Hamilton City Council (Parana Park) Land Vesting Bill

I distinctly recall that when I was last speaking on this clause everybody was on the edge of their seats, waiting to hear what I was going to say further on the Hamilton City Council (Parana Park) Land Vesting Bill. I have been so looking forward to this bill coming back to the Committee of the whole House today.

I was talking about GST. I was saying that under this legislation, in the transfer of this land, no GST will apply, unlike—

💬 Chris Tremain: That’s right. Now I remember.

The senior whip remembers distinctly. He has thought about it for the last 2 weeks as this bill has gone from one members’ day to the next members’ day. Under this bill GST is not applied, unlike the situation for everybody else in New Zealand, who has to pay GST at the inflated rate of 15 percent. The rate of GST was increased by the National Government, which went against its election promise in 2008. It promised not to put up GST. John Key specifically said that, yet National put up GST from 12.5 percent to 15 percent and broke that promise. The promise has been broken again. We are seeing the same things emerge in regard to Working for Families and the various excuses that have come out as a result of the Christchurch earthquake.

I am referring directly in this speech to clause 8(b), regarding the goods and services tax, which does not apply in this case to Parana Park. Would it not be great if the goods and services tax did not apply not only to Parana Park but also to fresh fruit and vegetables? If the goods and services tax did not apply to fresh fruit and vegetables, then they would be much cheaper for ordinary New Zealanders. Ordinary New Zealanders would not have to pay that tax, and fruit and vegetables would be cheaper. We know from scientific studies that have been done throughout the country that the uptake and consumption of fresh fruit and vegetables would increase if they were cheaper.

The bill in some ways is leading the way in terms of the goods and services tax not being levied. I would like to think that Parana Park and fresh fruit and vegetables go together in not having GST apply to them.

The CHAIRPERSON (Eric Roy): I think we need to come back to clause 8.

I come to a second point that we raised in the consideration of a couple of the other clauses in the bill. Clause 3 sets out the area known as Parana Park. The title of clause 8 states: “Vesting of land not gift, supply of services, or disposition, for certain purposes”. If we are vesting land there, we want to know pretty exactly what land we are, in fact, vesting. It is not clear, and we brought up the matter in some of the earlier comments on the bill. I would appreciate clarification from David Bennett, who brought the bill into Parliament. He has our support, but I think he has to clarify the issue. Perhaps he has had the chance in the last 2 weeks—if he was in his electorate; I am sure he was—to check out where that 0.4 of a hectare, which is nearly 1 acre, has disappeared to. Perhaps he could clarify that in a response to the Committee and to all of us here who are supporting the bill.

None of us has anything against the bill. We think it is visionary. We think George Parr was visionary. He was a man of vision and a person who had a plan for this area of the country. He was a man quite unlike the Prime Minister, for example, who does not seem to have a plan or vision for the country. But Mr George Parr had a vision.

Perhaps the member could give us some indication as to where 0.4 of a hectare of Parana Park has disappeared to. It may have been converted into a dairy farm. I doubt it; I do not think 0.4 of a hectare would necessarily be good for a dairy farm in the middle of central Hamilton. I suspect that it includes the house that is currently occupied by the Hamilton City Council grounds staff. They occupy one corner of the park and use it to administer the park. Perhaps that is the answer, but I do not wish to put words into the Min—

💬 David Bennett: Yeah.

—into the member’s mouth. I nearly said “Minister” then. I would like to hear—and I am sure people on our side of the Chamber also want to hear—what has happened to the nearly 1 acre of land.

I imagine 1 acre of land in the middle of Hamilton is very valuable. Let us face it: people could put apartments on it or subdivide it into eight or nine blocks and sell it all off. We would not want to see any inappropriate use of that land. We would like to see it being used in the way George Parr intended it to be used: for the children, for historic value, for recreation, and for its reserve status in the middle of one of New Zealand’s urban centres. We would like to see it being used appropriately. I am sure the Tainui Māori Trust Board, which spoke on the bill, also has some concerns, because that 0.4 of a hectare is close to the river. Thank you.

