Dunne Peter: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — In Committee 
Dunne Peter: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — In Committee 
[Volume:666;Page:13444] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I begin by congratulating the member who has just resumed his seat David Cunliffe on an extraordinary effort to make something out of very little. It was a commendable effort and I am sure it is a good lead-in to the line he will follow throughout the remainder of this debate. 
Let me remind the Committee what we are debating this morning. We are debating the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill 2009. This bill came into the House last November to make as the member conceded a number of worthy changes that most people support. This is not a bill to debate measures that were put into the public arena only yesterday that will be the subject of public debate over the next few months and that will lead to some decisions being made which will come to the House next year. 
The member also made some comments about the changes that Supplementary Order Paper 157—which is 13 pages not 28—introduces to the GST regime. I found that rather extraordinary. I appreciate the member was not in the House in 1989—I was—when the Labour Government increased the rate of GST from 10 percent to 12.5 percent. The contrast between what has happened now and what happened at that point is worth bringing to the attention of the Committee. In May 1989 the Government announced an increase in the rate of GST from 10 percent to 12.5 percent to take effect from 1 July that year—so there was 8 weeks’ lead time. No compensation was paid to low-income groups or to anyone on a benefit or any form of fixed payment who might be adversely affected. Contrast that with this year’s changes which were announced in May and take effect on 1 October. There will be full compensation for all those on fixed incomes and benefits superannuation etc. including National Provident Fund and Government Superannuation Fund recipients. This is a vast change from the 1989 situation. 
In 1989 business simply had to adjust to all of the issues around the transformation within the space of 8 weeks. This year we established the GST Advisory Panel for the specific purpose of allowing those upon whom the rate change would have some technical impact to have their issues considered and for those issues if they required a legislative solution to then be addressed in this bill when it came to the House at this time. So the Supplementary Order Paper and I gather from the member’s comments that he supports the provisions in the Supplementary Order Paper deals with a number of taxpayer-friendly situations that will give specific relief on a number of the issues that have arisen—for instance lay-bys insurance contracts and so on and so forth—all of which fall in that particular transition period. So I find the member’s complaint that this is an “oops we should have done it better last time round” measure to be somewhat ironic given the history. The last time his party was in a position to change the GST rate it simply stated: “The rate takes effect from this date. You fall where you may in terms of your compliance with it.” What we have done through the GST Advisory Panel and the amendments before the Committee is give some clarity and some certainty to the business community and to the consumers of New Zealand who will be affected by that change. 
Finally I was grateful for the member’s confirmation in the round-about way in which he spoke of something that I have long suspected was the Labour Party’s long-term agenda with regard to savings and taxation. When the member spoke about the work of the Tax Working Group and the fact that the Government chose not to implement some of its recommendations it was clear that he was signalling that a land tax a capital gains tax and some of the other measures that this Government has so specifically ruled out are very much on his party’s agenda. As the debate begins it is good to have on the record that the Labour Party is saying it would introduce a capital gains tax and a land tax; that is great to know as part of the ongoing debate. 
This bill is substantially user-friendly. It makes a lot of changes in terms of savings portability with Australia in terms of the implementation of the GST changes and in terms of other matters that have been the subject of some public angst for a while and are now being addressed in a way that is satisfactory and favourable to the interests of most taxpayers. Therefore I commend the bill to the Committee.