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The Soap Box: Don't expect any radical tax changes anytime soon

Author
Barry Soper,
Publish Date
Fri, 24 Nov 2017, 6:27AM
Prime Minister Jacinda Ardern, NZ First leader Winston Peters, NZ Green Party leader James Shaw. (Photo \ Getty Images)
Prime Minister Jacinda Ardern, NZ First leader Winston Peters, NZ Green Party leader James Shaw. (Photo \ Getty Images)

The Soap Box: Don't expect any radical tax changes anytime soon

Author
Barry Soper,
Publish Date
Fri, 24 Nov 2017, 6:27AM

You'd think the Government would have advice coming out its ears when it comes to tax reform.

You can understand when a party's in opposition, with a good chance of making the Treasury benches, wanting advice from the private sector and from the academic policy wonks.

But once they make it they've got more than 360 Treasury wallahs to call on, at last count. They're the Beehive's lead advisors on economic and financial policy with a vision statement telling us they're there to help the Government achieve higher living standards for all New Zealanders.

And if they're not happy with Treasury, there are almost six thousand staff working over at the Inland Revenue that could lend them a helping hand.

Not happy with that though the new inhabitants of the Beehive have decided to set up a Tax Working Group, appointing the Clark Finance Minister Michael Cullen as its chair, which is akin to an inside job although given his tight fisted reign as the purse-string puller, don't expect any spare change flowing from its findings.

In fairness to Cullen's Scrooge McDuck reputation, he did know how to diminish debt and for that the incoming National Government should have been forever grateful.

They of course had their own Tax Working Group, but then that was the brainchild of the bureaucrats, presumably to make sure they were getting it right. That of course meant the likes of Bill English could ignore their advice and other than increasing GST and cutting income tax, he did.

This working group's a political one and was used during the election campaign by Labour to park unattractive proposals, rather than front them. Outside the group's clutches will be income tax hikes, GST, except to reduce it on tampons, inheritance tax and capital gains on the family home or the land beneath it.

If the group of notables, which we'll know the names of before Christmas, feel that those areas would help in their objective of making the system fairer, and more balanced, ensuring everyone pays their fair share, then tough bikkies, they'll just have to come up with something else.

Four million bucks has been set aside for their deliberations which will be supported by a secretariat drawing from Treasury and the IRD, or taking it back to the officials who're already paid to give the advice. But just to make sure that's kosher they'll have an independent advisor to analyse the advice from the seconded working group advisors.

So with all the expert advice surely we can expect a taxation system second to none. But then again the recommendations that'll flow from it are non binding, so with an eye to a second term in the Beehive, don't expect anything radical this side of the next election.

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