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Health industry supports call to scrap FBT

April 16, 2008


Health industry supports call to scrap FBT

The health industry says 250,000 more New Zealanders could benefit from health insurance cover if a Government advisory group’s recommendation to abolish fringe benefit tax (FBT) is adopted.

Health Funds Association of New Zealand (HFANZ) executive director Roger Styles said today FBT was a “significant barrier” to greater numbers of employers providing employee benefits, such as workplace health insurance schemes.

He was commenting after the release yesterday of a report by the Government’s Small Business Advisory Group, which made 16 recommendations including abolishing fringe benefit tax. Minister for Small Business Clayton Cosgrove said he would give a considered response once the report had been fully analysed.

Mr Styles said since FBT had been in place, the number of employees covered by workplace-based health insurance had significantly reduced.

“With the public health system unable to cope with escalating elective surgery need, such a boost in employee health cover would be timely,” he said.

“An extra 250,000 employees covered translates to up to 20,000 elective surgical discharges a year being insurance funded.”

Mr Styles said currently an estimated $116 million was saved from the public health budget annually as a result of workplace-based health insurance. About $275 million is spent each year on group health insurance schemes, providing coverage for around 620,000 people.


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