Foss Craig: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — Instruction to Committee In Committee 
Foss Craig: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — Instruction to Committee In Committee 
[Volume:630;Page:2014] 
CRAIG FOSS (National—Tukituki) 
: 
 I would like to take members out of the TAB and back to the more mundane parts of the bill particularly Part 2. The bill is very technical in parts. First of all again I acknowledge the input of the various officials who assisted in its formulation and their assistance to the Finance and Expenditure Committee as we considered the bill. 
National will support the bill. It is very business-friendly but it is only a step—or perhaps a big toe—in the right direction. I pick up on what my colleague the Hon Dr Lockwood Smith was speaking about earlier particularly around the returning migrant issue tax holidays etc. We should ask whether the bill—the 346-odd pages that it is—will pass the threshold in terms of attracting New Zealanders back to New Zealand and whether it will stop them from leaving in the first place. Will it help us go up the OECD rankings? Will it help New Zealand’s productivity? Will it even address some of those issues? 
Regarding migrants etc. my colleague Dr Lockwood Smith proposes two amendments that we will obviously support particularly the amendment to clause 77D which deals with changing the time spent away from New Zealand by looking at a period of 5 years rather than the proposed 10 years. We also propose to move the concession. One way of looking at the concession is that it currently offers a zero percent tax break for 4 years. We are looking to take that tax break to 5 years again in order to attract New Zealanders back to New Zealand. That is based on their overseas income to bring them back and to build up the capital base of New Zealand. Again that is great in theory but in practice we need to be bolder and to do a lot more on that. We have to address why those people are leaving New Zealand. In respect of the 10-year threshold I quote Steve Camage of PricewaterhouseCoopers: “Ten years is too long … Kiwis who’ve been abroad for 10 years or more are probably well established in their new life and less likely to return home just for a tax break.” He is quite right—why would they do so? 
We can also address the issue of why on earth they left in the first place. One of the points here is that the discussion around the returning migrant does not seem to be bold or new; it merely seems to copy what is happening in Australia at the moment. We never like to be beaten by the Australians in any way shape or form—they are still not eating our apples; we will get there in the end. We need to go further than Australia because if we do not we will cement where we are right now—be it in respect of per capita income New Zealand’s tax structures or the continued flow of good New Zealanders who are essentially funding the growth in Australia at the expense of growth in New Zealand. 
One may think that is just a debating point in the House but I would like to put a real-world touch on the issue. An article in this morning’s  
New Zealand 
Herald 
 addresses whether New Zealanders should stay or go. The headline states: “it’s all down to money” and the article goes on to say: “The average income across the Ditch is 32pc higher and the middle-aged are valued for their skill and experience”. Those are exactly the people whom we need to stay here; we should not have to offer some tax package—it is almost a tax bribe—to bring them back in the first place. In another real-world example from the same article a 54-year-old electrician—I will not mention the gentleman’s name—has moved to Australia and doubled his after-tax pay. If the construction of the New Zealand tax system provided incentives for that gentleman to stay here in the first place he would not have left. Because all those New Zealanders are leaving for Australia the same article refers to New Zealand incomes being about 78 percent of Australian incomes. That is why they are leaving in the first place. 
So let us concentrate not just on putting on a Band-Aid to try to wave some white flag and bring them back. Let us really address the core and hard issues of why they leave in the first place. Another graph in this article shows that 22000 New Zealanders net have left for Australia in the past year. Members should look at the logic of the bill because we are trying to bring those people back to us.