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Govt dumps plan to extend GST to funds management fees after criticism & National leader Luxon saying he would unwind it

Personal Finance / news
Govt dumps plan to extend GST to funds management fees after criticism & National leader Luxon saying he would unwind it
[updated]
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Revenue Minister David Parker says the Government won't proceed with a proposal to standardise the application of GST to the fees and services of managed fund providers.

This announcement came via a press release just after lunchtime Wednesday, following criticism of the proposal, including from the opposition, after it emerged on Tuesday.

"Inland Revenue and Treasury advised this change be made to remove a loophole used by large financial companies, so they would have to align with how others in New Zealand pay GST," Parker said.

He said the move would've brought NZ fund managers more into line with Australia's approach.

“Smaller fund management providers who were doing the right thing were at a competitive disadvantage compared to others, mostly larger providers, who were using the loophole,” Parker said.

“Generally it’s bad to have these sorts of distortions in the tax system as bigger players can exploit them, but if the sector as a whole is happy to operate with the status quo then we will leave them in place."

He said during consultation views were mixed on the merits of the "technical" change.

"The large companies profiting from the current set-up were opposed to the change, while smaller providers were more supportive of the change. This was because these providers who did charge the full GST on their service fees faced unfair competition from the bigger players. However since the announcement it has become clear that smaller providers now oppose it too," Parker said.

National's unwind promise

Earlier National vowed to unwind the Labour Government’s plan revealed on Tuesday to extend GST to funds management fees.

Late Tuesday, the Labour Government quietly introduced an extension to the GST net to include funds management fees, Airbnb rooms and Uber fares. Combined, the change was expected to drag in an extra $272 million a year in tax revenues from 2026. That, in turn, would reduce future Budget deficits and therefore Crown debt by same amount per year, all other things being equal.

But it was also expected to reduce the amount of KiwiSaver funds under management by $103 billion by 2070 to $2.1969 trillion and cut non-KiwiSaver managed funds by $83 billion to $1.75705 trillion by 2070. 

It was done in a body of an omnibus of tax changes and without mention by a minister. Tax advisors and fund managers were given a heads up.

The change was included in the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Bill introduced into Parliament Tuesday afternoon. 

The detail about the GST extension for KiwiSaver was not included in the ministerial press release, but was included in the detail of the bill and its hundreds of pages of commentary and regulatory impact statements.

The changes included:

♦ Extending GST to funds management fees, which is expected to increase tax revenues by $225m from April 1, 2026 onwards and is estimated by the Financial Markets Authority to reduce KiwiSaver funds under management by $103b by 2070 to $2.1969t and cut non-KiwiSaver managed funds by $83b to $1.75705t by 2070;

♦ The extension of GST to online accommodation and transportation services such as Uber and Airbnb, which is expected to raise $47m a year in extra tax revenue; and,

♦ The exemption of public transport from fringe benefit tax, although the exemption for car parks provided by an employer also remains.

The news release focused on the Airbnb and Uber changes, along with the public transport exemption, which has been called for by the Greens for years. 

The GST extension to KiwiSaver and other managed funds snuck up on a few people because the 2018/19 Tax Working Group recommended not extending GST to financial services, in part because it risks opening up a very nasty can of worms that would lead to questions about why mortgage services and bank fees are not charged GST.

This Labour Government’s Tax Working Group recommended no change to GST on financial services in this 2019 paper on the grounds it would be too difficult to disentangle the tax on the service provided by the bank or the fund manager, from the return on the investment.

Parker and the IRD argue in the commentary on the bill that an anomaly has developed where some boutique fund managers taking a cautious approach on the ‘service provided’ aspect of their fees are charging GST, while others taking the ‘financial services are exempt’ approach are not.

This removes any doubt, but it’s not filling a hole in the GST net that is significant. New Zealand has the second most comprehensive GST net in the world. Only Luxembourg’s is wider, and that’s specifically because it does charge GST (Value Added Tax) on financial services provided to non-residents. This Tax Working Group chart from OECD data tells the story.

