Latest / Best of Business / Robin Oliver: OliverShaw Tax Partner on Nicola Willis hinting income tax cuts could come if National re-elected

Transcript

Robin Oliver: OliverShaw Tax Partner on Nicola Willis hinting income tax cuts could come if National re-elected · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
• 0:13
  Speaker 1: and our wide range of podcasts now on iHeartRadio. Now,
• 0:17
  Speaker 1: Finance Minister Nicola Willis has hinted that the National Party
• 0:20
  Speaker 1: may campaign on tax cuts. She was asked about bracket
• 0:23
  Speaker 1: creep at the big Business New Zealand conference today, and
• 0:26
  Speaker 1: she said she'd have more to say on this after
• 0:28
  Speaker 1: the pre-foo, the pre-election fiscal update, which is in a
• 0:30
  Speaker 1: couple of weeks' time. But, of course, any adjustments would
• 0:33
  Speaker 1: only happen when we hit surplus. Robin Oliver is the
• 0:36
  Speaker 1: tax partner at Oliver Shore. Hello, Robin.
• 0:39
  Speaker 2: Evening. How are you?
• 0:40
  Speaker 1: I'm very well, thank you. But I tell you what,
• 0:42
  Speaker 1: I'm not excited about it because surplus is so far away.
• 0:45
  Speaker 1: What do you say?
• 0:47
  Speaker 2: It's a principle. It's common sense. We should index the
• 0:51
  Speaker 2: tax rates. And then if we need more money, we
• 0:56
  Speaker 2: should legislate that each year. The government should be transparent.
• 1:00
  Speaker 2: It should go to the public and say, actually, we
• 1:02
  Speaker 2: need to increase your tax rates on middle-income New Zealanders
• 1:05
  Speaker 2: because we're going to spend it on health care and
• 1:09
  Speaker 2: better ed and what what have you um but it's
• 1:14
  Speaker 2: transparency but to do it behind the scenes like there's
• 1:17
  Speaker 2: nothing to see here and everybody sort of gets their
• 1:20
  Speaker 2: wage increase and then wonders why they got less money yeah.
• 1:23
  Speaker 1: So your argument is you legislate so that it happens
• 1:26
  Speaker 1: automatically and by right every year your your tax just
• 1:30
  Speaker 1: your your bracket goes up as inflation.
• 1:33
  Speaker 2: Goes up unless parliament decides no we're going to put
• 1:35
  Speaker 2: the tax rates.
• 1:36
  Speaker 1: Up yeah i'm with you on that How much, if you.
• 1:39
  Speaker 2: The UK does it.
• 1:41
  Speaker 1: Does it do it?
• 1:41
  Speaker 2: The UK does index it, but they've overridden it every
• 1:44
  Speaker 2: year for the last several years, but they have legislation
• 1:47
  Speaker 2: saying the tax rates are indexed.
• 1:50
  Speaker 1: If we do it, what would you change the brackets to?
• 1:54
  Speaker 2: I'd just up them every year by the Consumer Price Index.
• 1:57
  Speaker 1: Right, you wouldn't start off with a big dollop of
• 2:00
  Speaker 1: change to just account for the fact that we haven't
• 2:02
  Speaker 1: had it adjusted for ages?
• 2:04
  Speaker 2: Well, I mean, the government's gone away and spent too
• 2:08
  Speaker 2: much money to do that i think we we're in
• 2:10
  Speaker 2: a fiscal problem so that's probably not feasible how much
• 2:13
  Speaker 2: does it cost i think the government would have to
• 2:15
  Speaker 2: override it anyway yeah for the time.
• 2:17
  Speaker 1: Being how much does it cost.
• 2:20
  Speaker 2: Oh i i don't know on the other hand but
• 2:22
  Speaker 2: it's about you know my memory is about you know
• 2:26
  Speaker 2: one or two percent of the tax to make so
• 2:28
  Speaker 2: you know it's a big money it is it's billions
• 2:30
  Speaker 2: yeah but that's billions the government is taking and And
• 2:34
  Speaker 2: it's the middle class. It's the people who are on
• 2:38
  Speaker 2: $ 70, 000 a year incomes whose tax rises from 30% to 33%
• 2:44
  Speaker 2: when they've got no more money in real terms.
• 2:47
  Speaker 1: Robin, of all of the taxes that have been discussed
• 2:49
  Speaker 1: at this election, and there are a fair few now,
• 2:51
  Speaker 1: by count there's nine, apparently, is there anything that you
• 2:54
  Speaker 1: actually like?
• 2:55
  Speaker 2: No. No.
• 3:01
  Speaker 1: Is that also on principle, is it, Robert?
• 3:05
  Speaker 2: Well, no, it's just, if we want more money to
• 3:10
  Speaker 2: fund the government, we should be upfront, debate what we're
• 3:13
  Speaker 2: doing and how we're spending it and why we need
• 3:15
  Speaker 2: to spend more on healthcare or education or New Zealand Super, whatever.
• 3:21
  Speaker 2: And then the fearless way is to take it from GST,
• 3:23
  Speaker 2: where we all pay for it. But this idea that
• 3:26
  Speaker 2: somehow or other you can identify someone else who will
• 3:30
  Speaker 2: pick up the bill is nonsense.
• 3:32
  Speaker 1: Yeah, I love your way of thinking, Robin. Thank you
• 3:34
  Speaker 1: very much. Do appreciate your time. It's Robin Oliver, Oliver
• 3:37
  Speaker 1: Shaw Tax Partner. Yeah, so what did I say? Surplus
• 3:40
  Speaker 1: is supposed to be achieved 2930. So what is that?
• 3:43
  Speaker 1: That's three, four years away. So you're not, and even then,
• 3:46
  Speaker 1: it's the kind of size of a surplus, that projected surplus.
• 3:49
  Speaker 1: And I can't remember exactly what it is off the
• 3:51
  Speaker 1: top of my head, but it's not flash. It's the
• 3:53
  Speaker 1: kind of number you look at and go, yeah, they're
• 3:55
  Speaker 1: going to push that out in a year or two.
• 3:57
  Speaker 1: So I think surplus is so far away If they
• 3:59
  Speaker 1: campaign on tax cuts on account of tax bracket creep,
• 4:04
  Speaker 1: you should basically do this and throw it in the
• 4:07
  Speaker 1: bin because it's just utter junk, isn't it?