Seymour DavidDAVID SEYMOUR (Leader—ACT): Well thank you very much Mr Chair and thank you to the Minister for his continued engagement. If I may I'd like to speak to Andrew Bayly's amendment on Supplementary Order Paper 1. It appears—as far as I can tell—to raise the threshold for the lowest tax rate from the present $14000 to $17000 having the effect that people will pay 10.5c of the first $17000 and 17.5c thereafter—as opposed to the status quo where the threshold is $14000. This I have to say is a most extraordinary proposition to come from the National Party.We are in favour—or at least the ACT Party is—of broad based - low rate taxes. The reason that we're opposing the bill that's being debated tonight is that while it doesn't change the broadness of the tax base it does raise the rate on a certain strata of personal income. We think that's unhelpful because it's distortionate. The point of broad based - low rate taxes is that people face the same rate of taxation regardless of their behavioural choices so people can go about their lives seeking to use the knowledge that they have in their society to make their life better for themselves and their loved ones in their community without having to spend a lot of time trying to change their behaviour to avoid the IRD. That's the point of broad based - low rate taxes. So that's why we're opposed to a bill that while leaving the base the same increases the rate on higher incomes.But this amendment by Andrew Bayly on Supplementary Order Paper 1 that I've described actually appears to narrow the base. What it does is it says: we're not going to have tax to the same extent on the widest part of the tax base—that's the income that everybody earns at the lower end of the spectrum at any given year—we're actually going to cut the tax at the lower end and have higher taxes at the higher end. That's the effect of this Andrew Bayly amendment. He's actually going to make taxes more progressive. He should think very hard—Hon Michael Woodhouse: Rubbish.DAVID SEYMOUR: Well I just heard Rubbish." and I'm not sure if it was Andrew Bayly or Michael Woodhouse and I apologise to Andrew Bayly for accusing him of saying that. If the policy is to actually narrow the tax base and make it more progressive well one reason that I'd really caution Andrew Bayly and ask him to think carefully about whether he really wants to advance this is that in some future universe when there's a different Government in place and that Government sets about saying "How can we get to a lower flatter tax regime that's less distortionate?" then the question that's going to be asked is "Well we could but sadly because we reduced the tax rates at the base because we narrowed the tax base our ability to have a lower flatter tax regime is less than what it would otherwise be."And we've actually already been there because the 2010 tax changes—reducing the 19.5c rate down to 10.5c—may have seemed like clever politics at the time but the effect of it is that it has become almost impossible to get meaningful tax reform for lower flatter taxes because so much revenue is lost from that 9c drop on just about all income tax because just about everyone who earns income tax earns that first $10000 or $20000. Of course the problem with that is that you end up where Steven Joyce was come around 2016 where he was actually boasting that the National Party had made the tax system more progressive. Sadly this amendment by Andrew Bayly is at it again.So I'd just put it to the member if he wants to put this forward and have it debated is he in favour of broad based - low rate taxes? Is he in favour of less distortion? Is he in favour of low flat taxes? Or does he actually want to be the guy that comes to Parliament and makes the tax system more progressive? Because if that's what he wants to do my suggestion to him is he should walk across the Chamber and join the other side because that's what they believe. The member's confused; he's sitting on the wrong side."