Taxation (International Investment and Remedial Matters) Bill — Second Reading 
Text is incorporated into the Bound Volume 
Taxation (International Investment and Remedial Matters) Bill — Second Reading 
[Sitting date: 09 February 2012. Volume:677;Page:274. Text is incorporated into the Bound Volume.] 
Taxation (International Investment and Remedial Matters) Bill 
Second Reading 
Debate resumed from 8 February. 
PAUL GOLDSMITH (National) 
: 
 I speak in support of this bill the Taxation (International Investment and Remedial Matters) Bill which represents a small but important part of the National-led Government’s efforts to lift New Zealand’s economic performance. I do welcome the widespread support in this House for the bill.  
Tax law has a massive influence on the economy often in a manner opposite to the effect anticipated or desired by legislators so we keep refining in the hope of delivering a system that extracts the revenues required in a way that minimises not just the direct burden but also the dead-weight cost of that taxation. That is the economic cost to the country caused by the effects tax laws have on behaviour.  
 International tax law is a good example of generating dead-weight costs. Because of the New Zealand international tax regime many New Zealand companies over the years have simply decided not to expand abroad and New Zealand is the poorer for it. These costs have seldom been taken into account by legislators but they are considerable. The centrepiece of Budget 2010 was the delivery of a major tax package reforming the tax system to make it fairer more sustainable and a better support for economic growth.  
The Taxation (International Investment and Remedial Matters) Bill builds on and extends earlier international tax reforms. As we have heard the main proposal is to extend the active income exemption introduced in 2009 to offshore subsidiaries—controlled foreign companies or CFCs as they are often referred to—so that it also applies to joint ventures and other significant shareholdings in foreign companies that are not controlled by New Zealanders’ non-portfolio foreign investment funds.  
New Zealand went out on a limb on the tax regime for controlled foreign companies in the late 1980s and early 1990s in its desire to be comprehensive. This showed wonderful philosophical consistency in our arrangements as in much of the tax reform of that era. Unfortunately however in this area the rest of the world did not follow. So the active income exemption brings New Zealand’s tax rules into line with practice in other countries. It will help New Zealand - based businesses to compete more effectively in foreign markets by freeing them from a tax cost that similar companies in other countries do not face. For example a New Zealand - owned manufacturing plant in China will now generally face the same tax rate as other manufacturers operating in China.  
These changes will improve the competitiveness of New Zealand’s tax system and encourage businesses with international operations to remain establish and expand. Why is that important? Because we want New Zealand businesses to grow into international businesses based in New Zealand. That is how we build the economy and earn the money that we need to maintain our living standards. Our tax laws frequently made that unreasonably difficult in the past and in some instances added to the pressure for companies to leave New Zealand or more frequently just not to attempt international expansion. This bill will make it a lot easier to do that for the better of New Zealand.  
There are a number of worthy provisions in this bill showing that the Government has listened to the advice of the Capital Market Development Taskforce. In one the bill removes a tax barrier to non-resident investment in New Zealand corporate bonds. In 2009 the House might recall the Capital Market Development Taskforce recommended that the approved issuer levy be reduced from 2 percent to nil for some public issues of debt by New Zealand residents and this bill provides a zero rate of approved insurer levy for bonds that are traded in New Zealand. This is all about making it easier for New Zealand companies to get access to the credit at best possible rates and deepening New Zealand’s capital markets generally.  
Finally I am pleased that the Finance and Expenditure Committee adopted some of the suggestions that submitters made during the select committee hearings. These will simplify compliance for taxpayers using new rules. I particularly want to mention allowing taxpayers to apply the active business test using accounts prepared in accordance with the United States’ generally accepted accounting principles. That certainly makes it easier for New Zealand companies to jump through the hoops that are required by legislation and tax rules and I think that will be a great boost to New Zealand companies trying to expand internationally and grow this economy. Thank you very much.  
ANDREW WILLIAMS (NZ First) 
: 
 Firstly can I congratulate you Mr Assistant Speaker Robertson on your reappointment to the role as an officer of the Parliament. I have greatly enjoyed dealing with you in other capacities over the years. I have always enjoyed the relationship we have had in local government and working with you in your central government role and I appreciate the support wisdom and great knowledge in many areas that you have been able to give to me over the years. So I do congratulate you and your fellow officers of the Parliament.  
