Te Ururoa Flavell Speech: Taxation Bill Third Reading
Taxation (Tax Administration and Remedial Matters) Bill - third reading
Te Ururoa Flavell, MP for Waiariki
Wednesday 17 August; 8.15pm
In talking to this bill, the Taxation (Tax Administration and Remedial Matters) Bill I want to make a few comments.
One of the components of candidate training that should become part of compulsory learning for wanna-be politicians should be the long list of acronyms that get bandied about in Parliament and this chamber.
In this Bill for instance the SOP introduces new measures associated with RWT on trusts and beneficiaries; QC and LAQC transitional measures; and ESCT in the context of employer superannuation contribution tax.
I think you get the gist of this Mr Speaker.
Well today's new word is PIES - not the mince and cheese variety but amendments related to the treatment of non-resident investment in Portfolio Investment Entities ("PIES").
Actually even the category non-resident is slightly bizarre - it defines people by what they are not rather than what they are ' Its like non-Maori - which interprets a person's identity as NOT being Maori - but doesn't actually tell us anything about what the unique identity of these non-Maori are : of Irish, American, French whakapapa.....
Anyway -currently if a foreign person invests directly in a foreign investment they pay no New Zealand tax.
But 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 this will lead to more jobs in providing back office services for managed funds.
Mr Speaker, 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, for example, some of these Fund Managers include AMP and AXA.
It's a bit of a case of what is going to 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 wellbeing - so in this sense, we're pleased to support this Bill.
But I have to say pretty quickly that the Maori Party considers it necessary to carefully scrutinize and manage all foreign investments by non-residents in Aotearoa-and that's about protecting and preserving what is ours - within our hands - within our land.
It should go without saying that we will support the majority of the amendments which concern further responses to the Canterbury earthquake and affected taxpayers in the 2010 and 2011 tax returns.
The major provision allows for the roll-over of depreciation recovered into replacement assets.
For example, suppose a building had an historical cost of three million, had been depreciated for tax purposes to one million, and was insured for replacement of say five million. If this building was destroyed by the earthquake the owner would be up for a tax bill of $600,000 on the depreciation recovered of two million, even though they would have no money from which to pay this tax.
Such tax would represent a windfall gain to 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 the depreciation as one would usually.
I understand there are also the write-off rules. It is proposed that the write-off rules for buildings be extended from those written off by an event (say an earthquake) to include buildings which have to be destroyed as a consequence of an event. .
Mr Speaker, the Maori Party supports the effective recovery of Christchurch and as such we support any changes to tax law which will help to facilitate this, as a part of manaakitanga. We also wish to lift the economy of Aotearoa, and support whanau. In these regards then, we are happy to support this Bill at this its third reading.