Carter David: Taxation (Annual Rates Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill — Second Reading 
Carter David: Taxation (Annual Rates Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill — Second Reading 
[Volume:606;Page:3896] 
Hon DAVID CARTER (NZ National) 
: 
 I was intrigued by that contribution from the United Future man Mr Gordon Copeland in which he attempted to argue to justify the special tax rate that has been apportioned to Maori authorities. It seemed to me that his basic tenet for his argument was that Maori were in this country first. 
Clayton Cosgrove 
: You were the finance spokesperson? 
Hon DAVID CARTER 
: I will add to that. I was also the chair of the Finance and Expenditure Committee that the member now chairs. I tell that member that if I had been there chairing the committee on this bill I would have done a far better job of this legislation than has been done with it. 
Clayton Cosgrove 
: Why did Bill English sack you as finance spokesperson? 
Hon DAVID CARTER 
: I do not know. The member will have to ask him. I tell him though that I have far more confidence in the man who is now our spokesperson on finance than I have in the person who is the Labour Party spokesperson on finance. I am absolutely sure of that.  
I want to speak about the special rate that has been created for Maori organisations. It does mean that there is a competitive advantage. People in business will now have the ability if they are a Maori authority to pay tax at a lower rate than a business operating right next door that is carrying out exactly the same business activity. 
Hon Tariana Turia 
: Be a Maori and try to get a loan from a bank. 
Hon DAVID CARTER 
: This legislation has nothing to do with getting a loan. This legislation sets the tax rates and the tax rates are paid only when that business is operating at a profit. I tell the member that this legislation has nothing to do with getting loans. One of the most successful corporations in the South Island is Ngai Tahu Holdings Corporation. It has done a superb job but it will now have a tax advantage. I sat on the Finance and Expenditure Committee briefly when Ngai Tahu appeared before it arguing in support of this legislation. I asked Ngai Tahu whether it was in a takeover for Shotover Jets a business that at that stage was and I think still is listed on the Stock Exchange and it said it was. I said to Ngai Tahu: “Having then successfully taken over that company you’re going to argue to the select committee that it should pay a tax rate of 19.5c in the dollar whereas Kawerau Jets which operates in opposition to it would then have to pay tax of 33 cents?”. To be fair to the select committee as I was on it only for that day I understand that it has picked up—[ 
Interruption 
] Mr Chairperson could I have a little bit of silence to outlay this argument. 
The CHAIRPERSON (H V Ross Robertson) 
: I remind members that running commentaries are out of order. If they would like to check that they can look at Speaker’s ruling 51/5(3). 
Hon DAVID CARTER 
: I pointed that out to the select committee and to its credit it now says that if a business such as Shotover Jets is a wholly owned subsidiary then it should not be entitled to the special concessionary tax rate. That goes some way to strengthening my argument that it is a concessionary tax rate. Let me tell members that any sharp accountant now has the opportunity to minimise the tax that companies will pay on a successful wholly owned subsidiary and end up making sure that the tax they have to pay is within the Maori organisation. They will therefore be paying it at 19.5c. If companies cannot employ accountants who can engineer that then they have a problem with their accountancy company. So they will have a competitive advantage.  
Let me take another industry in which Maori are very significantly involved and in which they do a very good job—agriculture. Many of their farms are owned collectively and are Maori organisations. They might exist right next door to a farm that is run or owned by Polynesians Chinese or Pakeha New Zealanders. 
Hon Tariana Turia 
: Individual choice. 
Hon DAVID CARTER 
: Yes individuals. Now under this legislation they pay substantially different tax rates. I say that is unfair.  
Hon Tariana Turia 
: Most of them are beneficiaries. 
Hon DAVID CARTER 
: Tariana Turia just keeps on interrupting. Because of the state of this economy most New Zealanders are not paying the top tax rate. Most New Zealanders who may own a few shares in a company like Air New Zealand do not pay 33c in the dollar. But do we create a special exemption for them? No we do not. So members should not come into this House and suggest that this legislation is not racially based because it is. This legislation is racially based because it gives one tax rate to people who are Maori and that tax rate is not available to anybody else. 
David Benson-Pope 
: What’s that member’s solution? 
Hon DAVID CARTER 
: Mr Benson-Pope now wants me to do the tax rate for the Labour Party. I will do it instantly. 
Jill Pettis 
: How? 
Hon DAVID CARTER 
: By bringing down everybody’s tax rate to 19.5c. That is the answer. It took as long as that to think of the answer. That is the solution. If everybody’s tax rates were brought down there would not be this problem. 
Darren Hughes 
: Why not 19 percent like yours? 
Hon DAVID CARTER 
: Mr Hughes does not know my tax rate—he does not know whether I am on 19 percent—and I am not about to tell him what it is.  
The other point I want to comment on is that this legislation also cements in the annual tax rates. I do not want to let an opportunity go by without saying that the tax rates in this country are now constraining growth. Helen Clark comes into the House in question time and time and time again she says there is no relationship between tax rates and growth and she would be the only informed economist in the world who would argue that. Even Dr Cullen cringes when Helen Clark makes those sorts of stupid remarks. 
Darren Hughes 
: Lindsay Tisch believes that. 
Hon DAVID CARTER 
: Lindsay Tisch can speak for himself and very shortly he will. He will make a very good speech. Two things are wrong with the current tax rates and there was an opportunity to do something about them. We had the stupid legislation that increased the envy tax—the 39c in the dollar tax rate—in the year 2000. In fact as a result of the surpluses it has been proved that the Government never needed to do that. It created all that inconsistency in tax law and resulted in people having to rush off to their accountant and say: “Corporatise me because I don’t want to pay 39c.” Thousands of people have done that. Sure they have complicated their own tax affairs but they are not paying 39c. It is relatively easy to set oneself up. But the sad thing is that the Government never needed to do it. It gained the Government around $400 million and that has not been necessary— 
David Cunliffe 
: Robin Hood in reverse. 
Hon DAVID CARTER 
: Robin Hood in reverse? No no. I come from a different philosophy from David Cunliffe’s. I do not think that because people are successful they should be penalised with more taxes. That is a nonsense point of view but I acknowledge that some people in the Labour Party feel that people should not be allowed to be successful and that if they are successful we should drag them down by putting up tax rates.  
My final point is one that Dr Lockwood Smith also made. It is about the recent OECD report that pointed out that it is actually ordinary New Zealanders who because of the cusp they are finding themselves on—they are moving into the next tax bracket about $38000—are paying far more tax now than they were. Lockwood Smith gave some very credible figures from that OECD report— 
Hon John Tamihere 
: Oh yes! Very credible. 
Hon DAVID CARTER 
: —that is if members accept the OECD reports. Mr Tamihere might have a “BS” description or a “blankety-blank” description of it but I do not. 
Clayton Cosgrove 
: I could use one about this member’s speech. 
Hon DAVID CARTER 
: I guarantee that Clayton Cosgrove has not even read the report which clearly states that people are paying more tax than they need to.