We are here today to further the Taxation (International Investment and Remedial Matters) Bill. New Zealand First will support this bill but we do have some reservations and caveats in relation to it. The bill is intended of course to move to allow reciprocal arrangements between countries for investments and taxation to ensure that companies and businesses are fairly treated in the various jurisdictions where they are operating. However we would not wish to see departures from New Zealand as a result or any encouragement for companies to see this as an opportunity to set up their businesses elsewhere for the benefit of a lower tax regime in some other jurisdiction.  
Increasingly of course business these days is done over the internet in the ether via all sorts of other means rather than physical hard products and physical hard manufactured goods. Therefore as a result companies can in effect be based anywhere. They are almost cyber-companies in many respects because you are only as far as the distance from your mobile phone or your laptop. As a result companies can operate from anywhere. Therefore we certainly would not want to see a situation occurring where this was used as a matter of convenience so that companies could operate in cyberspace in order to secure more advantageous tax regimes.  
We do not have to remind you of New Zealand First’s longstanding commitment to this sort of situation going back to the most famous wine-box saga in the 1990s. Many of you will recall particularly those of you who were in this House at the time—and Mr Assistant Speaker you will recall—that that was a sad period of time in New Zealand because it was very clearly a situation where there was an attempt perhaps on the part of some to evade paying their due taxes to the Government and the Crown of New Zealand. In that situation it was convenient for some companies to find alternative locations for the registration of their companies and in so doing it was a significant situation in terms of the revenues to this country. For instance Treasury officials estimated during that period of time that New Zealand was losing up to a billion dollars a year in the mid to late 1980s through the wine-box tax deals situation. Companies’ tax money was not being paid meaning that the burden to meet the Government’s expenses here in New Zealand on welfare health and education fell on to the ordinary PAYE taxpayers. It meant that the Government kept running Budget deficits for a lot longer than it might have needed to and those deficits had to be funded by borrowing. We certainly would not want that situation to be repeated again in this decade.  
The Taxation (International Investment and Remedial Matters) Bill also raises the aspect of third-party situations where again I would remind you—and looking back in the records from those wine-box days—that apart from Australia the other country that took a pounding from the wine-box deals was Japan. Tax credits funnelling something like $1.2 billion to generate tax certificates were subsequently presented for tax rebates in Japan. The tax losses to Japan from those deals alone may be in the region of almost $200 million.  
As I said at the beginning of my address we certainly would not want a situation where clever creative accountants and clever creative organisations try to use the Taxation (International Investment and Remedial Matters) Bill and the law that will come out of it as a means of avoiding or evading tax. I am not talking just about New Zealand companies; I am talking about international companies. We had a situation in recent weeks which is before the courts in relation to some activities occurring in this country that are perhaps less than desirable and that we would not wish to be occurring in this country if they are proven through the courts to be so. So at the same time we certainly do not want to have international operators operating in this country for the purpose of perhaps avoiding taxes in their own areas of jurisdiction.  
New Zealand First has always supported reform of taxation. Our long-term objective is always that New Zealanders will pay less tax in the long run. We would like to see tax law simplified and enforced so that it is applied equally to all taxpayers. The burden of tax should fall equally to us all; it should not be imposed on some sections to the benefit of others. This includes incentives for increased research and development and reduced tax on export industries is a main platform that New Zealand First through this Parliament would like to see moved on.  
At the same time—and although this is slightly away from this particular bill—it does raise the issue of anomalies of instances of tax situations and pension situations for immigrants to this country and vice versa for New Zealand citizens living in other countries who do not necessarily secure the appropriate pensions and superannuitant payments because of the location of where they choose to live in their retirement. In a sense it is a penalty to them. Therefore while we are looking into this situation of being fair to corporates and companies to put them on a level playing field in terms of taxation so they can compete in world markets and in terms of investments around the world it does also raise the irony that we do have individuals—citizens of this country and citizens who have come to this country—who similarly perhaps are not on a level footing simply because of relocating to another country.  
So in a wider sense I think in the future we need to raise our expectations in terms of fairness. It should not just be fairness to the corporate world and the business world but perhaps in the future we need to give consideration to the everyday Joe Bloggs in the street who moves to another country another location.  
