Taxation (GST and Remedial Matters) Bill

on behalf of the Minister of Revenue: I move, That the Taxation (GST and Remedial Matters) Bill be now read a third time. Improving the integrity and fairness of the tax system was well signalled by the Government as part of the package of tax reforms announced in Budget 2010. Those reforms give New Zealanders greater choices in working, saving and investing, by putting more money into their pockets through lower tax rates.

The measures contained in this bill further deliver on that promise of a fairer, more transparent tax system, by strengthening parts of the GST rules to prevent so-called phoenix schemes while clarifying other areas where time and the complexities of business have resulted in uncertainty about how the rules should be applied.

In reporting back to the House, the Finance and Expenditure Committee recommended a number of very worthwhile technical changes to the bill to further clarify the scope, definitions, and timing of certain issues under the proposed new rules. Further to these changes, the bill now incorporates a number of significant new measures introduced by way of Supplementary Order Paper 187. The bill we see today is the result of very constructive public and private sector collaboration, forged during open consultation.

I would like to express, on behalf of the Minister, my thanks to all those involved in bringing this bill to its third reading. Now, with great pleasure, I commend the bill to the House.

Who would have thought that shortly after 9 this morning, when we commenced debate on this bill, we would be here at about 9 tonight, still debating the same bill? That is occurring for two very simple reasons. One of the very simple reasons is the Leader of the House. The other very simple reason is that this bill is a blatant abuse of process. It is an abuse of the House, because the speech the Minister read but did not understand is a speech about the bill as introduced. That was a speech about the bill that was considered by the Finance and Expenditure Committee. That was a speech about the bill that was put out for public submissions. It had nothing to do with the 60 or 70 percent of this bill that was introduced under urgency at the eleventh-hour by Supplementary Order Paper. Not only was it 70 percent of the content but it was about 95 percent of the value by tax revenue. It is the Supplementary Order Paper that introduces fundamental structural amendments that impact over $2 billion a year of tax loss, which is currently funnelled through loss attributing qualifying companies.

It is the amendments and not the bill that take the current loss attributing qualifying company rules and introduces an entirely new class of company called the look-through company, which represents a very timid step in the direction of making it less easy for corporate arbitrage to write off company tax losses on personal income. It possibly would have been a measure that one day could have been supported by other parties, had it been through proper scrutiny. But the reason we are opposing this bill tooth and nail in the House today is that the Government, by malice and intent, has denied the public of New Zealand the opportunity to participate in that debate. It has denied the public of New Zealand the opportunity to participate in that debate.

This is a totally inappropriate misuse of parliamentary process, and in my view it was made worse, not better, by the lame excuse of the Minister of Revenue, who said that just because it had been announced in the Budget and a discussion paper had been put out, it was legitimate, somehow, to bring provisions to the House by Supplementary Order Paper. I am afraid that that is not so. As a matter of simple logic, to do that for this bill would entitle any Government to do that for any tax bill, because very few affect more revenue than this amendment does, at $2 billion. If that is the case, then we could kiss goodbye the generic tax policy process that is one of the most valuable institutions of our fiscal tradition. It has been respected across both sides of the House, and across multiple bills, for many years, but this Supplementary Order Paper undermines that process.

The loss attributing qualifying company issue, of course, has dominated the substance of the debate, and it dominates three parts—over 70 pages—of the amendments.

Hon Gerry Brownlee: Has the member got an LAQC?

Hon DAVID CUNLIFFE: No, the member does not have a loss attributing qualifying company. Has that member got one?

Hon Gerry Brownlee: No.

Hon DAVID CUNLIFFE: Oh, jolly good! Well, enough Kiwis do, I tell Mr Brownlee, to avoid $2.5 billion worth of tax, and that is why we care about it, because his Government is running a $13 billion per year deficit, and the Government could do with some of that, if it could bother to clamp down on the avoidance. But because the Government has not done so, and because it has not given the public or the business community the opportunity for a fair say, Government members will be here all weekend with their paltry list of pre-Christmas rushed legislation—all weekend, because the Leader of the House has screwed up the process. He has overloaded the urgency motion, and he has allowed his Minister of Revenue to introduce a totally inappropriate Supplementary Order Paper. It is one thing for the Minister to make that mistake; it is entirely another for the Leader of the House to fall for the pressure, no doubt from officials through the Minister, that that just had to be done. Well, it did not have to be done, and it will not be done easily, because members of the Labour Opposition will fight this bill—and have fought the bill—clause by clause, part by part, and line by line to the utter limits of parliamentary process.

The bill also deals with the matter of GST and the opportunity for zero-rating some transactions. That has allowed—and the Speaker has ruled in terms of scope—debate about the zero-rating of other forms of goods and services, most notably fresh fruit and vegetables. New Zealanders in their homes and in their workplaces know that these are tough times, these are tough years. Household budgets are under pressure, and it is just this week that we have learnt some important new facts: the average household is $30 a week worse off than it was last year, by $18 per average income earner. We know now that for seven straight quarters, annualised GDP per capita has gone backwards—that is, real income—which means that average Kiwis are worse off today than they were when this National Government was elected. They are worse off today than when this National Government was elected.

