Flavell Te Ururoa: Taxation (Tax Administration and Remedial Matters) Bill — In Committee Third Reading 
Flavell Te Ururoa: Taxation (Tax Administration and Remedial Matters) Bill — In Committee Third Reading 
[Volume:675;Page:20788] 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Deputy Speaker. Kia ora tatou katoa. In talking to the Taxation (Tax Administration and Remedial Matters) Bill I think one of the components of candidate training that should be part of compulsory learning for all wannabe politicians should be to gain an understanding of the long list of acronyms that are sometimes bandied about in Parliament and in this Chamber. In this bill for example the SOP introduces new measures associated with RWT on trusts and beneficiaries QC and LAQC transition measures and ESCT in the context of employer superannuation contribution tax. I think members get the general gist by just reeling off some of those acronyms. Well today’s new word is PIEs—P-I-E-s. They are not the mince and cheese pies that Todd McClay associates himself with but are amendments relating to the treatment of non-resident investment in portfolio investment entities à la PIEs. 
Even the category “non-resident” is bizarre in a sense: it defines what people are not rather than what they are. It is like “non-Maori” which interprets a person’s identity as not being Maori but does not actually tell us anything about the unique identity of those non-Maori—of Irish American or French whakapapa. 
Currently if a foreign person invests directly in a foreign investment he or she pays no New Zealand tax. By making it more attractive for a foreign person to invest in managed funds it will support the managed funds industry in Aotearoa with the idea that it will lead to more jobs in providing back-office services for managed funds. Another benefit for other New Zealanders is that if we have a greater pool of funds under management we will get economies of scale. This makes it more attractive to foreign investors which ultimately makes it cheaper for investors in Aotearoa as well and for example some of these fund managers include AMP and AXA New Zealand. It is a case of what will be good for the foreign investor will ultimately be good for Aotearoa New Zealand as a whole. 
The Maori Party supports an economy of investment which leads to greater productivity and enhances well-being so in this sense we are pleased to support the Taxation (Tax Administration and Remedial Matters) Bill. I have to say pretty quickly that the Maori Party considers it necessary to carefully scrutinise and manage all foreign investments by non-residents in Aotearoa. That is about protecting and preserving what is ours—within our hands and within our land. It should go without saying that we support the majority of the amendments that concern further responses to the Canterbury earthquake and the affected taxpayers in the 2010 and 2011 tax returns. 
The major provisions allow for the roll-over of depreciation recovered to go into replacement assets. For example suppose a building had a historical cost of $3 million had been depreciated for tax purposes to $1 million and was insured for replacement at $5 million. If this building was destroyed by the Canterbury earthquake the owner would be up for a tax bill of about $600000 on the depreciation recovered of $2 million even though he or she would have no money with which to pay this tax. Such tax returns would represent a windfall gain for the Government from the earthquakes which in anyone’s books is pretty crazy. Basically the effect of the amendment means that people affected by the earthquake will not have to pay tax on depreciation as one would usually. I understand there are also write-off rules. It is proposed that the write-off rules for buildings be extended from those buildings written off by an event say an earthquake to include buildings that have been destroyed as a consequence of an event. 
The Maori Party supports the effective recovery of Christchurch and as such we support any changes to tax law that will help to facilitate this as a part of manaakitanga. We also wish to lift the economy of Aotearoa and support whanau. The Maori Party is happy to support this bill at its third reading.