Twyford Phil: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Twyford Phil: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 24 March 2010. Volume:661;Page:9764. Text is incorporated into the Bound Volume.] 
11. 
PHIL TWYFORD (Labour) 
 to the  
Minister of Local Government 
: Does he stand by his statement that “given how these councils have been run I would be surprised if there wasn’t some ability to make savings”? 
Mr SPEAKER 
: Before I call the Minister—[ 
Interruption 
] The noise on my right on this occasion—from the Government benches—was so loud that I could not hear Phil Twyford so I invite the member to repeat his question. 
PHIL TWYFORD 
: Does he stand by his statement that “given how these councils have been run I would be surprised if there wasn’t some ability to make savings”? 
Hon RODNEY HIDE (Minister of Local Government) 
: 
 Yes indeed. The present Auckland councils’ combined operating budget is $2000 million and I am confident that the structure will ensure better value from rates and central government funding by reducing duplication and delays in previously intractable problems such as transport issues. Services such as administration office systems finance human resources and information technology will be integrated and streamlined. Each council now operates its own systems so there are real savings to be made. Unified decision-making better transport and infrastructure and more efficient delivery of services will all contribute to a great Auckland region where people will want to live and do business. 
Phil Twyford 
: Can he confirm that under his third super-city bill six of the seven council-controlled organisations planned for Auckland will be required to pay tax on council activities that are currently non-taxable? 
Hon RODNEY HIDE 
: We are still working through the tax details but I can say this. Inland Revenue Department officials have advised the Minister of Revenue and me that there will be no increased tax exposure for the Auckland Council. Indeed they advise that there will be less tax. For example— 
Phil Twyford 
: I raise a point of order Mr Speaker. I asked the Minister whether he can confirm that under his third super-city bill six of the seven council-controlled organisations would be liable for tax and the answer so far does not address the question. 
Mr SPEAKER 
: In fairness I think the Minister said in answer that some of these decisions have not yet been finalised but he then went on to advise the House of Inland Revenue Department advice that contains quite helpful information for the member I would have thought. Had the Minister been political I would have stopped him but it seemed that he was being helpful to the House. If the member is now seeking the call to ask a supplementary question I will let him do that. 
Hon RODNEY HIDE 
: But I want to finish answering. 
Mr SPEAKER 
: I think we have heard enough answer. 
Phil Twyford 
: Why did the Minister say that no decisions have been made on tax issues for the Auckland Council when his third bill clearly makes six of the seven council-controlled organisations tax-liable; and is this not just another example of his rushed and shoddy handling of the super-city process? 
Hon RODNEY HIDE 
: Au contraire. Indeed over $100 million of existing tax losses that are now stranded will be made available to the entire Auckland Council as a consequence of the work that I and the Minister of Revenue have done. I have been advised by officials that the tax savings for the entire Auckland region as a result of the restructuring is estimated to be about $10 million a year ongoing. If the  
New Zealand Herald 
 told the truth that would be its headline because there will be tax savings for the new Auckland Council as a consequence of the work that this Government is doing. 
Hon Jim Anderton 
: As the Minister seems to be relying on tax losses to make up for the extra tax involved in these council-owned companies is the Minister aware that the Christchurch City Council runs its council-owned organisations at a significant profit and that dividends of hundreds of millions of dollars are regularly made to offset rates charged in our city; if so is he seriously telling the House that he and the Government are planning to run the new council-controlled organisations at a loss in order to prevent tax from being paid to the Government? 
Hon RODNEY HIDE 
: No I am not saying that; I am saying that tragically there already is $100 million worth of losses within the structures of the Auckland councils that cannot be realised and is lost and the new structure adds up to savings of $10 million a year for ratepayers. That is real money that will be saved. Indeed the advice that we have had from the Inland Revenue Department officials is that there will be savings in terms of taxes of $10 million each and every year—I repeat for Mr Anderton—as a consequence of the restructuring. That is good news for Auckland. 
Phil Twyford 
: Is it not true that even if we believe the Minister’s promise to make the council-controlled organisations tax-neutral Aucklanders will still have to pay more under his plan in rates water rates and GST on rates and to top it off $34 million in consultancy fees and executive salaries for the transition to a super-city they do not even want? 
Hon RODNEY HIDE 
: No. Once again that is not true. 
Phil Twyford 
: How is it fair for Aucklanders to pay all those extra costs when they have been given no choice on the super-city when his council-controlled organisations will lock them out of decision making on three-quarters of the council’s operations and when his local boards will have no powers to make by-laws? 
Hon Member 
: Have a think. 
Hon RODNEY HIDE 
: Well I am thinking because I am trying to work out how to explain in a simple way for the member that the restructuring saves the tax liability of the Auckland Council to the extent of $10 million a year. I would have thought that was extraordinarily fair. 
Phil Twyford 
: I raise a point of order Mr Speaker. My question asked him about the fairness of Aucklanders paying the costs of the super-city while having no input into and no decision making on the outline and the shape of the super-city. He did not answer that. 
Mr SPEAKER 
: I listened very carefully to the member’s question because I feared that a point of order might be raised. The member made a series of statements in his supplementary question—a series of statements. How the Minister responds to a series of statements contained in a supplementary question is really up to the Minister. If the member wants detailed answers he has to ask precise questions. Some of his colleagues could give him some lessons on that.