For a moment there I thought the member in charge of the Hamilton City Council (Parana Park) Land Vesting Bill might be rising to his feet, but thank you, Chairman Roy, for giving me the call on clause 8 of the bill.

Clause 8 is a very important clause. It was obviously an important factor that the council decided to include the clause for the sake of avoidance of doubt and for the sake of certainty, I suppose. In fact, all three subclauses of clause 8 refer to taxes and to duties that have come under some scrutiny and attention from the Government. There have been changes—or at least there have been announcements of intended changes—to each one of the subclauses, so it was probably quite a good idea from the Hamilton City Council to include clause 8 in the bill, in order to give it some certainty.

I will start with clause 8(a). Clause 8 states: “To avoid doubt, the vesting of the land by this Act is not—(a) a dutiable gift for the purposes of the Estate and Gift Duties Act 1968:”. People will know that as gift duty—the tax one pays if one gifts a large asset or a large amount of money, which is, I think, in excess of $27,000 in one financial year. Gift duty has to be paid on that asset. The Chair is shaking his head. I do not know; maybe I am not quite accurate, but I know I am in the zone. I am getting to the general guts of what gift duty is about. Gift duty is all about ensuring that people who have considerable assets cannot hide or dispose of those assets in a way that allows them to avoid paying their fair share of tax.

The Government has announced its intention to abolish gift duty. That will allow the Government’s mates who have massive assets—whether they be in land, shares, or any other form an asset can take, even cash—to perhaps be able to gift those assets to a family member or to someone close to them, which would assist them to avoid paying their fair share of tax. That seems just outrageous when the Government has increased taxes on middle and low income, hard-working wage earners and salary earners, who have to pay more taxes through GST. GST is also referred to in clause 8, and I will come back to that later on. People are paying more taxes, and the Government has announced that it will allow people of significant wealth—people who can afford to pay their fair share and who can contribute to the community, society, and country to make sure we can get ourselves out of debt, grow the economy, and provide the services the Government ought to be providing to New Zealanders—to be able to hide their assets and avoid paying their fair share of tax. I do not think that is on.

But it seems appropriate, given that the bill is about vesting Parana Park—it is not a gift—that the Hamilton City Council sought to have that clarified in the bill. If the bill had taken a little bit longer to pass through the House—I know it has already taken a little longer than the member in charge of the bill thought it might—we might have found that the clause was obsolete and unnecessary, because the Government is going ahead and abolishing gift duty for everybody. That will create that unfairness whereby people who can afford to pay tax will be able to avoid doing so while the Government increases tax on those people who can least afford it.

That takes me to clause 8(b), which is about GST. GST will not be applied to the vesting of that land. That was a very good move, a wise move, on behalf of the Hamilton City Council. It would have paid a whole lot more GST because the Government increased GST.

Although the Government is making more loopholes for wealthy people to hide their assets and reduce the tax they have to pay, it has increased tax on ordinary, hard-working Kiwi families, who are spending most of what they earn at the supermarket. Those families who are simply getting by from one week to the next, or from one fortnight to the next, have to pay 15 percent GST, but the Hamilton City Council will not have to pay 15 percent GST under clause 8(b). Hard-working, ordinary, Kiwi families, who do not have massive assets, who do not have large tracts of land from which to generate income, who are living from one week to the next, and who are trying just to put food on the table for their families and their children, have to pay the full 15 percent GST that is excluded in clause 8(b).

Clause 8(c) refers to the “sale, disposition, distribution, or transfer of property or liability for the purposes of the Income Tax Act 2007.” That was another area where the Hamilton City Council obviously decided in advance that it would have to make sure it had some certainty and clarity on income tax because the Government had made a number of announcements on income tax. The National Government was all at sea at first. First, it cut taxes as soon as it came into Government, then it realised that was not affordable, so it repealed them. Then it introduced some more tax cuts. It turns out that those were not affordable, either. Now the Government’s coffers are in such a bad way that it has to borrow millions and millions of dollars every week to pay for income tax cuts that it provided to people who were on the very highest incomes.

