Adams Paul: Goods and Services Tax (Exclusion of Rates) Amendment Bill — First Reading 
Adams Paul: Goods and Services Tax (Exclusion of Rates) Amendment Bill — First Reading 
[Volume:619;Page:14641] 
PAUL ADAMS (United Future) 
: 
 It is my pleasure to rise on behalf of United Future to support this bill. First of all I would like to pick up on a number of issues. Firstly our leader Mr Dunne did support GST on rates in the first instance and that was for the sole reason that the Government of the day said that the GST collected would be returned to the local authorities—and it was in year 1. In year 2 the Government said it could no longer afford to do that. Therefore as a good leader he is entitled to change his mind. 
Anybody who seriously understands what the zero rating of rates for GST purposes really means would vote for this bill. Unfortunately I discovered during questions to the Minister of Local Government the Hon Chris Carter earlier this year that even the Minister did not understand what it really means. He kindly offered to have me briefed by the Inland Revenue Department in his office where I discovered that I understood what the zero rating meant and he did not. 
I am absolutely amazed that the ACT party is not supporting this bill. I was at a public meeting earlier this year that was attended by the present leader of ACT Rodney Hide and also by Murray McCully. Rodney Hide stood up in front of potential voters and declared that he would move an amendment in the Budget debate to ensure that GST was removed from rates. He challenged me as a United Future MP knowing that we have a confidence and supply agreement with the Government to support it. I say to the ACT party members that their saying something to the public because they are politicking then coming to the House and doing exactly the opposite is the exact type of politics that this country has had enough of. If Mr Hide is listening to his radio now I tell him that I estimate he has about 15 minutes to come and vote for this bill and show some integrity; otherwise I will really enjoy debating every issue with the ACT party during the forthcoming election because it will have shown that it has absolutely no integrity in its processes as far as I am concerned. 
GST on rates is a tax on a tax because rates are funds collected for a local authority. Local authorities also borrow money for their works and they do not pay GST on that. What do they use rates for? They use them for paying salaries and for paying wages—things that are not subject to GST. Many members in this House have clearly not understood that the councils may need to double invoice. Local authorities need to invoice the ratepayer for the proportion of their rates that goes directly on rates. If they are supplying goods and services such as parking and rubbish collection they are well entitled to charge for them and to charge GST on them because GST is a tax paid by the end-user. So if the ratepayers are paying GST are they the end-users? If that is the case why do they pay it to the councils? If the councils are the end-users of a service I ask members to tell me what that service is. GST on rates is nothing other than a tax on a tax. 
This issue my friends will not go away. Most New Zealanders understand that when they are paying GST on rates they are paying a tax on a tax. Most New Zealanders understand that when businesses claim back the GST on their rates those businesses are not paying GST on rates. Those in Grey Power—the pensioners we have heard about; those on fixed incomes—understand that they are paying a tax on a tax. United Future has campaigned hard on this issue because we believe that the people out there—the citizens of New Zealand—want a fair deal. They understand that United Future has heard their cry and we are endeavouring to do our very best to remove GST on rates. Even the Government does not view rates as a user-pays activity; it views them as a tax on the ratepayers to fund local authorities. Therefore rates should be exempt from GST. Local authorities provide facilities for all the people who live in their area and for all the people who use the facilities in that area—whether tourists or persons passing through from another area. It is not just the ratepayers who are the end-users of the facilities provided by the councils. 
I support this bill with everything I have got and members should be assured that all parties will have to deal with this issue at the next election. I will watch which parties vote against this bill and so will the ratepayers of New Zealand.