That is why the polls overwhelmingly show that nobody buys the public relations spin from the Beehive about the tax that has made them better off. They do not buy it, because it is not true. They do not buy it, because they know that they might have 10 bucks in the wallet, but the groceries are costing 30 bucks, the power bill is costing 5 bucks, and so on and so forth. There is no relief in this bill; even though it empowers the zero-rating of GST, it contains no help for hard-working Kiwi families, and that is why Labour is going to bring that help. That is why Labour will deliver GST zero-rated fresh fruit and vegetables.

The bill talks about KiwiSaver, but it takes no opportunity to restore the cuts this Government has so short-sightedly made to the single most successful savings scheme in New Zealand’s history. It was the single most successful scheme, and was undermined by this Government when it cut employer contributions and Government incentives in half. For that reason, the rate of growth of the stock of savings has been reduced, and that is a very serious problem. Standard and Poor’s is about to drop our credit rating because we have an appalling savings gap.

That brings us full circle, because Standard and Poor’s told us that we are not only bad savers but we are very bad investors. Because such savings that we did have, instead of being put into productive businesses that would create jobs and incomes—things people say National once used to represent—were put into housing. We effectively borrowed internationally to bid each others’ house prices up. Why? One key reason was that there was a tax incentive to do it, and it is embedded in this bill and is still now perpetuated by this bill. There is a tax incentive that one could run a loss on a rental property and write it off not only against the future earnings of the property, which would be fine, but against the personal income of the owner or the shareholder. There is no logic, and there is certainly no economic rationale for that to be continued.

So this bill, in summary, is a sham. It is a sham and it is a wasted opportunity. There was a good process at the Finance and Expenditure Committee. There was a good process in dealing with the original bill that made some amendments, made some improvements, and—I give credit to the chairman of the committee, Craig Foss—brought the committee to consensus. That consensus was shattered on Tuesday when this enormous Supplementary Order Paper was introduced. The Government introduced this enormous, short-sighted, wasteful, and redundant Supplementary Order Paper.

Why is it redundant? I tell members that when Labour returns to the Treasury benches in 2011 one of our first acts will be to crack down on tax avoidance, because, to us, in tough times personal responsibility means that everybody pays their fair share. That is the Kiwi way—a fair suck of the sav, and a fair day’s pay for a fair day’s work. We all put our shoulders to the wheel in hard times to keep the truck moving forward. That means fewer outlets and fewer loopholes for fancy-pants corporate tax advisers and lawyers. We need to make those loopholes dramatically smaller. This bill had the opportunity to do that and it failed.

It is a matter of deep regret to the Labour Opposition that although we have used every opportunity in this debate, we know in our heart of hearts that the scrutiny we have been able to give to the detailed technical content of areas of this Supplementary Order Paper has not been anywhere near adequate, relative to the importance of the subject matter. The reason for that is, of course, that they cross-reference back to four principal Acts. They have multiple connections and it would take an expert many, many weeks to follow their way through the chain.

It is a pleasure to follow the member who has just spoken, David Cunliffe, on the Taxation (GST and Remedial Matters) Bill. I say to him that maybe he should have saved his energy and his speech for a barbecue at St Marys Bay this summer. When Labour members find out the result of the 3 News poll this Sunday they will be organising barbecues in St Marys Bay, in Christchurch, or wherever they think they will find their next leader.

To come back to the bill, as it has already been stated on this side of the House, this bill will transform the taxation system in this country. Much has been made of the so-called phoenix fraud schemes that this bill is designed to address, and much has been said by members opposite about the Supplementary Order Paper. We all know that these measures were announced in Budget 2010. We know that they are being put forward in the Committee stage. Chief amongst those measures is the clarification of depreciation for non-residential building fit-outs, the grandparenting of depreciation loading, and the improvement of fairness of access to social assistance programmes. We know that, and members opposite do not disagree with what this bill says. This bill is about streamlining the tax system, creating jobs, and making a fair and equitable tax system. I commend this bill to the House.

I move, That the motion be amended be inserting the words “this day 6 months” after the word “time”. This bill is called the Taxation (GST and Remedial Matters) Bill. That implies that the bill is a taxation bill primarily concerned with GST and remedial matters. It makes sense. It is the title of the bill, it is what it is about, it is what was sent to the Finance and Expenditure Committee, it is what we talked about at that select committee, it is what we heard submissions on at that select committee, and it is what the last speaker heard and deliberated on at that select committee.

