Dunne signals more tax grabs in Budget 2013
"More gutless grabbing from NZ'ers who actually work to get ahead so they can fund those who don't."
Featured commentExpect more bach, boat and paperboy tax grabs.
That was the message from Revenue Minister Peter Dunne to the New Zealand Institute of Chartered Accountants’ tax conference today.
Tax officials have already begun preparing proposals for Budget 2013 and although nothing has been decided yet Mr Dunne says the approach will be similar to the kind of tweaks seen in the last two Budgets.
“I am not making Budget announcements today – we are not yet at that point – but I can tell you that in line with successive Budgets and recent tax changes we will continue to make the system fairer and more efficient.”
Those changes are aimed at helping the government return to surplus by its target date of the 2014-15 financial year, he says.
By implication, this means any moves to make the system “fairer and more efficient” will be aimed at raising rather than reducing taxation.
However, Mr Dunne says if this were the sole criterion the government would have simply raised tax rates.
“To assist with returning to surplus we need to maintain robust taxes in order to raise the revenue we need to fund Government services and functions.
“But we will do it in ways that are as fair and efficient as possible, and that means that we apply existing tax bases more broadly to reduce distortions to investment and increase fairness so the tax burden is spread more evenly.
“This year’s Budget tax announcements inspired some to accuse the government of scraping the bottom of the barrel, casting around desperately for any dollar we could.
“While that is a colourful description, it is simply missing the point entirely.
“If the objective was to raise as much revenue as possible, we could do that very easily by raising rates or imposing new taxes, whereas the Budget decisions were about tidying up the system and removing outdated some tax credits.”
More explicitly, Mr Dunne says higher tax rates, a capital gains tax and/or a financial transactions tax would not help New Zealand.
Calling advocates for New Zealand to copy some EU countries in examining a financial transactions tax “sad and predictable”, he says “taxes that were dumb to introduce in the past are likely to still be dumb to introduce in the future".
“We are not in the business of rushing about applying quick-fix measures every time a new crisis arises.”
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Comments and questions25
Mr Dunne. You must take a stronger look at giving a haircut to Working for Families,(400,000), Interest free student loans,(200,000), and superannuation,(600,000).
This area of gifting transfers and government election bribes cannot continue at these extremely generous levels.
More gutless grabbing from NZ'ers who actually work to get ahead so they can fund those who don't.
Closing loopholes is fine provided that it doesn't add additional compliance. FBT is already a nightmare and the new mixed use asset rules look like a good reason to get out of mixed use assets.
Lets us remember not to trouble ourselves with matters of 'legitimate avoidance"
We continue to look at the paper boy for more tax while completely ignoring paying $28,000 to a superannuant couple living in a 2 million dollar house.
Thus the level of dependency gets ingrained in our youth.
Not long ago, it was a personal embarrassment to receive a government handout.
Given that the couple probably paid huge taxes while working, and will now be paying massive rates on their property, they should be given much more than $28,000. Like everone else, they have to eat.
I'm interested to know if the total average tax paid over the working life of superannuitants would be at the same level as the taxes being paid by the working class of today?
That's $28k after tax, not gross...
Actually, it's gross.
Sorry Lincoln, but one of us needs new batteries in our calculators: http://www.workandincome.govt.nz/manuals-and-procedures/deskfile/nz_superannuation_and_veterans_pension_tables/new_zealand_superannuation_tables.htm
So one thing i cannot understand is the detremental way the NZ tax regime penalises familys-
i earn say X and my wife stays home (our choice) to raise my family- yet if we were to famr my children out to child care and put her to work- and earn 1/2X each our tax liability would not only decrease by 20% as a family but we would then get childcare rebates (if they still are available)
Based on quick numbers under scenario 2 we would be over 6k per annum better off as a family or $115 dollars- SORT IT OUT NEW ZEALAND- i was better off in this arrangement in the US for goodness sake
Income splitting should not just be considered for families with children - any family where one partner is not in the workforce should have this option (as in other countries). For one thing, that is another job-seeker not on a benefit, presumably, and well worth the tax difference, rather than the cost of another income support payment.
the point is a good one. But as with all of these issues where then does the offset come from to continue to run the hospitals. Someone has to pay the bill.
I dont think anyone objects to taxation for the basic needs such as health and hospitals but when tax is used for direct election bribes and endless universal transfers, thats another issue.
Stay at home mums (or non-mums) don't get the benefit. Or, if they do, my wife's been keeping it pretty quiet for the last 5 years.
I think the point that was being made was that if they were working, another would be on a benefit, not your spouse...
What about income splitting for polygamists?
If I had say 3 wives, I could just about get them all on salaries under the minimum threshold for paying taxes.
And we continue to be happy to allow overseas people purchase our properties on which they can make tax-free capital gains that they can't in their own country, all the while pushing up the price of our properties...
Cutting compliance cost may go some way to achieving the "fairer" tax system Peter Dunne is talking about. What's ""fair" about requiring SMEs to act as the IRD tax collection agents - gee, they don't even provide postage-paid envelopes!
paperboy tax grabs - that's the sort of thing we expect of Labour, taxing children
I think you mean labour supporters with the mental capacity of children?
We are a really wonderful country ti immigrants check out what we provide for the steady stream of Pacific Islanders from all avenues, housing,health,education,income,childcare, plus untold unlimited subsidies, of which a lot of it is squirreled back to where they came from.
Now check this out the Indians, they come here and as we all know and soon the extended family arrive, then all of the oldies arrive they then find out that the oldies do not qualify for NZ Super, so hey presto they get lined up and provided with the unemployment benefit.... OHHH yes!!! NZ is a very wonderful country, and it is us hard workers that provide all of this, it is no wonder that no matter what Govt is in power, they need to find heaps more tax dollars to fund this in our very wonderful country, now when is someone going to grow some nuts and correct some of these terrible wrongs, I don't think anyone begrudges immigrants coming to our shores, but hells bells stop the associated baggage climbing over the fence.
Just read a question (and answer) in the Sydney Morning Herald Money section.
We really are a million miles from Oz
.....I understand I can earn up to $18,200 a year before I must pay tax. Is the pension included in the calculation of my annual income for the purposes of paying tax? If not, am I able to earn casual income and bank interest to a total of $18,000 before paying tax?
If you are a single person and are eligible for the senior Australian tax offset, you can earn $30,684 a year and pay no tax. This includes income from all sources, including the age pension. A pensioner can earn $6500 a year from employment - this money is not taken into account when assessing their eligibility under the income test.
The master plan for the NZ tax system is just a giant Ponzi scheme. Those that still have means (the haves) will be taxed so heavily to support handouts to those that don't (the have-nots) that they will soon become have-nots too. Then we can all line up together for our state handouts ... and find our cupboard is bare. Please remember that the politicians all get paid 6-digit incomes to run this Ponzi scheme for us. Me? I am moving to Greece.