Third Readings 
Third Readings 
[Volume:607;Page:4339] 
Third Readings 
Debate resumed from 20 March on the third readings of the Taxation (Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill the Taxation (Annual Rates of Income Tax 2002-03) Bill the Student Loan Scheme Amendment Bill and the Child Support Amendment Bill. 
Hon DAVID CARTER (NZ National) 
: 
 In closing I say that it will be a very sad day when this Parliament passes into our tax system a special tax rate based on race. I repeat the comments made by United Future’s spokesperson Gordon Copeland who said in the Committee stage on this legislation that Maori deserved a preferential tax treatment because “They were here first.” In the next election campaign I guarantee that I will make sure that my constituents know that that is the basis of United Future’s decision on this tax rate for Maori. 
Hon JOHN TAMIHERE (Minister of Youth Affairs) 
: 
 I commend this legislation to the House. I am grateful to acknowledge that two-thirds of it is in favour of the taxpayer. It does a number of matters that my learned colleague Dr Cullen expressed to the House in the first and second readings and in the Committee stage. I would like to make one point. One-third of the legislation does concentrate somewhat on the taxation of Maori authorities. That matter has been long outstanding since 1939 and Maori organisations and authorities will play a significant role in the economic roll-out of this nation. I commend the legislation to the House accordingly. 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: 
 I take a call on the third readings of these bills and in particular I will discuss the Taxation (Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill. I join with my colleagues in restating the opposition of the National Party to that bill. We are opposed to it because it puts into legislation two standards of citizenship in this country. The bill awards to one group in our community on the basis of the colour of people’s skin a preferential tax rate that no other group in the community is entitled to. I shall explain what that is. The bill proposes that distributions from certain trusts will be taxed at 19.5c in the dollar. That applies to Maori trusts where the beneficiaries are Maori. However if the trusts have beneficiaries who are Pakeha under this legislation they will pay tax of 33c in the dollar. 
That is not right. Increasingly in this country there is a sense of dis-ease at the separatism that this Government is pursuing. Every day there are new laws and regulations that separate our country on the basis of race. Every day there are announcements of grants and new schemes that seek to separate our country on the basis of race. Every day there is a never-ending stream of stories of mismanagement and inequity resulting from that separation. Just in the last 10 minutes in this House we have heard about the funding going through Maori broadcasting where there has been no accountability and none of the professionalism that one would expect with regard to funds coming from the taxpayer. 
Our leader the next Prime Minister of New Zealand the Hon Bill English has made it clear that we are opposed to this legislation because we are drawing a line in the sand when it comes to the segregationist policies of the Labour Government. We will call this legislation what it is. It is segregation and separatism and I am prepared to stand up in this House and say that. But I have to tell members that fewer and fewer New Zealanders are prepared to stand up to say that because if they do they are called racists by the Beehive or are accused of Maori bashing by the bovver boys on the front bench of the Labour Party. More and more New Zealanders are wising up to what is going on in the Government. They are wising up to the fact that Helen Clark and Margaret Wilson have New Zealand headed down a path of separatism that is anathema to the core values of this country. This Government Labour the Progressive Coalition the Greens and United Future support this legislation. 
This legislation states that if the beneficiaries of a trust are Maori they will have a lower tax rate than the beneficiaries of a trust who are Pakeha. That is appalling. Why should the children of Maori millionaires have their distributions taxed at 19.5c in the dollar but the children of hard-working working-class New Zealanders have their distributions taxed at 33c in the dollar? The member should answer that. I do not hear a word from Metiria Turei. There is not a word from her about why she will support this legislation. 
There is also no word about that from Annette King the Minister from Rongotai. The voters of Rongotai would be shocked to know that she is supporting a bill that states that Maori will have a cheaper tax rate than Pakeha. That is not right. I do not think Annette King knew that when the paper about this bill went through Cabinet; in fact I am pretty sure that the Cabinet papers will show that she did not know that. I cannot believe that she supports this measure. However Annette King is the Minister who has introduced primary health organisations. At the Western Heights Health Centre in Rotorua under her plan community service cardholders will pay $1 more for a visit to the doctor than they do now. She is requiring an $18 charge across the whole of Rotorua and right now the Western Heights Health Centre is charging a community service cardholder $17. She is making that go up to $18. She has been told that will happen and she has ignored it. 
