Ryall Tony: Taxation (Canterbury Earthquake Measures) Bill — First Reading Second Reading In Committee Third Reading 
Ryall Tony: Taxation (Canterbury Earthquake Measures) Bill — First Reading Second Reading In Committee Third Reading 
[Volume:672;Page:19052] 
Hon TONY RYALL (Minister of Health) 
: 
 I will respond to a number of questions that have been asked. There is no firm indication of the number of businesses or people who are likely to benefit from these changes. The amendment has come because of a number of concerns that have been raised with the Government and we do not have any specifics that we can put our finger on regarding the exact number of people who will be affected. 
The Taxation (Canterbury Earthquake Measures) Bill of course is not unusual in this sort of environment. Members will recall that during the Rangitikei floods specific legislation went through the House by leave that provided some tax flexibility around some administrative issues. However officials advise that for the Canterbury earthquakes which are extraordinary events more specific responses are required because of the breadth of issues that have been raised to be dealt with. The bill represents those responses. The depreciation amendments referred to earlier are also part of the response and the third responsive issue is the Order in Council stuff that happened at that time. 
A number of accounting-related questions were raised some of which took me back to Accounting 101 at Massey University for which incidentally I got an A+ but it was all downhill from there. In terms of periods of relief any trading stock donated between 4 September last year and 31 March this year will be covered. The redundancy provision finishes on 30 September 2011—that is all redundancies not just earthquake-related redundancies. The Working for Families provision will be at the discretion of the Commissioner of Inland Revenue. There is no evidence that employer welfare contributions were needed for any of the so-called aftershocks but for the two major earthquakes which significantly damaged businesses and affected employees we are providing for employer welfare contributions in the 8 weeks after each of the two main events to be exempt which makes a lot of sense. 
The GST questions have been raised. GST is payable by businesses on their sales income. If the goods have been given away then there is no GST liability and the usual business systems will be involved. The Income Tax Act 2007 requires that trading stock on hand at the end of the year be added back. That is because trading stock is a deductible when it is purchased so therefore it has to be put back in over the top line. These proposals mean that no special accounting requirements are necessary. All businesses with trading stock have to file a return. 
On the question of compliance costs clearly the trading stock provision will not create any issues the redundancy provision is pretty straightforward and in terms of the Working for Families discretion Working for Families always has some compliance cost and the extra cost will be pretty small. On the employer welfare proposals logically there will be compliance cost implications because of the detail that is required but the officials do not think there will be any great specific burden. The relief of course is voluntary for employers who are suffering these costs and there is a benefit for them in incurring those costs in order to make a claim. 
The question was put that the following amendment in the name of the Hon Ruth Dyson to clause 4 be agreed to: 
to insert in section CZ 23(1)(b) and in section CZ 24(1)(b) “or 26 December 2010” after “2010”. 
Amendment not agreed to. 
Parts 1 and 2 and clauses 1 and 2 agreed to. 
Bill reported without amendment. 
Report adopted.