Carter David: Income Tax Bill — Instruction to Committee In Committee Third Reading 
Carter David: Income Tax Bill — Instruction to Committee In Committee Third Reading 
[Volume:616;Page:12086] 
Hon DAVID CARTER (National) 
: 
 I accept the challenge made by the junior Minister in the chair the Hon David Cunliffe that National should front up with examples showing that if the New Zealand company tax rate were lower than Australia’s it would affect the behaviour of international companies looking to come to New Zealand and the behaviour of current New Zealand companies looking to go to Australia to take advantage of its lower company tax rate. I can give no better example than Air New Zealand and I would be very grateful if the Minister would take this up with the Hon Dr Michael Cullen on the 7th floor at the 6 o’clock tea break. Air New Zealand is a very good example of the way that companies adjust their business and where they operate. The Minister of Finance is now an 85 percent shareholder in Air New Zealand. Mr Cunliffe should be aware that Air New Zealand is currently involved in a tax dispute—it has been signalled on the front pages of all business papers in New Zealand—with the Hong Kong authorities. 
Lindsay Tisch 
: He doesn’t read them. 
Hon DAVID CARTER 
: Well the member should read these papers because the majority of Air New Zealand is now owned by the taxpayers of New Zealand. Following some very poor decision-making by Dr Cullen in not accepting interest from Singapore Airlines the New Zealand taxpayer is now saddled with Air New Zealand. Air New Zealand restructured its affairs and based a company to lease aircraft in Hong Kong for one reason only—namely a tax advantage. 
Dr Wayne Mapp 
: 15 percent. 
Hon DAVID CARTER 
: There is a 15 percent tax rate for the company leasing aircraft in Hong Kong and that is why Air New Zealand structured its business affairs that way. I tell Mr Cunliffe that is just one example of a company adjusting its affairs to make sure it gets the most advantageous tax rate it can. For Mr Cunliffe to argue that that will not happen if our tax rate is set at or below the current corporate tax rate in Australia is ignorance in its extreme. 
I also want to pick up on the special tax rate for Maori authorities. I heard Mr Duynhoven interject across the Chamber saying it is a fallacy. I want the member to open the bill at page 2026where it talks about the tax rate for policyholder income being 33c in every dollar for trustee income being 33c in every dollar for companies being 33c in every dollar and for trustees of group investment schemes or funds being 33c in every dollar. Yet when we look at Maori authorities it reads as follows for the benefit of Mr Duynhoven: “The basic rate of income tax for the taxable income of a Maori authority is 19.5 cents for every $1 of that taxable income.” Nothing could be clearer for the benefit of Mr Duynhoven or Mr Cunliffe or every other member of the Labour Party that this legislation cements in place a tax rate that is advantageous to Maori authorities. Nobody can argue against that. 
But the question I have of the Minister in the chair as I look through the 2000-odd pages of the tax bill is that I do not find a definition— 
Hon Harry Duynhoven 
: Quote the next sentence I said if you are not that ignorant. 
Hon DAVID CARTER 
: Mr Duynhoven can take a call if he wants. What I have said is absolute fact and if he had bothered to study the bill he would know that. I know that the bill is big but he should look at page 2026. My question to the Minister is where in this tax legislation will I find a definition of “Maori authority”. I have looked for it and cannot find it but I did not have the opportunity of working on the Finance and Expenditure Committee and I accept that it may be in the bill. But it would be advantageous to have that answer.