Members will be hearing more about what is happening at the Western Heights Health Centre in Rotorua under the primary health organisation in the next few days. But there is one thing I will say about that now: that stuff happens whether one is Maori or Pakeha—one is treated in the same way when one turns up at the Western Heights Health Centre in Rotorua and under the primary health organisation one pays more if one has a community services card. It is true. The subsidy in Rotorua will be changed—people with a community services card must pay $18 under the primary health organisation card yet that health centre was charging only $17 before the primary health organisation—[ 
Interruption 
] 
Mr SPEAKER 
: Would the member please come back to the bills. 
Hon TONY RYALL 
: The point is that that policy is being implemented in Rotorua whether one is Maori or Pakeha and frankly it is being implemented whether one has $1 million in the bank or $10 in the bank—one still gets the benefit of the cheaper doctors’ visits. 
Hon Annette King 
: Isn’t that great! 
Hon TONY RYALL 
: Women in the Bay of Plenty cannot receive radiation treatment for cancer but it is great that the wealthiest people in Rotorua will get money—[ 
Interruption 
] 
Mr SPEAKER 
: I have told the member to come back to the bills. 
Hon TONY RYALL 
: The point in this legislation is that the Government supported by United Future is proposing to have for the first time in my memory separatist tax policy. 
Clayton Cosgrove 
: It has been around since 1939. 
Hon TONY RYALL 
: I tell Mr Clayton Cosgrove that the tax rate has been the same since 1939 regardless of whether one is a Maori or a Pakeha. The difference—the reason that we are opposing this legislation—is that for the first time a Government is introducing legislation that gives a Maori a cheaper tax rate than a non-Maori. I tell Mr Cosgrove that that is not right. It is not right that people should have a cheaper tax rate because of the colour of their skin. That is not New Zealand. That is not what people voted for at the last election. They did not expect that Maori would be given a cheaper tax rate than Pakeha. 
If one is to have a cheaper tax rate then the tax rate should be lowered for everybody. I am in favour of lower taxes for everybody not just for the select few to whom the Government thinks its owes its electoral mandate. That is what is wrong with this legislation and that is why the Opposition parties strongly oppose this taxation legislation and have taken every opportunity to oppose it. I ask members to mark my words: the people of New Zealand will not stand for this Government promoting race-based tax policies any more. That is one of the reasons that support for Labour continues to fall around the country and that economic confidence is plummeting. Members should mark my words: the focus groups are telling this Government it is in big trouble because of its segregationist policies. I say that we will not see another piece of legislation like this out of the Labour Government in the next 18 months. 
CLAYTON COSGROVE (NZ Labour—Waimakariri) 
: 
 I rise to support this legislation. This is the first taxation legislation that the new Finance and Expenditure Committee in this term of Parliament has put through. I thank committee members from all parties in the House—even the National Party—for the valued contributions that they did make. Those contributions were far more valued than what we saw through that despicable character over there on the Opposition benches in his despicable speech. 
The facts are that since 1939 there has been a special rate of tax for Maori authorities. Under National it was 25 percent. If National members want to engage in their speeches of rage here double standard though they are why did Mr English and the previous National Government not change the special rate during their 9 years in Government if they were as philosophically opposed to the special rate as that? They did not change the rate. Why has there been a special rate for Maori authorities since 1939? It is not based on race and is not because the beneficiaries of those authorities are Maori; it is because the scheme of arrangement with their asset management is one that has special restrictions. For instance the assets of Maori authorities are communally owned. Even those more commercially savvy than I am would realise that one cannot sell with any degree of freedom communally owned assets. 
The special tax rate has been around since 1939 and that crew over there in the Opposition now think they can get up and bluff the people of New Zealand. There is no moral authority in any of those speeches—none! If National had wanted to change the special taxation rate and was as philosophically opposed as that to it it could have done so during its 9 years in Government. I find it very interesting that throughout this debate to my knowledge the real finance spokesperson of the National Party has not taken a call. Instead David Carter has taken a call and I suspect I know why that was. Dr Brash the National Party’s finance spokesperson is in a different party from me but I believe he does have a shred of decency. I believe that deep down he does have some honour. He knows that this legislation is right because it is based not on race but on the restrictions that occur through the scheme of arrangement that Maori authorities have in respect of their asset management. I simply say that if the National Party feels that the next election will be won by beating Maori over the head and beating racially-based groups over the head—as it is doing now—then it has another think coming. Mr Ryall talks about our party’s poll ratings going down. After that speech those snide remarks and that lack of dignity it will be the National Party’s poll ratings that go down. [ 
Interruption 
] I will not respond to my colleague. 
