United Future leader, Hon Peter Dunne, says the Government has flunked a critical test of its commitment to cutting business red tape by failing to make changes to the Fringe Benefit Tax regime.

He says the Fringe Benefit Tax is an outmoded of mid 1980s tax policy which has long outlived its usefulness.

"FBT was introduced by the Labour Government in 1985 to deal with distortions in income packages arising out of the Muldoon Government's prolonged 1982-84 wage and price freeze."

"It was seen simply as a way of dealing with a particular problem of the time, and not as a specific revenue source."

"It was always acknowledged that FBT imposed additional compliance costs on business, and this was promoted as a reason why employers should seek to structure remuneration packages so that the FBT did not apply," he says.

Mr Dunne, a former Minister of Revenue, says the situation has changed significantly since the imposition of FBT and it was now time to abolish it altogether.

"It is has served its original purpose, and is now just an impediment to doing business."

"A signal that it is to be abolished would be a powerful indication of the Government's commitment to further tax simplification."

"However, by ruling it out with the same firmness the Prime Minister showed at Knowledge Wave Conference when she ruled business tax cuts to promote competitiveness showed that when the crunch comes, this Government's commitment to promoting a better business environment is worse than luke-warm," Mr Dunne says.

Ends

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Gordon Campbell: On the Sony cyber attack

Given the layers of meta-irony involved, the saga of the Sony cyber attack seemed at the outset more like a snarky European art film than a popcorn entry at the multiplex.

Yet now with (a) President Barack Obama weighing in on the side of artistic freedom and calling for the US to make a ‘proportionate response’quickly followed by (b) North Korea’s entire Internet service going down, and with both these events being followed by (c) Sony deciding to backtrack and release The Interview film that had made it a target for the dastardly North Koreans in the first place, then ay caramba…the whole world will now be watching how this affair pans out. More>>