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Dunne’s arrogance, sloppiness will result in poor tax law

10 December 2010 Media Statement

Dunne’s arrogance and sloppiness will result in poor tax legislation

The Government is significantly changing tax legislation under urgency and without any public consultation or input, says Labour’s Revenue spokesperson Stuart Nash.

Stuart Nash said Revenue Minister Peter Dunne’s 70-page Supplementary Order Paper replacing the Loss Attributing Qualifying Company (LAQC) regime amounts to “a complete abuse of process and amazing arrogance and sloppiness”.

Labour supported the Taxation (GST and Remedial Matters) Bill through its first and second readings, but has now withdrawn its support for the bill, Stuart Nash said.

“What has happened this week is a flagrant abuse. The LAQC changes have been introduced through the 70-page SOP which was only tabled by Peter Dunne on Wednesday. SOPs are normally used to make very minor amendments and improvements, not generally to introduce substantial new legislation like this one.

“This SOP is the largest I can remember for any Bill, and it is larger than all but two tax bills passed this term,” Stuart Nash said.

”It contains a number of major changes to tax legislation that impact upon a lot of people and it is simply not right that Peter Dunne can arrogantly introduce it without any consultation. It is outrageous.”

Stuart Nash also said that this flagrant abuse of process underscored how disorganised Peter Dunne is. “His excuse for using urgency in this way is that the Government signalled these changes in the budget. Well, he’s had seven months since then to draw up a Bill, get it to select committee and pass good legislation using proper process. Instead he’s dithered and substandard legislation will result.

“These proposed changes are significant,” Stuart Nash said. “There are more than 130,000 LAQCs and at least half of all rental properties are held in an LAQC entity. All New Zealanders from tax experts through to rental property owners deserve the right to be heard on such important legislation, but Peter Dunne’s unacceptable arrogance is denying them.

"These last minute changes are particularly serious as they apply to over $2.25 billion per year of tax losses through LAQCs, and impact on major structural questions like the fairness of tax treatment of different asset classes. National had the opportunity to pass this Bill by consensus --- but they blew it. The substance is hugely significant and the process appalling."

Stuart Nash said the SOP also contains major changes to how income derived from trusts is viewed, the level of tax paid by Māori trusts and a number of other changes to current tax legislation. “The contempt illustrated by this SOP is emblematic of the approach the Government is taking under urgency this week.”


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