8 December 2010

Media Statement

Out-of-touch Dunne at it again on behalf of wealthy Kiwis

National is pushing through more legislation that advantages wealthy Kiwis, but does nothing to alleviate the plight of those struggling with the increased cost of living, says Labour’s Revenue spokesperson Stuart Nash.

Stuart Nash said the Taxation (Tax Administration and Remedial Matters) Bill, which has now passed its first reading, proposes to repeal tax gift duty.

“Gift duty is a charge on the total combined value of any gifts over $27,000 that one person makes over a 12 month period. How many Kiwis are going to benefit from this being repealed? Very, very few will, and all of them who do will be wealthy.”

Stuart Nash said Labour opposed the Bill. “Yet again Revenue Minister Peter Dunne has introduced a Bill that not only advantages those who have the resources to structure their wealth in trusts, but also perpetuates intergenerational wealth transfer.

“While trusts have an important role to play as a legal entity, the unscrupulous can hide assets in trusts for a number of reasons, but fundamentally to avoid transparency and mitigate their tax bills and avoid liability.

“The way this bill is drafted, a person can immediately gift all their assets to a family trust, thereby technically and legally owning nothing,” Stuart Nash said. “This allows a person to avoid creditors and can provide access to services or benefits that require some form of asset testing, like, for example, rest home subsidies.

“Abolishing gift duty paves the way for the intergenerational transfer of wealth to those lucky enough to be born with a rich benefactor.

"Labour believes that there are enough provisions in the current gift duty legislation to ensure that gifts to registered charities are exempt from any duty, but gifts to entities for the purposes of structuring affairs for avoidance are caught by the current legislation.

"Revenue Minister Dunne has completely lost touch with what can make a difference to the lives of middle and low-income New Zealanders,” Stuart Nash said.

"Previous tax bills, like increasing GST and income splitting, also highlight the fact that it is time for Peter Dunne to make contact with Kiwis who face the everyday struggle of coping with the increasing costs of living.”

ENDS

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