Connell Brian: Taxation (Annual Rates Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill — In Committee 
Connell Brian: Taxation (Annual Rates Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill — In Committee 
[Volume:607;Page:4237] 
BRIAN CONNELL (NZ National—Rakaia) 
: 
 I want to focus on clauses 86 to 89 as well. Essentially this goes to the heart of this debate. I am talking about the tax rate and imputation credits. I want to take a moment to read from the commentary. It is important that people understand exactly what this issue is: “Currently income retained by Maori organisations is taxed at a rate of 25 percent”—there is something in that for a start—“refundable if the income is distributed within 4 years.” Up to that point there is not a problem. “If the income is retained for 4 years before distribution to members the distribution is subject to resident withholding tax at a rate of 33 percent.” This is where we run into a problem. No credit is given for the 25 percent tax paid by Maori organisations. 
That is clearly wrong. I do not think members on this side of the House have a problem with that but one does not fix one problem by creating another. The tax imputation issue should be dealt with. One does not have to go down the track of introducing a race-based tax just to fix that issue. 
The other issue I would like to draw to the attention of the Committee is that the way this legislation is drafted is anti-competitive. By that I mean that it gives a party a competitive advantage. If we really want to grow our economy and if we really understand how to grow our economy we will understand that we need to attract foreign capital we need to give those people a fair go and we need to give our business people a fair go. We will not do that if we put in place legislation that is anti-competitive. 
Let me remind members why I say that it is anti-competitive. The select committee was told that this would provide a $70 million windfall for the Maori authorities in the fishing industry alone. That is not a fair go. It will lead to a racket. Gordon Copeland has already started to establish that there will be rackets. He has gone out and found someone who feels that he or she would like to take advantage of this. But more than that we have authorities like PricewaterhouseCoopers that told the select committee that it would not be difficult for Maori businesses with the help of PricewaterhouseCoopers to access the very favourable 19.5 percent tax rate. I again ask the members of this House whether that is a fair go. What does it suggest to members? It suggests to me that we will see widespread abuse. What we are doing is creating structures with the incentive for abuse—and human nature being what it is will take advantage of that. 
I will reflect on United Future’s position for a moment. I find it very ironic that a party with the word “united” in its title can be supporting legislation that is so divisive. What they are saying to the people who supported them—[ 
Interruption 
] Someone is yelling out over there. I think it is the senior Government whip again. I did not think that genetically modified organisms had been released yet! United Future members are telling the people who supported them on the basis that United Future wants a united future for this great country of ours that they are supporting a race-based tax. They will put a minority group of people at an advantage over others. 
The irony of this of course is that the Minister is right to reduce taxation if he wants to grow the economy. The problem is that the Government should not do so for just one section of the community. It should do so for everybody. It is a basic construct if I could use that word that if we want to share wealth then we have to create it and by lowering tax that is exactly what we will do.