Key John: Taxation (Disaster Relief) Bill — Procedure First Reading Second Reading Third Reading 
Key John: Taxation (Disaster Relief) Bill — Procedure First Reading Second Reading Third Reading 
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JOHN KEY (National—Helensville) 
: 
 I have not had a personal opportunity to visit the flood zones but I want to reflect on the disaster as it unfolded from my position in my own electorate in Auckland. Two initial thoughts struck me as the floods took place and then some time later a third one. The first of those was the enormity of the devastation in the tragedy that took place. It was not just a small tract of New Zealand rural land. It was an enormous piece. We have just heard from Mr Hughes the number of electorates that it passed over. So it was really a very large disaster and obviously extremely severe. 
The second reflection is the bizarreness of the event in that it occurred in February the heart of a New Zealand summer. In fact the first day that floods struck the middle of the North Island up in Auckland just a few hours away it was a beautiful fine day. It seemed quite bizarre to see what was unfolding on nationwide television in terms of the disaster and for that to be occurring in February. I think Mr Ewen-Street made some valuable comments when he said that there are some unusual things happening in our weather patterns and I will leave that for another debate. 
The third reflection that struck me some time after the disaster was that in many countries when a tragedy of this sort occurs when a natural disaster occurs we see the best and the worst brought out in a society. So often when we watch the evening news and see a similar kind of event happening in another country what we notice as well as all the great deeds taking place are a lot of very unfortunate things occurring like looting and the kinds of things we would not expect to occur when there has been a natural disaster in a community. It is one of the things that I think we can all as New Zealanders reflect on—just how good a society fundamentally we have. When we have a disaster in our own backyard we do not see the best and the worst coming out in New Zealanders in their efforts we see only the best. 
One thing that is worth reflecting on is the success of the mini-telethon that Paul Holmes undertook on nationwide television. Paul Holmes did a tremendous job of galvanising support and making all of us understand the severity of the situation. I think that telethon—that binding together of financial support from New Zealanders from all walks of life—played in its own way a role in making all members of Parliament come together and understand the severity of this situation. 
One of the reasons we are here tonight discussing the Taxation(Disaster Relief) Bill is that New Zealanders do understand that whether they are in Parliament whether they are living in the Rangitikei the Horowhenua or some other part of New Zealand. Paul Holmes should take some personal satisfaction that he has played an important role and all New Zealanders can take some satisfaction that they have been part of a process that will see as best as can be the case some relief delivered for those New Zealanders who have suffered as a result of this tragedy. 
The last comment I would like to make in that regard at least is that just as it brought out the best in New Zealanders I do believe it has brought the best out in our Parliament. It is not very often that we all agree on supporting one bill. In fact it is virtually unheard of. When I first came here 18 months ago I considered that a lot more legislation would travel through this House on a unanimous basis. It does not. The fact that this bill has been unanimously supported and I might add without a great deal of politics serves our communities well. It shows the people of New Zealand that Parliament can come together when it is reflecting on a situation like this when it really needs to. Parliament itself can take a bow and be proud of the way it has reflected this situation. 
Finally Dr Cullen does deserve some credit for understanding the need for this legislation. There was some discussion that he would be able to administer this relief through section 6A of the Tax Administration Act and that he might be able to doctor the original legislation. I do not believe that was possible. He tookthe proactive step of encouraging the Inland Revenue Department to look at the situation and he has done a good job in this regard. 
I want to reflect on some of the specifics of the bill for a moment—not many people have but I will take a second to put my finance hat on and reflect on one or two specifics and then call it a night so to speak. Those who read the bill will notice immediately that the wording about who can enjoy this legislation is quite broad in one sense. They are defined as those affected by extreme natural events. That is a broad definition. I want to dwell on why that might be the case in a moment. 
But it is also worth recording for  
Hansard  
that the Taxation (Disaster Relief) Bill is not a specific piece of legislation for the floods that took place in February of 2004. It will obviously serve to help the people affected in those floods but it is a generic piece of legislation. It could help anyone who is covered under that definition of an extreme natural event. By that we could mean another similar flood somewhere in the country an earthquake an outbreak of food-and-mouth disease— 
Darren Hughes 
: In Helensville! 
JOHN KEY 
: Yes in Helensville or anywhere should New Zealand be struck by that particular tragedy. It is also worth noting what the bill will not cover. It will not cover for instance an outbreak of foot-and-mouth disease spread by terrorists in New Zealand. That is worth reflecting on—that is not an extreme natural event; it is an eco-terrorist event. It would not affect somebody who suffered loss through a plane hitting a building as happened on 9/11 in the United States of America. That would not be covered under this legislation. So whilst the legislation will cover natural disasters it will not cover those types of things. 
The second situation that is worth talking about is what the bill will do for provisional tax payers in New Zealand. Most New Zealanders might understand that not only is provisional tax a future tax based on prior earnings but the way that situation works is that the provisional tax payer has two options. The first is to have what is called the natural uplift which is that the taxpayers pay tax on 105 percent of their previous year’s income on the basis that they will enjoy about a 5 percent growth. I might add that that is better than the Labour Government can currently deliver for the people of New Zealand which Dr Cullen outlined recently will plummet to 3.5 and then 2 percent in the years ahead. But it is 105 percent of the normal uplift. 
The second option is for taxpayers to have an estimate of what they believe will be their income. In the case where they are making their third provisional instalment on 31 March then P3—the date at which they need to pay that income—is 7 March. That is really the issue we are facing here. Let us take the very simple example of a farmer in the Rangitikei who may have earned $86000 or $90000 last year and is faced with a tax bill in the 2004 period of tax on $90000. He or she would have paid tax on $30000 in P1 tax on $30000 in P2 and had this legislation not been passed would have paid tax on an income of $60000 with no ability to claim back and would have had the loss of use-of-money provision and would potentially have to pay the third instalment if he or she did not have the time to make payment by 7 March. The second point that is worth noting is the impact that without this legislation would have occurred for farmers and business people who act as a collection agency for PAYE and GST. 
I want to reflect on one other point and that is simply this. In terms of the estimate it is quite true that most of the people who will enjoy the relief provided by this legislation will be those who have over-provided for tax and therefore want to get the money back. But of course there would be some other New Zealanders who would be affected the other way where their income may be significantly greater as a result of the floods and would have under-provisioned in their tax return had they not had this legislation who have been most affected. Members should not forget for instance someone who hasbeen growing flowers for example in Rangitikei and selling those flowers in Auckland. His or her income may in fact be lower. This is one of the reasons this legislation has very general provisions and why a great many New Zealanders will be looking for relief under the legislation. National will be supporting the legislation. We have pleasure in being part of the process and we look forward to it passing swiftly through the House. 
Bill read a second time.