Government members spoke on the first and second readings of this bill. They gave full speeches and they spoke in support of it. However, in the time between the second reading and the deliberation in the Committee stage, a Supplementary Order Paper of 70 pages was introduced. The bill is 57 pages long. The Supplementary Order Paper is larger than the bill itself—in fact this Supplementary Order Paper is larger than seven of the nine tax bills that have come before the House this term.

Hon Ruth Dyson: How many?

STUART NASH: It is larger than seven of those nine tax bills. Even more amazing is the fact that not one member opposite, not one National member of the Finance and Expenditure Committee, and not one National former member of that committee has taken a call in the Committee stage. We have been debating the Committee stage for nearly 12 hours—

Hon Ruth Dyson: Is that right?

STUART NASH: We have been debating in the Committee stage for nearly 12 hours—

Aaron Gilmore: Twelve hours of nothing.

STUART NASH: —and not one Government member has spoken, except, now, Mr Gilmore. He has something to say. Let us hope that Mr Gilmore has something to say for longer than 2 minutes, because this bill and the amendments in the Supplementary Order Paper deserve that. They deserve more than the practice of members opposite standing up, saying: “I support the bill.”, and sitting down again. Mr Gilmore knows better than that. He has financial qualifications and he knows about the tax system. He knows that 130,000 legal entities are being rubbed out because of this Supplementary Order Paper.

I want to make two further points in my third reading speech. The first is that Labour might well have supported this bill if the Minister had undertaken proper process. The second point is that this is no way to pass tax legislation. The GST component in this bill related to zero-rating land purchases between GST registered parties, so it was quite a change. We are talking about zero rating, and therefore the bill probably deserved its title: the Taxation (GST and Remedial Matters) Bill. The zero-rating provisions remove the possibility of rogue taxpayers undertaking phoenix fraud. Labour supported those amendments. We supported this bill in its first reading, second reading, and during the select committee process. Everyone in this House supported that.

Part 2 concerns amendments to the Income Tax Act, and we supported that part in the first and second readings and at the select committee. Part 3 amends the Tax Administration Act 1994 and we supported that, as well. Part 4 makes amendments to the Income Tax Act and, yes, we supported that. Part 5 makes amendments to the KiwiSaver Act. Part 6 makes amendments to the Stamp and Cheque Duties Act, and Part 7 makes amendments to other legislation. We also supported those amendments. Do members get the picture?

This is a pretty simple bill; it is a technical bill. As I said in my speeches in the first and second readings, and as my colleague David Cunliffe mentioned in his second reading speech, it is a technical bill—one of those necessary bills that Labour supports. Labour members support good, common-sense, robust, and transparent legislation. That is what we are about. We support legislation that allows taxpayers ease in paying tax. We support legislation that simplifies tax legislation and adds a level of transparency. This is what we support.

We supported the bill at the first and second readings, and through the select committee process. That is what we did, and we did so in good faith. Then what happened? On Wednesday evening when we were sitting in this Chamber we saw a 70-page Supplementary Order Paper dumped on the Table—a 70-page Supplementary Order Paper to the Taxation (GST and Remedial Matters) Bill. What has this Minister been doing?

The Minister told us that these changes had been signalled, and we knew that. We knew that the changes had been signalled by the Tax Working Group, as the Minister pointed out. A discussion document outlined these changes, as the Minister pointed out, and the Budget also outlined these changes. Even within the Labour tax team we believed there should have been changes to the rules around loss attributing qualifying companies. We were not against working with the Government on changes to that tax regime. But what the Labour Party demands is transparency, consultancy, and accountability in tax legislation, and this is not what this bill has become. That is why we do not support it.

The original bill—I was going to say the substantive part of this bill, but it is only 57 pages compared to 70 pages—was introduced on 17 August. As I have pointed out, there has been plenty of time for the Minister to undertake consultation with his officials and with experts—behind closed doors, because it did not happen in the select committee process. There has been plenty of time for the drafters to come up with a bill that the Minister could present to the House and to the select committee, and we could be debating it now.

The thing about this bill is that if it had stayed in its original form—57 pages—then the debate, instead of starting at 9 a.m. and finishing at 9 p.m., could probably have started at 9 a.m. and finished at 11 a.m. The debate would have taken 2 hours, not 12 hours. The reason it has taken 12 hours is that Labour rejects outright any tax bill that has not gone through the proper process.

The Minister followed the proper process to the drafting stage. He drafted a bill—and a Supplementary Order Paper that could have been a bill, because, as I said, it was larger than seven out of the nine tax bills that we have seen before this House—and then the bill was referred to the Finance and Expenditure Committee. Then at the select committee Labour members, Green members, ACT members, Māori Party members, and National members got an opportunity to look at the bill, talk to their experts, talk to officials, and call for submissions from those who had not been originally consulted. So the Minister went halfway though the process and then stopped. He said that that was enough consultation. I contend that that is not enough, and the Labour team contends that that is not enough.