In closing can I just say that taxation is with us all. It is something you do not avoid in life; that and death are two things you are assured of through life. In terms of taxation it is beholden to us all to ensure that taxes are fair. We do have an increasing burden in terms of health education and social security. We do have a responsibility to provide for the people of this country and of this nation in a fair and equitable manner and we do have to ensure that our companies and our corporates are competitive at the same time in order to compete in the world markets.  
I hope that this bill will be supported in the House but with those caveats that when it does go through and is confirmed by this Parliament it is on the basis that it will ensure fair taxes both within New Zealand and in other markets where our corporates operate to the benefit of the New Zealand economy and to the benefit of our corporates and to ensure that New Zealand is a strong global player. Thank you. 
DAVID BENNETT (National—Hamilton East) 
: 
 Thank you Mr Assistant Speaker Robertson. I want to congratulate you as well on your appointment to your role and to follow on in regard to the Taxation (International Investment and Remedial Matters) Bill.  
I think there were some interesting points that were raised by the last speaker. One of the things in taxation law is that sometimes it can get too complex and the more complexity you bring into taxation law the more opportunity there is for people to try to avoid the law by getting around those rules. The essence of what we are doing here today is to take out some complexity to make it fair for New Zealand companies that are investing overseas in a manner in which they do not have control of those companies but have a significant investment in them so that they are not under some set of rules and regulations that are frankly outdated and can lead to people having to structure their affairs in certain ways to avoid taxation when it would be much better if we did it in a simpler and more effective form. That is the purpose of this reform that is before Parliament and it is something that in essence does not lead to the problems that the previous speaker spoke of which are encouraged by having too many rules and regulations.  
Many people have spoken about the nature and aspects of this bill including the active and passive taxation. For those who are not tax gurus “active” is when you have a business that is actively producing something. If for example Fisher and Paykel Appliances was building washing machines in China that would be “active” whereas “passive” is something where you just receive an interest royalty or dividend. That is the difference between “active” and “passive”.  
When you hear members of Parliament talking about that in regard to this bill it is very much to extend the active income exemption to extend the exemption for those companies that are actively engaging in activities. These are basically controlled foreign companies or CFCs so it applies to joint ventures and other significant shareholdings. You may have less than 50 percent but a significant shareholding and in an active company you would be taxed in this manner. That is to give some fairness to New Zealand companies that are investing overseas and to give them some simplicity in how we do business for them.  
One of the things that was changed in the Finance and Expenditure Committee was in regard to the use of accounting principles. Generally accepted accounting practice is the American approach and this legislation enables companies to fulfil generally accepted accounting practice in accordance with US rules. So that means that they do not have to prepare two sets of accounts because the US typically does not recognise the international accounting standards that a lot of New Zealand companies will be following. If we did not have that they would have to supply generally accepted accounting practice accounts for their activities in the US and also international accounting standards - supplied regulations and financial reporting for those operations. This is another attempt within the committee to reduce the compliance costs on companies so that they do not have to have two forms of accounting records produced when it comes to the US and companies in that jurisdiction. 
So in essence this bill is there to make it easier for New Zealand businesses to make money overseas. That is good for New Zealand. If our businesses make more money overseas and can bring that back to New Zealanders that is in the best interests of “New Zealand Incorporated” and something that I know all members of this House will want to see happen because that grows the pie here. That is what we are all about so that we can actually deliver those better services for our people.  
So this legislation is important. It is part of providing growth for our country. It delivers a taxation system that is much more up to date recognises the current circumstances and enables New Zealand companies to have a structure and system that are comparable with other countries so that they can compete on a level playing field and do not have excess regulation from the New Zealand side. Thank you. 
Hon CLAYTON COSGROVE (Labour) 
: 
 Mr Assistant Speaker— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I recognise the Hon Clayton Cosgrove. 
Hon CLAYTON COSGROVE 
: And I recognise you too sir.  
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Well done. 
Hon CLAYTON COSGROVE 
: Thank you. I am sure we all recognise you actually Mr Assistant Speaker given the venerable status you have—building on Mr Bennett’s comments.  
On a serious note Labour will support the Taxation (International Investment and Remedial Matters) Bill. As we know this bill builds on the recent changes to the tax treatment of international investments and like other members who have spoken have said obviously we are in favour of simplification and making it easier for companies to grow their revenues and to increase their capacities. It also aligns the rules relating to the foreign investment fund—or as it is known FIF—income with the current method for calculating attributed controlled foreign company income.  
