Carter David: Income Tax Bill — Instruction to Committee In Committee Third Reading 
Carter David: Income Tax Bill — Instruction to Committee In Committee Third Reading 
[Volume:616;Page:12095] 
Hon DAVID CARTER (National) 
: 
 I will take the opportunity while Dr Michael Cullen is the Minister in the chair to get some answers to questions that I asked earlier when his junior Minister David Cunliffe was in the chair before the dinner adjournment. My issue was around this argument that has just been developed very well by my colleague Dr Wayne Mapp: the advantages of a tax rate of 30 percent which is at least as good as Australia’s. David Cunliffe challenged us to give examples of why that would affect the behaviour of various companies. 
He argued it seemed to me that if there were a difference in the tax rate then companies would not be inclined to make decisions that mean they accept the generosity of Australia. Of course I do not think that is right and I quoted to Mr Cunliffe an example which I think the Hon Dr Michael Cullen might also like to comment on. 
My simple question is why his airline Air New Zealand established its leasing arrangements in Hong Kong if it was not simply to gain the advantage of a far better tax rate. Would Dr Cullen like to explain to the Chamber tonight why Air New Zealand took the opportunity to establish its leasing company in Hong Kong if it was for any other reason than that it saw it as tax advantageous? If he accepts that that is the reason and I cannot see how even our Minister of Finance could argue that it was for any other reason then it is surely logical that there are companies now in New Zealand that are considering Australia as a base for production because of advantageous company tax rates and equally that there are Australian companies that might be tempted to come to New Zealand if we had a similar tax regime. 
The second question I want answered relates to the definition of “Maori authority”. We had quite a debate before the dinner break on the advantageous tax rate that is available to Maori authorities with Harry Duynhoven initially interjecting that this Income Tax Bill did not give an advantageous tax rate to Maori authorities. That is clearly wrong and I think Harry Duynhoven has accepted that. I then asked the Minister to point me in the direction of where “Maori authority” is defined and I thank him for pointing us to page 1878. As I read it a Maori authority means a person who has made an effective election under clause HI 3 “Election to become a Maori authority”. I have to say not having had the opportunity to work through the select committee that I am none the wiser as to who has the ability to elect to be classified as a Maori authority and therefore enjoy a substantially advantageous tax rate. 
I refer to my own area and the performance of Ngai Tahu and I would be grateful to know whether its commercial entities could be classified in an advantageous way to be described as a Maori authority. I certainly think that if that is the case we need to have an understanding of where this definition extends. For instance—and I see the Minister taking an interest in this—Ngai Tahu has just been involved in a full takeover of a publicly listed company Shotover Jet. I would be horrified if that particular entity were now able to structure its affairs so that it was paying tax at 19.5 percent when a similar operation on the Kawarau River for example was facing a corporate tax rate of 33 percent. 
The final point on which I want clarification from the Minister is that I note in the report from the select committee—and I acknowledge that I was not at the select committee and I have not been through the 2300 pages in detail—that the work took place through 2003. At that time the Minister whether or not he wishes to recall it was part of a Government that was promoting the “flatulence tax” and I just want to make sure that nowhere in these 2307 pages is there hidden away the wonderful idea that Mr Hodgson came up with regarding the “flatulence tax”. 
Hon Dr Michael Cullen 
: Open it up and have a sniff. 
Hon DAVID CARTER 
: I hope it is never to be seen again and I look forward to the Minister’s comment and his confirmation of that.