When it comes to taxation, it is only fair that the people of New Zealand have their say. The select committee will put ads in every major newspaper and it will tell New Zealanders their rights under due process. It will say that New Zealand citizens have the right to appear before a parliamentary select committee and give it their views on the legislation. What then happens is that members of that select committee. from all sides, every single party in this House, will take on board their recommendations and their submissions. We talk to officials, we talk to our expert tax consultant, and then we come up with considered opinions—that is the process.

I contend that if that process had been followed, then this bill would have been passed more quickly. The Supplementary Order Paper, which would have been another bill, probably would have passed, but it would have passed with amendments, because there always are amendments. In every single remedial matters bill there are changes, because we always make changes and we always make sure that the bill is a lot more robust.

The tax officials do a brilliant job. They hear what we say, they liaise with our consultant, and they say: “Yes, we hear what you say; this is good.” This Supplementary Order Paper would have been a good bill if it had gone through the proper process, but it has not, and the people of New Zealand should be outraged.

The ASSISTANT SPEAKER (Hon Rick Barker): I want to deal with a motion moved by Stuart Nash. The motion to amend the question that the bill be read a third time is not in order. It is ruled out of order as it is inconsistent with the decision of the House to accord urgency to the passing of the bill. This is also consistent with my previous ruling that a motion to postpone the debate is out of order as it is inconsistent with the decision of the House to accord urgency to the passing of the bill. I draw members’ attention to Speaker’s ruling 12/2 by Speaker Jack in 1976: “When urgency is taken for the “passing” of a bill, this means passing through all stages.”

I rise to speak on the third reading of the Taxation (GST and Remedial Matters) Bill. This has been a pretty ugly day for Parliament, if the truth be told. It has been pretty ugly for two reasons. Firstly, Parliament has basically been bumped. Secondly, someone has dumped a 70-page Supplementary Order Paper into Parliament this week. It is bigger than the bill that we are actually supposed to be addressing. They dumped it on Parliament.

We are not dealing with just the regular kind of bill. Anyone who has been on a Finance and Expenditure Committee for tax bills knows how complicated tax bills are and how much we rely on our expert advisers, whether from the Inland Revenue Department or the independent expert adviser, in order to understand tax bills. They are really, really complicated law. People probably do not know that generally it is the Parliamentary Counsel Office that writes law. The tax office has its own ability to write law; tax law is so complicated that there have to be people in the Inland Revenue Department who can write tax law.

The problem for Parliament is that we are supposed to be voting on this giant amendment, and the truth is that hardly anyone in Parliament understands it. We may have a rough idea about what it means, but, given that we have only just got this 70-page Supplementary Order Paper, I doubt that anyone on the Government side of the House actually understands it, because they have just had it dumped on them. I think it is fair enough to say that most people in this House would struggle in the very short time that we have had this amendment to understand what it actually does.

Parliament is being asked to vote on a very complicated law that it has only just received and has really had very little opportunity to understand. That is where we are today. That has resulted, of course, in Labour stringing the debate out no end. To those who have been listening—goodness knows how they could bear it—I say that Labour has strung it out as a protest, essentially, against the process. I think it has been pretty ugly, but I totally understand why Labour has done that.

The Government has made a terrible abuse of process with this bill. I think of all the times when National was in Opposition and complained about process. This is a disgraceful process for making law in our country. It is actually shocking that at 8.30 on a Friday night we are sitting in this House dealing with a law that almost nobody in this room understands, yet a majority are about to vote in favour of. They have no idea what the bill will do, because they have never seen it before. The Supplementary Order Paper got dumped on them just now.

In some ways it reminds me of making trade deals. Trade deals are a little like this. When trade deals are negotiated they are basically dumped on the public of New Zealand and the supposedly elected democrats have to rubber-stamp trade deals before they have any idea what they mean. It seems that the governing parties have learnt something from trade deal negotiations and have now applied it to tax law.

The other thing is that apparently the big accounting firms have been consulted about this tax law. The public’s representatives have not been consulted about this tax law, and therefore the people of New Zealand have not, but National’s favoured friends, perhaps Chapman Tripp and perhaps some of the other big accounting firms, have been consulted about this—

Aaron Gilmore: Chapman Tripp’s a law firm.

Dr RUSSEL NORMAN: My apologies to Mr Gilmore. Some of the big accounting firms like Deloitte have been consulted about this legislation. Possibly Chapman Tripp has been consulted; the law firms have probably been consulted as well. National is very close to the big accounting firms, the big law firms, and basically anyone who has a lot of money and might give it to National. Those big firms have been consulted, no doubt, about the content of this bill. The people who have not been consulted are the publicly elected representatives who have to vote on this bill tonight. They are the ones who have not had a chance to read what is in it and fully comprehend it.

