Lotu-Iiga Peseta Sam: Taxation (GST and Remedial Matters) Bill — Second Reading 
Lotu-Iiga Peseta Sam: Taxation (GST and Remedial Matters) Bill — Second Reading 
[Volume:669;Page:15785] 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I rise to talk on the Taxation (GST and Remedial Matters) Bill but like my colleagues my thoughts at this time are with the people in the South Island particularly the families and friends of those who have been confirmed as deceased. It is a tragedy for the families and friends it is a tragedy for the West Coast community and it is a tragedy for all of New Zealand. As the representative for Maungakiekie in Auckland I know that the people of Maungakiekie certainly grieve for them. We mourn with them and we are sad for them in terms of the loss of life that has been confirmed today. Our thoughts our prayers and our hearts go out to the people who have been affected—not just New Zealanders but also the South African British and Australian families and friends of the miners lost today. 
As has already been stated tonight this bill is part of a reform package that the National-led Government has put forward to make the GST system fairer more sustainable and better for economic growth going forward. I applaud Mr Nash for supporting our Government by asking for a fairer system and supporting the system that we have put in place. So I thank Mr Nash for supporting the National Government. 
This bill forms part of our tax reforms. It promotes fairness and integrity across the tax system. As has already been stated tonight it is an important measure to counter what are called phoenix fraud schemes. These schemes as has already been described by many speakers tonight undermine the integrity of our GST rules. These schemes involve the Inland Revenue Department refunding GST to the registered buyer where no corresponding GST payment has been made by the supplier to a transaction. They deliberately wind up such entities in order to avoid paying that GST. 
It has been of particular concern. It is an attack on the tax base and for that reason we as a Government are intent on closing the loophole. We have already heard tonight from my colleagues that we have one of the most efficient and effective taxation systems in the world and despite the protestations of colleagues across the aisle for exemptions from GST on food and other such items this system is as pure a system as we will get across the world. It is a system that has worked in the past and will continue to work in the future. 
Other measures in the bill make it easier for taxpayers to understand their GST obligations and reduce compliance costs because it is these costs and these obligations and the degree of uncertainty in entering into transactions that are a big handbrake on business and economic growth. The measures clarify parts of the GST rules where taxpayers have experienced difficulties in accounting for GST or interpreting the legislation. I give members an example. The current change-in-use rules that apply when assets are used for both taxable and non-taxable purposes is replaced with an approach that apportions the input tax deductions according to the actual use of those goods and services. This is a common-sense approach it is a reasonable approach and it supports the purpose of the bill—to maintain the integrity of our tax system. 
One of the other measures is the GST boundary between residential accommodation which is GST-exempt and commercial accommodation which is not. This distinction is clarified within the bill. There are GST rules around transactions involving nominees where a purchaser has nominated another person to receive the goods and settle the transaction. These are also clarified. 
The bill deals with an unintended timing problem for non-profit bodies accounting for GST when they supply large assets such as a house for a person in need. There are other—as have been described—technical amendments and the Finance and Expenditure Committee assessed them and made certain tweaks to them before bringing the bill back to the House. These include allowing portfolio investment entities a deduction for credit impairments and clarifying the tax treatment of superannuation funds under the National Provident Fund. We heard six submissions at the select committee. These were received from a wide range of interest groups and individuals and the changes that we made are pretty much accepted across the House. I recommend that this bill proceed through to the Committee of whole House. 
Bill read a second time.