Tax base broadening measures in Budget 2012 will target high income New Zealanders who structure their financial affairs in ways to avoid their obligations, Finance Minister Bill English says.
Speaking to media ahead of tomorrow's Budget, English would not be drawn on what those measures might be, or how much revenue the government expected to raise with those measures. Prime Minister John Key has said there will be one new base-broadening measure in Budget 2012.
English confirmed the new measure would not be anything like a capital gains tax. The government is already tightening up on the use of trusts, and how mixed-use assets such as baches attract tax.
Meanwhile, the theme of Budget 2012 was confidence in uncertain times, English said.
“Things haven’t all gone New Zealand’s way, but the Budget shows the government’s confidence in getting its own books in order, [and] also in being able to support a growing economy that generates more jobs and better incomes," English said on Wednesday morning.
“Just because things are a bit tough hasn’t diminished our confidence, and we think that reflects the resilience of New Zealanders. They adapted pretty well to difficult times, and I think we continue to show that confidence that we are going to see results," English said.
The Budget would be a sensible one, not an austerity budget, which would show steps to stop the government’s debt rising while improving New Zealand’s longer term growth prospects.
English said he expected the credit ratings agencies to respond "pretty positively" to the Budget.
"What's important there is, we're a small, highly indebted nation, and foreign lenders are getting pretty uneasy about who they can lend money to, because they need to know they're going to get it back," he said.
"The Budget will show a credible path to surplus, and that it's achievable and under control. I think that will be pretty well received."
Base broadening
Prime Minister John Key said at the start of May that Budget 2012 would include one base broadening measure which hadn't yet been announced. He said it would come as no surprise.
The no surprises comment led PWC partner Geoff Nightingale to point to the IRD's 2012/13 tax policy work programme, which includes work on a number of small measures to tighten up holes in the tax system.
The government has already announced it is changing live-stock valuation rules, how employee benefits like carparks are taxed, and how mixed-use assets such as baches (which can be used privately and for income-earning purposes) were treated.
Revenue Minister Peter Dunne told media in Parliament on Wednesday afternoon that work was still ongoing on how employee benefits like carparks should be taxed, and would not feature in this year's Budget.
A paper from the New Zealand Transport Association ealier this year estimated there was at least NZ$675 million of annual untaxed benefits from company cars and carparks.
See Bill English talking about the changes and the Budget this morning in the video below:
(Updates with video of Key and Dunne, video of English at Budget printers Wednesday morning)
28 Comments
Another great idea for the government to consider.
Stability and choice - "THE NZ GOLD DOLLAR"
Recommended for Bernard and team and other experts: Listen to Dr. Bruno Bandulet – could be an interesting concept for New Zealand.
http://www.youtube.com/watch?v=GXC44l942bE
..and other reasons why:
http://www.youtube.com/watch?v=qeQtpRGSI_8
Not an austerity budget........? well the following statement tells you everything you need to know about who the Govt would like to keep happy.................The ratings agencies, the IMF hall monitors gone rogue.
English said he expected the credit ratings agencies to respond "pretty positively" to the Budget.
"What's important there is, we're a small, highly indebted nation, and foreign lenders are getting pretty uneasy about who they can lend money to, because they need to know they're going to get it back," he said
.......and to use the words "he expected" was outrageously presumptuous of you Billy Bob...you can expect all you like, just pray they don't do the homework to check if your path to prosperity isn't full of potholes.
A tick on this occassion...will amount to about 1cent for a day or three.....your clutching at straws boyo!
Great spectacle on BE at question time in parliament yesterday.
http://inthehouse.co.nz/node/12781
worth another airing.
Superb, thanks. The last bit strongly suggests that Bill English thinks that the proceeds from the sale of a capital asset help the Current Account, when both business sense, and Norman's question, show it absolutely does not. This is so worrying of a Minister of Finance, that it is laughable. We are probably the only nation in the history of the Western world that has a Finance Minister that does not understand the difference.
It also explains why they are carrying on with the sales. English does not understand basic accounting.
Morally bankrupt. And those same individuals will sit down for dinner with you and with all the persuasive arguments of the upwardly mobile, decry the broken welfare state.
When individuals make a concerted effort to act morally, not just technically within the rules the whole of society benefits. We all should try it some time.....especially all the f&^ked up religo's out there.
WFF is based on income, not assets (I think) and if your family earns more than about 120K you don't get it. I am wondering how they manage to do this if they are earning "well into 6 figure each". We have 5 kids, similar incomes, self-employed and sure don't get a cent (nor would I want or expect to)! Go figure...
I am not sure how but I know they have very good tax accountant. I was told by them at a BBQ that each of their income is channel into a holding company, some expenses are being paid via their subsidiary company.. Don't know too many details
They travelled to europe for business and then holiday regularly. Often on business class (yes, they posted on FB)
Ahhhh, I see. I do our returns and we don't channel anything anywhere other than claiming legitimate business expenses... And we're honest. That might explain why we pay a whole lotta taxes!! I'd feel pretty bad if we tried to game the system when we have more than adequate incomes though...
I'm going to call BS on you - making up rubbish about people you 'supposedly' know.
People might believe you a bit more if you didn't blatantly make stuff up - you cannot earn well into 6 figures and claim working for families. The fact that their assets are in a trust is completely valid and more to the point does not impact whether or not someone qualifies for Working For Families. The fact that you are bleating about it as if it is, invalidates your comment entirely.