National and fund managers opposed

National Leader Christopher Luxon vowed in media interviews on RNZ and Newshub Wednesday morning to repeal the change once he was in government.

“They're addicted to spending and need to dream up whole new tax grabs and that's what this is,” Luxon said on RNZ.

"It doesn't make any sense and really what it is is again a government that has to dream up new taxes because it's got its spending out of control and it's delivering poor outcomes,” he said.

"We want people to stay really invested in KiwiSaver but this doesn't help. We need to stop this right now and not actually let the government even implement this."

Luxon later told Newshub: “This is now a retirement tax on top of all the other taxes that we've had."

“We're going to stop it. I actually think the team of five million people needs to stand up this week and actually say to the Government, 'Enough, stop' and actually get the Government to withdraw it,” Luxon said.

"This is such a bad idea - a retirement tax when we're trying to encourage people into KiwiSaver, it makes no sense."

Financial Services Council CEO Richard Kilpin said the council was disappointed with the bill that was over-reaching.

"In the middle of a cost of living crisis, increasing taxes that are then likely to increase the fees that consumers pay to invest in KiwiSaver and managed funds, and potentially decrease returns, is a suboptimal outcome,” Kilpin said.

Deloitte tax specialist Allan Bullot told Newshub the move was a sledgehammer.

“Everybody that I've talked to that's got a KiwiSaver fund and is talking and looking at this have told me that they consider it to be a brand new tax," Bullot said.

"Technically, is there a new tax that someone's invented? No. Are we coming and looking at something that hasn't been subjected to tax since 1986 and saying, 'We're going to change the legislation'... [it] sounds like a new tax."

Luxon said he had received messages in the early hours of this morning outraged about the plan.

"People are just so angry about it - how can the Government pile another tax in the middle of a cost of living crisis where everyone's doing it tough, just trying to get through it?,” he said.

"It's the cumulative effect of just all those costs adding up and it takes value off your KiwiSaver."

*Parker's release in full is below.

 GST proposal for KiwiSaver fees will not go ahead

The Government will not proceed with a proposal to standardise the application of GST to fees and services of managed fund providers.

Inland Revenue and Treasury advised this change be made to remove a loophole used by large financial companies, so they would have to align with how others in New Zealand pay GST.

The move would also have brought New Zealand fund managers more into line with the approach in Australia.

“Smaller fund management providers who were doing the right thing were at a competitive disadvantage compared to others, mostly larger providers, who were using the loophole,” David Parker said.

“Generally it’s bad to have these sorts of distortions in the tax system as bigger players can exploit them, but if the sector as a whole is happy to operate with the status quo then we will leave them in place.

“During extensive consultation views were mixed on the merits of the technical change. The large companies profiting from the current set-up were opposed to the change, while smaller providers were more supportive of the change. This was because these providers who did charge the full GST on their service fees faced unfair competition from the bigger players.

“However since the announcement it has become clear that smaller providers now oppose it too.

“It’s important to clear up some inaccurate representation of the proposal. New Zealanders’ KiwiSaver contributions and balances were not going to be taxed under this legislation. However it is clear from the reaction to this proposal that it has caused concern for Kiwis,” David Parker said.

“I am proud of Labour’s role in introducing KiwiSaver and its role in securing the future of New Zealanders. We will never do anything to undermine it.

“By contrast, National will not commit to keeping KiwiSaver in its current form, and cannot be trusted to support this important scheme. When last in Government National ditched the Kick-Start payment and introduced a tax on employer contributions,” David Parker said.

“Because of the importance of public confidence in KiwiSaver and the need to ensure nothing unduly affects New Zealanders’ willingness to save, the Government will not to go ahead with the proposal contained in the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Bill.”

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129 Comments

How are you guys enjoying the "No more Taxes" from Taxinda ?

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30

That was in their first term wasn't it?

