Key wants tax free funds hub urgently

Get financial services hub law in by April, PM Key tells Economic Development Minister Brownlee

2nd Dec 10, 8:41am by Alex Tarrant

Prime Minister John Key has called for urgent action on the proposed financial services hub which would see foreign funds administered in New Zealand at zero tax ~~interest~~, reports Fran O'Sullivan in the NZHerald.

Economic Development Minister Gerry Brownlee has been ordered to produce an urgent paper covering a zero tax rating for the relevant foreign funds which Key wants incorporated in the November taxation bill and passed by April 1 next year.

Key was talking on Tuesday night in Auckland

"There's been a whole series of advice coming from MED which basically says 'if you want to do this, you've got to deliver the Magna Carta of documents'," Key told the International Business Forum audience.

"'You've got to do all these things and need bipartisan support' and [so] it goes - on and on and on."

"I don't need the Magna Carta of documents - just get on and do something - which is why I have told Gerry to deliver me a paper that has zero rating of funds and we'll work on that."

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44 Comments

by Bernard Hickey | 2nd Dec 10, 8:47am 1291232876

Creating tax havens for funds management may not be a great idea.

Our trading partners aren't thrilled with this sort of thing.

It also smacks of the sort of 'short termist' tax driven ideas that Ireland used to build its economy.

And do we really want encourage the creation of a hub for financial services at a time when the rest of the world is beginning to blame the financial services industry for the melt up and meltdown of the last decade?

cheers

Bernard

by PI_Rimmer | 2nd Dec 10, 11:19am 1291241985

I'm not sure I agree with you on this one Bernard. I might be wrong, but if he's talking about zero-rated funds, that could just be referring to not taxing any capital gains that the fund might make on it's trading (which would be awesome for fund managers) - everywhere else, however, NZ would be benefiting as it would from any new business starting up: new high-paying, high-skilled jobs, office space leased and equiped, income tax/GST/ACC levys paid, and so on. If it doesn't come at a net cost to NZ, I don't see how this is a bad idea - a bit like supporting The Hobbit where the gains more than offset the consessions made. Also, Ireland's problems aren't due to low taxes, but to stupidly high levels of debt.

by steven | 2nd Dec 10, 12:32pm 1291246339

Opportunity knocks, when you are un-loved in one place and face punitive tax threats to your business and the small places like cayman islands are too small to stand against the US....who do you call? Why an ex-bank mate who now runs a country!

Do we care if our partners are not thrilled? OZ shafted us on apples for 90 years...the EU is set to implode....probably produce tariffs there and the US are pretty certain....Asia is the place for growth anyway....(ignoring peak oil) and here we are on its doorstep...

Alao the US and EU and japan will devalue, our exporters are going to hurt....do they care about us hurting? no....

regards

by Fred | 2nd Dec 10, 8:53am 1291233203

Wow, the Switzerland of the South Pacific, laundering money through anonymous accounts, no paperwork needed for that, wealth protection. We might even attract a few expats like Richwite and co back here. Can't believe he thinks that THIS is the best idea to get us back on track.

by Wolly | 2nd Dec 10, 9:31am 1291235505

Fred....I'm really sorry to break this news to you but there is no track to get back onto....!

by Alex Tarrant | 2nd Dec 10, 9:54am 1291236896

There's a new cycle track Wolly

by Fred | 2nd Dec 10, 10:09am 1291237769

Well all the 3,000 Financial Services Hub folks got to have something to do so they will spend their weekends, after tough weeks of trading derivatives of derivatives cubed, exploring the idyllic byways of the countryside by cycle sipping Latte's in homestays run by GBH. They just need to avoid Kunst out shooting bastards.

by Wolly | 2nd Dec 10, 10:28am 1291238894

Yes there is Alex but between the short sections of JKtrack we have the most dangerous bloody roads on the planet. Take Highway One out of Picton by bike and you will know the meaning of death at your elbow.....chances are you will not make it to Blenheim.......

by steven | 2nd Dec 10, 12:18pm 1291245497

Funny but the number of locals pulling out of junctions and pubs at low speed, not looking and then driving slowly/iractically have always endeared that stretch of road to me....not.

regards

by Kunst | 2nd Dec 10, 10:53am 1291240404

I'm not well informed but I heard the Primminster worked in England once for a famous company and nearly bankrobbed NZ. So, why not have this hub in NZ and we may can bancrop rich Switzerland and others. I think it is a good idea for the Primminster and his friends, sacked ministers Gerry and Steven to bring the money over here.

Because we are not rich, I think we should do everything we can, to makes money for us.

