Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Spending restraint welcome but higher tax not

Media release

25 June 2014

Spending restraint welcome but higher tax not

Labour’s signals of more discipline in spending are welcome, but its higher tax proposals are concerning, says BusinessNZ

Commenting on the alternative budget released by Labour today, BusinessNZ Chief Executive Phil O’Reilly said its costings and commitment to frugal spending would be welcomed by the business community, although he cautioned that some of the costings had been heavily qualified by economists involved.

“Labour’s proposal for a firm approach to tax avoidance by multinational companies is sensible in the interim while international measures to harmonise international tax law are being worked through,” Mr O’Reilly said.

But the centrepiece of the alternative budget – an increase in the top personal tax rate and trust rate to 36 percent – would not aid competitiveness and would penalise those who tended to invest most.

“Higher income and trust tax along with a new capital gains tax are not good signals for anyone wanting to invest in New Zealand’s growth.”

He questioned whether the proposed capital gains tax would raise much revenue, given the proposal included the ability for losses to be offset against capital gains.

He said the proposal to abolish the current targeted R&D funding regime and reinstate general R&D tax credits was surprising given the distortions arising from their past use in other countries.

“General tax credits for all business bring an incentive to claim credits for spending unrelated to research and development, diminishing the amount actually spent on R&D. Targeted grants based on company performance and co-investment are a more transparent form of assistance.”

Another feature of the alternative budget – the proposal for the government to build and sell 10,000 homes every year – would be an unwelcome intrusion of government in the private sector, Mr O’Reilly said.

“The key problem here is local government zoning decisions restricting land supply and pushing up prices. A better intervention would be to require better zoning decisions by local government.”


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Science: Hookworm Discovery At Malaghan Institute

Professor Graham Le Gros has led a team which has stimulated both innate and memory responses to the parasite, discovering along the way the unexpected behaviour of one particular immune cell, in Hookworm, one of the world’s most devastating tropical ... More>>

Business: Provinces Urged To Make Full Use Of New Air Services

Provincial New Zealand has been urged to use new air services to Auckland or risk losing them either partially or completely. The stark warning was issued today by Far North mayor John Carter at a ceremony at Kaitaia airport to mark the final Air ... More>>

Mobile: 2degrees To Credit All Calls And SMS To Nepal

In the wake of the devastating earthquake in Nepal in the weekend, 2degrees will be crediting all calls and SMS messages made to mobiles and landlines in Nepal from Friday 24th April until midnight Wednesday 29th April. More>>

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news