Wood MichaelMICHAEL WOOD (Labour—Mt Roskill): I am very happy to rise to speak to the Taxation (Annual Rates for 2016-17 Closely Held Companies and Remedial Matters) Bill. Following on from that Churchillian speech can I open up by noting first of all the value of passing this bill with a week to go to ensure that the Government's appropriations over the last year have in fact been lawful. That is running it pretty close but we are pleased that we are there.This bill is a very important bill. There is one important—very important—aspect of it in fact that Minister Nathan Guy did not spend one second of his speech talking about. That is the setting of the income tax rates for the previous year and the rates that will take us through for the next period. What I want to touch on in respect of those rates is a comment made by my colleague Mr Robertson in a previous debate on this bill. This is what Mr Robertson had to say: he said that here the bill would have been an opportunity for the Government to say: 'It's time for some fairness. It's time to have another look and make sure that we've got the rates set in a way that's fair instead of just automatically rolling them over.' " And "fairness" has to be the central word in any debate about tax policy in this House. It cuts straight to the heart of the purpose of our tax system.Why do we need a fair tax system and why do we need a fair set of tax rates? Well it goes to the kind of country that we want to live in. It goes to the kind of incentives that we want our people to have. It goes to the notion of fairness in our economy. It goes to the kind of productive economy that we want to have. And it goes to overall confidence in our tax system because our tax system at its core relies on trust. When we set these tax rates we are saying to 2 million New Zealand salary and wage earners: "This is the amount of money that you will hand over to the Government every year to fund public services." Most New Zealanders accept that. Most New Zealanders think that is a good thing. But we do it on the basis of the fact that it is a fair system and that everyone will pay their fair share.If we have a system in which those 2 million New Zealand salary and wage earners—and next to that every single small business operating in New Zealand—are having to pay their fair share and are having to pay these rates that we are setting in this bill which the Minister did not mention once but we have other entities operating in our country that do not pay their fair share then that cuts straight to the integrity of the tax system. And of course it opens up questions for people who do pay their fair share: "Why should I do that when others do not?". That is when the house of cards starts to fall down and we simply cannot have that. Across this House I believe that it is maybe not unanimous support but there is broad support for there being a progressive tax system in this country that funds our public services that taxes people at a fair rate and that distributes income fairly within our country to create the kind of society that we would all want to live in. But what have we got from this Government? We have got a set of rates that have simply been rolled over here—rolled over as they have been for 6 years.And what about those people who are not paying tax? Of course we have had the news this week about Apple—a multibillion-dollar corporation operating in this country with billions of dollars of revenue over the past 10 years. How much tax has it paid? If we look at the income tax rates that we are talking about here tonight—let us have a look at them. Let us have a look at them. The lowest-paid New Zealanders in our country from the first dollar of income that they earn pay 10.5 percent income tax. What is Apple paying? What has it paid over the last 10 years? Did it pay the 10.5 percent that the lowest-paid New Zealanders pay? It paid zero. It paid zero. It did not pay 30 percent as people earning between $48000 and $70000 pay. It did not pay 33 percent as people earning over $70000 pay. It did not pay 17.5 percent as people earning between $14000 and $48000 pay. It did not pay 28 percent as every struggling or successful small business in New Zealand pays. It paid nothing. So in this debate about the income tax rates that we are affirming for this year and taking forward in our country it cannot go without saying that there are some in this country who are paying and there are some who benefit from this country who are not paying. This Government so far has done absolutely nothing about that.What about the people often low paid who are paying secondary tax at 45 percent? Have we heard a whisper about that today? We have heard plenty about it from the Government benches over the years. We have heard that it might come someday. We have heard that we need to get a new computer system. But we have heard very little in terms of a commitment to actually helping those New Zealanders who could really do with it. This is a Government that does talk a big game on tax but actually delivers very very little indeed. We have had 6 years of bracket creep under this Government as well. We on this side of the House say that we do need a fair and progressive tax system but this Government actually does not address the fundamentals at any point at all.There are some good things in this bill if we set aside the setting of income tax rates for the year for the moment. There are a range of helpful technical measures. In the area of tainted capital gains we have got some sensible technical changes to ensure that we are not casting the net more widely in respect of tainted capital gains than we really want to. In respect of look-through companies we have got some sensible changes as well and these have been worked through constructively by members across the House in the Finance and Expenditure Committee. We know that look-through companies are a useful structure within our economy but we do not want them to be abused. So we have got to make sure that they are being applied to the right kinds of organisations. I also just in these comments as I did in my previous speech want to commend the select committee for the work that it did in transitional measures around look-through companies particularly as they might apply to charities and to Māori organisations that have previously used that mechanism but are affected by the changes in this bill. That was sensible collegial work in this House.But really those things are useful but "small beer" adjustments to our tax system and they really go to the world view of this Government. We have had this described to us from the Prime Minister himself this year. This is a Prime Minister and a Government that says they have reached their limits. This is a Prime Minister and a Government that says that when the issues are difficult it is just too hard. It is a bit like that with this tax bill—those small but useful adjustments but nothing about those fundamental issues.If we return to that issue of multinational tax on the Minister's own estimates since the Government was warned about multinational tax rorting 5 years ago we have lost about $1.5 billion in revenue—$1.5 billion in revenue based on a $300 million loss every year. That is the Minister's own figure. But what did we hear in question time earlier today? We heard that there was absolutely no commitment to actually passing legislation to deal with the rorting of multinational tax in this country in the term of this Parliament. Yet we are of course setting the rates for every single New Zealander to pay their income tax.Do you know what the thing is? What happens if an ordinary New Zealand wage or salary earner tries to avoid their tax? We know exactly what happens in that event. There is a knock at the door and there is a phone call from IRD and you are on the leash. Yet what we had last week was credible information that one of the world's biggest companies has been avoiding $300 million of tax and the Minister would not say boo to a goose about it. That speaks to the lack of fairness in our tax system under this Government and that is something that needs to change.There was one other good thing that has come through the passage of this legislation and that was the depreciation rollover relief through the Supplementary Order Paper put forward by Minister Judith Collins for victims of the Kaikōura and greater Wellington earthquake. That was a measure that was strongly supported by this side of the House. It was only right and just that we provided that relief to provide some fairness to the victims of that earthquake. But we should not restrict fairness to people who have gone through a natural disaster. Every New Zealand taxpayer should be able to expect fairness out of our tax system. That is what we call for on this side of the House. That is what is so patently lacking in the current tax system and that is what the Labour Party looks forward to changing when we next debate this bill from the Treasury benches next year. Thank you."