Fairbrother Russell: Building Amendment Bill — In Committee 
Fairbrother Russell: Building Amendment Bill — In Committee 
[Volume:645;Page:14680] 
RUSSELL FAIRBROTHER (Labour) 
: 
 Having listened to the speeches on the Building Amendment Bill since we started tonight I was delighted when the Minister Shane Jones rose to his feet and exhorted those of us in the Chamber to pause from our florid rhetoric and take a moment to dwell albeit briefly on Part 2 of this major construction the bill. The Minister demonstrated such a sound grasp of the issues involved in Part 2 and I noted that as he dealt with Part 2 he left clause 92 for me to deal with because of the finely tuned legal terms and astute wording of that clause. 
As I move to clause 92 I note that all of the speakers on the other side of the Chamber have studiously avoided it. I wonder why? Perhaps it could be that the clause seems to be circular. I think clause 92 might mean something like this: it “provides for the validation at all times of the current practice of calculating the relevant levy as defined in clause 92 on building work as if the definition of estimated value were as amended by clause 6.” 
Chris Tremain 
: Of course! 
RUSSELL FAIRBROTHER 
: You see Mr Tremain understands that because that is where one makes one’s money. The levy had previously been required to be calculated on the basis of an estimated aggregate of values other than—as is the current practice and the intended definition of “estimated values” as stated in clause 6—the estimated aggregate of the consideration. Where value is determined in accordance with section 10 of the Goods and Services Tax Act 1985 “consideration” has the meaning given to that term in section 21 of that Act. Do members understand that? This is quite an important change. We are moving from “values” to “consideration”. 
Just so we can follow this train of thought I will take the Committee to clause 6 of the bill—which of course is in Part 1 but we have to go there because Part 2 requires us to in subclause 92(2) which defines “values” as in clause 6. Clause 6 states: “the definition of estimated value in section 7 is amended by omitting “values” and substituting “consideration”.” What does that really mean? To put it briefly it means one pays GST. It means that when one calculates the amount of the levy one calculates it including GST. This is a novel thought to the people on the other side of the Chamber. They who claim to have invented GST and to have administered our financial system and our collection of monies had a Governor of the Reserve Bank temporarily parading around the bedrooms of New Zealand and the leadership of the party. They who do not understand the GST will not understand clause 92. Quite simply the clause directs the members opposite to appreciate that when one calculates the costs they are GST inclusive. 
This is not a new idea. This is not a new idea at all. But there has been some uncertainty in this House and there have been those who have tried to avoid their moral obligation to the public good and to lessen the taxation burden by trying to interpret the word “values” as excluding GST. Since 1991 it has been intended to be GST inclusive. The purpose of clause 92 in Part 2 is to make it crystal clear to all of us even those who have trouble reading the bill and legislation that the costs include GST. That is why there is the important movement away from “values” to “consideration”. Why is that? Value of course can be argued successfully as being what someone actually paid for something. So if one swapped something one could say that was the value of it. But of course consideration is the actual fee that was paid and if one pays an actual fee an actual quantum in that nature GST is inherently part of it. 
The change from values to consideration may at first blush confuse many people. I trust this speech tonight has eased that confusion somewhat because the whole point of clause 92 is to make it crystal clear. I do not want to bore members with repetition. I am sure that my earlier explanation of this as provided in the commentary to the bill is crystal clear—that value no longer means value but means consideration. 
Hon Shane Jones 
: Totally lucid. 
RUSSELL FAIRBROTHER 
: I thank the Minister very much. So the purpose of clause 92 I think we can briefly say is to include GST.