Connell Brian: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — First Reading 
Connell Brian: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — First Reading 
[Volume:616;Page:12505] 
BRIAN CONNELL (National—Rakaia) 
: 
 That last speech was lacking in inspiration was it not? It is just as well it was very short. Mr Carter’s speech however was full of inspiration and I congratulate him on it. It dealt with some of the real true issues of what this Government is really all about. It is one tax policy for some and another tax policy for Maori. But we will come to that in due course. 
Despite all the rhetoric that this Government has taken us through this evening I have to say that this is not good legislation. Despite David Cunliffe’s assurances to the contrary this is not good legislation and that is a widely held view in the business community. But I will allow that there are some good aspects of this legislation. There are a couple of initiatives. In particular I am referring to tax treatment of venture capital. I would give that a tick. Sales and leaseback intangibles and patent and resource management application costs I would also give a tick. But on balance the National Party opposes this legislation because it simply does not deal with the very vexed issue of taxation. I would like to come back to this if time allows but I want to deal with other areas of concern first. 
The commentary really makes me chuckle. It makes reference to the Government’s growth and innovation strategy. This is really a joke. Promoting venture capital investment moves in the right direction—I have already said I agree with that—but if this Government thinks that that is the solution to the problem of attracting foreign and domestic capital it is woefully wrong. The real blockage to investment and the development of industry in this country is the Resource Management Act and red tape. This Government continues to demonstrate that it just cannot intellectualise this problem. If it could it surely would have by now. Does Mr Carter think that is fair? If it could have it would have by now. 
Hon David Carter 
: This is the Government that tried to tax farting. 
BRIAN CONNELL 
: I agree with Mr Carter. The Resource Management Act is the biggest handbrake on growth in living memory and I want to give the House an example of what foreign investors think about it as well. [ 
Interruption 
] This bill does absolutely nothing to address this fundamental problem absolutely nothing and Mr Mark knows this. He knows this. At Christmas I had the opportunity to deal with some executives from a multinational conglomerate a forestry company called Weyerhaeuser. This company turns over US$22 billion a year. Do members know what they said to me? They said: “We like your country. We like this place for growing trees but your Resource Management Act is a showstopper.” They also said: “And by the way your corporate tax rate is far too high.” They said that we are simply not competitive. The real issue here is that those guys left with their chequebook unopened. They came here to invest and they left with their chequebook unopened. [ 
Interruption 
] If Darren Hughes had more years of experience he would realise that that hurts every New Zealander even his constituents in Otaki. [ 
Interruption 
] An ounce of intelligence would help as well. 
I want to pursue for a while the matter of the amendments to income tax introduced as a rebate on income tax for small businesses. We have been told to swallow this as good for cash flow pressures. But I have to say this is a real sham an absolute sham. It is a sprat to catch the mackerel. It would catch someone like Darren Hughes out. He would think this is a good idea because he is a sprat. [ 
Interruption 
] I said sprat. This would catch him out. It is going to improve cash flow pressures all right but guess whose? 
 It will improve the Government’s cash-flow pressures and nobody else’s. It is an incentive for the unwitting to pay tax before they have to. They will put pressure on their own cash flow and the Government will have us believe that it went around the country consulting broadly. What it did was get a few Government patsies—it was a bunch of old cobblers really—to turn up and listen to John Tamihere rattle on for a while and then they told us that everyone was converted and this is good. I will now turn to annual rates of income tax because this is I suppose the issue that hurts us most. 
Hon David Carter 
: Darren Hughes laughs. 
BRIAN CONNELL 
: He is not used to paying tax. It probably has not hurt him yet. He probably still has tax incentives from being at university. 
Not only has the Government not dealt with the issues of corporate tax or the top marginal tax rate it has reverted to type when the pressure has come on. Mr Carter has already dealt with this but I have to say that when he referred to it in his speech I could hardly believe it. I read the legislation I turned to the page and despite Darren Hughes’ denials I read and reread it and it says that Maori authorities will pay a tax of only 19.5 percent. I was a bit excited when I first heard that because I thought it was a good idea to have a flat rate of 19.5 percent. That would get my vote—it would get a lot of votes. I started to get a bit concerned as I realised it could not be right so I reread it. Mr Carter was dead right—it applies only to Maori authorities. Other Kiwis will cringe when they hear about this. When the Government tries to justify this— 
Rodney Hide 
: Where in the world is your tax determined by your race? Only in New Zealand. 
BRIAN CONNELL 
: Does the member know what it is called? It is called being racist. It is discriminatory—it discriminates on race. The Government has tried to justify this on the basis that some Maori trusts are poor. Some Maori authorities suffered double taxation whammies and in some cases I have to agree that that was taking place. But we cannot fix the problem by creating a worse one. Fix double taxation yes but do not cherry-pick on the grounds of poverty because if poverty is the issue what about poor white businesspeople? What about Asian and Pacific Island businesses—why can they not have the same tax advantages that the Maori trusts are now enjoying? I would have thought that this Government had learnt its lesson. The recent polls have been telling it that the population en masse is sick of these types of discriminatory policies and they will bring it down. I fear that Government members will learn their lesson only when the next election takes place and they find themselves out of a job. That is what will happen. I have tended to focus on the major issues of this legislation but there are some minor amendments that I do not think we should bother speaking about. 
I will conclude by saying that this legislation falls well short of the Government’s intention to try to stimulate investment in this country. David Cunliffe is sitting opposite and he cannot look me in the eye because he knows that what I am saying is true. He knows now that this is wrong and that he cannot justify a 19.5 percent tax rate for Maori authorities when the rest of the country can go and sing. He cannot justify it. [ 
Interruption 
] Dianne Yates is calling out. She had an opportunity to take a call for 10 minutes and I think she was on her feet for 30 seconds. She did not want to talk then but now when her opportunity is lost she wants to interject. That just will not wash. People in this country will vote at the next election to show that they are tired of this type of racist discriminatory legislation. I have to say that the Finance and Expenditure Committee will have one heck of a job trying to sort this bill out because members know that if they continue down this path there will be a change of Government and the present Government members on that select committee will be very uncomfortable. At this stage unless some monumental changes are made by the select committee the National Party simply cannot support this legislation and we remain strongly opposed to it. 
Darren Hughes 
: Oh! 
BRIAN CONNELL 
: Mr Hughes knows that is a prime ministerial speech in the making and he is now cringing because there will be a huge change.