Wong Pansy: Goods and Services Tax (Exclusion of Rates) Amendment Bill — First Reading 
Wong Pansy: Goods and Services Tax (Exclusion of Rates) Amendment Bill — First Reading 
[Volume:619;Page:14633] 
PANSY WONG (National) 
: 
 First of all I would like to pick up two points that were raised by Gordon Copeland. Firstly he told us that when GST was introduced Dr Michael Cullen actually voted against imposing GST on rates and then changed his mind. We also know that Gordon Copeland’s party leader the Hon Peter Dunne who did support the provision to have GST on rates is now against it. So that leaves the public and me with the clear understanding that our National Party Leader Dr Don Brash is the only clear thinker whose position has not changed since GST was first introduced. 
The second point that Gordon Copeland raised concerned the Finance and Expenditure Committee’s visit to Australia. I do not think that that member should be economical with the facts because an official and also the Ministers over there told the delegation openly how much they envy New Zealand’s comprehensive and simple GST system. I hope Gordon Copeland is not trying to get us to copy the Australians who have a lot of compliance issues relating to their GST system. 
Dr Nick Smith a very effective and hard-working member of Parliament will illustrate and expand on the confusion of the argument raised by Gordon Copeland with regard to the public’s dissatisfaction with the level of rates. That should not be confused with the issue of whether removing GST is the answer to that. I will focus on the definition of payments for what local government provides and whether those are taxes or payment for services. 
If the existence of local government bodies did not relate to providing services then I am sure those bodies would not be in existence now. There will always be debates as to the standard of service the public receives—whether the service is cost-effective and whether local councils carry out effective consultation with ratepayers. But none the less councils must provide services. Some of them might do it via private contractors and others might do it in-house. Ratepayers of course can show their dissatisfaction with the job councillors are doing every 3 years through the ballot box. 
Every now and then the public will also voice dissatisfaction with the existence in effect of some local councils. In 1989 New Zealand went through a massive scale of local government reorganisation where a lot of smaller councils were merged. That was partly to ensure that local government was more cost-effective and that it was not costing taxpayers unnecessarily in terms of the level of rates they had to pay. 
I will use an example to demonstrate that. If the Wellington City Council decided tomorrow that it would not provide any rubbish collection service then each household would either have to deliver its rubbish to the dump itself or contract somebody to do it—and GST would be levied on that service. So rates are a mechanism for local councils to recover the services they provide but whether they do that cost-effectively is quite a different debate. That is the argument that rates are simply collected so that councils can generate a surplus. I am quite sure that every 3 years ratepayers will show that they do not tolerate any local council that simply uses rates as a mechanism to raise itself a surplus instead of to provide its services.