Lees-Galloway Iain: Hamilton City Council (Parana Park) Land Vesting Bill — In Committee 
Lees-Galloway Iain: Hamilton City Council (Parana Park) Land Vesting Bill — In Committee 
[Volume:671;Page:17553] 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 For a moment there I thought the member in charge of the Hamilton City Council (Parana Park) Land Vesting Bill might be rising to his feet but thank you Chairman Roy for giving me the call on clause 8 of the bill.  
Clause 8 is a very important clause. It was obviously an important factor that the council decided to include the clause for the sake of avoidance of doubt and for the sake of certainty I suppose. In fact all three subclauses of clause 8 refer to taxes and to duties that have come under some scrutiny and attention from the Government. There have been changes—or at least there have been announcements of intended changes—to each one of the subclauses so it was probably quite a good idea from the Hamilton City Council to include clause 8 in the bill in order to give it some certainty. 
I will start with clause 8(a). Clause 8 states: “To avoid doubt the vesting of the land by this Act is not—(a) a dutiable gift for the purposes of the Estate and Gift Duties Act 1968:”. People will know that as gift duty—the tax one pays if one gifts a large asset or a large amount of money which is I think in excess of $27000 in one financial year. Gift duty has to be paid on that asset. The Chair is shaking his head. I do not know; maybe I am not quite accurate but I know I am in the zone. I am getting to the general guts of what gift duty is about. Gift duty is all about ensuring that people who have considerable assets cannot hide or dispose of those assets in a way that allows them to avoid paying their fair share of tax. 
The Government has announced its intention to abolish gift duty. That will allow the Government’s mates who have massive assets—whether they be in land shares or any other form an asset can take even cash—to perhaps be able to gift those assets to a family member or to someone close to them which would assist them to avoid paying their fair share of tax. That seems just outrageous when the Government has increased taxes on middle and low income hard-working wage earners and salary earners who have to pay more taxes through GST. GST is also referred to in clause 8 and I will come back to that later on. People are paying more taxes and the Government has announced that it will allow people of significant wealth—people who can afford to pay their fair share and who can contribute to the community society and country to make sure we can get ourselves out of debt grow the economy and provide the services the Government ought to be providing to New Zealanders—to be able to hide their assets and avoid paying their fair share of tax. I do not think that is on. 
But it seems appropriate given that the bill is about vesting Parana Park—it is not a gift—that the Hamilton City Council sought to have that clarified in the bill. If the bill had taken a little bit longer to pass through the House—I know it has already taken a little longer than the member in charge of the bill thought it might—we might have found that the clause was obsolete and unnecessary because the Government is going ahead and abolishing gift duty for everybody. That will create that unfairness whereby people who can afford to pay tax will be able to avoid doing so while the Government increases tax on those people who can least afford it. 
That takes me to clause 8(b) which is about GST. GST will not be applied to the vesting of that land. That was a very good move a wise move on behalf of the Hamilton City Council. It would have paid a whole lot more GST because the Government increased GST. 
Although the Government is making more loopholes for wealthy people to hide their assets and reduce the tax they have to pay it has increased tax on ordinary hard-working Kiwi families who are spending most of what they earn at the supermarket. Those families who are simply getting by from one week to the next or from one fortnight to the next have to pay 15 percent GST but the Hamilton City Council will not have to pay 15 percent GST under clause 8(b). Hard-working ordinary Kiwi families who do not have massive assets who do not have large tracts of land from which to generate income who are living from one week to the next and who are trying just to put food on the table for their families and their children have to pay the full 15 percent GST that is excluded in clause 8(b). 
Clause 8(c) refers to the “sale disposition distribution or transfer of property or liability for the purposes of the Income Tax Act 2007.” That was another area where the Hamilton City Council obviously decided in advance that it would have to make sure it had some certainty and clarity on income tax because the Government had made a number of announcements on income tax. The National Government was all at sea at first. First it cut taxes as soon as it came into Government then it realised that was not affordable so it repealed them. Then it introduced some more tax cuts. It turns out that those were not affordable either. Now the Government’s coffers are in such a bad way that it has to borrow millions and millions of dollars every week to pay for income tax cuts that it provided to people who were on the very highest incomes. 
If there was income being derived from this land the Hamilton City Council would have received quite a significant tax cut because the income derived from this land would be quite significant. But if the Hamilton City Council were just a salary or wage earner who was earning at the lower end it would have received very very little. In fact it would have been very important even doubly important that clause 8(b) was included. It would have wanted to avoid paying GST because the increase in GST for salary and wage earners was much larger than what they received in the pitiful tax cuts they got if they were at the lower end of the income spectrum. 
I think clause 8 is a massively important clause in this bill because this bill is all about giving certainty to the nature of this land and to its status as a public asset. We have already discussed how the Hamilton City Council is doing such a wonderful job of ensuring that this land remains a public asset how it would be unreasonable to expect the Hamilton City Council to pay gift duty GST or income tax on what is simply a change or a re-establishment of the description of this land rather than a sale or change in title of this land. Those provisions are sensible and important for the Hamilton City Council. 
But would ordinary New Zealanders not like to have those provisions apply to them? Would ordinary New Zealanders not like to have to pay National’s 15 percent GST? Would ordinary New Zealanders not like to get the kinds of tax cuts that people at the top have been able to get which are reflected in the income tax cut that the Hamilton City Council gets from this clause? 
Clause 8 is very sensible. It is important that there is certainty for the Hamilton City Council. It is important that this land is retained as a public asset. It is great to see that the Hamilton City Council is not hocking it off to pay its bills. It obviously has much better fiscal management than this Government has. It is able to retain its assets; it does not have to sell them off to foreigners in the way that this Government is doing. 
From that point of view Labour is very very comfortable with clause 8 and we thoroughly support it. We think having those clarifications in this bill is very important for the Hamilton City Council. We hope this bill gives the Hamilton City Council the certainty it requires to retain Parana Park in its current state.