Nash StuartThird ReadingHon STUART NASH (Minister of Revenue): I move That the COVID-19 Response (Taxation and Other Regulatory Urgent Measures) Bill be now read a third time. The proposed tax measures in this bill add to the support and aim to help sustain individuals and businesses during the global pandemic and economic crisis. With over $23 billion in support the coalition Government has launched the most significant peacetime economic plan in modern New Zealand history to cushion the impact of COVID-19 in the fight to support Kiwis' jobs and the domestic economy from the virus. The Government is united in doing everything we can to support New Zealand workers and businesses. We need our businesses to stay solvent to help with the economic recovery as we emerge from this health crisis. We are also supporting business to help people in work so that no matter what happens as many New Zealanders as possible can continue to provide for their families and contribute to their local communities. The support already provided through the tax system alone is substantial and this support includes $2 billion in tax deductions to landlords through depreciation on commercial buildings; the removal of 95000 taxpayers from the provisional tax regime by raising the tax threshold to $5000; allowing businesses to claim back more for spending on low-value assets like laptops and phones; and allowing interest to be waived. These measures provide wide-scale support and protection in response to the coronavirus. But we must also not overlook the fact that some sectors individuals and businesses face unique difficulties which we can and must help alleviate. This cross-Government omnibus bill therefore contains some non-tax proposals aimed at supporting New Zealanders to get through this crisis.I'll provide a quick overview of the proposals in the bill. Loss carry-back: under existing tax loss continuity rules business losses can be carried forward to reduce taxable income in future years. This helps prevent over-taxation but for businesses facing difficult times ahead carrying the loss forward postpones the benefit of being able to claim losses and means that a business would still incur a tax liability from the previous year. Carrying a loss forward also carries the risk that a business may lose that loss through ownership changes which is especially relevant in a time where ownership adjustments may be required to support businesses. The Government is aware that many businesses might have made a profit in the 2019-20 year but then due to the virus have a large loss from 2020-21 to carry forward as would be the usual procedure under the current rules. We are therefore proposing a loss carry-back measure which would enable businesses to offset the loss made in the current year against the profit made in the previous year. This loss carry-back policy will also help established businesses which have been profitable but will dip into loss because of the COVID-induced economic downturn. We want to help those businesses. They are viable but vulnerable. Businesses will get a refund of some of the tax already paid in the previous year thereby having a positive impact on their cash flow in the current year when this really counts. They're still paying the right amount of tax in terms of the profit they've made over those two years but they are able to take advantage of their losses now. This is an urgent measure. The next instalment of provisional tax is due on 7 May and we want those businesses to know what they have to do and what their options are. Administrative flexibility for Inland Revenue: the Government is proposing a law change to give Inland Revenue the discretion to quickly provide an extension to due dates or time frames or to modify other administrative requirements for taxpayers affected by COVID-19. This could for example include extending deadlines where an affected taxpayer has difficulty filing tax returns or paying provisional or terminal tax. This could cover any taxpayer affected by COVID-19 and could apply to individuals companies trusts or so on. It would allow the IRD to anticipate new issues for compliance as they arise and to act swiftly. It could be applied for any time frame or procedural requirement across all tax or social policy obligations set out in the revenue Acts. We're proposing that this discretionary power be limited to an 18-month period would operate retrospectively and only apply to the benefit of the taxpayer. This measure is also urgent because of a number of practical issues with compliance that have already arisen due to COVID-19 and we don't want taxpayers stressing about this.Benefit to Kiwis overseas: because of lockdown travel restrictions some New Zealanders have been stranded overseas and forced to be away from home much longer than they intended. For some this means they could be at risk of losing their pension and benefit payments. The Minister for Social Development has made a welfare programme to ensure that equivalent payments of New Zealand superannuation veterans pension main benefits orphans benefit unsupported child benefit and supplementary assistance can be made from the date that the person had expected to return to New Zealand even if they have not made it home yet. The bill proposes that these payments will be subject to the same tax and child support rules as the payments they normally receive from the Ministry of Social Development. This would also cover any Working for Families entitlements. The bill represents a cross-Government response to the economic upheaval. So I now turn to some other non-tax measures. Credit contracts legislation amendment: the Government also proposes to change the timing of various measures introduced by the Credit Contracts Legislation Amendment Act 2019. Some protections relating to high cost loans only are proposed to be moved forward. They are: a limit on the accumulation of interest in fees capped at 100 percent of loan principal a prohibition on charging compound interest and a cap on default fees. These protections were intended to commence from 1 June 2020. These protections were always important and now they are urgent. The proposed new commencement date would be the day after the bill receives Royal assent. This bill also enables a delay of broader reforms in the amendment Act. These were to come into force from 1 April 2021. The bill therefore shifts the backstop commencement date to April 2023 but the reforms can be brought into force prior to that date by Order in Council. For efficiency the bill also provides for the coming into force of a range of technical and other provisions of the amendment Act which would otherwise have been brought into force by an Order in Council. Animal welfare: people who own or care for animals perform many routine procedures on animals such as docking lambs' tails. These surgical procedures are currently performed by non-veterinarians. However an amendment to the Animal Welfare Act 1999 due to come into effect soon will require these types of procedures to become veterinarian only. The Ministry for Primary Industries (MPI) had intended to discuss new regulations with owners and people in charge of animals before the amendment came into effect. These regulations would allow non-veterinarians to continue to perform some procedures under certain circumstances. However the lockdown has prevented this. This bill now proposes to delay the date the amendment to the Animal Welfare Act comes into effect and therefore the immediate need for regulations to align with the amendment. This will allow people who own animals or are in charge of animals to continue to undertake these procedures and allow MPI time to have those discussions with stakeholders once lockdown regulations have eased. The final measure I wish to mention relates to State-owned enterprises. Extension of time frame for providing plan documents: State-owned enterprises departments and Crown entities are required to prepare and finalise a number of planning documents for responsible Ministers by 30 June 2020 or 1 May 2020 for statements of corporate intent and statements of performance expectations. Meeting this requirement is going to be challenging under the current restrictions and these entities are likely to find themselves in breach of the State-Owned Enterprises Act 1986 the Public Finance Act 1989 and the Crown Entities Act 2004. The Government is therefore proposing that if responsible or shareholding Ministers are satisfied that certain criteria are met the SOE be allowed up to three months to produce these planning documents. In conclusion the effects of the coronavirus are being felt in different parts of our economy and society in different ways. This cross-Government bill is one which is urgently needed for a cross-section of society because we must do our best for all New Zealanders. I commend this bill to the House.