Dunne Peter: Taxation (Consequential Rate Alignment and Remedial Matters) Bill — In Committee Third Reading 
Text is incorporated into the Bound Volume 
Dunne Peter: Taxation (Consequential Rate Alignment and Remedial Matters) Bill — In Committee Third Reading 
[Sitting date: 24 November 2009. Volume:659;Page:8241. Text is incorporated into the Bound Volume.] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I will take a brief call to respond to three points that were raised in the preceding contributions. Firstly with regard to the resident withholding tax issue let me say with due respect to Mr Cunliffe that this is a slightly more complicated issue than he portrayed it to be. I think the solution the select committee has come forward with is a very elegant one. It was not quite as straightforward in the original drafting as he made it appear but I am very comfortable with the committee’s recommendations and I think it has done the bill credit in that respect; I acknowledge that. 
The GST issue that Mr Nash raised has quite an interesting history. It goes back to about the year 2000 when the law was first changed to clarify a number of issues regarding the treatment of various aspects of tourism for GST purposes. One of the consequences of that was this ongoing debate about facilitation fees. Effectively over that period between 2000 and the present roughly half of the tourism sector thought it was subject to GST and roughly half thought it was not. There had been an ongoing dispute. 
I forget precisely which year it was but 2 or 3 years ago the Inland Revenue Department issued a ruling that appeared to give comfort to one side of the argument and not the other. That led to some controversy and confusion. I can recall as a member of the previous Government having discussions with the then Minister of Tourism Damien O’Connor about how this issue might be resolved. We were not able to make progress on it before the election. It simply ended up as unfinished business at that time. 
The matter then came back on to the table this year and the Prime Minister as Minister of Tourism became involved. Effectively we have said: “Look we will give you that one year. From 1 July 2008 everyone will pay the GST. We will not have the debate about whether the fees are subject to GST. From that point forward everyone will be in but there will be a 1-year holiday to give people breathing space.” 
There are winners and losers in this. Those people who have dutifully paid since 2000 might well feel a little aggrieved. On the other hand the dispute is a finely balanced one and I think that the solution that has been worked out is reasonably elegant. I take the member’s point about setting a precedent. I think this is one of those rare things that does not come into that category but we do need to be mindful that we do not open up that opportunity. 
The issue of electronic communication and the ability of people with regard to email is an important one. It is much bigger than just the particular issue that is set out here. Mr Nash got close to it when he started talking about the paper war; the 25 million pieces of correspondence that the Inland Revenue Department sends out a year or 100000 pieces a day. I have been saying in recent speeches that we will have to move away from a paper-based system. It is inefficient it is hopeless and it is years out of date. We need to bring our tax administration into line with the requirements and the abilities of the 21st century. 
When we put future inland revenue systems and technology in place in the late 1980s and early 1990s emails and websites were all things for the future. What we are trying to do now pending the much bigger change is make it more possible for people to communicate in the way in which they would do their own banking and every other form of activity. I know it is not in this bill—it will be in the next one—but if the member wants to have a look at what we are doing with the student loan administration he will get a sense of what lies ahead. 
I conclude on this point. I am grateful to the Committee for its consideration. I did promise the House when the last tax bill was considered that this one would be different; so it has proven to be. I am mortified that the Supplementary Order Paper is so short after my last effort in that regard and that the bill itself is so brief but I am grateful for the consideration that the Committee has given it. Thank you. 
The question was put that the amendments set out on Supplementary Order Paper 93 in the name of the Hon Peter Dunne be agreed to. 
Amendments agreed to. 
The question was put that the following amendments in the name of the Hon Peter Dunne be agreed to: 
to omit from clause 15F subclause (5); 
to omit from clause 15H(11) “Subsections (1) to (10)” and substitute “Subsections (1A) to (10)”; and 
to omit from clause 69 “Sections 70 and 71” and substitute “Sections 70 to 71”. 
Amendments agreed to.