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1

Clearly, Labour’s throwing in the towel.

A sizeable chunk of its support base won’t forget this madcap move at the forthcoming general election.

The late Sir Michael Cullen will be turning in his grave.

TTP

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20

Wanted:

- More pay for teachers and nurses

- Money to pay for retiring boomers

- More cheap housing

The country has desires far in excess of its ability to pay.

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19

They could start by reprioritising wasteful spending on consultants and bureaucrats before reaching into taxpayers' pockets for more moolah.

- Nurses, doctors and allied health workers are not going to get even a dime out of the hundreds of millions, if not billions, being spent on reshuffling the bureaucracy in the name of health reforms.
- The number of PR specialists earning over 100k at NZTA has gone up 10-fold since 2017, while road conditions continue to deteriorate.

The hiring of non-core staff across most public agencies has gone through the roof under Cindy but this did not offset the off-the-charts growth in spending on consultants and contractors that was promised.

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19

"while road conditions continue to deteriorate" - what that one guy in the Herald complaining of potholes? All the roads I drive on seem pretty good.

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1

not one guy roads are apalling state once off SH1

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3

There is an issue with wasteful spending on consultants and some bloat but the sums involved pale in comparison to the cost pressures.

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1

Is it ability, or willingness to pay that's the problem?  I suspect its the latter for those making the most noise about it. 

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3

More and higher benefits please sir

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2

Yip - I don't mind paying more taxes if i and everyone else gets a fair share of a better life as a result

I DONT like paying increased taxes for:

- more money for social housing because the RBNZ and government drove up the price of housing and brought in too many unskilled immigrants and created a massive bubble and shortage

- more infrastructure costs to pay for infrastructure for unskilled imported workers for the wealthy (sort out your own productivity)

- more money for people on benefit deemed unemployable (sort out your government delivery team and find ways to make them employable and motivate them to work rather than sit home on their ***)

- more money to pay banks interest for the money we printed and borrowed to give to the rich for peanuts during covid (dircing up house prices and making the place unliveable for many your professionals)

- excessive amounts of consultants and government staff that give us nothing 

- consultants to merge the DHB's, come up with plans for 3waters and bike lanes under bridges that will never be built

- dual systems to support different nationalities (make one efficient system with processes for specific people if required)

- because there is no CGT on housing and so investors in houses get a big return and money doesnt go to grow productive businesses as investments

Sorry - happy to write a list of what i am happy to pay for...  but at the moment a bit of a bee of chest about the massive ongoing increases in taxes and lack of anything to show the country in return except a potential recession. and lots of very wealthy landlords.

 

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14

They know they’re finished so now intent on forcing through as much change as possible before Sept 2023.

I just hope the damage they inflict on the economy and the people between now and then can be repaired by the next govt.

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9

wanting to throw National the old hospital pass

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5

Following National's logic shouldn't fund managers also be exempt from income tax - so they can pass on the savings to customers.

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9

The best approach would be to make all contributions to pension funds and other savings instruments such as endowment funds tax deductible to encourage people to save for their retirement, childrens education etc.

In fact these used to be deductible from personal income for tax purposes until the Govts started listening to the "ideological burps" coming up from the likes of Treasury & IRD - to those with a hammer everything looks like a nail.

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1

make all contributions to pension funds and other savings instruments such as endowment funds tax deductible

You mean like they used to be before Muldoon killed it off and no government since has bothered to reinstate?

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2

Yep exactly.

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0

Whatwillhappen,

The UK system is, in my view, better. Contributions to pension schemes are tax deducible while the schemes themselves are exempt, but the retirement incomes are then taxed. This allows for pension funds, both corporate and individual to grow bigger, with the government getting tax revenue once the pensions become payable.

Thus, as a partner and therefore self employed, my pension contributions received tax relief at 40% for many years and this encouraged me to make full use of the maximum contributions available.

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1

How does the UK tax authority treat lump sum withdrawals from pensions ? 

