make it easier for people to get tax right in the first place.
Mr Speaker, I commend the bill to the
house. The question is the motion be agreed
to. Michael Wood.
Mr Speaker, thank you for the
opportunity to speak on the
Taxation
Employment... Bill It's the intention
of Labour to support this to the committee stage,
at which point we think it
appropriate for a number of
the matters to be flagged to be
closely examined. I thank the
minister for her attention to the debate going
on. One of the things that's
important to be aware of of this
bill and many of the large tax bills
that come in the
House's way this year, is that they are
sprawling beasts. This bilby my adding up here
amends at least 6 bills in
reasonably important ways. The
Income Tax Act 2007, the
Tax Administration Act 1994,
the Kiwi Sair Act 2006, the GST Act 1985 and
the Child cup srt for Act,
Accident Compensation Act and the income Tax
Act, so there
are potentially impacts flowing and a lot of
the detail is very complex. So it will
be extremely important
that when this bill goes to select committee
it receives a thorough
examination. As I stand here I notice that
the upstanding and hard working chair
of our
upstanding and hard working chair of it
upstanding and hard working chair of our committee, Mr Chris Bishop
coming into the House, wrapped
with attention to this debate and I look
forward to working with him on the
committee on the bill. There are
four broad aspects to this bill Mr
Speaker. The first is it sets
the
the range of changes which focus on the business reporting of
tax information, a lot of
these are related to
related to the business transformation process that
the minister spoke about in her speech.
There are very substantial
changes to the treatment of
employee share schemes and I want to return to
those a little bit later and then
various remedial
various remedial matters as we always get with these
bills. Mr Speaker, I want to start off
with the rates. They were
really the unspoken story, but they will be
of some interest to the 3 million or so
New Zealand taxpayers out
there who want
New Zealand taxpayers out there who unspoken
want clarity on what their income tax
want clarity on what their income unspoken
want clarity on what their income tax rate also be for the year ahead.
tax rate also be for the year ahead. It wasn't that long ago we
stood in this House, I think probably five
or six weeks ago, to confirm the rates
for the
six weeks ago, to confirm the rates
up with two or three days before the financial year, Mr Bishop
knows how concerned the Labour Party is and I
know he will be committed to
a more orderly process and perhaps he
can speak to the Leader of
the House about ensuring that unfolds. It's
notable that the rates in this bill
are
notable that the rates in this bill are simply a repeat and they are put
to this House days before a budget
in which the minister has been
foreshadowing and pumping up the
expectation of changes in
the income tax space. All I can say Mr
Speaker in that area is I hope they
do a better job than last time that
they looked at New Zealand income tax
rates. The last time
they did that at the beginning of this National
Government, the changes that
they made shifted income distribution in
this country vastly to the advantage
of the
this country vastly to the advantage
earners. I think Mr Speaker that when you listen to people out in our
communities a t the
moment, people are looking for a budget
that has fairness at its core. If
we see changes to income tax rates again,
that significantly weight those
advantages and additional
income to the
advantages and additional income to advantages
advantages and additional income to the top ten per cent
of income earners as happened last time
the National Party changed
income tax rates there will be a huge backlash.
More broadly though, Mr
Speaker, in respect of tax rates, I guess the
view of the Labour Party is that
the ongoing tinkering that we're
getting from the National Government,
that's what we expect to see in
the coming week with the tax system, simply is
not good enough. Over a long period
of time, we've had a
not good enough. Over a long period
substantial inbalances in our tax system. Simply reconfirming the
income tax rates for the year
or looking at the thresholds as we
might here on Thursday, doesn't
resolve the big issues in our
economy and society that stem
from those inbalances in our tax
system. I know many members may have heard
about the book Tax
and Fairness which has come out over the
last week. Look, a very well qualified,
extremely intelligent author, Dr
Deborah Russel, Labour's candidate
for a seat is one
of the authors. It's worth a read. I'm
halfway through. It devils into the
substantial
through. It devils into the
points and points os to the fact fiddling with thresholds won't be
enough. For example, the tax
treatment difference between
people who put their wealth into
productive investment and savings verses
those who put their income, who put
their income into
income into property speculation, is vastly different. It's
vastly different. And Mr Speaker, if
the Government, when it
is putting forward a tax bill like this,
with deals with
deals with the tax treatment of certain kinds of
investments really wanted to invest in a
productive economy, that's one of the things
it could look at. What Deborah
Russel says is that the tax burden on
people who put their wealth
into productive
people who put their wealth into says
productive investments is four times that of the tax burden
of those people and who knows, it may be some
of them on benches opposite, who
put their wealth into
property speculation. And Mr Speaker,
that goes
speculation. And Mr Speaker, that speculation.
