Wong Pansy: Income Tax Bill — Instruction to Committee In Committee Third Reading 
Wong Pansy: Income Tax Bill — Instruction to Committee In Committee Third Reading 
[Volume:616;Page:12089] 
PANSY WONG (National) 
: 
 I am glad to see the Minister of Finance in the chair because I am sure that he will be very happy to enlighten us on a few questions. We are here to debate the 2000-odd pages of the rewritten Income Tax Bill. Not only is that the case but Supplementary Order Paper 195 has also been tabled. I would like the Minister of Finance to take a call to address some concerns that I did not originally have until during one question time the Minister said that the Inland Revenue Department was conducting a tax investigation into some New Zealand trading banks. We were assured that this bill which the Finance and Expenditure Committee members put a lot of work into deliberating on would not change taxation policy but obviously the implication of what the Minister of Finance said during question time a few weeks back is that some of the income tax provisions we are now currently debating may in effect not be watertight. If that is the case should the House hold back from passing the 2000-odd pages of this bill? 
Why waste a golden opportunity to make some changes to the legislation? After the Minister raised the issue of a tax investigation into the trading banks I think it cast doubt in the public’s mind as to how watertight our income tax legislation is and how law-abiding our trading banks are. I think that to be fair to both the public and the trading banks—and apparently our Inland Revenue Department has been carrying out the investigation for a year—the Minister should take a call to persuade the National Party as to why it should continue to support this bill. Dr Cullen promises that the bill will not change taxation policy but at the same time it seems to me that the Minister and the department have some doubts about the activities of the trading banks in terms of whether they have been paying their proper tax bill. I think that is quite a serious issue and that the Minister should take a call to tell us why the legislation is being rewritten and to reassure us that the bill is not intended to change taxation policy. Some doubts are being cast on whether the provisions of the legislation are adequate to ensure that New Zealand taxpayers are getting good value and on whether our trading banks are observing the tax legislation. 
The Minister may also like to take a call to address this legislation in the light of the cancellation of Project Aqua by Meridian Energy. We heard representatives of the petroleum industry say on the news that they are very happy to come in and help in this situation by taking up more exploration activity and will look to the Government for some encouragement to do so through a fiscal or tax provision. I wonder whether the Minister will take a call to say whether in light of the looming energy crisis that faces New Zealand the Government is to miss that golden opportunity to address some of those issues. 
I took this early call firstly to ask the Minister to address in particular my first question relating to the investigation into trading banks in New Zealand—when that investigation may be concluded and whether this legislation will be subject to very early amendment. Should we rush to pass 2000 pages of tax legislation or wait for further amendments to come? But I have another question that the Minister may want to address. One of the provisions in this legislation relates to film production. I guess it relates to the very famous producer Mr Peter Jackson and to  
The Lord of the Rings 
. There has been some debate in public between Mr Jackson and the Minister of Finance with regard to how generous a tax concession Mr Jackson’s company received. I have read the provision that relates to the film industry and to film production and I want to know what is deductible within it. I want the Minister to address that and say whether the current provision within this tax— 
Hon David Carter 
: You’ll get another call. 
PANSY WONG 
: Exactly. I will continue to take calls and ask these serious questions until the Minister stands up to address them. Mr Jackson reckons that the tax concession given to his film production company was not very generous. I want to know whether the Minister can assure us that the provisions relating to film production in this bill apply to everybody and can tell us how generous they are. 
The Labour Government always loves to claim credit— 
Hon David Carter 
: King Kong. 
PANSY WONG 
: Yes he is King Kong. I want to know whether this legislation will be an encouragement for Mr Peter Jackson who has started to work towards his next Oscar award with regard to  
King Kong 
. The Labour Government has claimed much credit for the success of New Zealand films so has the provision been generous or was the tax concession —as Mr Jackson has said it was as far as he was concerned—really chicken feed? 
I remind the Minister that I have asked two questions. I have a third one so it is really worthwhile for this Minister to take a call. My third question relates to Maori authorities. We know that last year the National Party voted against this yet— 
Dr Wayne Mapp 
: We voted against it. 
PANSY WONG 
:—none the less the Government with the help of United Future passed legislation to allow Maori authorities to claim a tax rate of 19.5 percent. The 19.5 percent was meant to apply only to Maori authorities because there were restrictions on what they could do with their assets and on the way they could distribute profit. But I have been told some people believe that wholly owned subsidiaries of Maori authorities which were not supposed to be entitled to claim the 19.5 percent tax rate were restructured to take advantage of it. I say to the Minister that that is a very serious issue because wholly owned commercial subsidiaries of Maori authorities are competing on a commercial basis with other private enterprise and if they are claiming that tax advantage then it is not a level playing field. I think the public deserves to hear from the Minister that the 19.5 percent tax rate is applied only to Maori authorities and he should categorically assure the public that wholly owned commercial subsidiaries of Maori authorities cannot take advantage of that rate. If they do then it is not fair to other private businesses that have to pay income tax at the 33 percent rate. 
My fourth question—this is why it would be worthwhile for the Minister to answer my questions—concerns the Minister’s championing of one economy between New Zealand and Australia. Maybe he would like to take a call to tell us why it is not desirable for New Zealand’s company tax rate to be the same as that of Australia. 
I am pleased to see the Minister of Finance diligently scribbling things on his writing pad. I am sure that the public will be delighted to know that he will indeed take a call to address the four questions that I have raised. After all we are debating a tax bill that is over 2000-odd pages long and I would like to think the Minister appreciates hard-working members asking appropriate questions in order to get his reassurance that this bill will not change any taxation policy.