I find it most peculiar, when we think about the coercive powers that the State exercises. One of the coercive powers is the police power to detain people and so forth. But the other coercive power is to take people’s money off them. That is one of the things that this Parliament has the power to do: it has the power, through taxation, to take people’s money off them. One would think that the laws governing the taking of people’s money would deserve special scrutiny. One would think that even for someone on the right-wing side of politics, the process of taking people’s money off them through taxation—a highly coercive process; if one does not give over the money, one gets thrown in jail—would be especially deserving of close attention.

We have seen the depth of the cynicism in the National Party, the ACT Party, and, presumably, the Māori Party, although I do not know if the Māori Party will vote for the terrible legislation that is being hammered through the House tonight. It is disgraceful that the right-wing side of politics would vote for tax legislation that was dumped on Parliament and is being hammered through Parliament at 8.30 p.m. on a Friday before pretty much everyone in the House has had a chance to really get their heads around the whole thing.

I see Mr Boscawen from the ACT Party sitting there. He has complained bitterly and at some length about parliamentary process, the Electoral Finance Act, and all sorts of stuff. Presumably, he will vote tonight for a change to tax legislation that will coercively take people’s money off them, in a bill that he himself will have hardly understood or had a chance to read but that has just been dumped on Parliament. How on earth is this good democratic process? It cannot be proper process for this Parliament to agree to vote for this bill tonight when almost nobody in the House understands what it means. Minister Paula Bennett claims she know what it means, but very few people have had a proper chance to have a good look at this legislation, because it was dumped on the House.

The Green Party will not vote for the Taxation (GST and Remedial Matters) Bill. Had we had a chance to look at it further we may have, but it is being hammered through the House. I will also say that one of the great things about MMP is that the select committee process became much better than it used to be. That was one of the advantages of MMP. The Finance and Expenditure Committee has gone nowhere near the substantial contents of the bill, as inserted by the Supplementary Order Paper, because it was not allowed to look at it. It was kept secret by the Government, and now the bill is being hammered through the House tonight before anyone in the Finance and Expenditure Committee has had a chance to look at the Supplementary Order Paper. Perhaps some Government members of the Finance and Expenditure Committee will look at it, but the select committee as a whole has had absolutely no chance to see this giant Supplementary Order Paper.

I strongly urge anyone on the political right who has any concern about the way tax law is made to vote against a bill that is being hammered through the House in the middle of the night to make tax law.

Dr Norman is right: the ACT Party will support the Taxation (GST and Remedial Matters) Bill. I commend it to the House.

Tēnā koe, Mr Assistant Speaker. Me pēnei rawa te kōrero he poto noa iho tāku ki te Whare. Nā runga i te aha? Nā runga i te mea, tuatahi, i wāhi kē au mō te roanga o ngā kōrero. Kāre au i konei, ka tahi. Ka rua, ehara au i te tangata mōhio ki ngā mea kaute nei. Ka toru, ko tā mātou tangata, wahine matatau ki tēnei āhuatanga, a Rāhui Kātene, ko ia tērā i āta titiro ki te hōhonutanga o tēnei o ngā take. Kua puta ia mō te wā engari, ko tāna i te mea, ko ia te mea i noho nei i runga i te komiti tikanga; i āta rongo ia i ngā piki me ngā heke, te whānui, te whāroa o ngā kōrero, anā, ka riro māna mātou e ārahi. Ko tāna, me tautoko i tēnei wā, ā, i ngā kōrero katoa, ka mutu, ka riro māna e whakatau i te huarahi hei whāinga mā te Pāti Māori. Koi nei mātau e tū ake nei ki te tautoko i tōna kōrero.

[Greetings to you, Mr Assistant Speaker. I should state that this contribution of mine to the House will be only a short one. Why is that? Firstly, I was somewhere else for much of the contributions. I was not here. That is one reason. Secondly, I am one of those who is lacking when it comes to matters dealing with accountancy. Thirdly, our person who is an expert in matters relating to taxation, Rāhui Kātene, the one who delves into matters like this on our behalf and at great depth, is not available at the moment. She is out on another matter. She leads us in matters like this, sits on the committee, hears and listens intently to the ups and downs, and the width and scope of talks. She advocates that we support the Taxation (GST and Remedial Matters) Bill at this stage, and all contributions to it. In the end, it will be for her to resolve what path the Māori Party will pursue. That is why we rise in support of what she wants us to do.]

It gives me enormous pleasure to stand for a very short, intense period to commend and support the Taxation (GST and Remedial Matters) Bill. It is a wonderful bill. It is a great day for the Government and a great day for democracy. Many good people will be very happy with the results of the bill. Thank you very much.

Here we are on the third reading of the Taxation (GST and Remedial Matters) Bill. The debate on the bill before us has descended into farce. The last three speakers typified the Government’s view of the bill, and showed why we are debating at 8.30 p.m. on a Friday legislation that has been effectively superseded by a 71-page Supplementary Order Paper in the last 48 hours. The last three contributions really underscored the contempt that the Government is showing for Parliament, the process, and the people.

