Smith DamienDAMIEN SMITH (ACT): Minister it's strange in these COVID times and in a pandemic that we're actually in a situation for the second time that a major tax change has been brought here under urgency without what I would consider proper select committee scrutiny. I just wanted to talk about specifics in terms of compliance and the introduction of the top tax rate at 39 percent. CHAIRPERSON (Adrian Rurawhe): That's not in this bill. You can mention it in passing but you can't—DAMIEN SMITH: Yeah but I just want to talk about the trends of where that's going. CHAIRPERSON (Adrian Rurawhe): —debate that issue because it's not before the committee. DAMIEN SMITH: We have a responsibility under this bill to provide for a fair and ethical tax bill and a progressive and practical tax bill and it's clear with regards to elements like fiscal drag the lack of certainty over the revenue that will be coming in this year which has been estimated to be down by between 6 and 8 percent of income tax levels that this is the right time to be making these types of decisions. So we have proposed before an overhaul of the tax system and we think the way it's structured at the moment is punitive. It brings us back to the Michael Cullen era where people who were trying to get on—and just for the Labour and Green parties' benefit everybody in this country has an aspiration to do well and to pay their income taxes and to provide public services but the toll poppy syndrome that our leader had mentioned earlier is interesting because we want to develop a high-wage economy yet the Labour Party wants to disincentivise people through their tax structure this year to actually not deliver on that and it's something we have to address in the future. One final thing is that our tax system as it progresses for this year is across the Asia-Pacific region the fifth-highest corporate tax rate in the OECD. In terms of income tax we produce on a like-for-like basis around 50 percent of the revenues like Australia does but they have a different tax structure and we believe it's time to readdress that. So every business that is out there every person that's earning personal income is looking today at the way the Government introduces these tax changes and whether it's fair and ethical and every week we now seem to be heading into a tailspin where people just don't know what their tax rate's going to be. You earn your money and then you try and invest it in a property and suddenly you're taxed again. This isn't what I would consider to be the most effective use of our tax base. One last thing to introduce which I thought Mr Robertson had agreed to was we're finding from our research that at this new introduction of taxes people are exploiting our labour here in New Zealand and setting up in foreign jurisdictions their companies and not paying taxes here in New Zealand. So there's another problem that's being compounded by the existing tax structure. So what we're saying is: give people a fair go let's stop introducing taxes under urgency without proper select committee scrutiny and let's get back to the spirit of clause 1 of this bill which is to actually not be unfair not provide something that isn't workable but actually get back to treating people in New Zealand who earn money—whether it's a nurse a doctor or a business person—as someone that we respect and we're not on the take from. So Minister on the specificity we can't support this bill. But we do agree with Labour that we thought until today that a capital gains tax other than 39 percent wasn't possible but we've learnt today that a stealth tax is where we're going and so we need to stop that. I'm afraid the infringement on the tax base is one that we're all going to have to contemplate in a very quick step time. So that's our contribution please from the ACT Party.