If there was income being derived from this land, the Hamilton City Council would have received quite a significant tax cut, because the income derived from this land would be quite significant. But if the Hamilton City Council were just a salary or wage earner who was earning at the lower end, it would have received very, very little. In fact, it would have been very important, even doubly important, that clause 8(b) was included. It would have wanted to avoid paying GST because the increase in GST for salary and wage earners was much larger than what they received in the pitiful tax cuts they got if they were at the lower end of the income spectrum.

I think clause 8 is a massively important clause in this bill, because this bill is all about giving certainty to the nature of this land and to its status as a public asset. We have already discussed how the Hamilton City Council is doing such a wonderful job of ensuring that this land remains a public asset, how it would be unreasonable to expect the Hamilton City Council to pay gift duty, GST, or income tax on what is simply a change or a re-establishment of the description of this land, rather than a sale or change in title of this land. Those provisions are sensible and important for the Hamilton City Council.

But would ordinary New Zealanders not like to have those provisions apply to them? Would ordinary New Zealanders not like to have to pay National’s 15 percent GST? Would ordinary New Zealanders not like to get the kinds of tax cuts that people at the top have been able to get, which are reflected in the income tax cut that the Hamilton City Council gets from this clause?

Clause 8 is very sensible. It is important that there is certainty for the Hamilton City Council. It is important that this land is retained as a public asset. It is great to see that the Hamilton City Council is not hocking it off to pay its bills. It obviously has much better fiscal management than this Government has. It is able to retain its assets; it does not have to sell them off to foreigners in the way that this Government is doing.

From that point of view, Labour is very, very comfortable with clause 8, and we thoroughly support it. We think having those clarifications in this bill is very important for the Hamilton City Council. We hope this bill gives the Hamilton City Council the certainty it requires to retain Parana Park in its current state.

I am very pleased to stand in support of clause 8 of the Hamilton City Council (Parana Park) Land Vesting Bill, which has been brought in in the name of the Hamilton City Council—

💬 Paul Quinn: What about those 16,000 Playcentre kids being funded; 9,000 kōhanga reo kids?

I ask whether the member opposite is in the right debate, as I am not sure. I can talk about early childhood education if the member would like me to, but I was going to try to stick to the clause in this instance. It would be nice to have the opportunity to talk about passenger train services from Hamilton to Auckland, as well, but I will leave that aside for now. I was just responding to the interjection, Mr Chair.

Coming back to clause 8, which deals with the vesting of land, I am particularly pleased to stand in support of this part of the bill, because I think that in the time since the Hamilton City Council drafted this legislation, the clause has become even more pertinent. As my colleague Iain Lees-Galloway pointed out, it ensures that the Hamilton City Council does not incur any further cost than is necessary in having Parliament take over and vest this land, once this bill passes. We would not want the council to incur any further cost, because since it drafted this bill, the council has found that its costs have been a real problem. It was reported just last week that because of the recession—which is National’s recession now because it has double-dipped, and that must be because of what the National Government has not done—the council now faces a very precarious financial situation. It was reported just last week in the Waikato Times that as a result of there being no growth in the economy in Hamilton, the council is facing—

💬 David Bennett: It’s not true.

The member in the chair, David Bennett, who is in charge of this bill, said that that is not true, but it was there in black and white that the council has lost $4 million in the development contributions that it had budgeted for in this financial year, and that is for Hamilton City Council alone. That tells us that economic growth has dropped so badly in Hamilton that there is just no development going on there. Although the Hamilton City Council had budgeted knowing about the global recession that was taking place, it put forward a budget of X amount of dollars, which has fallen short by $4 million just on the development contribution alone. The council has also identified that as a result of there being no extra money available for families to spend in Hamilton, what had been budgeted for to be brought in through gate sales for the Waikato Stadium has fallen by $780,000 in just 1 financial year. That tells us a story about ordinary families not being able to spare $20 or $25 to go to the rugby match because things are so stretched on that front. It is really important, because of those circumstances, that this Parliament supports this part of the bill, where we make sure, or the drafters of the bill have made sure, that no further cost is incurred.