I recall a few years ago there was a huge scandal about major pension funds (eg Universities staff) being underfunded by tens of billions pounds, has this been fixed  ?

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0

This is possibly one of the worst Governments in the modern history of NZ. Once these incompetent and ideologically driven clowns are kicked out next year, it is going to take many years to unwind the damage done by this far-left government. 

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29

Haha, yeah, because far right governments world over have displayed a masterclass in how to run their countries over the past 30 months.

Imagine thinking it was as easy as switching teams.

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13

Why do you say 'far right' and not 'right'?

Are you saying National is 'far right'?

Or are you just using the term 'far right' pejoratively in a general, non-thinking kind of way?

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9

Hes responding to fortunrs belief that labour are far left. They are all far king useless.

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8

The fastest back-flip in the west 

Incredible stuff

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17

It reeks of panic and desperation, putrid politics by a party on borrowed time.

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17

Whatever. To me it reeks of over reaction to a sensible change to fix a tax Loophole favouring the banks over smaller KiwiSaver  providers. Seems labour can’t fix anything without claims of a new tax and the herald making up ridiculous sums, so they canned it. 

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3

Who needs Murdoch when we have The Herald/Zb nexus.

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1

She would not even have understood it. She would have said to Parker Let's do this Yipee

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1

Isn't GST a tax targeted to those who spend rather than save? Now we are disincentivising saving in a country that is already far behind in retirement savings? The silver lining here is that this should be another nail in Labour's coffin. Oh, and yet another example of the lack of transparency.

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26

Its a tax on goods and services. In this case a fund manager is providing a service aren't they? 

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12

So are Landlords?

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9

Housing is one of the few exemptions to GST. 

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1

Financial services were as well.

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18

Doesn't that seem like nonsense though? If I pay a guy to invest my money for me that has no GST but if I pay a guy to look after my teeth that does. If I were poor and had no investments but had shoddy teeth I would find that a tad unfair. 

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5

About as fair as a Hotel, Motel, Campsite, or even a Campervan  owner paying GST on each nights accommodation.

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1

Residential houses were left out as imagine the GST input claims if a renter was bought.... "could I please get a GST refund of $130k on the $1m I spent to buy this renter... Thank you").

Sure GST would be paid on the out but most renters would be locked and never be sold or be sold as a going concern and zero rated. Also, tenants do not want to pay an extra 15% just to live somewhere. If you can afford a holiday then you can pay the 15% for the hotel or campsite. 

Apples and oranges.

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1

Don't get me wrong, I am against it. But the logic holds. The Landlord is providing housing as a service. So rent could be taxed.

As for the property, again, they are operating as a business in everything but legal name. Their intent is to provide a service for a profit. Maybe if GST was applied on top of the purchase price for a non-owner occupied house, we wouldn't have seen the prices go stratospheric quite so quickly. Particualrly on the lower end housing.

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0

ha come on ... landlords are only serving themselves 

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3

As stated in the article, many are charging GST on that portion of the fee that relates to the service provided, so presumably this could be tidied up to be consistent and fair. However there is a reason financial fees are exempt, and my understanding is that GST was introduced to target those who could afford to spend, without disadvantaging those just trying to save.

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3

"It's a service!" ignores the fact that plenty of services are exempt. 

Hell, interest is the purest kind of servicing cost there is. It's exempt. Well, currently, anyway. 

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8

Interest is quite a bit different to fund management. AFAIK you are paying GST on the service provided by the fund manager, not on the gain from the fund. Isn't it more aligned with paying GST on bank fees rather than interest?

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3

So GST on break fees? Still a pretty crappy thing to sneak in under the guise of a remedial matters type bill, especially when you won't even adjust tax brackets for inflation once in a decade and counting.

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2

So, next up tax on the interest charged by Banks on loans ? Where does that end ? 
Better to introduce a Financial Transaction Tax as recommended a few years ago.

