Mallard Trevor: Taxation (GST and Remedial Matters) Bill — In Committee Speaker Recalled In Committee Procedure Third Reading 
Mallard Trevor: Taxation (GST and Remedial Matters) Bill — In Committee Speaker Recalled In Committee Procedure Third Reading 
[Volume:669;Page:16143] 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I want to speak in particular on clause 88 which includes some of the amendments to the Income Tax Act 2004 although having looked at that Act I find that those sections of the 2004 Act have already been repealed and replaced in the 2007 legislation. It might be one of these numbering questions because in clause 88 the Minister is asked to repeal section CE 1(1)(c) but there is no 1(1)(c) in the legislation. There is CE (1)(c); there is no 1(1)(c) whatsoever. To be fair I checked back to the 2004 legislation and there was no—[ 
Interruption 
] What are we repealing here if that particular section is not there? That is the question I have.  
I think it is fair to say that the fact that it is not there is recognised with its replacement subsection (1B). So if there is no CE 1(1)(c) after CE 1(1) there is a recognition that there is a numbering problem. Last time I identified one of these issues the Minister told us that we had restarted the English language at B rather than at A and that that was the system being used. But that does not appear to be the case here. Again it might be one of those technical errors that can be tidied up in the Clerk’s Office but I think it would be useful in order to have it work properly.  
The primary purpose of my taking a call and tabling an amendment is to be of assistance to the Government. My amendment relates to subclause (3) of clause 88 with the suggestion that subclauses (1) and (2) instead of applying to the 2005-06 year and later income years would apply to the 2000-01 year. The reason for this is relatively simple and I think it will be known in the future as the “Bill English (Pay Your Tax) clause”. If we look carefully at new subsection (1B) in clause 88 we can see that this focuses on the proper taxation of the market value of the benefits of accommodation. It makes it clear that tax should be paid on the benefits of accommodation which are part of the perks of the job.  
I think it has been made very very clear over a period of time that Mr English has had substantial benefits. I am not saying they have all been through accommodation—I think there have been some other benefits as well—but they have been in the region of $500000 as a result of suggesting that he lived in Dipton when in fact he lived in Wellington. Why should he pay back taxes on those benefits only back to 2005-06 when the situation has been in place since at least 2000-01? I think the general feeling is that there is a lot of evidence that it has been in place for that length of time.  
I turn to new subsection (1B) in clause 88 which states: “The market value of the following benefits provided to a person is income of the person if the benefit is provided in relation to an office or position held by them: (a) the provision of accommodation:”. It might be convoluted it might have gone through a trust or two it might have had one name on the trust earlier and other names on the trust later it might have been the most expensive State house in the country—on recent leasehold arrangements it is certainly the most expensive State house in the country—but it is clear that the provision of accommodation is taxable.  
I am not sure whether all of my colleagues are here. It might be that fringe benefit tax has been paid on this on our behalf but I doubt it. Some of my colleagues who are not Wellington-based are now looking at me slightly askance. Subsection (1B)(b) refers to the market value of “the provision of an accommodation allowance instead of accommodation.” and states that it is in fact taxable—and taxable back to 2005-06. I know that the Minister is a Wellington Minister and that like me he is not interested in this. If we take into account the interest that some people might have in this question and if only Wellington members could vote on this particular issue we could get an interesting result. I think we started the year talking about accommodation and in fact I think we finished last year talking about accommodation.  
The fact that we are finishing up the year dealing with subsection (1B) which relates to the benefits of accommodation and what is part of someone’s taxable income shows just how much Gerry Brownlee who we know is right across the details of this taxation legislation—Mr Brownlee is a details man—still dislikes Bill English for taking his job.  
If we look at section CE (1)(c) referred to in clause 88(1) we see that it did not go to the question of accommodation; it went to the question of the market value of the board that someone receives. My understanding is that there is a difference between a boarding arrangement which normally involves living with someone else in a boarding house and the supply of accommodation which might more logically be the entire house. So this is quite a big change. I say to the Minister in charge of the bill the Hon Peter Dunne that this is an old bit of the bill. It is the bit that has been to the select committee. I ask him whether Bill English made any personal submissions on this— 
Hon Darren Hughes 
: He’s bound to have. 
Hon TREVOR MALLARD 
: No—to the select committee. I am not asking him to reveal whether Mr English pleaded at the Cabinet committee not to have to pay the extra tax because I think it would be inappropriate for Mr Dunne to say that. However I ask my colleagues whether there was ever any request from Mr English not to pay the taxation on the massive accommodation benefits that he received over a period of time. It was roughly half a million dollars of accommodation over the 10 years. 
Hon Darren Hughes 
: How do you work that out? 
Hon TREVOR MALLARD 
: I do not want to go into a lot of detail. I am happy to talk about his accommodation but clearly there is another set of benefits which the member received as a result of pretending to live in Dipton that go beyond that. I think to go further would be entering an area that I would be slightly uncomfortable to head down. But I think many members will be aware of what makes up the balance of the half million dollars over and above the accommodation allowances. 
Hon Darren Hughes 
: That would be taxable. 
Hon TREVOR MALLARD 
: It is taxable. It is clear if one looks at subsection (1B) in clause 88(2) that it is taxable. There is no doubt that that is part of someone’s income.  
I am certain the Commissioner of Inland Revenue will be having a look at this question. I think it is probably especially the case where the benefit is being paid when it should not be being paid—when someone is not shifting from somewhere that they are normally resident. One of the questions I have is whether the Commissioner of Inland Revenue uses the same definition as the Speaker as to where someone is normally resident. I think the Speaker has been exceptionally liberal in that area and I think that generally the Commissioner of Inland Revenue has been more factual.