Mr Boscawen, that well-known warrior for the rights of the people, provided in 12 words the entire contribution of the ACT Party in the Committee stage and the third reading debate. His contribution consisted of 12 words. He was followed by the Māori Party member. I regret I did not pick up the earpiece to listen to exactly what was contributed by the Māori Party’s whip, but I would suggest that it was less than 100 words in respect of this most important legislation and the accompanying 71-page Supplementary Order Paper.

The tour de force, the cream on the cake, came from Aaron Gilmore, the list MP from Christchurch, the know-it-all of the National Party. He contributed about 15 words on the bill. This debate would have been a great opportunity for Aaron Gilmore to stand up while the Minister for Canterbury Earthquake Recovery was in the House—he may still be in the precincts—because the bill, as I recall from earlier discussion in the Chamber, has a new clause in it, clause 28B on Supplementary Order Paper 187, regarding taxation treatment of government grants to businesses. I would have thought that was a very good opportunity for Aaron Gilmore to stand up. He would like to be a constituency MP in Christchurch. He hankers for it.

Hon Trevor Mallard: No, he doesn’t. He’s waiting for Eric to resign, because he’s got fond memories of Bluff.

BRENDON BURNS: He might have his eyes on constituencies further south, but in the interim at least he would like to be regarded as a potential electorate MP for Christchurch.

I would have thought Aaron Gilmore’s best opportunity would be to stand up, take a call, and say what the Government had done in respect of government grants to businesses in Christchurch that have been hit very hard as a result of the 4 September earthquake. Some support could have been provided under the bill, because the new clause 28B introduced on the just-seen 71-page Supplementary Order Paper provides for the tax treatment of government grants to businesses, including payments in the nature of a grant or a subsidy to a business, grant-related suspensory loans, and payments not in the nature of an advance or loan other than a grant-related suspensory loan. That mechanism on the Supplementary Order Paper provides somebody like Aaron Keown—no, not him; he is the more widely known new member of the Christchurch City Council—somebody like Aaron Gilmore, who would like to be a constituency MP in Christchurch, with his best opportunity to stand up and take a call on behalf of his family, who own and operate small and medium sized enterprises of the kind that have been knocked around by the quake in Christchurch. If a scan was taken now, I can tell members that small and medium sized enterprises across Christchurch would be seen to be reeling from the earthquake. They were looking for a mechanism to receive assistance, and it is there in black and white in the new clause 28B on Supplementary Order Paper 187. It is a mechanism for government grants to businesses, and it could have been picked up.

My colleagues are absolutely right: I think Gerry Brownlee will put that blue-ribbon seat in peril at the election, because he is failing. I am hoping that the Minister of Agriculture, another Christchurch MP, will take a call in this debate and tell us, as a member of Cabinet, how hard he fought to get some relief like the tax measures provided under the new clause 28B for his would-be constituents, the people he grew up with, the people in the Canterbury region whom he stood to represent. That clause provides for the taxation treatment of government grants to businesses, be they grants, subsidies, suspensory loans, or advances. There are four different mechanisms that could have been used to provide interim relief to the hundreds and hundreds of Christchurch and Canterbury businesses that are feeling absolutely abandoned by this Government, a Government that in most instances they probably voted for, and that they would have expected to give them some decent opportunities to make their businesses viable and keep them going in the interim.

They would have looked to the Government in the same way that farmers look to the Government. The next bill to be debated in the House relates to the kiwifruit industry, and $25 million of relief is being provided to the kiwifruit industry. I applaud the Government and the Minister for Biosecurity for doing that. Here we have a Supplementary Order Paper which provides a mechanism for the tax treatment of government grants to businesses, and that is exactly the sort of mechanism needed in Christchurch right now—right now. If I had an indication from members opposite that they would ensure that there would be support for Christchurch businesses, I would be tempted to support them on this bill, but we will not hear it. I will bet $1 that we will not be hearing from any members opposite, because they are lions when it comes to issues at times, and they are lambs at other times. This is very much a lamb time for members opposite.

They should be standing up and demanding that the Government support at the very least the very modest Canterbury Employers’ Chamber of Commerce package, which could have benefited from clause 28B on Supplementary Order Paper 187. Those employers were envisaging some interim modest support. They were going to work in concert with Enterprise North Canterbury, which was seeking about $950,000. In total, Cabinet was being asked to tick off around $4 million worth of support, the kind of support that is envisaged by clause 28B. Instead, we got a derisory $100,000, to be shared with Kaiapoi, to promote Canterbury businesses.

I wish the Ministers in the House tonight would take a call and tell us why we are not seeing that support, despite the mechanism in clause 28B. It is about time Ministers explained to the House why they will not stand up to support their constituency of small and medium enterprises. That constituency provides the jobs in Canterbury. Most of the employment comes from small and medium enterprises. They are asking for the sort of relief and support that is envisaged by clause 28B. The Government has the opportunity to put in place and use the tax treatment provided on the Supplementary Order Paper, but we are hearing nothing from members opposite. They are not taking calls, they are treating the House with contempt, they are treating Canterbury with contempt, and they will rue the day. They will rue the day, because people will not forget that at their time of need, when there was a mechanism of tax treatment available, the Government abandoned them. The Government abandoned the people of Canterbury at their time of need.