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4

Luxon could be falling into a trap I reckon. If I was Labour I would go into the next election with tax cuts equalling National's in total value but all applied to the lowest PAYE bracket, hence it will apply to almost everyone. National will have a policy of unwinding Labour's tax changes which will mainly help the rich and the property investors, Labour will give a tax cut to all for the same price. 

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10

National wouldn't unwind a tax cut of Labour's. They would just berate Labour for cutting taxes to buy votes (while denying any claim of hypocrisy).

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9

I agree that Labour will bring in tax cuts via level changes. I think it will be a wash though if the unemployment scheme is introduced. We can’t afford another three years of this lot. Just like Terry Baucher’s articles, the agenda with the left is always more tax take. 

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4

Ah yes the Luxon favourite - the Uno reverse card. 

What innovative ideas the Nats have. . . 

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9

Yep that's all their policies are is undoing whatever Labour has done. I for one find the prospect of wasting money undoing legislation a great reason to not vote National. Just wish Labour would give me reasons to vote for them.

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5

Undoing stupid is usually a sensible move.

 

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26

Tax dodged Roger.

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3

Mic dropped :)

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2

Won't tax land, will tax Kiwisaver?

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9

Literally everyone: One of the key issues with housing affordability is property's popularity as an investment due to it's favourable tax treatment compared with alternative investments.

Labour: So anyway, let's put another tax on the only actual investment the majority of Kiwis will ever have.

Gormless idiots.

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26

.... the same week they're splashing " cost of living " helicopter money to the living & the dead around the planet , they're dipping into our KS through a new tax ...  Saints preserve us . 

And  still no land tax , to pull back some of the  hundreds of $ billions of untaxed windfall gains landowners have accrued under Jacinda's government ...

.. protect the rich , kick the snot out of everyone else , as usual ... 

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7

Most of us here have bought properties, added value to them or let their value rise in a rising market, sold them, and paid tax on the profit. Don't waste everybodies' time pretending we don't have such taxes. If I have no money, and my property is deemed to have risen in value by a dollar, why would I pay tax on that rise in value? When I realise that gain, then I pay tax on it. Don't forget that if my property goes down in value, under your system, it becomes a tax deductible loss, to be claimed whether I realise that loss or not.

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0

Imagine if the Government started taxing businesses on their unsold inventory on an annual basis.  Could call it a SLOB stock tax.  

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0

The thing that stands out with this is the naivety around how the costs will be passed onto the investor.

Parker made the comment yesterday over that time the market will respond accordingly. If fees are already at a competitive rate it might flow through in fees - if not, it may well be there is no effect on fees,"

Somebody should remind Parker that these same investment companies were found to be charging fees on dead peoples bank and investment accounts - as night follows day - investors will be paying the GST on these fees and the kiwisaver providers will probably chuck in an additional admin fee for now needing to collect and transfer the GST through to IRD.

 

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14

This regulatory expansion is crippling us:

The detail about the GST extension for KiwiSaver was not included in the ministerial press release, but was included in the detail of the bill and its hundreds of pages of commentary and regulatory impact statements.

It seems the efficiency gains of computerisation have been exceeded by the vast increase in regulation they have enabled. Documents used to be a few pages long....

In order to do anything new we now have to go through hoops.

Papiere, bitte.

 

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8

If Luxon promised to repeal the FIF tax I may actually start paying attention to him

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2

Incentivise offshore investing? Seems unlikely anyone will do that.

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0

Can't tell if you are being sarcastic, but has not adding GST on fees done exactly that?

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2

Just making the point that Labour won't do it for that reason, and National won't do it because Labour would stomp all over them if they did.

Personally I'd be very pleased if it was gone.

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0

Why not? Overseas individuals and institutions invest millions of $ in New Zealand and then we complain when the profits and dividends are exported. If we were incentivised to invest overseas then we could be bringing hard currency profits and dividends home

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4

Unfortunately National's vision of casting a wide investment net just means buying a second investment property in a different suburb. Not that Labour are doing much better in this area, but they are at least putting a couple of thumbs on the scales against property - if they got the hang of actually incentivising other investments as well then that would be worth applauding. 

