Tremain Chris: Melanesian Trusts (Income Tax Exemption) Amendment Bill — First Reading 
Tremain Chris: Melanesian Trusts (Income Tax Exemption) Amendment Bill — First Reading 
[Volume:642;Page:12474] 
CHRIS TREMAIN (National—Napier) 
: 
 I will take a brief call tonight on the Melanesian Trusts (Income Tax Exemption) Amendment Bill. National will be supporting this bill going to a select committee. I understand that it is to go to the Finance and Expenditure Committee where it will be chaired through that committee and then the bill will pass through its remaining stages. The bill clarifies beyond doubt that the Melanesian Mission Trust Board is exempt from paying income tax on its earnings and on the distribution of its income. 
Let me just go over some of the points that Minister Goff raised tonight in respect of the mission just to remind members what the Melanesian Mission Trust Board is all about. The mission was originally established by the Anglican Church in 1855. Those members who visit Auckland or who are residents of Auckland will know the mission building in Mission Bay just around from Kohimarama. It is a lovely building which has been there I understand since 1872. That was the original base of the mission trust and the surrounding land originally formed the asset of the trust. 
The mission trust was set up as a charitable entity to support mission work in the province of Melanesia including the Solomon Islands the New Hebrides and New Caledonia. The mission trust undertakes as Minister Goff canvassed a range of charitable work including housing schooling and hospital work. I will not go into more detail about the specific charitable works of the trust; it is just so that people know that this organisation does a lot of good work in the South Pacific. Currently the trust is the beneficiary of some $7 million per annum in income and this arose as I said earlier from the subdivision of the mission-owned land in the Mission Bay area and in the Kohimarama area. The trust did not just subdivide and sell the land; it subdivided it and leased it out on a perpetually renewable Glasgow lease - type arrangement which was subject to periodic rent reviews. 
We are quite familiar with those types of leases because we have a number of them in the seat of Napier. Members will recall that the 1931 Napier earthquake caused a significant amount of land to rise out of the marshes—it rose nearly 6 feet in some areas. We ended up with suburbs such as Onekawa Pirimai and Marewa which now have significant tracts of leasehold land. These lands are now under a Treaty claim and quite understandably. But the beneficiaries of those lands were the original harbour board and also more particularly the Hawke’s Bay Regional Council which are now the beneficiaries of a significant amount of annual income as a result. 
Most of the leases are 21-year leases and they have been the cause of some angst in my electorate. They come around for renewal every 21 years and the leases are based on the new values of that land. As members will be aware obviously land values have gone up significantly around New Zealand and particularly in the city of Napier I might add but many of the residents who have been in these properties for some period of time—many have been there for 21 years—are now faced with significant increases to the value of their leasehold payments. It is an issue because it is pricing some older residents out of their houses. 
I come back to the similar situation with the Melanesian Mission Trust Board. It is in that situation and it has property like that around Kohimarama and Mission Bay. So the value of the leasehold payments from that land now is significant and it allows the mission trust to do its charitable work in the South Pacific in the area of Melanesia. That income is at issue tonight—the $7 million that the trust is concerned about—and it is why we are debating this bill tonight. 
The decision in a recent case in the New Zealand Court of Appeal  
Dick v Commissioner of Inland Revenue 
 placed the tax-exempt nature of the Melanesian Mission Trust Board at risk. I will not go into the details of that particular case as Mr Goff has covered it fully tonight. Let us say that advice to the trust both legal advice and accounting advice has put it in a position where it believes that its tax-exempt status is at risk. We are here tonight with this bill to avert that problem to solve the issue for the trust and to put legislation in place that puts beyond doubt the tax-exempt status of the trust. I will not get into the details. I will leave it at that. Suffice it to say that the Melanesian Mission Trust Board will be put in a situation with this bill where its tax-exempt status is beyond doubt and it can go on doing the good works within the South Pacific that it has become legendary for. Thank you Madam Assistant Speaker.