Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


Government Plans New Tax on Motorists

Government Plans New Tax on Motorists

Car parks in Auckland and Wellington are set to cost 50% more as a result of John Key's new car park tax, business leaders and unionists say.

The indiscriminate 50% tax hike will be forced on everyone in the CBD from night-shift cleaners to merchant bankers, but is expected to pick up a comparatively paltry amount of additional revenue.

The new tax proposal, snuck into tax legislation in December, is currently before a Select Committee, and involves extending the 50% Fringe Benefit Tax (FBT) to all employer-provided car parks in the Auckland and Wellington CBDs.

This would mean businesses would pay an extra $1,500 a year for all on-premises car parks, and close to $2,400 a year for all commercially supplied car parks.

The FBT Action Group, a coalition of industry groups and businesses including Employers and Manufacturers Association (EMA) Northern, Property Council New Zealand and Tournament Group, says the tax goes against all the principles of good taxation policy.

“This is a discriminatory and inefficient piece of legislation,” said Property Council CEO Connal Townsend. “It will hurt businesses and workers and undermine the vitality of our city centres. It is grossly unfair that it only focuses on Auckland and Wellington, not every city in New Zealand.”

Mr Townsend says the new tax cannot be justified from a cost/benefit perspective.

“This new tax will no doubt entail major compliance costs and productivity losses for businesses, and for what benefit? The Government’s telling us this is only going to capture about $17 million a year in FBT,” said Mr Townsend. “It begs the question: what’s the point? Shouldn’t the Government be focusing on the big issues instead? The cost to implement this tax will exceed the revenue generated.”

Those comments were supported by an independent NZIER review, which found that the Government’s estimate of how much revenue the tax would generate failed to adequately consider the costs and benefits involved.

The review concludes that law-makers “cannot be confident that the proposals in the Bill are in the interests of New Zealand” and that “it is not clear at all from the RIS [Regulatory Impact Statement] that the proposed solutions are superior to the status quo.”

EMA Chief Executive Kim Campbell says that the new tax creates distortions and inequities, rather than removing them.

“The new tax will apply to all business in the CBD, but only some of those outside it, which is a big blow to CBD competitiveness,” said Mr Campbell. “Over time, this is going to push more and more businesses to the fringes, and undermine our most productive economic hubs. Limiting it to just Auckland and Wellington makes this a regional tax, something the Government has already ruled out as a revenue-gathering exercise to support public transport infrastructure spending in Auckland.”

Unite Union National Secretary Matt McCarten, whose organisation will join the FBT Action Group’s upcoming campaign against the new tax, says that the shift workers he represents will now be subject to FBT on work car parks if their shifts start or finish outside a 10pm-6am window.

“This is a daft idea drawn up by bureaucrats in Wellington who have no concept of reality,” said Mr McCarten. “The reality is that while the tax seems to target the benefits of highly paid white-collar workers, it also captures blue-collar night workers who can least afford to pay it. The reality is that thousands of night-shift workers in the city centre will lose their car parks, and will be forced to walk to and from cars parked in the streets at unsafe hours in some of the most unsafe parts of the city, risking assault and rape.”

Meanwhile, Tournament Group Managing Director James Brown says the new tax will be virtually impossible to administer.

“Trying to determine whether a car park is for staff or for customers, whether a car is for private or business use or even whether a worker is an employer or an employee is going to be a nightmare for the IRD,” said Mr Brown. “There a so many potential loopholes for tax-dodgers to exploit.”

The FBT Action Group is now preparing a public campaign to mobilise opposition to the proposal.

Mr Campbell said the Government had done a good job of sneaking the new tax in through the back door to avoid raising the ire of the public, and that the role of the FBT Action Group was to bring attention to the issue.

“This Group will use a range of media to let people know that the tax man is coming after their car parks, and next it will be their mobile phones and lap tops,” said Mr Campbell.

About the FBT Action Group

The FBT Action Group is a coalition of leading businesses and industry organisations that has been formed to articulate shared concerns about the proposed changes to the FBT, in particular the extension of the tax to include employer-provided car parking in the Auckland and Wellington CBDs.

The Group’s foundation members includes the following:

• Employers and Manufacturers Association (Northern) – 8,000 business members;

• Property Council New Zealand – more than 600 member companies; and

• Tournament Parking – leading provider of parking services nationwide
The Group’s role is to bring to the attention of policymakers, the public, and other stakeholders the harm that the new tax will bring to businesses and workers, and the costs that it will occur for a likely negative fiscal impact.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Labour's 'Future Of Work': Major Reform Of Careers And Apprenticeships

The next Labour Government will transform careers advice in high schools to ensure every student has a personalised career plan, Leader of the Opposition Andrew Little says. More>>

ALSO:

State Investments Management: Treasury Likes IRD, Not Education Or Corrections

The Inland Revenue Department has scored an 'A' in the first tranche of the Treasury's investor confidence rating for state agencies that manage significant Crown investments and assets, gaining greater autonomy as a result, while the Corrections and Education ministries gained a 'C' rating. More>>

ALSO:

Govt Goal: NZ To Be "Predator Free" By 2050

Prime Minister John Key has today announced the Government has adopted the goal of New Zealand becoming Predator Free by 2050... “That’s why we have adopted this goal. Our ambition is that by 2050 every single part of New Zealand will be completely free of rats, stoats and possums." More>>

ALSO:

Gordon Campbell: On The IOC’s Treatment Of Russian Sport, And Lone Wolf Terrorism

A blanket ban on Russian athletes would also have exposed the IOC to criticism that its treatment of Russia would have been marked contrast to its treatment say, of the track and field team from Kenya – a country about which the IOC has very similar doping concerns. More>>

ALSO:

Sounds Like A Plan: Auckland Council Receives Unitary Plan Recommendations

A key milestone in New Zealand planning history was reached today when the Independent Hearings Panel delivered the reports containing its recommendations on the Proposed Auckland Unitary Plan. More>>

ALSO:

National Park Expansion: Forests And Coast Of Kahurangi Protected

Five parcels of high value land totalling more than 890 hectares have been formally gazetted as part of the National Park. More>>

ALSO:

PPP Go-Ahead: SkyPath Gets Unanimous Support

Auckland’s SkyPath project has been given the go-ahead to be delivered through a public private partnership, after a unanimous decision at today’s Finance and Performance Committee. More>>

ALSO:

Gordon Campbell: On The Reserve Bank, The UN Shortlist, And Trump

Can there really be there any link between the US presidential elections and yesterday’s RBNZ signals on interest rates and the NZ dollar? Well, maybe. And it would be this: the improving US economy is reportedly putting a tailwind behind the US dollar, and rendering the actions of our Reserve Bank virtually irrelevant. More>>

ALSO:

Gordon Campbell: On What John Key Should Be Asking Joe Biden

No doubt, US Vice-President Joe Biden will be updating Prime Minister John Key on the chances of a TPP vote taking place in the ‘ lame duck’ session of Congress that’s held between the November’s election and the inauguration of a new President in January. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news