Wong Pansy: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee 
Wong Pansy: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee 
[Volume:621;Page:16574] 
PANSY WONG (National) 
: 
 Part 2 is a big part of the bill and we intend to take several calls. I start with clause 4 “Non-residents’ exempt income”. 
The Labour Government continues to trumpet about how much it understands the importance of attracting foreign investment into venture capital in New Zealand. We all know that the minority Labour Government continues to talk about an innovative framework to support high-tech industry in New Zealand but all the high-tech industries or start-up companies do have high levels of risk connected with them and usually in other types of countries venture capital funds are there for that type of investment. The Labour Government once again has come up with a half-baked idea in terms of clause 4. It thinks it will make everybody feel good even though 100 percent of the submitters to the Finance and Expenditure Committee said that clause 4 is a very very small step. 
In order to attract venture capital into New Zealand first there needs to be a limited liability partnership structure and second the list of so-called foreign countries needs to be extended to the grey list. At the moment the list that qualifies in terms of clause 4 whereby the sale of shares would not be treated as dividends but as capital gain is extremely limited. When we ask the officials what is happening about the limited liability partnership structure that foreign investors would want and also about a common regime between New Zealand and Australia they say they are still working on it. We suggest that they just finish working on the whole structure so it would then at least show a genuine understanding of the venture capital sector and would become really useful to attract investors. We realise that this is just a political game by the Government in terms of announcing this legislation and selling it by saying it will attract venture capital. But there is actually no substance within this legislation. Last week in the  
Sunday Star-Times 
 there was an article from the venture capital sector stating that this taxation bill will do nothing to attract any additional foreign investment into New Zealand. 
I have spent a bit of time expanding on this matter in order to demonstrate that day in and day out in this Parliament just as with the bill that we have finished debating this Government continues to bring into this Chamber legislation that has half-baked ideas without understanding the whole concept of getting New Zealand to become competitive in a taxation framework that is transparent that has low taxation rates and that is easy to comply with. Instead the Government likes to play favourites and it keeps saying that today it is doing something to attract venture capital. But submitters to the select committee made it very clear that we have not even set up the right type of vehicle to attract that foreign investment into New Zealand. I use that example to demonstrate that Parliament is continually being presented with legislation that on the surface appears to address an issue but that in substance does not. Submitter after submitter told us that this bill has no substance. 
CRAIG McNAIR (NZ First) 
: 
 I disagree with giving certain non-residents a tax advantage on profits from the sale of shares in unlisted New Zealand companies. That disadvantages New Zealand - resident venture capital investors. It will not attract the appropriate capital needed for the purposes for which Part 2 was created. Even the proponents of this part say that it will not attract the capital needed for the purposes it was created for. We have a Government that allows certain non-residents a tax advantage from shares. This Government is selling off Powerco. This Government is paying for hip-hop trips and spending millions of dollars on the arts. Instead of the Government giving non-residents a tax advantage on profits from the sale of shares in unlisted New Zealand companies why does it not give the small Kiwi battler a go? That is what we in New Zealand First are asking. Why does the Government not give the small-business owner or the small exporter a go? Why not give them a tax break? 
If we look at the example of the Republic of Ireland we can see how it helped its exporters. The Republic of Ireland exports $48000 per man woman and child compared with New Zealand’s measly $8000 approximately for every man woman and child. Singapore lacks resources when compared with a beautiful resource-rich country like New Zealand yet it exports about $60000 per man woman and child compared with our $8000 per man woman and child. I say and New Zealand First says that instead of giving non-residents a tax advantage on profits from the sale of shares in unlisted New Zealand companies we should give the Kiwi battler the small-business owner a go—because even proponents of the bill say that it will not attract the capital that is needed. 
There is another issue that I want to address. I see the United Future member Gordon Copeland in the Chamber. As I said during the second reading debate on this bill United Future has put in a minority report on this legislation. We note that United Future voted for the bill during all stages yet it has written a minority report as we see in the bill. New Zealand First says to the United Future members that this is their last chance. We will give them another chance to vote the bill down. This is their chance to vote against all the things they said they have a problem with like increasing the taxation thresholds and so on. We say that this is their last chance to do that. We say to this Government and to United Future that instead of spending $21 million on a propaganda campaign for the Working for Families package and instead of giving non-residents a tax advantage on their profits from the sale of shares in unlisted New Zealand companies we should be helping our exporters. 
There is another issue I want to discuss in relation to Part 2. It was brought up last night I think and it is the issue of the taxation of Maori authorities. When that provision was first put into legislation New Zealand First under my name put forward a Supplementary Order Paper.