I finish by saying that 90 percent of Maori earn less than $38000 a year and therefore pay tax at that 19.5 percent rate anyway. If they earn over that amount then a taxation wash-up occurs and of course they will pay the same rate of income tax as everybody else. So I conclude by saying that this legislation is built on firm principled foundations and that for Opposition members to get up and make some of the most racist speeches I have ever heard in my life is I think despicable and dishonourable in this House. I support the legislation. 
Hon Bill English 
: I raise a point of order Mr Speaker. That member may be a younger member but he knows that he cannot use that language in respect of any member in this House. He should be required to withdraw and apologise. 
Mr SPEAKER 
: On the matter of the last phrase I will ask the member to withdraw and apologise. 
CLAYTON COSGROVE 
: I withdraw and apologise. 
Mr SPEAKER 
: I call Metiria Turei. The Greens have not had a call. 
METIRIA TUREI (Green) 
: 
 The Greens are pleased to— 
Dail Jones 
: I raise a point of order Mr Speaker. New Zealand First is entitled to a second call in this debate. 
Mr SPEAKER 
: No. I have the countdown of speakers. The National Party has had three calls. Every other minor party has had one call except that the Greens have not had any calls. They are entitled to the call. 
Dail Jones 
: I raise a point of order Mr Speaker. The Greens are a semi-Government party. They should have taken one of the calls of the Labour Party— 
Mr SPEAKER 
: No. The member knows that is not right. 
Dail Jones 
: —because New Zealand First invariably gets the last call. 
Mr SPEAKER 
: No. 
Dail Jones 
: It does. Would you like to tell me when we get a call other than the last call in this situation? 
Mr SPEAKER 
: Occasionally New Zealand First gets the last call because the Greens get the eighth call. The Greens have not had a call and— 
Dail Jones 
: That is their problem. 
Mr SPEAKER 
: No that is not their problem. The Greens can seek the call in the Opposition slot whenever they like. Metiria Turei— 
Dail Jones 
: I raise a point of order Mr Speaker. I suggest that is unfair. We get two calls and one of them is the twelfth. If we are down to the eighth call that is the Greens’ problem. You are being discriminatory against New Zealand First. I think we deserve an explanation of that. 
Mr SPEAKER 
: No I am not discriminating against New Zealand First; I am conducting the debate according to the list that I have and there is no change at all. I call Metiria Turei. 
METIRIA TUREI 
: Throughout the Committee stage of this legislation there has been a continual barrage of attacks on its provisions particularly on those that reflect the particular characteristics of and economic constraints on Maori organisations. The claim that the legislation is racist is absolute drivel. In fact it could be successfully argued that the previous system of high tax rates despite the relatively low income of 90 percent of Maori and despite double taxing was itself racist. That system failed to provide for the particular circumstances of Maori authorities and failed to recognise that those circumstances were largely the result of Government–imposed legislation and process and therefore favoured non-Maori. But some members of this House even go so ridiculously far as to suggest that the 19.5 percent tax rate will result in the withdrawal of overseas investment and that the favourable treatment of Maori may even cause New Zealand businesses to relocate overseas. Before we take those views even remotely seriously let us consider what this legislation will actually mean for everyone in this country. 
This legislation will put in place a good behaviour rule that will provide some relief to taxpayers who for whatever reason find themselves landed with a shortfall penalty for lack of reasonable care. It will remove the requirement to pay 50 percent of any tax in dispute and instead will give the Inland Revenue Department some discretion in that. Although for some people that change will be onerous for many the removal of the requirement to make that payment will assist them in their financial recovery. Surely that is an essential aim when taxpayers find themselves in trouble. For employers this legislation will simplify their PAYE obligations thus reducing their compliance costs which indirectly will assist employees. For individuals the legislation will raise the maximum rebate rate for charities thus giving further relief to those charities that rely on individual donations for their vital community contributions. 
