Shirley Ken: Goods and Services Tax (Exclusion of Rates) Amendment Bill — First Reading 
Shirley Ken: Goods and Services Tax (Exclusion of Rates) Amendment Bill — First Reading 
[Volume:619;Page:14637] 
Hon KEN SHIRLEY (ACT) 
: 
 The United Future member Gordon Copeland who brings this bill to the House today had the courtesy to write to all parties soliciting support and I thank him for that. What I would like to do is read to the House as part of my comments and contribution to the debate my response to him on behalf of the ACT party. Because we did consider his bill as we should in caucus and we had the following view: “Dear Gordon We have received your letter of 1 July and are surprised that you have dredged up this hoary old chestnut particularly in view of the fact that your party leader Peter Dunne is a former Minister of Revenue and indeed voted for the initial legislation including GST on rates. I have no doubt that the advice you have received from economists and tax experts has told you why your proposal is nutty. I know there are elements in Grey Power and other organisations that have long lobbied for the exclusion and zero rating of GST on rates and possibly you are pitching at that market for political reasons. It is obvious that if local authorities were exempt from GST or zero-rated they would be tax-preferred relative to private businesses. The ACT party believes that local bodies generally are engaged in far too many activities that should be left to the private sector and the prevailing situation would only be exacerbated if the council were to be granted an additional 12½ percent competitive advantage on tax. You may argue that GST should apply only to the goods and services of council trading activities but that only begs the question should the council be engaged in commercial activities at all.” 
“I am staggered that the United Future Party believes that your proposal would help businesses. GST is a tax on final consumption. It is consumers who would derive any benefit if rates were zero-rated or exempted. So why did he claim that it would benefit businesses?” 
“The ACT party does share your concern with the impost that ratepayers face. We see no justification for the annual escalation in rates throughout the country way above the rate of inflation. Escalating rates is an issue in themselves but that should best be addressed directly by focusing councils on their core public-good activities and through the elimination of waste and excessive expenditure. Tinkering with GST on rates does not address this basic problem. Hopefully your caucus will re-examine your position on this issue and encourage you to quietly withdraw your bill.” 
That is still the best advice I can give to Mr Copeland in this bill. It is a very nutty proposal. I listened to the speech made by the New Zealand First member and they said they will support it to the select committee solely for the purpose of opening up and having a broad debate on rates. But as we know that is actually beyond the brief of this bill. So that will not be permitted by that committee. So really the New Zealand First position of supporting it to the select committee is being done under a misapprehension and a belief that there could be a general debate on rates when in fact there will not be because this bill is specific to the GST component. So I would invite New Zealand First to rethink its position. 
I think that every member in this Parliament—indeed much of the public—has been staggered. We have seen great big billboards at our airports and great full-page advertisements in the papers with Peter Dunne’s picture. Mr Dunne was the Minister of Revenue in the Bolger Government! We never heard a squeak—not a murmur not a whisper—about this issue when he was the tax collector. He was the Minister of Revenue! It never even entered his head that this could be an issue. At first I thought that perhaps he was just letting Mr Copeland have his head and was not really supporting it but when I saw those hoardings with Mr Dunne backing this nutty proposal I thought there was something very very strange here. Full-page advertisements—it is clearly a full-thrust approach from the United Future Party. My other suspicion was that the Government was going to accede to it and this was a little trophy they were sort of going out campaigning for. But I have heard the Government speaker and the Deputy Prime Minister’s speech but they do not support this bill—and I am pleased about that—so what is the strategy of United Future? It just does not make any sense. It is a nutty proposal. I hope it does not make it to the select committee.