speculation. And Mr Speaker, that goes to the housing crisis that
affects so many New
Zealanders today speculation.
affects so many New Zealanders today but it goes to
the fundamental economic settings and incentives in
our economy as well. If we ever
really climb that
mountain that we talk about year in, year out in the
House, about building a high wage,
high skill economy, with high rates
of RND in which we have world class
living standards, we will have
to effect that shift at om stanl. If
we keep ploughing wealth to property
and keep having a tax system that
incentivises us, we will simply
never get there. We have a
tax bill that a lot of work has gone
into, a lot of
lot of institutional knowledge from the IRD, a lot of research, time,
a lot of submissions
and we're tinkering around the edges,
not dealing with those very,
very fundamental issues. That
is something that Labour wants to see
and will deliver as a shift, as
looking at the fundamental
drivers of the tax system, rebalancing it to
ensure we're incentivising the right
kinds of investments. More on it,
Mr Speaker, we
Speaker, we wait with great interest, there's nothing in
this tax bill to ensure
that while Kiwi taxpayers who are paying
their tax diligently at the rates set down in
this bill, we're
seeing multinationals getting
multinationals getting away with ripping off the Kiwi taxpayer
be to the tune
ripping off the Kiwi taxpayer be to
billion a year by some other estimates. Once again
we have a tax bill that doesn't begin to
touch on that and absolutely no certainty
that the Government has
any intention, any intention whatsoever
of progressing action in that area
that
of progressing action in that area before this election. Order! We will
come back to what's in the bill. Not
what's not in the bill.
Mr Speaker... Mr Speaker... I know the
members opposite are eager to hear
information, I'm happy to
One of the concerns we have with the bill Mr Speaker and one of
the aspects we seek to explore
further bill
aspects we seek to explore further in select committee is the extent to
which the shift to
prepopulation...
... Set out in the bill, mentioned in the commentary, many
in the tax community want to know where this is
going. At first blush IRD
having better intoer mags earlier
in the piece
better intoer mags earlier in the community
better intoer mags earlier in the piece sounds like a good idea. We
can agree that is a good idea.
We can agree that is a good idea
for that information to be used to
prepopulate people's tax
returns but there are many in the tax
community who are asking is
this taking us back in the
direction of compulsory filing of tax
back in the direction of compulsory
certain signals, bits of smoke, that seem to come out of
IRD that suggest this might be the case. That,
Mr Speaker, is something we will
want to explore further in the select
committee process. I want to turn
to the changes proposed to employee
share schemes. Most of
us in the House will enjoy
that employee share schemes are a valuable tool for
recognising employees, giving people
to support not just their attention by thair growth under the right
circumstances. Probably at the most
significant changes proposed
in this bill are the treatment of those
employee share schemes. Effectively
the changes proposed to further
date when employees acquire the
shares for tax purposes. It is
a major, major change, and there is already
a lot of chatter amongst businesses
and amongst the tax community
about lot
and amongst the tax community about how this may
affect the attractiveness of employee share
schemes. This isn't the time and place to go into
all of the detail there, but once again
on behalf of the Labour Party I would flag that's
an area we want to spend real time
at select committee because
we can't afford to get that wrong, or
we will rock the boat on an
area that's important in erm terms
of incentives in many of our businesses. Once
again, Mr Speaker t Labour
Party will support this bill in
its first reading and look forward
to further discussion and
discussion and good quality debate at select committee.
at select committee. I call Chris
Bishop. Thank you Mr Speaker. I
know the member who resumed his seat is a
new member, but I think he
really, Thank
Relatively new member. But I think Mr Wood really needs to talk to
his, the opposition finance spokesperson,
because that was quite