White HelenHELEN WHITE (Labour—Mt Albert): Thank you Mr Chair. I just want to look at Part 1 clause 3 and talk about some of the basic assumptions in it because this as I understand it is the clause that will mean that New Zealand taxpayers are compelled to pay taxes at the rate set out in the Schedule. I wanted to know from the Minister whether he considered the implications of the work that was done when we were looking at the high-wealth individuals and the amount that people were being taxed at about the way that money churns in high-wealth individuals' accounts. My understanding was that the findings of that inquiry were that people who had a lot of money weren't actually drawing an income at these higher levels and paying tax at these higher levels because it didn't actually crystallise as income at any time. So they were taking the money that they were gaining—when they were buying a property for example—and buying a business. And they were simply pushing that back into a situation where there was no income so they were consistently reporting low profits. And so they actually don't show up as an income.So we've got people here—say they're on $180000—and so they're earning really good money but they're paying every dollar in tax that is in this section and they are doing their bit in terms of their contribution to the economy. But you've got a whole lot of other people who are way way wealthier and they are actually earning money. In the same time period the money's going up exponentially more and yet they're not paying any money on it because they're sinking that money straight into businesses or property where in fact it's recognised as a loss not a profit. Meanwhile their piece of the pie grows and grows and grows and taxpayers are not produced by that process so the rest of us end up forking out for all the services that taxes pay for and that group actually ends up with an effective tax rate that is so much lower than anybody else's because they simply never crystallise an income out of it.So I'm really interested to know—and I know somebody else asked the Minister whether the Minister had read the report but I'd like to know what the Minister thinks about this and whether we should be settling a schedule that doesn't recognise the real income because for ordinary New Zealanders they would actually see that as income. They would see that growth—that constant growth—of the amount of wealth earned as income. If it happens in a financial year that your wealth goes from $1 million to $2 million or your wealth goes from $5 billion to $6 billion you'd expect to pay the same rates that are in here and yet there's nothing being paid at all. So what's the logic for doing that and what are the Minister's thoughts about that issue in that particular report? Because I fully expect that the Minister will have read that report. So I'd really like to know what the thinking is here. Is that something that is going to be done later? Is it something that the Minister doesn't think is fair?Actually am I not seeing something here that there's some sort of gain our society gets that is of a different kind? What's going on here in terms of the logic behind setting rates for New Zealanders? Because some of those New Zealanders will be on those lower amounts and it will particularly matter to them because they're paying amounts of 30 percent for example if they're at $70000 and yet these individuals are paying—my understanding is—under 10 percent 8.9 etc. And again the Minister's comments are welcome on what the effective tax rate is for those people and what the learnings are from that study and whether the Minister agrees with that study and can see this within this context as something that's a work in progress or what's going on. Thank you. I'd value the comments.