Mallard Trevor: Taxation (GST and Remedial Matters) Bill — First Reading 
Mallard Trevor: Taxation (GST and Remedial Matters) Bill — First Reading 
[Volume:665;Page:13324] 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I thank Catherine Delahunty. It is good to make sure that the time of the Opposition parties on the Taxation (GST and Remedial Matters) Bill is well used. Rather than her talking it is very kind of her to yield the balance of her time to me in order to ensure that we can look carefully at these particular matters. Is a Minister in the House? Oh I see Jonathan Coleman—and Mr Finlayson as well. I could not see him. That one was hiding. 
Jo Goodhew 
: Just sit down again. 
Hon TREVOR MALLARD 
: No no; I have plenty to say. There are some really important changes within Part 3 of this bill that amend the Tax Administration Act. One of the questions I have is whether these changes go far enough especially in respect of the late payment penalty in this particular area. 
This is a bill that we will of course support going to the Finance and Expenditure Committee. But I agree with Catherine Delahunty’s comments about the GST increase and I want to reinforce the point that a number of us will be debating it publicly. However there are some sensible changes in this legislation and a number of remedial amendments. 
The Government is hammering families by increasing GST. It put the power prices up; it put GST up on top of that. What does the Government say to the superannuitants and beneficiaries who are being hammered? It says there will be 5.9 percent inflation but it will not give them a similar increase under this legislation. I cannot see it in this bill and it should be here. Although this bill is quite distinct in that it is different from the Budget GST matters it is a very very good reminder of them. I thank the Government for making sure this bill got to its first reading stage and is about to head off to the select committee because people will be given another opportunity—after debating it under Budget urgency—at the select committee to debate and focus on GST and the regressive nature of that tax. 
It was interesting today in the House to hear Mr Boscawen in his first set of answers as a new Minister one who has become a Minister in relatively unusual circumstances— 
David Garrett 
: Not in your party! 
Hon TREVOR MALLARD 
: No; we knife people in the front in our party not in the back in the way that Rodney Hide did. We certainly do not go around stealing papers out of members’ offices when they have “Defence: Top Secret” on them. 
David Garrett 
: Go and say that on the steps. 
Hon TREVOR MALLARD 
: I think we are seeing a slight sign of tension amongst the ACT Party; it is having a pretty bad effect on the whip. I say to him that I do have some sympathy for him. I was the whip in the 1987-90 Government and it is fair to say that on the basis of keeping a Government party together and keeping it cohesive I did not do a very good job. I say to that member that I would have thought that with just five members he could keep them on track. If the member talks to Roger Douglas he will hear that even in the worst times the relationship— 
Mr DEPUTY SPEAKER 
: Order! 
Hon TREVOR MALLARD 
: I will get back to GST. That Government introduced GST in 1986. By 1987 there was a proposal for a flat tax and I am sure we would have had to have a Taxation (GST and Remedial Matters) Bill in order for it to be introduced. The point I am making to the member is that he will have to do quite a lot better as whip if he is to hold his party together. Now the member is doing Len Brown imitations. I am not certain that that is an appropriate thing for him to be doing within the House. I do not know whether it is parliamentary to mimic local body candidates in that way. 
I think we should now focus on this bill. The provisions for the prevention of phoenix schemes which undermine the integrity of the GST rules are very useful. There is no doubt that when GST was first introduced it was seen as pure and simple. There was a major drop in the income tax that people paid. When I became a member of Parliament in 1984 the top rate was 66c in the dollar and it was reduced to 33c in the dollar when the GST legislation came in. People saw that as a fair cop: there was a big drop in the marginal rate of taxation but GST came in. Around that time we did not have phoenix schemes or cash arrangements or things like that. But over a period of time what has happened—and I would be interested in Mr Bakshi’s contribution to this particular issue—is that particularly in some trades and in some ethnic communities a cash economy has been operating and GST payments have not been made. There has been a change of culture in New Zealand. Having this sort of legislation to try to tighten up some of those gaps and to reduce the opportunities for that to happen is important. 
I also think it is good that the bill is clarifying a situation in the GST rules with which some taxpayers have had difficulties. There is no doubt that there is a need for clarification. I think that any of us who are doing good constituency work know that sometimes the rules do not work towards resolving the problem. There are occasions especially with regard to the penalty regime where the Crown ends up in a worse position as a result of the implementation of the rules which are very very tight. 
There is stuff on KiwiSaver amongst the remedial matters in the bill. The Labour Party in later speeches on this bill will say the bill is an opportunity to do what the Prime Minister said is needed which is to bring in a savings culture. It is good that KiwiSaver is being brought up again within the scope of this bill. Seeing as it is within the scope of this bill the Labour Party— 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the honourable member but his time has expired.