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10

The FIF tax is one of the most idiotic pieces of legislation ever. Unfortunately, I do not think that National have anybody financially competent enough to understand the nature and effects of a FIF tax, and why it should be removed as soon as possible.  

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6

At least Luxon should increase the threshold to 200k.

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2

The bigger concern for me was how David Parker tried to sneak this through. His release on the beehive website yesterday made no mention of this at all - the release focused on everything except for the extension of GST to funds management - 

What else has this government weaved into rushed legislation that we'll only learn about in the years to come. 

Tax bill removes FBT on public transport | Beehive.govt.nz

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17

It's a pointless trap for Nats to fall into and you wonder at their own intellectual capacity. Just like the furore about interest deductibility for landlords which they waste time attacking.  This GST change actually involves no observable change in anyone's day to day cash flows, as with the deductibility change, it is simply not a problematic issue for people.

National would be much better off going into 2023 with a clear scheme to cut middle class taxes on SALARY INCOME, not all this other crap. A forceful adjustment of brackets is the best way to do this.

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6

Yep, National giving peanuts to salary earners and sacks of cash to investors does not sound like a vote winner. 

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6

My usual reaction to politicians offering tax bribes is disgust.  Bad behaviour in my view.

But in for Kiwisaver if the Nats or Act offered to cut all Kiwisaver taxes -yes all - it would catch my vote because it's a good thing to do.

I would vote for no tax at all on Kiwisaver investment.  Nil. Zip. Zilch. Entry, earnings and exit. 

It's a social protection method.  It's not a standard investment. You can't get at it for your working life.   We need this boost in our country.

When I floated the 'no tax on Kiwisaver' idea earlier, commentator Hamish made this interesting comment.

".............Absolutely. It would certainly be a good move to turning our consume now, pay later way of living back towards what I think would be a better way of living........."

As for detail I do understand lining up the GST on the provider service.   And if Kiwisaver investment is not taxed at all, then I don't see the need for government subsidy as now.

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7

The elephant in the room is that NZ Super is completely unsustainable, and at some point NZ is going to have to face reality and send it the way of the dinosaur. I fully expect Kiwisaver will be the only source of cash for most of us in our retirement years. The government should be doing everything it can to make sure people have healthy Kiwisaver balances when that time comes, and not treating it like a piggybank to be raided when it suits. It absolutely should be tax free, I'm already going to pay tax for a couple of generations to receive a universal welfare scheme that I will never have the pleasure of accessing.

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4

"I would vote for no tax at all on Kiwisaver investment." - For old people it would make sense to funnel every cent into Kiwisaver, for young people not so much as they get locked in, so yet again we would end up with young people paying tax with wealthy superannuitants paying none (just like how I have to pay my own power bill and public transport while my wealthy uncles and aunties don't). 

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1

Young people would have the most to gain from such a change.

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4

Millennials are now turning 40.

The time is running out for them to pay down massive mortgages AND save for their retirement. Soon they'll be considered 'old people' as well. 

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And if the government gave every young person a $100 tax cut and every old person a $1000 cut, the young people still gain the most over their lifetime so should just be happy?

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0

Who has more working life left in them? They're going to benefit the most. You're talking about weighting the initial capital higher for older NZers, which no one here is proposing? 

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3

Jimbo Jones.  Your post at 1.14pm is not what would actually happen.  You got the young old thing back to front.

What would really happen is that young people would enjoy a tax free kiwisaver, and with the exponential curve young people would be the ones getting great returns because they have been there a very long time.

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2

... and .... they've caved in & dumped this idea : public backlash has caused the government to backtrack , and withdraw the extra tax on KS  ...

The problem is ... the extra damage is done to Ardern's circus ... further proof that they're totally incompetent , totally out of their depth ... totally our of their cotton picking minds ...

