Tax takes

Saturday, February 25th 2006, 12:11AM

I've had a number of responses to my Blog on tax. These are published here as the comments function is currently turned off. If you would like to add something email me at blog@goodreturns.co.nz

Prospect of fairness unlikely
Hi Phil, a belated comment on your capital gains Blog. In all the discussion about the tax, people seem to have ignored the comment in the discussion paper to the effect that the government believe it is in the best interests of the country that New Zealanders invest at home rather than overseas. Surely this is as much, if not more, the driving force behind the tax than the raising of revenue itself. So long as this belief exists in our socialist government, the prospect of making tax on overseas investments more equitable is unlikely, Cheers, Alan Milton.

Tax driving good people away
When Dr Cullen learns the simple lesson of not penalising New Zealand savers he may get somewhere. Before I retired I had the good fortune to work for a well known electricty supply organisation in Auckland for 26 years. They had a National Provident lump sum super scheme in place with a dollar-for-dollar subsidy with a cap of 10% of your salary etc.
When I worked overtime under Rob Muldoon I frequently paid the top tax rate of 56% (prior to the Lange Govt reforms) and then put that money into providing for my retirement.
When I retired the lump sum was paid out and I pay income tax on the interest this earns as if it were wages, salary etc. There is NO CONCESSIONARY INCOME TAX RATE FOR RETIREES IN NZ. However there are concessions in place in Australia for retirees for income tax. Therefore Dr Cullen and Labour want to penalise your savings despite the wall-to-wall rhetoric of talk wanting you to save. Yeah Right!
Take as an example the ASB Bank Headstart bank account for children, babies etc. The deduction is 19.5% at source on children's savings. Again a concession could apply.
How can the New Zealand government expect to attract ExPats back home only to find draconian rules to tax foriegn investments held by Kiwis whilst the Cullen Fund and ACC invest ovewrseas no doubt granting themselves a dispensation from the de facto capital gains tax legislation beyond Australia.
The same will apply to Ex Pats concerning their as of right workplace Super from Australia where no doubt this Government will want a slice of the value of the earnings from that fund or apply a Capital Gain tax to that.
There is no incentive to save in New Zealand and if you do the government wants its pound of flesh every which way. A good starting point would be to ask Sir Bob Jones, Sir Ron Briely and others why they dont reside in New Zealand these days?
We in New Zealand are driving good people away for good and we wonder why they keep on moving away. - R. Clarke.

« This was probably the deal of the year in 2005

It's not all about looks »

Special Offers