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Dunne drops carpark tax

The government will not continue with a proposal which would have changed the way some employer-paid carparks in central Auckland and Wellington are treated for tax purposes, Finance Minister Bill English and Revenue Minister Peter Dunne say.

Their statement today falls in line with what NBR ONLINE exclusively predicted last week.

“The proposal was made as a matter of fairness, because in general we consider that cash and non-cash benefits should be taxed the same way,” Mr English says.

“While we do not resile from that general principle of fairness, we do need to be pragmatic. This was considered likely to be one of those proposals from IRD where the cost of compliance, compared with the likely return, made it not worth pursuing.”

Mr Dunne says officials’ estimates of the number of carparks which would have been affected were far fewer than the 180,000 that was being talked about publicly.

“Even so, for expected revenue of about $17 million, and the difficulties around ensuring the policy would not have adversely impacted other workers, it seems sensible not to proceed,” Mr Dunne says.

“We will continue to focus on fairness in the tax system but we also think that there are bigger and more important tax matters for officials to focus on.”

The carpark tax plan attracted considerable unfavourable comment, undoubtedly from a significant slice of National's business supporters.

Comments and questions

The continued promotion of left-wing policies being proposed by this government is causing great concern to business.

Yes, but there's a bonus in this one. Having been first promoted by Labour, and then opposed because the other lot planned to introduce it, they will now have to drop it if they ever get back in power - that is if they become the coalition leader ahead of the Greens.

And we have aWINNER! The first person to link this back to Labour!!

If you step back a bit further you can see the issue is not really "left-wing policies". It's more about the bloated beast has an insatiable appetite that must be fed in any way possible. Left-wing policies, right-wing policies - in fact, any policy that will keep the beast fed is a must. As we have seen around the world, governments are running out of money and ours is no different. The productive sector is shrinking while the non-productive sector bloats and demands more from the productive sector by way of petty carpark taxes. Look at the number of courses run by the universities that are social services based and that the graduates have no hope of employment in the productive private sector. How many companies need to hire a graduate psychologist or a major in English Literature? As a technology company we hire engineers and software developers who can help us develop products that we export - not some BA graduate who has chosen to major in an obscure course like the influence of Aboriginal cave painting on interpretive dance. Bascially, the country is stuffed long term while we continue to offer non-productive courses that should really marketed as night school hobbies rather than careers. We are now actively moving our 100% export business offshore as we have come to the conclusion that no matter who governs here, the long-term outlook is that NZ is a nice place to own a holiday home but not a business.

Where's your loyalty? To your own back pocket. See you later.

Applying your logic then, everyone who seeks a better life for their families by moving elsewhere is being disloyal. Extending your logic therefore one can only conclude that anyone immigrating to NZ surely must also be disloyal to the country they left but I am sure you classify them differently. Your argument is hollow to say the least. Perhaps it's not loyalty that you really fear but the realisation that those who see the writing on the wall and have the means to leave are doing so.

Great post! I own a small, heavy manufacturing business and couldn't agree more

Tax fairness = Left wing??? Where do you get off??

It started at the smacking bill. We effectively have two Labour parties.
We certainly do not have a National Party.

How much longer do we have to put up with Peter Dunne?
Way past his use-by date.

Hair today, gone tomorrow.

Isn't he the unfortunate byproduct of MMP?

Rather, the unfortunate by product of hair gel.

His presence in parliament is not a product of MMP, however his presence in cabinet is. He is the Electoral MP for Ohariu. The people of that electorate voted him in to parliament represent them.

Did national stand a candidate in his electorate?

His presence in parliament owes a lot to Labour's Charlie Shovel, who stood against him.

National often govern on 35% of the vote whether it be under FPP or MMP.

We need more action groups like the FBT Action Group! How about an action group to stop the taxation of accommodation allowances?

That's great news. What about the smartphone and laptop tax?

The Bouffant One looks like a right buffoon, now.
"Trying to be fair", indeed.

Mr Dunne, what about GST on margins for locally owned inbound tour operators who currently cannot compete with foreign companies in our own country because your ruling?
You need to do something!

Can National stand a decent candidate next election? We want a change.

Why don't you do it if you want a change?

Or is it much easier to say than do?

With all your whingeing Solidarity, why don't you go down there yourself? What are you going to do rather than just whinge? Stand for the ACT Party?

It was a small man's tax from the get go. Why don't they all grow some nuts and simplify the tax system instead of polishing a t*rd.

Bet the pollies weren't going to get their free carparks taxed.

Dunne like a dinner.

I am aghast at National advocating for absurd taxation policies such as this. What is in the water down there? It is clear they do not want to be in power come 2014. What we need to do is ferret out just who's pee brain this cloudcuckooland idea emanated from and publicly vilify them. It wasn't Dunne's idea, someone floated it to him. The moron needs to be outed.

I don't get this. Surely the simplest (and fairest) way for any business, regardless of size, is for staff to pay for their own car parks? if necessary adjust their salaries by the equivalent amount.

Why should one staff member have to pay for a carpark and another not?

If an employee has a company supplied inner-city car park and another doesn't - and their salaries are the same - surely the value of their respective remuneration packages is not the same. Is their not an untaxed benefit enjoyed by the former, supplied by the employer ie a fringe benfit.

Okay then, so following that logic why don't we charge FBT on employers providing office space for their employees to work, as opposed to those who telework from home? Come to that, why don't we charge FBT on employers providing employees jobs? Why don't we tax and choke everything?

That is a pathetic argument Mark, unless of course you don't believe in people paying their fair share of tax. For everyone that avoids tax, I and my business have to pay more!

In theory, another double tax as this always was an FBT issue. I wonder how the big salary's and bonuses paid to the directors of SOE's are taxed ... I'm guessing they pay a pitance in Witholding Tax as a "contractor" and the rest disappears into a mystical trust fund.... that one would be easy to observe and control. NZ really could afford to tax the corporate pointy end a little more. Banks, for a start, are generally funded equally by the cross-section of society so they should have a higher level of social contribution by way of taxation.

You clearly know nothing about tax law. Reading your post, an old saying comes to mind: "Better to keep your mouth shut and seem like a fool than to open your mouth and remove all doubt."

I wasn't talking about law, I was talking about what might be a little more fair. I pay more in PAYE than many multimillion dollar businesses. I just don't bother to look for lots of loopholes and tax dodges which are legal. Carparks and other employee benefits should in theory already be declared as FBT liable benefits by an employer. So what's the point in a double grab from the employee by treating it as income? Bring on the cellphone and laptop tax, Peter...

Peter is becoming a burden for the nation and constituency....National should field a credible candidate next year if they want to win Ohariu!

A brilliant post from "Blood from Stones".
It beggars belief that this envy tax proposal could ever make it from the desk of some hairy-a*sed clerk/adviser and be pursued as a serious proposition by a lawmaker.

Why not tackle a real issue like the stupidity of three different tax rates on company, trust and personel entities. Like make the rate 20-25% across the board.
IRD pays interest on overpaid provisional but not overpaid witholding tax.
Cmon Peter Dunne, tackle some real issues. Leave the paper boy and the carparks alone.

Sorry, my earlier comments were in response to "J" not "Blood from Stones".