I must congratulate those who drafted the bill, as they have done a very good job on it—I tell Mr Bennett that I am referring to the officials, but if the member has actually put pen to paper and drafted the bill himself, then I would apologise, withdraw that comment, and would want to congratulate the member; however, I suspect that it was the officials—because little in this bill has become controversial. I think that is the result of good drafting.

However, we need to support this clause because of the terrible financial situation that the Hamilton City Council has found itself in due to the lack of economic growth in our region and our city. I think that it has to come back to an absolute lack of a plan from the current Government that we have families who are really stretched and who cannot afford to go to rugby matches and the funding has fallen. Therefore, it is so important that we make sure there are no additional and unnecessary costs for the Hamilton City Council to try to cover off in its budget this year. We know that if gift duties were to be paid on this land and if GST were to be paid, it would come back on the ratepayer.

I rise to take a very short call on the Hamilton City Council (Parana Park) Bill. Those of us in the Chamber 2 weeks ago will remember that we had a lengthy debate about this bill because we felt that it was very important to the people of Waikato. It was also a great example to other territorial authorities around the country of honouring the intent of land gifted to councils. I come from Rotorua. I acknowledge the good people of Ngāti Whakauē, who have endowed amazing stretches of land to our city to be used as recreational reserves for the benefit of the many and not just the few. This bill is a reflection of the way city councils and regional authorities around the country are taking seriously their responsibility for managing assets under their purview.

Clause 8 is a short clause but I think it is very significant. I too congratulate the drafters because clause 8 makes very clear what the vesting of the land is not. It covers off the dutiable gift, so there will be no incurring of gift duties on the transfer of this land. Clause 8(b) states: “a supply of goods and services for the purposes of the Goods and Services Tax Act 1985:”, and I think that makes things very clear for the Hamilton City Council to go ahead. I congratulate them.

I hope that the member in the chair, David Bennett, who is supporting the bill, has done his homework. We were very concerned about the footprint of the land and the missing 0.4 hectares. The good member in the chair has had time over the last 2 weeks to go away and find out what happened to that land, and whether the missing land was due to an anomaly between the historical archive reserves of the Hamilton City Council and land registered on the land base of that region of the Waikato. We do want to find out about that. It may have been sold off. If it was sold off, it has been lost to the people of Waikato.

This legislation shows that regional authorities around the country do have a plan, as opposed to the Government at the moment, which, clearly, does not have a plan. When we have an asset like Parana Park, which is a beautiful park and is certainly not for sale, we need a plan. But we in the Opposition are very concerned about what assets are for sale, as the Government tries to get on top of the double-dip, National-constructed recession. Before the Canterbury earthquake hit, we were facing a double-dip recession. This Government needs to make sure that it is not looking at selling assets as a way of getting out of this constructed double-dip recession, which is part of National’s mismanagement of the economy. The Hamilton City Council, on the other hand, is making sure it is looking after assets. I think it is great that there will be no incurring of GST, as clause 8(b) states.

I congratulate Waikato and the Hamilton City Council. This is something for ordinary Kiwis who cannot afford to travel now because of the costs of travel, the costs of petrol, and cost of living pressures. Those costs mean they cannot get out of the Waikato. Families there are rather trapped, but they can go to Parana Park. They can go to Parana Park and play in the paddling pool. That is wonderful for the many and not just for those at the top who got a tax cut and who can afford to get on an Air New Zealand flight from Waikato and get around the country. This will be a wonderful asset for families facing incredible cost of living pressures. They can get out on Saturday and look at and enjoy this recreational reserve. I think these provisions, called “Miscellaneous provisions”, are incredibly important for stipulating in law what this vesting of land is not all about for the good people of Waikato.

I move, That the question be now put.

Motion agreed to.

Clause 8 agreed to.

Clause 9 Powers of Registrar-General of Land