Bayly AndrewANDREW BAYLY (National—Port Waikato): Thank you Madam Chair. I must admit I didn't quite understand the logic of that answer to the Hon David Bennett's question. But I suppose the other part of this is the portfolio investment entity (PIE) tax rate which has a top tax rate of 28 percent. PIE is as you know Minister of Revenue used for investment in a whole lot of different asset classes. So what I think my learned colleague is actually highlighting we are now giving rise to the highest differential in 20 years of tax where we've got a high marginal tax rate and we've got a low company tax rate and a low PIE tax rate. Actually that high differential is what the advice that the Minister has received is saying—that that cuts at the integrity of the tax system. So my first question is: are you also going to address the issue of the PIE tax rate?The second thing I just want to ask you is quite specific. I'm aware that the Attorney-General made his report and came to an opinion that there was an issue with the clause around disclosure. The Minister of Revenue himself—in his capacity as the Minister of Revenue—then put a Supplementary Order Paper (SOP) on the table after the bill was lodged which is surprising in a matter of I think about an hour an hour and a half later. Has the Attorney-General opined on the Minister of Revenue's SOP? So could we have a response to that? Because I think it's very important that given the gravity of the Attorney-General's initial concerns the solution that's being put forward actually is an appropriate one. I actually want to return to this whole issue about disclosure. I think once people become aware of the disclosure requirements contained in this bill there is going to be an uproar. There's going to be an uproar because it will ripple across all trusts every accountant and we've got many hundreds of thousands in fact of trusts. We've got accountants. The disclosure requirements that are set out in here quite significantly—the first point is that and I don't think we've ever had a proper response to it the Commissioner of Inland Revenue already has the power to request information that allows her to undertake the roles and here we are. We've got a bill that's giving her basically unfettered right on the pretence of policy development to go and get a whole lot of information. I'm going to talk about the nature of that information. Why doesn't the Minister also require some information from companies and other business taxpayers? Because I think if you're talking about policy and tax integrity there's an argument that should be there and whether in fact she already has this power for enforcement as my colleague the Hon Michael Woodhouse was talking about as opposed to the policy development which has been the excuse for this. The second thing is the nature of the disclosure. Now normally the commissioner's power relates to tax matters. One of the huge additions to the disclosure requirements—the search and destroy type arrangements set out in this bill—is the providing for the commissioner to actually get a whole lot of information relating to non-taxable and exempt distributions from trusts. So normally as a matter of course the Minister wouldn't be concerned about that type of information because it's clearly not a tax matter. But this requirement this part of the bill starts to go into a whole area around what would normally not be a matter for the commissioner. If she had had concerns she would have raised it previously. But obviously non-taxable distributions can include a distribution of the capital of the trust and of course with the power to go back seven years it now opens up a whole cesspit of transactions that the commissioner is going to be able to go in and understand and request information on which just gives rise to an issue about why the commissioner will need all this information. This is going to impose incredible compliance costs. I think this is what's going to be the outrage about this whole new clause because when you look at the actual annual returns for trusts there's now a whole profit and loss statement financial position amount in nature of each settlement that is not the provision of the trustee. There's stuff about the income tax. There's a whole requirement now around beneficiaries. We've never had this level of disclosure around beneficiaries—the name date of birth jurisdiction tax residence. So presumably Owen Glenn and Eric Watson which he quoted as the test case for why we need this provision—CHAIRPERSON (Hon Jacqui Dean): Order! The member will not bring the Chair into the debate.ANDREW BAYLY: Sorry the Minister did. I presume they are not actually tax resident in New Zealand neither case. But here we are. The commissioner is going to require—and this of course will have to be done annually—the name date of birth jurisdiction tax residence tax file number taxpayer identification number. Each settlor makes a settlement on the trust in the income year or whose details are not previously provided and presumably now have to go back seven years and for each distribution the amount of distribution name date jurisdiction etc. of the beneficiary. It just goes on. We've got this little rider in 59B the other information required by the commissioner. So where we've gone—this has gone beyond just policy because if there was a real policy it should be dealt with appropriately—Kieran McAnulty: Point of order. Thank you Madam Chair. Madam Chair earlier in the week you quite rightly reminded members that the purpose of the committee stage now after recent changes in the Standing Orders was to have a free-flowing conversational question and answer session between Ministers and members. We're now 6½ minutes into this contribution and I'm not sure the committee is sure what the question is.CHAIRPERSON (Hon Jacqui Dean): Look thank you for that. I was aware of that at the time and there was a pause at the point where the Minister could have answered questions. There were further questions coming so I allowed the speech to move on.ANDREW BAYLY: Just to help my colleague who just stood up there I've already got two questions on the record as he may recall if he's been listening carefully. So the third one is the extent of the disclosure—why the need for particularly distributions that are of a non-taxable or exempt nature? This bill has taken the commissioner into a whole new area of information requirements and it is extensive Minister.