But we do want to raise—and Labour members did raise in the commentary—a concern in respect of the approved issuer levy. Those concerns are regarding the removal of the approved issuer levy on payments of interest on securities meeting certain requirements as notified under the Income Tax Act. Now one of the issues I want to raise in respect of this is that there is a concern that relates to a further erosion of the tax base associated with financial transactions at a time as we know and as the Government has forecast of falling Government revenue.  
In a public session on the Finance and Expenditure Committee earlier this week we heard from the Inland Revenue Department and other submitters on a number of issues but there seemed to be a theme running through some of the submissions that the Government is of course you know in a sort of dash-for-cash mode. Whether it is cutting and slashing Government department capacity and services or trying to screw extra cash out of various other entities and agencies it is in a sort of clawback mode. We know why: because it has to fund on the borrowings and it is borrowing wide because it has given a small percentage of New Zealanders right at the top of the stack a large tax cut. Now all that means is that this Government is chasing revenue like billy-o. Everywhere there is revenue it wants it. It wants to drag it in.  
The concern that we raise—we support the bill—is that this move in terms of the removal of the approved issuer levy may indeed erode a falling and reducing Government revenue base. We were advised by a number of submitters that the proposals outlined in the bill would not help increase liquidity reduce interest rates or add depth to our capital markets.  
I know that the Prime Minister has waxed eloquent about wanting to increase the depth of our capital markets. He spins that as part of the line or the alibi for promoting asset sales—that somehow the partial asset sales will add depth to our markets and will give opportunities for investment; you have heard it all etc. etc. etc.—when we know exactly what will happen in respect of those assets. They will fall offshore and the returns that are made at least on the 49 percent of those assets will not flow into the coffers of the Crown. That is important for New Zealanders because those resources could be deployed to provide the social services we need but they will flow offshore. So at a time when the tax base is reducing at a time when the Government seeks to grab every bit of revenue it can there is a concern that this move may simply add to that.  
In addition our side of the fence is concerned that in some cases the current tax system already effectively contains a lower tax burden on offshore sources of capital relevant to the tax on domestic savings thereby providing an undesirable incentive for funds to be sourced offshore rather than being retained or saved domestically. I think that is a valid point to raise. Surely one of the objectives is for companies to retain capital onshore to save capital onshore and utilise that here. Now you know we are in sort of unchartered waters with some of this stuff. There are a number of international obligations here but again I think it is worth raising those concerns.  
Our side of the fence believes that there is a need for further work on this issue in order to improve the neutrality of the tax treatment of capital across domestic and international sources. So we of course are for simplification. We are for providing an environment where companies can grow and prosper and of course invest internationally but we think this is one area where the Government should have done some more work done some more in-depth analysis at least to allay I think the fears of a number of us in this House. I come back to it again: if there is a further erosion of the tax base do we have projections on that? I was not on the committee at the time but at a time when the Government is sort of out there trying to rake up everything that looks like a dollar then one wonders whether this is a potential risk.  
 We support this bill. We note that companies both domestically and those that are showing a tonne of guts actually to expand their operations and pursue markets offshore in order to expand their domestic capacity—and we applaud that. We want to see those companies growing and prospering here but also of course paying their fair share. I think it is worth when we are dealing with these bills to note with a degree of pride that we have some of the most innovative companies in the world. We have companies that are small in their number in their capacity but they are some of the most creative on the globe. So it is appropriate that we do what we can to assist—to align to make it easier to do business and to expand markets internationally—and we should pay tribute to those companies.  
I was in business once for a short period in my life. Probably the best lesson I learnt was that if you are in business it is the one area where if you do not work you do not eat. You are totally reliant on your own capabilities. We are lucky in that we get a pay cheque every second Thursday or whenever it is and whether we are any good at it—whether we sit on our chuffs or we do the work—the taxpayer is generous enough to pay us. When you are a small business when you are a sole trader you are a business and you are risking your own shirt. Again we had the privilege in Government when we were there and now these folk are there risking everybody else’s money on their behalf and utilising everybody else’s money on their behalf. When you are in business as we know you are risking your own shirt.  
I know that there are people across the country innovative business people who have shed a lot of sweat to get where they are or to maintain the number of employees they have in exceptionally difficult times. As I say the best lesson I learnt in life was if you do not work if you do not get out of bed and if you do not keep your eye on navigating the business through you do not eat because you do not get paid. It is all up to the business person and they do risk a lot. They are the ones of course who put bread and butter on the table of their employees.  
