Nash Stuart: Taxation (GST and Remedial Matters) Bill — Second Reading 
Nash Stuart: Taxation (GST and Remedial Matters) Bill — Second Reading 
[Volume:669;Page:15774] 
STUART NASH (Labour) 
: 
 I rise in support of the Taxation (GST and Remedial Matters) Bill in its second reading. I enjoyed the speech of Peter Dunne the Minister of Revenue and I look forward to hearing it again in a couple of years’ time. There are only three things that I wish to talk about tonight. The first point is that Labour will always support good legislation that promotes fairness and equity for all New Zealanders. The second point is that Labour will always support good legislation that clamps down on tax evasion. The third point is to say what a legislative necessity this bill is. I see that Mr Bennett is nodding. He was on the Finance and Expenditure Committee and he knows what important legislation this is. 
Labour always supports good tax legislation. We have supported the vast majority of tax bills that have gone through the House in this session. But the types of bills that Labour does not support are the bills that give those 650 New Zealanders who are earning in excess of $1 million a year $1000 a week in the hand and that give the majority of New Zealanders who are earning the median wage less than $5 a week. Please be assured that we will never support tax legislation that does not promote fairness and equity. 
This bill’s headline provision is amendments to the Goods and Services Tax Act 1985 in order to provide for tax to be charged on supplies of land and transactions between registered persons at the rate of zero to simplify the method for making adjustments for changes in use and to streamline transactions involving nominated persons. In essence this is just another example of zero-rating a GST transaction. What I want to know is where the howls of derision and outrage are from members on that side of the House similar to those heard when Labour proposed to zero-rate GST on fresh fruit and vegetables when Labour proposed a tax policy to help New Zealanders lead a healthy lifestyle. Well there were no howls of derision when policy involved a financial transaction but there were when there was a healthy lifestyle transaction. It says something sad about priorities does it not I say to Sam Lotu-Iiga. There are a number of cases where there are zero-rated provisions in GST legislation. These include export goods financial services and duty-free goods. In fact there are about 17 categories of goods that can be zero-rated in certain circumstances. So when Labour proposed a policy to zero-rate fresh fruit and vegetables it was not a bastardisation of the Goods and Services Tax Act; it was a policy that promoted healthy choice a policy that would be better for all New Zealanders. 
Other policy and remedial amendments that this bill covers include amendments to the Income Tax 2007 the Income Tax Act 2004 the Tax Administration Act 1994 the Income Tax Act 1994 the KiwiSaver Act 2006 the Stamp and Cheque Duties Act 1971 the Gaming Duties Act 1971 the Local Government (Auckland Transitional Provisions) Act 2010 and other regulations that are also in this bill. It is wide ranging in its scope and reach. Its amendments are part of an ongoing process to improve legislative integrity which is something that everyone in this House wishes to see and works towards. 
One cannot go past a GST bill without bringing to this Parliament the views and feedback from constituents on the implementation of the increase in GST to 15 percent—you know the increase that Mr Key said that he would not make. It is not good. I have had many unhappy constituents say that this is hurting New Zealanders. It is quite frankly a disgrace. It all started when the then Leader of the Opposition one Mr John Key stood up in front of the nation and laid our fears to rest by informing New Zealanders in their living rooms that no he would not be raising GST if he became the Prime Minister. In answer to a specific question from a reporter—and I quote—“Can you rule out National raising GST to 15 percent?” Mr Key replied: “National is not going to be raising GST.” If members do not believe me then they can go on YouTube and have a look. New Zealanders will remember. A large accountancy firm Ernst and Young in a press statement stated that “many are realising this is not a modest increase”. Mr Key did raise GST when he said that he would not. We will forget neither those words nor his actions. 
My second point is that Labour will always support good legislation. This bill is a remedial matters bill. Remedial matters bills can play an important role in tidying up legislation and closing down the holes or gaps that people and taxpayers may be exploiting. This is certainly the case with this bill. As mentioned the main provision of interest in the bill clamps down on tax evasion. We are a country that is founded on the principle of fairness and equity and this certainly applies to tax. This bill promotes these principles. There is something called a phoenix fraud where GST is refunded to a registered purchaser of land with no corresponding GST payment made by the vendor. As mentioned this bill essentially zero-rates most transactions involving land if both the purchaser and the vendor are GST-registered. I doubt there will be many in this country who would speak out against closing down a tax loophole that has been taken advantage of by unscrupulous property developers. 
This bill makes other changes. These changes will not affect many people but they are just as important and those whom they will affect need to understand that the law around these areas will tighten up. They include for example the sharing of KiwiSaver member information. This bill amends the KiwiSaver Act 2006—unfortunately it does not reinstate the provisions that were cut by that Government—and the Tax Administration Act to allow a member’s address date of birth and IRD number to be shared between the member’s scheme provider and the Inland Revenue Department. 
We debated the on-premises fringe benefit tax exemption at length at the Finance and Expenditure Committee because the bill as it was presented to the committee wanted to make this provision retrospective. In the committee’s wisdom we decided that retrospective tax legislation was to be used only in very very rare circumstances and this was not one of them. We decided that we would let the courts determine whether people had acted within the law or outside the law. 
There are provisions on joint bank accounts and we argued and debated them at length—for example the application for overseas donee status. One can now donate money to the Mutima Charitable Trust and the Bougainville Library Trust. We talked about Auckland Council restructuring the tax treatment of emissions trading units and a number of other amendments to different bills. 
To sum up I have spoken about two key points. Labour will support any legislation and especially any tax legislation that is fair and equitable for all New Zealanders. It will certainly support legislation that closes down tax evasion opportunities and this bill does that. The second point is that this bill is important because it makes a series of changes that are necessary to preserve the integrity of the tax system. This is a good bill. The Finance and Expenditure Committee agreed on every aspect of the bill. We made some good changes. It is good law which is why I am supporting it. Thank you very much.