Sanford calls for tax on non-trade related transactions
Fishing company Sanford is calling for a tax on currency speculators so the New Zealand dollar reflects its real value.The call was made by managing director Eric Barratt at the company's annual meeting today, a week after the Tax Working Group suggested
Fishing company Sanford is calling for a tax on currency speculators so the New Zealand dollar reflects its real value.
The call was made by managing director Eric Barratt at the company's annual meeting today, a week after the Tax Working Group suggested the Government increase the goods and services tax and consider taxes on assets so income tax can be lowered. Prime Minister John Key is a former currency market dealer.
Sanford is an exporter and said it made a satisfactory return when the NZ dollar fell to around US53c to US54c last year in the wake of the global financial crisis. But it had quickly risen above US70c again.
The NZ dollar's rate was not determined by the fundamental economics of New Zealand as a country compared to other countries currencies but by currency traders looking for safe havens to park large sums of money for short periods.
A very small proportion of trades in NZ dollars were related to the basic trading in international goods and services. Mr Barratt said.
"It is high time New Zealand as a country started earning some income from these currency traders that costs shareholders in Sanford and other trading companies many millions of dollars each year.
"A tax on non-trade related currency transactions could not only earn significant income for the Government it could also result in our exchange rate moving closer to its realistic value and thereby add significant value to the wealth of New Zealanders."
Chairman Bruce Cole said the board had agreed that the company's balance sheet strength and corporate talent could be used more aggressively in the future.
The company's strategic objective included joining with like-minded parties "so as to move from the present fragmented industry approach".
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