FYI - the way trusts work, is that you make investments via them and then only play the trust rate on the resulting income. You seem to think they are a magical way of pretending you have no income and don't have to pay any tax.
Is the " Car-Park Tax " the fore-runner of a full-blown land-tax ?
..... you gotta test the waters , start with a carpark tax ... then move onto a man's shed tax , build up to a haybarn & tractor shed tax , then vacant house sections ..... slowly-slowly catchee tax avoider ..
.. .[ basic rule of thumb : if you still have cash in your pocket , you're deemed to be avoiding paying your " fair share " of tax , unless proven otherwise ]
..... where's that woman we biffed out , the one with Romanian economics as her template .. .. can we get her back ?
In 2010 the World Bank defined high income countries as those with a gross national per capita income of $US 12 196 or more ....
..... back in 1976 the US Congress dictated to the IRS that high income ( for tax purposes ) be $US 200 000 p.a. income ..... they never bothered to index that for inflation ; had they done so high income would be set at $US 708 612 p.a. 30 years later , in 2006 .
.... do you earn somewhere between $US 12 196 and $US 708 612 per annum , Billy ?
You may be a " rich prick ! " ( M. Cullen quoted )
Let's leap past the spin and BS ok....imagine revenue exceeds expenditure on paper for one day somewhere in the future..........What Then I ask!
Do we have a govt capable of shrinking the size of govt...fat chance
Time we were allowed to see Nationals plan for the next two decades....or are we to accept they have no plan...
A good plan would see all govt debt paid off....it would see further shrinkage of the state sector...it would point to planned tax reductions, both paye and gst.
The tweak and fiddle years are over....
That is interesting Wolly.
Your prescription is pretty close to what National have in mind. They want to shrink the size of government as % of the national cake and get taxes down so people can spend their own money.
That involves growing the cake which seems a bit challenging but i doubt it includes cutting GST.
.... if the Nats wanted to shrink the role of government they'd have dumped the seriously dopey WFF ....... instead of which , they've increased it ......
That Cheshire Cat " purr " of satisfaction you hear is one Michael Cullen , impressed that the Nats support his policies 100 % .....
...... which makes me wonder , why did we chuck Clark & Cullen out , if their policies are still in force ? .... they must've been doing the right thing , yes ?
How the rich behave.
Jon Corzine and MFGlobal - 21 min Frontline programme here.
http://www.pbs.org/wgbh/pages/frontline/mf-global-six-billion-dollar-bet/
Copied from an email.
Dear Mr. Key,
Please find below our suggestion for fixing NZ's economy.
Instead of giving billions of dollars to banks that will squander the money on lavish parties and unearned bonuses, use the following plan...
You can call it the Patriotic Retirement Plan:
There are about 200,000 people over 50 in the work force.
Pay them $1 million each severance for early retirement with the following stipulations:
1) They MUST retire.
200,000 job openings - unemployment fixed
2) They MUST buy a new car.
200,000 cars ordered - Car Industry fixed
3) They MUST either buy a house or pay off their mortgage -
Housing Crisis fixed
4) They MUST send their kids to school/college/university -
Crime rate fixed
5) They MUST buy $100 WORTH of alcohol/tobacco a week ...........
and there's your money back in duty/tax etc
6) Instead of stuffing around with the carbon emissions trading scheme that makes us pay for the major polluters, tell the greedy b........s to reduce their pollution emissions by 75% within 5 years or we shut them down.
It can't get any easier than that!
P.S. If more money is needed, have all members of parliament pay back their falsely claimed expenses and second home allowances
If you think this would work, please forward to everyone you know. If not, please disregard.
Grumpies of the World Unite
Also .
Let's put the pensioners in jail and the criminals in a nursing home.
This way the pensioners would have access to showers, hobbies and walks.
They'd receive unlimited free prescriptions, dental and medical treatment, wheel chairs etc and they'd receive money instead of paying it out.
They would have constant video monitoring, so they could be helped instantly, if they fell, or needed assistance.
Bedding would be washed twice a week, and all clothing would be ironed and returned to them.
A guard would check on them every 20 minutes and bring their meals and snacks to their cell.
They would have family visits in a suite built for that purpose.
They would have access to a library, weight room, spiritual counselling, pool and education.
Simple clothing, shoes, slippers, PJ's and legal aid would be free, on request.
Private, secure rooms for all, with an exercise outdoor yard, with gardens.
Each senior could have a PC a TV radio and daily phone calls.
There would be a board of directors to hear complaints, and the guards would have a code of conduct that would be strictly adhered to.
The criminals would get cold food, be left all alone and unsupervised.
Lights off at 8pm, and showers once a week. Live in a tiny room and pay $600.00 per week and have no hope of ever getting out.
Think about this (more points of contention):
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THE NZ CONSTITUTION - They keep talking about drafting a Constitution for Iraq ... Why don't we just give them ours?
It was drawn up by a lot of really smart guys, it has worked for centuries and we're not using it anymore.
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THE 10 COMMANDMENTS
The real reason that we can't have the Ten Commandments posted in a courthouse or Parliament, is this -
You cannot post 'Thou Shalt Not Steal', 'Thou Shalt Not Commit Adultery' and 'Thou Shall Not Lie' in a building full of lawyers, judges and politicians...... It creates a hostile work environment.
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Also;
Think about this ..... If you don't want to forward this for fear of offending someone -- YOU ARE PART OF THE PROBLEM! It is time for us grumpy old folk of NZ to speak up!
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