Governments can knock down roadblocks Governments can assist sometimes Governments create roadblocks but at the end of the day businesses create jobs companies create wealth and what we must ensure is that you know everybody pays their fair share. I know companies especially smaller businesses are staring at this and saying: “Oh no more compliance. More stuff we have got to keep our eye on or get up to speed on.” and every time you are getting up to speed on more Government compliance of course you are not behind the counter growing the business; you are behind the desk almost doing the Government’s work. So it is appropriate I think as we deal with these taxation bills that we do acknowledge the contribution of business. Labour will support the bill. 
TODD McCLAY (National—Rotorua) 
: 
 It gives me pleasure to stand and speak on the Taxation (International Investment and Remedial Matters) Bill. Before I go into some of the substance of the bill I want to recognise the fine speech of my parliamentary colleague Mike Sabin who made his maiden speech just a short time ago. Can I say to Mike Sabin that it is great to see a member who shows feeling and emotion. In fact I think it shows the strength of so many people who come to this House to represent others and to work hard to make their lives better. I particularly enjoyed it as I have enjoyed speeches yesterday from other members and I look forward to the coming week or so when we will hear from those members who have not been able to make their maiden speeches yet. 
I am glad to speak on this bill because the centrepiece of the National Government’s Budget in 2010 was the delivery of a major tax package and a reform of the tax system to make it fairer and more sustainable and to offer better support for economic growth. The National Government is firmly focused on lifting New Zealand’s economic performance and this bill is another step in that direction. In fact it is one of a number of measures that were started in the last term of Government and will continue this time.  
Can I say that actually I agree with Clayton Cosgrove’s sentiments around small businesses and the need to recognise that for many people in business it is their livelihood they put on the line it is their hard work and for many of them—at least the ones whom I have had an opportunity to work with or have met—they often pay others pay their bills and so on before they put payments to themselves at the forefront. So whenever it comes to the work we do in this House particularly in our committees around taxation and to the need to make sure there is not too much regulation placed upon them I agree with Mr Cosgrove’s sentiments.  
This bill builds on and extends earlier international tax reforms. We have seen a lot of reform around the tax system over a number of years. The main proposal or component of this bill extends the active income exemption introduced in 2009 to offshore subsidiaries—in short this is controlled foreign companies—so that it also applies to joint ventures and other significant shareholders in foreign companies that are not controlled by New Zealanders.  
It also deals with the active income exemption and it brings New Zealand tax rules into line with the practice of other countries. I think that very clearly it helps New Zealand - based businesses to compete more effectively in foreign markets by freeing them from a tax cost that similar companies in other countries do not face. An example of this would be New Zealand - owned manufacturing plants in parts of Asia where the Government has worked very hard over a number of years to increase trade and to bring down tariff barriers and non-tariff barriers through trade agreements; China is an example. A New Zealand - owned company that might manufacture in China today or in the future will now generally face the same tax rate as other manufacturers operating in China.  
In brief international tax calculation methods will be rationalised by this bill exemption for investment in Australia will be maintained thin capitalisation rules for investors will be dealt with and when we come to the Committee stage I look forward to going into particularly that last one in much much greater detail. Thank you. 
Dr KENNEDY GRAHAM (Green) 
: 
 This bill the Taxation (International Investment and Remedial Matters) Bill seeks to change New Zealand tax law specifically the Income Tax Act 2007 around gains from income in overseas companies and gains by foreign investment in New Zealand companies. 
The main changes are threefold. First it relaxes what is known as the thin capitalisation rules. These rules are designed to deny interest-related tax deductions to multinationals that use debt as a way of avoiding a tax liability here. The Inland Revenue Department claims that the new laws adopted as recently as 2009 have created some unfair consequences for resident companies investing abroad. Secondly it extends the active income exemption to New Zealand businesses operating offshore and rationalises the international tax calculation methods. This brings New Zealand into line with overseas practice freeing companies here from a tax cost they do not face elsewhere. Thirdly it removes the 2 percent tax or levy on bond issues for non-resident investors. This follows one of the recommendations of the Capital Market Development Taskforce. It effectively lowers the cost of raising funds from offshore. 
