopes to undertake I understand. And he actually said something that I agreed with. So we are going to need to mark this down: 8 p.m. on 8 December 2015 Mr Seymour said something I agree with which is that when the interest-free student loan policy was set up it was set up to be interest free when you were in New Zealand. It was never set up to be interest free if you went overseas. One of the reasons for doing this—Mr DEPUTY SPEAKER: Point of order David Seymour. Let us hope it is in fact a point of order.David Seymour: I raise a point of order Mr Deputy Speaker. I said no such thing and the member knows it.Mr DEPUTY SPEAKER: That is not a point of order; that is a matter for debate and you have had your debate.GRANT ROBERTSON: Yes it was not that good either.So the interest-free student loan scheme was designed so that it was interest free in New Zealand. If you went overseas interest began accruing. There was some allowance for the kind of OE that New Zealanders undertake or if you were working for a voluntary organisation or for the New Zealand Government. That is part of this legislation to tidy up the way in which charitable organisations are defined—those where you do not attract interest when you are working for them overseas and it is good to see that being tidied up. More discretion is going to be given to the Commissioner of Inland Revenue.David Seymour: Mercy!GRANT ROBERTSON: Read the bill Mr Seymour. It is in there. More flexibility is going to be available to the Commissioner of Inland Revenue to decide whether people are working for a charitable organisation.But the Labour Party supports following up that debt. We through the interest-free loan scheme made that scheme fairer and made that scheme more of an enabler for people to get into tertiary education but we respect the fact that it is a loan scheme and that the loan does need to be paid back and the relationship between the Inland Revenue Department in New Zealand and the Australian authorities is close enough to be able to share that information so that those who do default on their loans can be followed up. This was a loan scheme that the now leader of the National Party said that he would oppose with every bone in his body. When it came in he said he would oppose it with every bone in his body—well that has failed. The National Party has continued on with it it has tinkered around at the edges it has managed to make the interest-free loan scheme more unfair and more difficult and it has taken away a number of the student allowance provisions—but on this particular piece of legislation involving student loans the Labour Party can support it.So we will be supporting this bill to the select committee. It is a bill that could have done so much more when it comes to cracking down on speculation in the housing market. But as is typical of this Government’s approach it has tinkered at the edges it has dipped its toe in the water and run away scared when it could have actually been doing something to give New Zealanders a chance to buy their own home and be part of the Kiwi dream. Maybe one day when we get a Labour Government we can get that to happen.