McKelvie IanPart 2 Amendments to Goods and Services Tax Act 1985IAN McKELVIE (National—Rangitīkei): Thank you Mr Chair. It's a pleasure to take a call on Part 2 of this bill. The bill is a bit of an enigma—a bit like some of the Minister of Revenue's comments a moment or two ago about opening and shutting the railway lines north of Napier. It bemuses me how they can open the port of Gisborne with a whole lot of money open the railway line from Wairoa to Gisborne and open the railway line from Wairoa to Napier. One or the other is going to get the trade; not both. Anyway I want to speak about Part 2 of this bill and the enigma in this bill is that there are some parts of this bill that are clearly very sensible and very well put together and there are some parts of this bill that we cannot agree with. I think that's a bit of a shame because there are many parts of this bill that are sensible and make good sense for New Zealand. One of those is GST being applied to offshore goods and that's a piece of legislation that's been talked about for some time now and has finally arrived in the House. I think it's a very sensible piece of legislation. It's critical that we get it right. It's critical that we end up in a position where we are able to tax equitably all of those people supplying into the New Zealand market at that level. I think that will be the challenging thing for the inland revenue to get those people registered and to get the money collected from them because it is a very complicated business and it's not unlike the racing reform legislation that we had through the House this afternoon where a similar sort of proposition has been put where we are looking to collect effectively a levy on gambling. Here we're effectively looking to collect a levy or a tax—obviously it is—on goods that are imported to New Zealand via remote means I suppose. It's been a bugbear for the retail sector in New Zealand for quite some time because not only have more individuals been able to import goods under $1000 to New Zealand and pay no GST on them—which effectively straight away makes them 15.5 percent cheaper—but there's also another anomaly in this and it won't be fixed by this bill. It has always bemused me a bit that if you import stuff through remote means or through the internet or however you import it or buy it you don't then pay duty where duty is applicable in New Zealand and on things like clothing in New Zealand for example we still have an old-fashioned kind of duty applied on that clothing. We don't have that obviously on goods that are imported by individuals into the country. So straight away that's another small inequity that our retailers suffer from and that's grossly unfair. If you go back a few years of course we used to have massive duty on cars when we were protecting the New Zealand car manufacturing industry. We are now protecting or still protecting in effect a New Zealand clothing manufacturing industry which is very very small. In fact it's not quite non-existent because there are some pretty good clothing manufacturers in New Zealand still but the vast majority of our clothing goods are made offshore and of course they come into New Zealand from offshore through a legitimate retail sector—and I'm not saying that any other means is not legitimate—and they end up paying an extra duty on it. So not only were those people who were bringing clothing into the country for example getting a 15.5 percent discount for no GST; they were also getting a 10 percent discount because they don't pay duty on it. So there are still some anomalies in that but this piece of this legislation is a sensible solution to a problem that's been bugging New Zealand retailers for some years and I hope that it's successfully resolved. A little bit more time has been given to the revenue to get this in place—and I think probably sensibly so—and no doubt my colleagues might talk about one or two other issues that have arisen in the course of that like the ability to tax pre-ordered goods and one or two of those sorts of things. But it is a very sensible piece of legislation. It will raise a significant amount of money for the inland revenue and it will I think temper to some extent the purchase of offshore goods via the internet because it will make the prices much more relevant to New Zealand prices at the time. So whilst I said earlier there are parts of this bill we certainly cannot support this is a part of the bill that the National Party certainly can support and we'll look forward to it being implemented successfully as it goes forward from here. Thanks.