This legislation provides some good opportunities and changes that will benefit everyone but regardless of those advantages some poor members of this House have continued the hue and cry about it being racist. It is as I say utter rubbish to say that the legislation is based on the human traits and biological composition of nga tangata Maori. That is absurd. It is based on the characteristics of the entities established as a result of Government legislation and process in the past. This legislation is not racially based; it provides a much fairer system for Maori organisations and authorities. The 19.5 percent tax rate is not a new tax rate. Since April 1999 all New Zealanders regardless of race have paid that rate on their first $38000 of income—and they still do. Perhaps some members of this House have not been in that position or perhaps they can no longer remember it but members should at least remember that in 2001 Treasury estimated that 90 percent of Maori earned less than $38000. Thus the choice of the 19.5 percent tax rate for Maori authorities is entirely reasonable. 
The differential tax rate in this circumstance is but one of many variations that may exist between different commercial entities. If other MPs want an equal playing field then they also need to consider and recognise the factors that do effectively disadvantage many Maori authorities in a commercial sense. Those factors include circumstances such as limited access to loan finance because of multiple and communal land ownership high demands for benefit distribution support by those organisations of broader social objectives—not just commercial ones—and the difficulty for those organisations in disposing of uneconomic assets. 
The 19.5 percent tax rate is a sensible and practical move which recognises the particular constraints faced by Maori organisations in the development of their assets for their people. Those constraints arise out of the structural framework in which Maori have had to manage communally owned land and I must add that the roots of that system lie in the establishment of the Native Land Court and its attempts to individualise title in order to make easier the purchase and alienation of Maori land. It is not surprising that critics of the legislation seldom refer to the many examples of uneconomic land units forestry blocks and farming trusts that are designed to create jobs for local Maori but that have difficulty in doing so. It appears that the criticism is aimed at circumstances where Maori development may in fact challenge mainstream corporate business. 
This legislation makes other significant changes that the Greens support and which reflect the needs of Maori organisations. We are very pleased to see the widening of the definition of “charitable purpose” to include those organisations whose beneficiaries are primarily related by blood. That recognises the authority and purpose of whanau and hapu and their traditional structural system of caring for and taking care of their members. We are also very pleased to see the broadening of the purposes for which marae can be considered “charitable” as a way of recognising the essential community functions that marae provide not only for the hapu and whanau in particular areas but also for the wider community. 
The Greens think the advantages in this legislation outweigh the disadvantages. Some considerable work has been done by Maori organisations in bringing to the fore the issues that particularly affect them and we acknowledge their work in raising these issues with the Finance and Expenditure Committee and with other members. One of the previous speakers referred to Maori millionaires being able to gain a competitive advantage for their children under this legislation. I suggest to members of the Rongotai electorate that they might want to ask for some further information about that issue. Although it is not appropriate to describe that member’s contribution as misleading it is appropriate to describe it as not entirely putting forward the whole story. In fact Maori millionaires the few that there may be will be required to pay tax at the same rate as they would in any other circumstances. 
This legislation does not provide a special taxation system for Maori individuals but recognises the particular constraints placed on Maori organisations for the benefit of their members and of the wider community as well. So the Greens are very pleased to support this legislation. 
A party vote was called for on the question  
That the Taxation (Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill be now read a third time. 
Ayes 71 
Labour 52; Green Party 9; United Future 8; Progressive 2. 
Noes 47 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7. 
Bill read a third time. 
A party vote was called for on the question  
That the Taxation (Annual Rates of Income Tax 2002-03) Bill be now read a third time. 
Ayes 71 
Labour 52; Green Party 9; United Future 8; Progressive 2. 
Noes 47 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7. 
Bill read a third time. 
A party vote was called for on the question  
That the Student Loan Scheme Amendment Bill be now read a third time. 
Ayes 71 
Labour 52; Green Party 9; United Future 8; Progressive 2 
Noes 47 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7. 
Bill read a third time. 
A party vote was called for on the question  
That the Child Support Amendment Bill be now read a third time. 
Ayes 71 
Labour 52; Green Party 9; United Future 8; Progressive 2. 
Noes 47 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7. 
Bill read a third time.