O'Connor Damien: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
Text is incorporated into the Bound Volume 
O'Connor Damien: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
[Sitting date: 18 September 2012. Volume:684;Page:5345. Text is incorporated into the Bound Volume.] 
Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman) 
: 
 I have come into the House to listen to this debate. I guess taxation for the National Party has always been really important. The National Party has focused a lot on it in its campaigning saying that lower taxes are nirvana and higher taxes are outrageous and will cripple the economy. How then can National bring into this House a bill that increases taxation by 50 percent? This bill the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill increases the KiwiSaver default contribution by 50 percent—from 2 percent to 3 percent. Is that a 50 percent increase? Yes. Is that going to cripple the economy? Well on the basis of arguments we have heard in this House for years from the National Party any increase in taxation will cripple the economy. That is what it says. That is why—[ 
Interruption 
] Part 2. That is why—[ 
Interruption 
] Part 4. Part 4. That is why— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! We are actually on Part 4. Some of the things you have been talking about are in Part 5. [ 
Interruption 
] I am giving the member the opportunity. Part 4. 
Hon DAMIEN O’CONNOR 
: Thank you very much. It is about GST and I appreciate the Chairman’s guidance on that. I will stick to the issue around GST and the one of late-payment fees. 
I guess the issue is that this is the party—the great party of National—that wants to slash all taxes because that is going to provide a way forward. So what we have— 
Dr David Clark 
: It’s a tax grab. 
Hon DAMIEN O’CONNOR 
: It is a tax grab all right. So we are now going to have GST on late-payment fees. Do we pay GST on fines? When I get a parking fine do I pay GST on that? 
Hon Clayton Cosgrove 
: Or a speeding fine. 
Hon DAMIEN O’CONNOR 
: A speeding fine no. I have had the odd one of those. But the question is do we pay GST on fines? That is not a late-payment fee; it is a late parking fee. 
John Hayes 
: It’s a service. 
Hon DAMIEN O’CONNOR 
: It is a service. Oh you see—GST. The question is that if we are going to place GST on late-payment fees which most people would see as a penalty or a fine— 
Hon Clayton Cosgrove 
: Against accounting advice. 
Hon DAMIEN O’CONNOR 
: That is right—against accounting advice against all the advice to the Government. If we are going to start charging GST there then will the Government have in this House a piece of legislation to put GST on parking fines or on fines imposed by any part of the court system? I am guessing that that would open the way for some interesting constitutional issues. The Government could be honest and say that it is just increasing the fine but what part of that fine would then come back into the GST pot? If the accounting advice on this change to the legislation is that it should not occur then I am guessing that maybe the Government is not going to move on fines. But we want and I think most New Zealanders expect some kind of consistency in legislation. 
Hon Clayton Cosgrove 
: That’d be too much to ask from this mob. 
Hon DAMIEN O’CONNOR 
: Well it might be. On one hand the Government has championed the lowering of taxation on its mates. That is if you own $100000. If you earn high incomes we have to cut—and of course the GST argument the GST that this Government through this change is now going to impose on late payment fees that extra GST is just like the increase in the GST charge it put across the whole economy. It put it across the whole economy but did not mention it though. I guess the question that we must ask of the Minister is if this is going through against good accounting advice what else has the Government got in store for people? The one thing that it has consistently done is made it easier for people at the top who spend a lower portion of their income on GST-liable goods and made it harder at the bottom for the average New Zealander who spends the vast majority of all their income on GST-liable goods. They do not have much opportunity to move into the financial sector or to spend their money offshore because most of them are struggling to survive. 
This is in my view just another odd proposal by the Government. I am advised by my colleagues that it has been advised against by the accountancy industry and the Government is determined to push through with this in the same ridiculous idiotic way that it is pushing ahead with its asset sales. The consistency of that is that we have good advice that these are both bad things to do. We have professional advice— 
Hon Clayton Cosgrove 
: History proves you right. 
Hon DAMIEN O’CONNOR 
: History absolutely proves us right. Clearly there are no students of history over there. In spite of that advice that GST on late-payment fees is not good accounting practice and selling State assets is not good economic practice why is it that this National Government partnered by the ACT Party partnered by National’s mate John Banks is determined to push ahead with stupid things where the advice it has received from professional people is that it should not happen? Well I guess people will make their own conclusions hopefully in 2 years’ time. I am happy to take— 
Dr David Clark 
: Hopefully sooner. 
Hon DAMIEN O’CONNOR 
: Sooner? There is the opportunity and those members should be very aware of that. That is right. 
Hon Clayton Cosgrove 
: “Banksie” will be out to grass. 
Hon DAMIEN O’CONNOR 
: Sure he will be. What kind of animal eats grass? No we cannot say that. 
This is just one component of this bill here that clearly exposes—and I will have the opportunity later on to talk about the increase in taxation at a rate of 50 percent—that the imposition of GST on late-payment fees does raise the possibility that we will have GST imposed next on parking fines on speeding fines or on any kind of penalty that can be imposed on anyone. The question must be around the fee that the National Government imposed on people in the courts. What was that fee? The $50 fee is it or something—it has got a standard fee on everyone going through. 
Dr Rajen Prasad 
: Victims of crime. 
Hon DAMIEN O’CONNOR 
: Victims of crime that is right. Will there be a GST component to that payment? 
Dr Rajen Prasad 
: The Minister will tell us. 
Hon DAMIEN O’CONNOR 
: The Minister perhaps will hop up and tell us that. No. There is silence. OK. 
The thing that people expect of Parliament as I have said before is consistency and fair and reasonable law. 
Hon Clayton Cosgrove 
: Oh he’s consistently quiet the Minister. 
Hon DAMIEN O’CONNOR 
: Consistently quiet. Consistently inconsistent would be the way I would put it. The only thing we do know is that if you are poor and you are paying these things you are going to pay more under the National Government and if you are wealthy and you can get out of paying them you will not. So late-payment fees will generally be imposed upon people who struggle to pay their bills. They struggle to pay their bills for whatever reasons but mainly because they do not have enough income to cover all their costs and there are hundreds of thousands of New Zealanders like that. We have got the level of child poverty in this country. What will this additional GST charge do for those people who are already on the breadline or who are in fact below it? 
In summary this is just another Tory piece of legislation that makes it harder for people at the bottom and makes it easier for people at the top. Thank you.