Edmonds BarbaraHon BARBARA EDMONDS (Labour—Mana): Thank you Madam Speaker. I had to have a little bit of a giggle after that contribution from the chair of the Finance and Expenditure Committee—Hon Grant Robertson: All 40 seconds of it.Hon BARBARA EDMONDS: —a little bit of a giggle at the 40 seconds it took for the chair of the Finance and Expenditure Committee to provide a history as to the Taxation Principles Reporting Act 2023. So I'm going to spend my contribution on the second reading of this bill which again has come under urgency with no select committee process—and very much like the leader of the ACT Party who spent his contribution deflecting transparency deflecting the reason they should have this bill—I'm going to spend my contribution on providing the people of the public a history of the Taxation Principles Reporting Act 2023 and how we actually got to the point where this Government does not want to be transparent and does not want to be able to provide a reporting framework so that ordinary New Zealanders can understand the principles by which their tax policies whatever they will be will benefit them. Because that is the absolute purpose of this bill despite a press release that is full of contradictories. So I'm going to provide to this House a reason and the background and the history of how we got to a Taxation Principles Reporting Act which this bill now repeals and actually it goes way back—before Thomas Piketty. It actually goes back to 1776 to Wealth of Nations Adam Smith's magnum opus Wealth of Nations. The members on the other side of the House are getting exercised about this history lesson that I'm just going to take them through. The reason why the members on that side of the House from the Government cannot provide a strong reason to remove the Taxation Reporting Principles Act is because those tax principles have been used throughout generations—throughout centuries—to be able to develop tax policy across the world. It then moved on—and I'm going to move history a little bit closer a little bit closer to their home maybe in 2010 when the Victoria University of Wellington Tax Working Group which was led by the formidable Sir Rob McLeod—he used to be a partner of Ernst & Young and he's still very much an active commentator on the tax community isn't he Dr Russell and Dr Webb? That also then led to another review in 2019 by the previous Government which was the Tax Working Group to assess the design of New Zealand's tax system. Time and time again throughout the ages throughout centuries throughout decades and throughout different Governments—including members who are still in this House who have throughout those different tax working groups—New Zealand has grappled with this question of fairness and where does the incidence of tax fall in New Zealand. That's why there have been millions of dollars spent over generations and decades to try and grapple with this question. So what this Government then did back in 2011 was we asked the question: What is the problem that we're trying to solve? Can we save the public of New Zealand millions of monies in the future by being able to have a data set to be able to have a framework in which these principles which we have used over the decades through various economists who have written many books over this?". We asked "Is there a way to futureproof it so that it doesn't matter who is in Government they can use this framework in order to develop tax policy in New Zealand so that it is fair?". Because I will admit fairness has a different definition depending on which side of the House you're on. I'm not going to say whether that's right or wrong although I definitely agree with this side of the House. But fairness has different definitions and the tax principles therefore try to draw out from those centuries of history the centuries of economists' views—basically what have been the principles that this country has used to develop tax policy since I think the late 1800s when our first land tax was actually the first income tax that New Zealand ever had. So what this side of the House then managed to draw out was the different principles which we have used. Then if you look at the regulatory impact statement for that first Act it says that Governments around the world are currently facing similar challenges in the form of rising inflation and supply chain shortages therefore putting pressure on the economy and revenue collection. It then carries on in the form of rising inflation and supply chain shortages therefore putting pressure on the economy and revenue collection. It then carries on—there are also impacts from technological changes and the impacts of climate change and the changing nature of work.Basically that Act provided the background and the history in which the context that the previous Government was grappling with as well as other Governments across the world—and then it covers out through the different reviews that we continued with. But actually what that regulatory impact statement also referred to—and I've met different members across the House who have referred to this—is that the Government then tasked Inland Revenue with collecting information to determine the effective average tax rate paid by the wealthiest people relative to their economic income. Now this is important because economic income—yes it may be on paper but at any point it can be realised so we wanted to understand where is that incidence of tax falling. The Inland Revenue high-wealth individuals research project revealed a startling disparity and this is a world first another world first that provided data and evidence to show that there is a startling disparity between the effective tax rates paid by the super wealthy compared with other New Zealanders. Everybody across the House may have a different definition of tax but actually that high-wealth individuals project provided the data and evidence. It was a world-first—such a world-first that other revenue jurisdictions were actually asking us: "How did you do it? How did you manage to get this data—because we have been grappling with this as well; we have the same challenges post-COVID we have the same challenges with climate change." So we were a world leader. That individuals project again basically compared the full income of the super wealthy. What it showed was that on full income information from 311 of our wealthiest citizens the average person in this group pays an effective tax rate of just 8.9 percent tax on their economic income. In contrast most New Zealanders—and I'm going to hear probably time and time again in this House in adjournment debates us thanking the cleaners; us thanking the security guards. Well actually those salary and wage earners—if someone earns a salary of $80000 with no other income they pay 22 percent tax on that income. That excludes GST. Now if you add GST the wealthiest—their effective tax rate rises to 9.5 percent but you know what? For the other New Zealanders if you include GST it goes up to 28 or 29 percent. That is the evidence and the data that showed that it was unfair. So the Tax Reporting Principles Act therefore tried to provide a reporting framework to show this unfairness—or actually just to show what's happening because maybe it wasn't going to be unfair if they did more data. A major obstacle to understanding that unfairness that that project brought out has been the lack of reliable data. So what this Act wanted to do is basically—we're already framing tax policy based on those principles. Governments across the centuries have been making tax policies based on those principles. What happened was the previous Government said "Let's put that down on to paper so that we can communicate it to the average Kiwi so they can understand so that that cleaner and security guard or those who are earning $80000 who are having to pay more tax than the super wealthy in our country can at least know that the decision makers here in this Chamber know that they have an ability to be able to have some fairness in this system" and that's what that reporting framework is going to provide. It was going to provide the data and the evidence and the transparency which that side of the House has proven over the last two weeks not to contain. That is why again days before Christmas when a draft report is likely to have been written they do not want to release that report under this framework. That is why they are rushing this legislation through. But this side of the House absolutely believes that New Zealanders need to know where the incidence of tax is falling. That is why we are fighting hard to ensure that there is transparency. It doesn't really matter what that side of the House want to say to Kiwis about cost of living—it is really clear by their actions and their actions matter—that they want to push under urgency something that will help the fairness of our system."