The Prime Minister came down after the earthquake and said: “We will do whatever it takes to help you, Canterbury.” That is on the record; that is what he said. I commend the Government for its early response. Peter Townsend from the Canterbury Employers’ Chamber of Commerce came to the Government and within 5 days it was able to put in place a wage subsidy. I commend the Government for that; I acknowledge that it was very useful. But $15 million was budgeted for that, and do members know how much of that $15 million was spent? $12.5 million! It did not spend all of the money that was allocated. Here, under clause 28B on the Supplementary Order Paper to this taxation bill, is a mechanism that would allow the Government to support Canterbury’s small and medium enterprises that are bleeding jobs for lack of cash flow, which is down by half, or more. They need assistance and support to get them through. The Christmas period is usually their bumper time, but people are not coming into the city and shopping. The cordons around the city are discouraging people, and they are staying away. More than that, every job that is lost in the central business district is compounding the impact—

Aaron Gilmore: Through the cordons of battle, according to “Bad Brendon”! I agree.

BRENDON BURNS: The member opposite’s family businesses will not get the benefit of people being in the central business district and buying their shoes and their shoe linings, and having their shoes repaired. Those businesses are not able to get that support any more. They were looking to the Government, and the mechanism is there under clause 28B, but this Government has abandoned Canterbury at its time of need after a once-in-750-year earthquake. The mechanism is in the bill, it is there for the Government to use, but the Government has gone deaf on Canterbury. It has gone absolutely deaf, and I think it is despicable that as we head into Christmas we have a Government that has effectively abandoned the people of Canterbury and told them they are on their own.

I support the Taxation (GST and Remedial Matters) Bill.

Tēnā koe, Mr Speaker. I have to acknowledge the grand old man of Northland politics, Mr John Carter. The shortness of his speech is paving the way for him to go to Rarotonga next year, where members of the Golden Oldies rugby team may prevail upon him from time to time. I have to say that other characters who have washed up on those shores have not enjoyed a long and fruitful life, so I say kia tūpato to Mr Carter.

Aaron Gilmore: What about size?

Hon SHANE JONES: Of course, there is Mr Gilmore, the man who wanders around Parliament humming: “I’ve been there, man; I’ve been everywhere, man.” That is his whole approach to his political contributions in this House, but I can tell members when he never does that: when Amy Adams gives him that withering look. She gives him that withering look after she has suffered the bumbling of the chair of the Finance and Expenditure Committee, Mr Foss; then the member freezes. She tried that look with Parekura Horomia’s cousin, Hekia Parata, and came off second-best. That is why the latter is on the benches of Treasury and Amy has gone back to give more of those heartfelt speeches about Christchurch. There is a level of emotion where there are almost tears from the wreaths around this room, but she did nothing—absolutely nothing—in the context of her contributions to this bill to improve the prospects of the garden-variety families down there in Te Wai Pounamu, and around Ōtautahi, to receive any meaningful benefit just before Christmas.

Every time we hear from Mr Aaron Gilmore, he gives everyone a DNA-based reminder that National should not ditch him and jettison him, along with the ACT Party members, who, during the time that we on this side of the House have been debating this bill, have wandered around the country, continuing to drive a racial wedge between God-fearing, friendly New Zealanders. Those members mistakenly think that while we are working on this arid topic doing the job of the Government, they can wander around because they are either too ill-informed or uninterested in earning their pay to make meaningful parliamentary contributions. Perversely enough, the newest member of the ACT Party will wake up and realise that she is occupying a similar sleeping space as Hone Harawira. With the level of extremism that they both bring, they deserve each other on that particular issue. But that is another matter.

The Taxation (GST and Remedial Matters) Bill continues a host of issues that the select committee considered, and, regarding our contribution to it, we were quite relaxed in terms of support. We got sterling service from the members of the policy unit out of the tax department. If memory serves me correctly, once or even thrice we had the oracle, Mr Robin Oliver—please spell that word in the right manner—who generally knows everything about tax law.

Hon David Cunliffe: About everything.

Hon SHANE JONES: Well, I recall Helen Clark saying that Robin Oliver not only knew everything but also was a great contributor when the Government realised that as a consequence of entering into tax innovations it needed a solution to rationalise them. Mr Oliver probably did his greatest work in relation to Mr Tony Gibbs’ innovation.

