Copeland Gordon: Third Readings 
Copeland Gordon: Third Readings 
[Volume:607;Page:4314] 
GORDON COPELAND (United Future) 
: 
 United Future is pleased to lend its support to the third reading of the bills. The present taxation regime for Maori authorities is fundamentally unjust. Some distributions from those authorities are subject to double taxation as both the organisations’ income and the distribution to the members are taxed. That same situation used to apply in an even more fundamental way to taxation on New Zealand companies. In those days they were also subject to double taxation. But all that was rectified by the introduction of the imputation system which now ensures that a credit is given back to shareholders so that the income stream is taxed once and once only. 
The new Maori authorities taxation regime works in exactly the same way. The only difference is that whereas the average New Zealand shareholder in a company has a marginal tax rate of 33c in the dollar 90 percent of the beneficiaries of Maori authorities have a personal tax rate of just 19.5c in the dollar. That is why that particular rate has been chosen. It is quite clear from the evidence presented to the select committee that if we do reach the happy day when the average Maori authority beneficiary has a tax rate of 33c in the dollar or even better 39c in the dollar then the Maori authority rate will go up to those levels. Again United Future categorically rejects any suggestion that these principles are based on race. In fact they are the same for all New Zealanders. It must be remembered that if the personal tax rate for beneficiaries under Maori authorities is 33c or 39c in the dollar—and that is true for 10 percent of them—then they will pay tax at those rates. The competitive argument that has been rehearsed again by the Hon Lockwood Smith was well dealt with in the select committee and put to bed. In my opinion there is no basis whatever to that argument. 
I would like the House to take note of the general tone of the comments made by John Tamihere about the need for all of us to focus on how on earth we crack the problem and lift the Maori citizens of this country from the bottom of the heap up through the tax bracket until they indeed come to that more normal situation—that is with their tax rates in line with the rest of the population. That is a tremendous problem for this country. I hope we will not continue to be mealy-mouthed about simply correcting an injustice that has the outcome of putting just a few more dollars into the pockets of the members and beneficiaries of Maori authorities. Surely we want them to get fair and just treatment. They are the group that need it most. 
But I am not voting for the legislation on that basis; I am voting for it on the basis that it is a fair and consistent tax treatment and in reverse of the angle taken by National—that is unless this is done for everyone else it should not be done for Maori authorities—I take the other view. I believe that this is the first step and I will be pushing the Government to say: “Yes we’ve now got this in place; let’s extend it to superannuation funds. Let’s extend it to family trusts and other similar organisations.” I am with National in terms of that objective but I choose a totally different route to get there and I am not prepared simply to catch votes by falsely claiming that this has anything whatever to do with race. It does not. 
For the rest United Future welcomes the provisions of this legislation as they relate to charities to tax pooling PAYE intermediaries depreciation rules and amalgamation GST treatment of telecommunication services and superyacht crew tax exemptions. All these provisions will reduce compliance costs for taxpayers and introduce greater fairness and equity into the tax system. Accordingly we are in the rare situation with this legislation of being able to say with confidence that all the affected taxpayers saving only those dishonest people who wish to evade their legitimate tax obligations will be well pleased with its outcomes. I guess we cannot often say that about a tax bill but we can on this particular occasion. 
I just want to add one further point. Lockwood Smith raises legitimate concerns about the present mix of tax rates family credits and so forth for low-income earners. He raises a legitimate point in saying that they have in some circumstances a marginal tax rate of 100 percent. I am therefore pleased to hear the Government say that it is committed to working hard on that very problem next year. Concerning the tax rates themselves I also agree with the National Party that we should at the very least even though the Government is committed to progressive tax cuts be adjusting those for the effect on the consumer price index. I am pleased to have gone along with it this year because we actually came into Parliament as a party for the first time after those rates had already been set and were applying from 1 April 2002 but I give notice as I have already done to the Minister of Finance that we will be on his case about seeing that adjusted and I would ideally like to see that done in this year’s Budget. So with those explanations and reservations I have great pleasure in signifying our support for the third readings of this legislation.