I’m sick of working hard anyway, so the Primminster can go down with tax and I have more time to drife to the Malborrow, fishing and hurting bastards and other pigs. It is all good for us - hubby hubby !

by Andy Rodgers | 2nd Dec 10, 8:59am 1291233594

First cycleways, now tax-free financial hubs, JK seems to be getting desperate.

by Mark Daly | 2nd Dec 10, 9:20am 1291234827

The idea never stood up to any type of scrutiny. Lots of time wasted on something that will have microscopic economic impact. Much more deserving initiatives out there.

by Les Rudd | 2nd Dec 10, 9:25am 1291235125

"So of the two countries, NZ and the Cook Islands I ask you which currently has a better regulated regime? Which should have more credibility as a financial centre?

NZ's lax regulation and stodgy, sporadic approach to legislative reform in my view makes it the perfect offshore centre. Perfect for the crims. Against any jurisdiction I've been involved with and dealt with regulators directly, NZ measures up badly at present."

http://asianinvasion2006.blogspot.com/2010/02/nz-under-regulated-offshore-centre.html

Let's stick with cycleways eh.

by hamrod | 2nd Dec 10, 9:31am 1291235481

I dont think we'll ever be the next Singapore... we'd have to reduce personal tax to near zero as well. Those investment bankers getting paid $10m + a year dont want to be giving 30% back to the government.

by chrissy | 2nd Dec 10, 9:48am 1291236504

And the benefit is that the govt-ratepayers get to bailout any financial enterprise that may take on bets that they have no intention on honoring themselves. Yay. financial wizards with poison potions. Yay.

by President of P… | 2nd Dec 10, 9:52am 1291236779

perhaps rather than zero tax they could propose sponser a WINZ client in lieu of higher tax costings.

by Wolly | 2nd Dec 10, 10:37am 1291239432

" a winz client"....don't you mean a thousand winz clients!

by President of P… | 2nd Dec 10, 9:54am 1291236897

by stevel | 2nd Dec 10, 10:32am 1291239126

This is desperate.

John Key knows what is going to happen to our cost of funds here soon.

Is anybody else a little worried when our prime ministed is prepared to dictate " .....I have told Gerry to deliver me a paper that has zero rating of funds "

And ignore democracy ".....need bipartisan support' "

by steven | 2nd Dec 10, 12:43pm 1291246980

To play the devils advocate....

Actually he has a democratic mandate.....some half whit MED official insists there is a need for bi-partisan support....constitutionally / legally there is no need for it.....the risk then however is that the next Labour Govn could un-wind it.....however ANY next Govn could un-wind it....

The urgency makes me scratch my head.....why is it now so sudden.......why?

Funny but didnt we want some uh leadership? well here is some.

regards

by Berend de Boer | 2nd Dec 10, 1:31pm 1291249889

Has nothing to do with OUR access to funds as this is about "International funds which are not invested in New Zealand but are administered out of NZ".

by powerdownkiwi | 2nd Dec 10, 10:51am 1291240269

"it will help to grow the worldwide industry".

The what?

That's total shyte! It's not 'an industry'. Does nothing productive.

Merely parasitic.

But you're right, Steven - smell the fear. You have to feel a little sorry for them (well, not really!) they weren't taught about what's hit them, and they're reactingin the only way they know how.

Straws, clutching, etc

by steven | 2nd Dec 10, 12:51pm 1291247506

Yes, straws, the Q is, why? whats the real action behind the scenes? what has Key seen or been shown that we have not?

JK said he had moved a lot of business into Irelend.....I wonder if his mates are now telling him they need to move it out really urgently.....the threat must be and indeed looks significant to them by staying in Ireland so they want to cut and run but have no "good" where to go....

Indeed its parasitic.....it actually I think damages industry...in terms of jobs and advantages though its quite cunning I think, I follow Steve Keen's work closely.....if it does not impact NZ finances etc.

Just think when the panic starts lots of bankers can fly here to lifeboat NZ in their private jets knowing their money is "safe" here in NZ....

Yet more useless skills for the powerdown and end of globalisation that no one will need.....

regards

Steven

by Kunst | 2nd Dec 10, 11:32am 1291242773

Who can sack the Primminister ?

by Casual Observer | 2nd Dec 10, 11:53am 1291243984

Hey Walter, you would have to be happy to read of this:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=106…

by Kunst | 2nd Dec 10, 12:34pm 1291246482

Exactly – more decent - and more higher skilled jobs for 70% of our workforce is the key for success of our nation and that can only be achieved in the real economy by increased production and less quality imports.

The government should invest billions in manufacturing infrastructure needs not importing them, but by allocating contracts to NZmanufacturers in order to lift employment, skill, research etc. and to support exporters in all sectors of industries.

Importing high paid jobs in the service industry creates more problems for our society then it solves.

A move in desperation from our PM - just an addition to our "Patchwork Economy"

by steven | 2nd Dec 10, 12:54pm 1291247697

All else being equal, Im not so sure it does create more problems....the knock on effects might just be worth while....