A number of measures in this bill were designed as a contribution to simplify the administration of the GST system. I will not repeat the fact that there was an opportunity to lessen the burden of GST on our Kiwi families in their day-to-day toil. That was rejected. In addition, there was an opportunity to explain to New Zealanders, as a consequence of a sudden burst of enthusiasm through a Supplementary Order Paper, why the additional changes were needed. So it fell to this side of the House. As someone who grew up on a farm and has owned a bit of land from time to time, there is some sense in what is proposed in relation to the zero rating. However, what has blighted the discussions is there was an unwillingness on that side of the House to stand and gradually take us as a full House through why a number of these changes were dropped on the floor of the House in a virtual ambush fashion just before Christmas.

This bill picks up and papers over the mistakes of the Minister of Māori Affairs. Several months ago, when other tax changes were made, there was an egregious omission reflective of the fact that there is great inattention and sleepiness on that side of the House. The Government ended up changing tax rates but forgot all about some of the neediest New Zealanders—that is, those Māori families who have rights and interests in Māori trusts. Their tax rates should have been calibrated at that point in time. It was fixed up in the time that Labour was in power. It was a late contribution, but, nevertheless, a useful contribution. It is a shame that Te Ururoa Flavell made a decent rationalisation as to why he felt compelled to support this bill, given that Rahui Katene has provided most of the verbal leadership on the bill. She is now back on the seabed and foreshore issue, where, we understand, she is preparing to abandon her party and vote with our side of the House. Meetings are being held from Te Tau Ihu right through to Te Wai Pounamu. She is under intense pressure this evening because she now realises that she will lose that seat. That is why she is not here this evening to fulfil her responsibilities in respect of tax policy. Goodness knows what it is she could say that would make much sense in relation to filling the vacuum that has been evident on that side of the House.

But, never mind, I and my colleagues, particularly Mr Mallard—that stubborn campaigner—have ensured that not a single measure or level of vacuum goes unattended in this House and in this debate. However, the Māori Party needs to take a lesson from the omission on their part that was fixed up by us: pay attention to the bread-and-butter issues, because that is what tax impacts on. It impacts on the lives of not only the corporate merchants, but also the daily people. Do they have enough buns at the end of the week? Do they have the ability to live within their budget? Many people, as a consequence of failed tax policy extended in many respects by that rather rushed job of a Supplementary Order Paper, will have a Christmas where they will be the casualties of a flawed tax policy. They will have a very meagre range of goods in the tōkena, in the stocking, of Father Christmas.

As we go beyond this point in our debates about tax, we cannot wait until we move into the new year and continually remind New Zealanders—not as a consequence of Gerry Brownlee’s foolish management of the House that we are stuck here on a Friday evening; members on the other side of the House are giving frightfully short speeches because they are angry that Gerry Brownlee has trapped them here—that they will suffer because there has been a very impoverished view given by the Government as to how fiscal policy ought to be used to improve the lives of New Zealanders. Nowhere was that seen more lucidly than by the Governor of the Reserve Bank, Dr Alan Bollard, recently. He said to not place all the pressure on him as the architect of monetary policy, but blame those who hold the levers of fiscal policy. Fiscal policy is tax policy. Fiscal policy is revenue policy. When one shrinks one’s revenue, when it is frittered away and enjoyed by a narrow economic caste who are already able to pay their way, and one removes from the pockets and wallets of needy New Zealanders those precious cents and dollars, one only makes their Christmas, their summer break, and, indeed, the year coming towards us a worse experience.

I tell New Zealanders to wait, as help is on the way. We have a host of very innovative and impressive policies that will address the ongoing failures of tax policy, in particular the perpetuation of privilege through nefarious structuring of property and other assets, including, as I was told today by Mr Cunliffe, recreational boats. I am very confident that the senior members of our team are bringing forward a set of policies that will enable New Zealanders to see that there will be a demonstrable change and a new trajectory. As a consequence of that, New Zealanders will be more secure, the country will be more prosperous, and those members will be held responsible for the poverty they are bringing through failed legislation such as this. Kia ora tātou katoa.

An excellent point to pick up from the Opposition member Shane Jones is the nefarious idea that Labour actually has some new policies. Let me back up the truck to just 3 or 4 days ago when the Leader of the Opposition delivered a much-hyped speech to Chapman Tripp, which was an unmitigated disaster. Not only was it a copy of Ed Miliband’s speech, not only did Chris Carter’s crew come out and make it an absolute disaster, not only did it take the mickey out of David Caygill, alias David Cunliffe, and not only did it include voodoo economics, but also the central part of the speech was about increasing the level of work that is done to bring about change to loss attributing qualifying companies and trusts. What are we doing in this bill, which the Opposition is voting against today? The Taxation (GST and Remedial Matters) Bill focuses totally on upper income New Zealanders, on Working for Families, on student allowances, on the community services card, and on people who structure their income to reduce their tax obligation. This legislation closes loopholes and increases the obligation of high-income taxpayers to pay tax, yet members opposite are voting against it. They came out with a policy on Monday; they are voting against it on Friday. I commend this bill to the House.