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16

Parker will of course say they were just following IRD and Treasury advise. 
 

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8

... I heard this " flip flop flip flop " noise , and I thought , that's nice ... Spring is coming ... folks are out & about in their jandals ...

But , no ! ... it was the government again ... flip flop , flip flop ...

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19

Second sentence in Parker's release - "Inland Revenue and Treasury advised this change be made to remove a loophole used by large financial companies, so they would have to align with how others in New Zealand pay GST"

He's a snake. 

 

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13

Looks like the voters rejected the premise of that tax.

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18

Hopefully David Parker gets marched by end of week.

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9

What a bunch of clowns! This government is utterly incompetent.

 

Let’s start a chain, I’ll go first:

  ‘Couldn’t organise a pi$$ up in a brewery’

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12

They got caught with their hand in the till.

And they knew it was going to hurt them. 

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6

Anyway that's my dash done with Kiwisaver. I'll be nixing my contributions and paying into managed funds from now on.

This sort of dicking around is exactly why I don't trust it. The first thing that should happen with Kiwisaver is a pivot to tax-on-exit or no tax at all.

Instead we get this political nonsense so that someone can crow about paying down debt faster using a hitherto untapped revenue stream.

I wonder how much damage this fiasco has done to the integrity of the scheme. It's clear with those who have the legislative power to stuff around it don't understand how compounding returns work.

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The GST that was proposed was going to affect managed funds outside of Kiwisaver also.

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1

The key difference is I'd have to be in material hardship to access KS funds before 65whereas with a managed fund, I could simply divest it and move it to something else, or even a GST-free return like a term deposit. 

Otherwise, it's totally locked away and you're just forgoing returns. The further away you are from 65, the more it functions like a payroll tax. The GST proposal tips the balance of control vs. returns away from Kiwisaver as being a sensible retirement savings vehicle. That's dumb as hell. 

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5

What an absolute circus!!!

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10

This whole business has been extremely bizarre. They had no prior public discussion about the merits of such a tax, then quietly hid it in a bill and made no announcement, and are now just retracting it a day later? Be interested to know what has gone on behind the scenes. This is a pretty big political fumble.

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8

or what this is being used to distract us from?

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Yes, an unfortunate consequence of idiotic behaviour is that it promotes such thoughts.

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The problem is, that it is hard to believe one Govt could offer up this much junk in a two terms without there being an ulterior motive.

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1

Wow !!!! Not even enough time to put a focus group together. DPMC staff just spent the morning listening to talkback and Parker got the call. "There's a dead rat coming your way, open wide"

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They havnt had enough time to blame the IRD ( they got " thrown under the bus " yesterday , by David Parker ) ... ... but Parker has ripped into the Gnats .... sheesh .... pathetic , Parker ..

 

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5

Just wait until the PM jumps in front of the camera and simply refutes the premise of ever having floated this tax in the first place.

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11

Ministry of Truth having a busy one today.

Glorious day for Labour as they remove the GST that was imposed on poor Kiwisavers by National 6 years ago.

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2

"I am proud of Labour's role in introducing KiwiSaver and its role in securing the future of New Zealanders. We will never do anything to undermine it. By contrast, National will not commit to keeping KiwiSaver in its current form, and cannot be trusted to support this important scheme."

David Parker said this just moments ago. Shows the contempt they have for the intelligence of the electorate.

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4

Lol, looks like their MoT is a lot more eloquent than me.

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Wow that was a quick turnaround! I suppose we could say they’re finally listening to the people.Or are they just getting nervous with an election next year and after so much negative press in the last couple of weeks?

 

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It isn't a good look for them. Maybe they also need to reverse their position into an enquiry over their rouge MP. I do wonder who is making decisions now. But I guess the good thing is that they do backtrack when they need to.

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I would suggest they only backtracked because of the negative press..and an election year is looming. Of course they should have had an enquiry re Dr Sharma.Makes one suspect there’s something to hide otherwise.what happened to being the most transparent government ever?

