News Round Up

Pros and Cons of capital gains tax, Calan delays construction, NZSE index changes.

Sunday, September 17th 2000, 12:37AM

The New Zealand income tax system is especially open to manipulation as a direct result of not having a general body of rules taxing capital gains, IRD general manager (policy), Robin Oliver, has told a conference in Canada.

"Moreover, in some areas our tax rules defy policy logic, creating problems that defy an obvious policy solution for this same reason."

He says the lack of a comprehensive capital gains tax has created some problems and favours certain types and methods of investing.

For instance the lack of a capital gains tax discourages intermediation, and favours mismanagement of equity portfolios, domestic shares over foreign shares and equity over debt.

For a full copy of Oliver's speech to the Fraser Institute 2000 Symposium on Capital Gains Taxation visit the Features section.

Calan delays construction

The past 12 months have been a difficult time for the Calan Healthcare Property Trust because of a sharemarket that dislikes property, some one-off costs in the books and increased holding costs for key projects which have not yet been started.

Despite this chairman Neville Darrow says Calan is positioning itself for future income growth.

He says the trust has delayed the start of construction on the flagship Waitemata Private Hospital and Ascot Clinics and this has resulted in increased holding costs.

Construction will begin once the pre-leasing of the facilities is finalised.

"While these projects have the highest priority the board does not consider it prudent to begin construction until it is fully satisfied with the tenant mix and final specification of each facility," he says.

Index Changes
The following changes will be made to NZSE indices from October 2.

NZSE 10: No Change
NZSE 40: Steel and Tube will be removed and replaced by Frucor
NZSE 30: AMP Office Trust shares and notes will replace TrustPower
NZSE Mid Cap: TrustPower, Metropolitan Life and Ryman Healthcare will be replaced by GDC, Restaurant Brands and Tasman Agriculture.

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