Franks Stephen: Taxation (Annual Rates Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill — In Committee 
Franks Stephen: Taxation (Annual Rates Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill — In Committee 
[Volume:607;Page:4225] 
STEPHEN FRANKS (ACT NZ) 
: 
 I appreciate the fact that the Minister in the chair is taking calls and responding to and explaining issues. I would like to have an explanation of the effect of the anti-avoidance provisions the eligibility criteria and the implementation of the committee’s recommendation that companies not benefit from this concessionary or privilege regime. I ask that because it seems to me that a result of the change recommended by the select committee—a sort of attempt to lessen the insult of the race discrimination in this so that companies go back out into a more normal regime—is that companies will be a less preferred form of business entity for Maori-owned businesses. The effect of this will be that Maori may for tax reasons be encouraged to not use normal limited liability companies and instead to trade through trusts. 
If that is the case it may be one of those horrible results of tax planning that means that the Maori authorities as defined that are not companies will be trading in a more risky position with the assets they are stewards of and could lose them because they have decided not to use the limited liability company subsidiary structure which is of course designed to allow risk to be isolated and confined to the particular enterprise. So I would be very pleased if he would take a call. 
I will now go back to the comments made by Gordon Copeland whom I first heard when this was debated several weeks ago espousing the theory that this was not racially discriminatory—that this was not racist—because anyone could qualify for the same treatment as long as that person made sure that he or she did not earn enough. I thought hard. I thought: “He is an enthusiastic member who is doing the bidding of his masters. He has definitely been given very short notice to come in here and speak and he hasn’t a clue what he is talking about or he wouldn’t speak such twaddle.” However I heard it again today. The member has had time to reflect and he still says that this is not race discrimination because the same tax rate—19.5 percent—can somehow apply if people do not earn enough. I really do ask for this Committee to allow him another call to try to get to the bottom of that. 
What we have here is a regime that every superannuation fund and every trust and authority that has a mixture of members who have a low income or a low marginal tax rate and others who may have a higher one would dearly love to get. What it really says is that company tax which is a withholding tax under an imputation regime will be withheld at the rate that is applicable to the lower taxed beneficiaries instead of the higher taxed beneficiaries. Well of course we would all love that. The fact that this is a concession only for Maori when so many other parts of the community would love to have it is of course racism. It is not as Mr Connell says the result of subjugating us to an unsuitable old treaty; it is in fact a result of not applying the treaty. Article 3 of the treaty states that all New Zealanders should be subject to the same rights and privileges as British subjects. Article 3 of the treaty would not allow this provision if it were properly applied. 
I commend Mr Connell and the Minister to Sir Apirana Ngata’s little treatise on the subject of road rates which were the way that so much of New Zealand was opened up and roads were built. They were special rates that rated the property that got the benefit of pushing road through. For decades Maori were not subject to road rates at the same rate as Pakeha. Sir Apirana said very clearly “This is a breach of the Treaty of Waitangi because it is treating us differently.” He went on to say: “It may be something of a quid pro quo for other breaches of the treaty but both are undesirable and as soon as possible we should get out of this position.” If Sir Apirana had been listened to we would have got out of it. We would also have got out of it if this Government had bothered to treat the Convention on the Elimination of All Forms of Racial Discrimination seriously. That convention states that every form of discrimination must have an end date. It states that positive discrimination is OK but that it must be defined for a specific period. This bill breaches that.