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FINALLY THE GOVERNMENT HAS BEEN ABLE TO COMBAT RAM RAIDS.  This was a ram raid by the Government on the Kiwisaver of New Zealanders.  What a U turn!  Just demonstrates how this Government governs.  Populist politics is only going to see this country go downhill even faster.  How many days until the next election?

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Honestly, what a complete shower.....

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It was crazy that they tried to sneak this in without even  a press conference. Now it has been dumped. It is a worry this happened in the first place.

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WTF are they up to... National should be all over this, will your everyday kiwi care though?

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Its a management service and should have GST added like other services and as the smaller providers were doing.

Who cares what that moron Luxon says. I have trouble taking religious people seriously. I wonder what he expects the James Webb telescope to see when they point it back to the creation of the Universe. An old man with a white beard.

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Last time I checked, Luxon was clean shaven? 

 

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Banks "manage" the savings sitting in your bank account - are you happy to start paying GST on top of the bank fees you are charged for this service? It was a dumb idea, and an idea that may have discouraged investment into Kiwisaver. The damage this government has done to the popularity of kiwisaver in just 24 hours is a real shame.  

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I'm not exactly a fan of Luxon, but I don't see how a person's religious beliefs should determine whether their thoughts on tax policy are valid. Maybe you are the moron.

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Careful, your prejudice is showing!

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The puppets are losing their strings.

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"You turn if you want to - because this lady's also for turning!"

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Muppets. And Parker is one of the worst. Overrated.

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It’s scary, it’s nonsense like this that makes me think I *might* vote the Nats to help get rid of these clowns.

It’s a scary thought.

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Two sides, same coin.

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This is a terrible look for the government. Despite the backlash it would have been better for them to stick to their guns.

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Populist not principled.

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Exactly.

I have no view on whether the original decision was a good one - I don’t know enough about it, and don’t really care.

But this flip flop is an awful look, and reeks of populism and lack of principles, as you say. 
 

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Seemed like a bit of a storm in a teacup to me. But as expected, a tax change that would predominantly be paid by wealthy asset owners is reversed

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Disagree. This affects everyone's KS, proportionate to total balance.

Also the more wealthy, the more likely to invest in non KS investments. 

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U TURN took 24 hours where as the KIWI BUILD policy uturn took forever.

Even the shake of the head,twirling of the hair or a wry grin couldn't get these thru.

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This is a play by Liarbour. They never intended to implement this and by walking back appear to be responding to popular will and so can put hand on heart and swear they're 'democratic'. There is plenty of stuff they're doing in the dark though that they don't want to subject to the will of the masses. 

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You know what else reduces future budget deficits... Not printing BILLIONS of dollars of new debt in the first place! 

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True.  NZ Government Debt according to Treasury increased from $60b to $100b in the past 2 years.  Shock, outrage that's massive etc.  It's the second biggest increase in Government Debt since 2009 when it increased from $10b to $60b.  

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Is anyone actually paying a substantial amount of fees to make it worth complaining about? I'm with Fisher Funds, GST on fees isn't worth my time to think about for 1 minute.

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Roughly 1% with Fisher Funds.   So GST on the fee portion would basically equate to 0.15% p.a. of additional cost via tax.  

Assume you put in $10k each year.  ROI is 10% per annum.  Over 30 years you'll have $1.7m in your Kiwisaver fund and have "paid" $24k in GST over 30 years. 

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That's roughly correct if Fisher is charging fees according to their estimates in their PDS. However they do not so if you look at the fees you actually get charged then its nothing to worry about.

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I was originally going to work on 0.5% in fees, I think some providers even work less than that, but I had a look at Fisher's website and saw their average estimates at around 1%.  Figured *shrug* it'll be a worst case scenario, and can only get better than that.  

https://fisherfunds.co.nz/investment/kiwisaver/fisher-funds-kiwisaver-s…

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