So what is the likely fiscal cost of these changes in terms of lost company revenue? They are estimated to be somewhere around $15 million in the first instance $10 million in the second change and $5 million in the third—that is to say $30 million all up. This package of company tax totalling $30 million of course pales in the light of the $1.5 billion of company tax cuts already announced by the John Key Government which Todd McClay spoke of so effusively just a moment ago. 
Todd McClay 
: Thank you. Thank you. 
Dr KENNEDY GRAHAM 
: You are welcome. 
And what are the political implications of this bill as well? The provisions of the bill are complex in their detail—ironically because as Clayton Cosgrove said just a moment ago we are all in favour of simplification in our tax laws. But most of them involve a similar kind—generally a broad trade-off as the Green Party said in the first reading; that is lower company tax revenue versus the risk of company emigration offshore. This creates a problematic tension between a race to the bottom with company tax breaks in a race we cannot win in the long term or the loss of tax revenue and jobs as companies move offshore motivated by tax reasons. Each of these cases is slightly different so we may support some measures while not supporting others. 
We shall vote for this bill in the second reading but as a general principle we should not support the slow erosion of our tax base for unquantifiable theoretical gains. Better to understand our natural advantages and play to them while simultaneously extending our efforts abroad in international forums to agree to satisfactory environmental labour and tax standards.  
RAYMOND HUO (Labour) 
: 
 I rise to take a call on the second reading of the Taxation (International Investment and Remedial Matters) Bill. Inadvertently I guess the bill was made famous on its first reading in November 2010. The bill although complex and a little bit dry in a technical sense made headlines and the  
National Business Review  
outlined it very well. I acknowledge the presence of Minister Jonathan Coleman. According to the  
National Business Review  
it is easy for MPs to become confused about tax legislation and none more so than Minister Jonathan Coleman. The unfortunate Dr Coleman the then Minister of Immigration and Minister of Broadcasting was given the task of introducing the first reading debate on this particular bill in the absence of the Minister of Revenue the Hon Peter Dunne who was responsible for introducing this bill. Obviously someone gave him the wrong bill and his speech focused primarily on another bill. If my memory serves me well it was the Taxation (International Taxation Life Insurance and Remedial Matters) Bill. The famous bill got a nickname of the “Telephone Book Bill” because in its original form it contained more than 820 pages.  
We should not give too much of a hard time to Minister Coleman because the two bills are related. I feel sorry for him; I guess many of us would have been in a similar situation. The incident prompted me to thank the officials the submitters and the members of the then Finance and Expenditure Committee for the great work and efforts they made.  
It is an important bill that introduces significant changes to the tax treatment of inbound and outbound cross-border investments. Most of the changes are intended to take effect from the beginning of the 2012-13 tax year as I understand from reading various reports so this bill has been reintroduced in a timely manner.  
I certainly recall my contribution on the first reading debate; I borrowed part of the title of an article published by Deloitte to describe some of the aspects presented by the bill and the priorities taken by the Government which was “The Good the Bad and the Ugly”. The good is that the bill introduces some significant changes to the tax treatment of international investments. It is bad because we have concerns with regard to the removal of the approved issuer levy or AIL as it is commonly known. It is ugly that some of the important issues that are worth a cross-party bipartisan robust consideration and debate such as a capital gains tax have not received such an approach.  
The bill in the current form proposes changes to foreign investment fund or FIF rules. This bill means that New Zealanders holding stakes of 10 percent or more in offshore companies will now be subject to New Zealand tax on those interests unless the companies earn passive income such as interest royalties or rents. The bill replaces the exemption of non-portfolio foreign investment funds in the eight “grey list” countries—such as Australia UK US Canada France Germany and so on and so forth—with an exemption for non-portfolio foreign investment funds that are resident and subject to tax in Australia. 
 We do have concerns as raised by David Parker last night and Clayton Cosgrove just now on various grounds regarding the removal of the approved issuer levy. Firstly our concerns relate to a further erosion of the tax base associated with financial transactions at a time of falling Government revenue. Secondly we were advised by a number of submitters that the proposals outlined in the bill will not help increase the liquidity of the New Zealand corporate bond market. Thirdly and finally as pointed out by David Parker we have concerns that in some cases the current tax system— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: I am sorry to interrupt the honourable member; his time has expired. 
LOUISE UPSTON (National—Taupo) 
: 
 I am pleased to support in its second reading the Taxation (International Investment and Remedial Matters) Bill. 
Bill read a second time.