National floats company tax cut, recommits to higher pension age
By Pattrick Smellie
Aug. 26 (BusinessDesk) - The National Party is floating a cut to New Zealand's 28 percent company tax rate among a suite of possible tax changes it would promise going into the 2020 election.
"New Zealand has one of the highest company tax rates in the OECD at 28 percent and we collect the fourth largest share of tax in the OECD from companies," the party's leader, Simon Bridges, said today at a launch of the party's economic policy discussion document in Auckland.
"Tax is one of the single largest costs for businesses and can be the difference between a business surviving or not. So we’re asking questions about whether the company tax rate is becoming uncompetitive."
Finance spokesman Paul Goldsmith also re-committed National to its 2017 election campaign position to raising the age of entitlement for national superannuation from 65 at present to 67, but not starting that process for another 18 years, in 2037.
"We made this commitment to ensure the long-term sustainability of the scheme. We will again campaign on this," he said.
Also on the table are a proposal to allow savers to deduct the impact of inflation from their taxable interest income, small business tax relief modelled on Australia's, and accelerated depreciation for business assets.
Bridges accused the government of slowing the economy by slamming the brakes on a range of previously green-lit roading projects and failing to build momentum for plans of its own, such as the Auckland light rail lines.
"National is considering new approaches to infrastructure funding and procurement ranging from commercial revenue schemes, partnerships with the private sector and capital injections from general government spending," he said.
Congestion charging also remained on National's agenda to help "efficiently manage the flow of traffic" and which would be "revenue neutral." Work on that project began under the previous National-led government but was always some years over the horizon owing to the immaturity of available charging systems. Labour is also open to congestion charging, but only when sufficient public transport options to replace private car use are in place.
Other elements of the discussion paper that would see National return to policies of the Key/English government include reintroducing specific health, education and law and order targets that were developed under then Finance Minister Bill English's 'social investment approach' and have been replaced by a wider set of targets by the current administration.
Amendments to the Public Finance Act and changes at the Treasury would seek to identify waste in public spending and refocus on the outcomes that policies were achieving.
The paper also commits National to imposing a requirement that all government agencies pay small businesses within 30 days of invoicing and introducing a voluntary 'Small Business Payments Guarantee’, "committing large New Zealand businesses and not-for-profits to ensure New Zealand small businesses are paid on time and within 30 days."
Bridges also promised a "regulations bonfire," taking a leaf from the Donald Trump playbook by promising to "repeal 100 regulations in our first six months in government and we’ll eliminate two old regulations for every new one we introduce."
On tax policy, National has already announced it would index tax brackets to inflation to deal with so-called 'bracket creep', where people on lower and middle incomes work their way into the top tax brackets simply because those brackets haven't been changed for some years.
Goldsmith recommitted that "we won’t introduce any new taxes in our first term." The party would also repeal the regional fuel tax, repeal the offshore oil and gas exploration ban, overturn the current government's foreign investment restrictions, and repeal changes to employment legislation, including the removal of 90-day trials for firms employing more than 20 people.