Copeland Gordon: Questions for Oral Answer — Questions to Ministers 
Copeland Gordon: Questions for Oral Answer — Questions to Ministers 
[Volume:619;Page:14610] 
11.  
GORDON COPELAND (United Future) 
 to the  
Minister of Finance 
: Does he accept given the dictionary definition that rates are “a tax levied on property by a local authority” that the imposition of GST on rates constitutes a tax on a tax; if not why not? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The Government prefers to concur with the advice of a 1985 advisory panel on goods and services tax led by Dr Donald T Brash that rates should be “subject to GST in the usual”—[ 
Interruption 
]; that is the way it is signed—“way as they are a payment provided for the services of local authorities and especially if some of these services are provided in competition with the private sector.” 
Gordon Copeland 
: I raise a point of order Mr Speaker. I am not sure whether that answer really addressed the question. 
Mr SPEAKER 
: I think the answer addressed the question. Please ask a supplementary question. 
Gordon Copeland 
: Is the Minister aware of and can he therefore tell the House any international precedent where a central government has imposed a tax on a tax levied by a local government? 
Hon Dr MICHAEL CULLEN 
: I am aware of many countries that have appallingly inefficient GST systems where they exempt various articles where they have differential rates and where one has to differentiate between food taken away from a place and food consumed within a place. Thank goodness we have not followed those very bad policies. I am certainly aware in New Zealand of GST being levied on top of other taxes. Every time the member fills up his petrol tank he is doing precisely that. 
Gordon Copeland 
: Can he confirm that during the last decade the then Government had an opportunity to revisit the question of GST on rates but decided to retain the status quo and can he confirm that the Minister who made that decision was the Rt Hon Winston Peters when he was Treasurer in 1997? 
Hon Dr MICHAEL CULLEN 
: I will take the member’s word for that and congratulate the right honourable gentleman on his wise decision. 
Rt Hon Winston Peters 
: Will the Minister confirm that when I left the office of Treasurer—and a very sad day it was for this country—I instructed Treasury to continue its research on the core element of rates on which one could properly say that it is a tax on a tax and not all rates in the way that the loose United Party is looking at this issue? 
Hon Dr MICHAEL CULLEN 
: I thank the member for that advice but that rather reduces my congratulations to him because that would muddy up the GST system very substantially. 
Gordon Copeland 
: Has the Minister at any time expressed a personal opposition to applying GST on rates? 
Hon Dr MICHAEL CULLEN 
: I well recall two things in the Labour Party caucus when the decision came to a vote. Firstly as senior whip I was required to bring down the then Prime Minister to ensure there was a majority—the Prime Minister was frequently absent from caucus in those days. Secondly the motion was passed by one vote. As I recollect now outstanding in the majority was Mr Peter Dunne now the leader of the United Future party. 
Gordon Copeland 
: I seek leave of the House to table the Inland Revenue Department’s report on GST on rates to the Treasurer in 1997. 
Document by leave laid on the Table of the House.