Nash Stuart: Taxation (Canterbury Earthquake Measures) Bill — First Reading Second Reading In Committee Third Reading 
Nash Stuart: Taxation (Canterbury Earthquake Measures) Bill — First Reading Second Reading In Committee Third Reading 
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STUART NASH (Labour) 
: 
 I suppose that over the next 4½ hours we will hear in the House how good the Taxation (Canterbury Earthquake Measures) Bill is and what a magnificent job our Christchurch MPs are doing. We will also hear that this is important legislation. In a way it is ground-breaking legislation certainly from a tax perspective. [ 
Interruption 
] Thank you very much. It took about 2 seconds. 
I know we cannot refer to someone not being here but perhaps during the Committee stage the Minister could let us know whether this bill is the first piece of tax legislation to be brought in for this sort of event. I suspect it is because as the last speaker alluded to the earthquakes are in fact the first national disaster we have had in the country’s history. I suspect that back when the Napier earthquake occurred there was no such thing as a national disaster. It is good to see the House rallying around this legislation. It could have been here a little bit earlier. Certainly Labour and National—in fact every party—wanted it here a little bit earlier except the Greens I think who may have blocked it at the Business Committee but that is OK because it is here now. Better late than never I suppose. 
There are a couple of things I will talk about. I will not take a long call on this; there is plenty of time for that. I want to talk about the policy problem. 
There is no doubt that the immediate provision of goods to those in need was of vital importance and we talked about that before. I think most speakers have alluded to the fact that it just had to happen. People did not sit down and they did not consult a tax accountant or a lawyer. They knew they had to get out there and make it happen for the people of Christchurch as soon as possible. But the problem we have is that the existing laws do not support that sort of behaviour. They do not encourage a donation or supply of goods for less than market value—but let us say a donation—to assist people in Christchurch who have been affected by the earthquake. In fact existing laws are designed to deal with manipulation by business not the goodwill of business. That is one of the great things to come out of the Christchurch earthquake and again many speakers have talked about it. People rallied together in a way that not only brought a city together but brought a nation together for a small time. As a result of the existing law dealing with the bad side with manipulation it does not adequately deal with the donation of trading stock particularly in circumstances such as the Christchurch earthquake. I suppose it is an unintended policy outcome due simply to the fact that when tax legislation was designed the drafters did not contemplate the fact that people would be giving away stock to victims of such an extreme national disaster. So that is part of the policy problem. 
As has been mentioned currently under the law that exists at this point in time goods donated to victims of the Christchurch earthquake are not eligible for the donations tax credit or the company donation deduction. The effect of the section in the Income Tax Act that governs this issue is that people donating in response to the Christchurch earthquake will have to file a tax return for income tax purposes for the full market value of that trading stock. We are posing some questions about that and it will be very interesting to get the answers to those questions in the Committee stage. The sorts of questions this issue brings up include whether those businesses will have to file a tax return or any form of return that deals with the stock that has been given away—how they will have to account for it I suppose. The gift of trading stock or selling it down at less than market value constitutes a gift under the Estate and Gift Duties Act. Even though we are getting rid of gift duty—probably before the election I suspect—under this Act during this time one will still be liable for gift duty. 
This was what we were talking about before. There was just not the time to consult a tax accountant and to get one’s affairs in order. I do not know at what point the businessmen and businesswomen suddenly said: “Hell’s teeth! What am I going to do about this?” but at some point it did happen and the Inland Revenue Department received a number of calls about it. In a way this bill is cutting out a whole lot of red tape because if the Inland Revenue Department had insisted on those business people accounting for every single bean then there would have been problems because I suspect that a lot of businesses had no idea. I understand that a lot of businesses have lost a lot of their records so to go back and stocktake would have been close to impossible. In fact there was no realistic way to deal with this issue. So that is a question we will pose in Committee. 
This is very good legislation because it deals with an extreme event in a way that I think the vast majority of businesses would like it to be dealt with and I think every New Zealander would expect it to be dealt with. We absolutely support it and we commend it to the House. Thank you.