One I can think of is that the eyes with the money to invest will now be on NZ shores and not an ocean away....

regards

by steven | 2nd Dec 10, 7:57pm 1291273042

PM or Govn?

The Queen and her representative I think can sack the Govn but that would be very un-constitutional, otherwise its the caucus....for PM.

regards

by Vanderlei Luxemburgo | 2nd Dec 10, 11:34am 1291242846

The reason key is a genius is that he realises that kiwi's are bored of making and exporting things, and really want to service the whims of a bunch of international financial "experts".

He's way smarter than all you lemons.

by steven | 2nd Dec 10, 12:52pm 1291247569

Down on your knees and open wide eh?

regards

by steven | 2nd Dec 10, 12:25pm 1291245907

So JK has lost the plot big time....

or he's a great opportunist....

Q, if most countries around the world are looking at the banksters and aiming to slam super taxes or even lock them up, so they will want to run somewhere so to where? NZ has a stable Govn system, good air travel, communications, pretty good weather and english speakers....a perect tax haven for all those un-wanted banksters....bet JK has been touched up by his mates looking for the perfect haven....zero tax.....floating currency.....banks not due to implode....whats not to like about the deal?

Why so urgent? because the huge meltdown coming and its beginning to look like its 2011.....

regards

by Berend de Boer | 2nd Dec 10, 1:29pm 1291249747

Is this for real?

by David B | 2nd Dec 10, 2:02pm 1291251778

I see another New Zealand 'Yeah Butt' moment!

"Just do something!"

Typical New Zealand response - Yeah butt!

And ya'all wonder why you're poor!

by Christov | 2nd Dec 10, 3:24pm 1291256643

I think you will find Dear John is anxious to build a future for himself and the like minded from the cesspool of Forex traders.

It's probably quite normal to revert to ...."what you know"...when you start to panic........it is now absolutely evident the Prime minister is desperate to keep the NZD over valued...... and now a reasonable explanation is in order.

Exporters and manufactures....you have found your...enemy...he has revealed himself....now what are you gonna do about it.

by Kunst | 2nd Dec 10, 3:50pm 1291258221

As I said earlier today I have a bach in the Malborrow's and ........

by KW John | 2nd Dec 10, 4:38pm 1291261094

This looks like quite a nice place for a financial services hub....

http://www.barangaroo.com/opportunities.cfm?menu_id=2

http://www.business.nsw.gov.au/NR/rdonlyres/91ED0DD2-A77C-4F75-9AD5-FFA…

by steven | 2nd Dec 10, 7:58pm 1291273108

Total rot.....all you do is cause yet another bubble...

regards

by powerdownkiwi | 2nd Dec 10, 8:41pm 1291275677

He will understand them enough, Hugh. 132 IQ, or thereabouts, I seem to recall.

More than enough to raise him above the level of the simplistic.

If you catch my drift.

Whether he grasps the bigger picture - the global/resource depletion/limits one, I'm not so sure.

by scarfie | 2nd Dec 10, 9:19pm 1291277979

Gee I hope you are mistaken on that one. I mean it would be okay if he had some brain power supporting on the benches, but he doesn't. A bit light for a prime minister really.

by powerdownkiwi | 2nd Dec 10, 9:54pm 1291280082

There's never much brain power on the benches - no political party ever goes deeper that 6 or so with nous, and mostly they operate with less.

Cunliffe thinks he is but I don't, Parker may be, Cullen was, Fitzsimmins was, can't think of any others. I'd be seriously surprised if any of the current crop were knocking on the Mensa door.

by Fred | 2nd Dec 10, 10:37pm 1291282670

PDK

Actually understanding limits to growth is a 12 year old's comprehension. What happens after that is we "grow up" and become "tribal". The tragedy of the commons. Use it or lose it to the competition.

by Justice | 2nd Dec 10, 7:05pm 1291269945

Key is a another clear example of how wealth can sometimes be a total fluke. If this is HIS best idea then he clearly was just in the right place at the right time.

by powerdownkiwi | 3rd Dec 10, 8:50am 1291319456

close......

My physics Prof did a wee rave about 'Cognitive Dissonance' - acknowledged he was way out of his field, but that it was the only explanation.

The folk who laughed at Hubbert, genuinely believed in forever, as apparently do HughP, PhilB and others here.

Chronologically at least, they're not 11-year-olds.

The problem is that there was always going to be one dominant species, that it would consume resources, and would at some point (half-way through the Gaussian has to be seen as 'late') have to make a call - forward to annihilation, or back off to sustainability.

I'd have liked us the be mature enough as a society, to choose the latter.

So, in a way you're right - it's a matter of maturity.

Which has nothing to do with age :)

by expat | 3rd Dec 10, 1:52pm 1291337545

Or it may be in response to this

http://www.stuff.co.nz/business/market-data/4420429/NZ-share-market-at-risk-of-extinction