Category: Asia Pacific

Source: Govt’s austerity Budget to cause real harm in communities

Hon SIMON WATTS (Minister of Revenue): Thank you very much, Madam Chair. Look, a very good morning, everyone. Welcome back to the growth Budget, and what a great Budget it is. I don’t mind doing a basic lesson in what depreciation is for the member because, in effect, what we are doing is increasing the rate at which people can claim a tax deduction, increasing it in the first year and the balance will be claimed for the rest of the asset life. This is a timing difference; we are bringing forward that ability to claim that tax deduction. We’re not creating some new world or new paradigm of other aspect. We are simply moving that benefit forward so that New Zealand businesses can achieve a tax deduction—from yesterday—and get the benefit of that in terms of less tax this year.

That is a significant investment and opportunity for them as a business. But it in no way has any impact on what would be a normal rate of depreciation on any economic asset over the life of that asset. So the whole premise of the question is uninformed and without basis. Our policy is very much focused on delivering that economic growth. And heck, I mean, I guess some people in the House are concerned about too much economic growth. But on this side of the House, we think a little bit differently. We sort of think economic growth is a good thing. It sort of helps us with a range of factors including higher paid jobs, better standard of living, and more tax revenue flows.

CHAIRPERSON (Barbara Kuriger): That’s true, but that’s not what the member asked the Minister, thank you.

Hon SIMON WATTS: Well, the member asked about the risks in regards to the policy and I have clarified that it is a depreciation policy which is well articulated in accounting standards.

MIL OSI New Zealand News –

Source: Govt’s austerity Budget to cause real harm in communities

Hon SIMON WATTS (Minister of Revenue): Thank you very much, Madam Chair. Look, a very good morning, everyone. Welcome back to the growth Budget, and what a great Budget it is. I don’t mind doing a basic lesson in what depreciation is for the member because, in effect, what we are doing is increasing the rate at which people can claim a tax deduction, increasing it in the first year and the balance will be claimed for the rest of the asset life. This is a timing difference; we are bringing forward that ability to claim that tax deduction. We’re not creating some new world or new paradigm of other aspect. We are simply moving that benefit forward so that New Zealand businesses can achieve a tax deduction—from yesterday—and get the benefit of that in terms of less tax this year.

That is a significant investment and opportunity for them as a business. But it in no way has any impact on what would be a normal rate of depreciation on any economic asset over the life of that asset. So the whole premise of the question is uninformed and without basis. Our policy is very much focused on delivering that economic growth. And heck, I mean, I guess some people in the House are concerned about too much economic growth. But on this side of the House, we think a little bit differently. We sort of think economic growth is a good thing. It sort of helps us with a range of factors including higher paid jobs, better standard of living, and more tax revenue flows.

CHAIRPERSON (Barbara Kuriger): That’s true, but that’s not what the member asked the Minister, thank you.

Hon SIMON WATTS: Well, the member asked about the risks in regards to the policy and I have clarified that it is a depreciation policy which is well articulated in accounting standards.

MIL OSI New Zealand News –

Source: Govt’s austerity Budget to cause real harm in communities

Part 2 Amendments to other enactments

CHAIRPERSON (Maureen Pugh): Members, we now come to Part 2. This is the debate on clauses 17 to 30, to the “Amendments to other enactments”. Part 2 contains changes to the KiwiSaver regime as well as changes to the Tax Administration Act 1994. The question is that Part 2 stand part.

Rt Hon ADRIAN RURAWHE (Labour): Point of order. Thank you, Madam Chair. I refer to two matters. Before the closure motion and the vote on Part 1, the Chair seemed to indicate that despite the end of Part 1, that those elements of the KiwiSaver from Part 1 could be debated in Part 2. I just want to confirm that that’s the case, mainly because it is a bit odd given that we’ve voted on amendments to KiwiSaver clauses—but that’s what she indicated. There were very few calls on the KiwiSaver and I note that colleagues from the Green Party and Te Pāti Māori were seeking calls but were not given the opportunities to speak on that part of Part 1—

CHAIRPERSON (Maureen Pugh): I understand.

Rt Hon ADRIAN RURAWHE: So my question, just for clarity of the committee, is: have I heard that correctly?

CHAIRPERSON (Maureen Pugh): You have heard that correctly, sir. And I was watching the debate and I heard the previous Chair make reference to being able to go back, where relevant, into clause 1 as it relates to KiwiSaver.

Hon Dr DEBORAH RUSSELL (Labour): Speaking to the point of order. I just want to really, really clarify this because, with respect, the operative changes to the KiwiSaver regime actually occurred in Part 1. The Chair seemed to think that we could, in actual fact, discuss those operative changes in Part 2, but that’s going to be very hard because we can’t relate them to a clause in Part 2—they actually sit in Part 1. The amendments in Part 2 are very, very technical and just to do with a very small part of the changes. So may I suggest that provided we bring up new points, that we have a rather more thematic debate in Part 2 around KiwiSaver? We could confine it to KiwiSaver and always make sure we are bringing up a new idea rather than repeating ideas, rather than trying to relate specifically to clauses.

Tim van de Molen: Speaking to the point of order.

CHAIRPERSON (Maureen Pugh): I’ll just take some advice from the Clerk. Speaking to the point of order, Tim van de Molen.

TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Chair. There is, obviously, under Part 2, clause 17, which relates to KiwiSaver. My understanding of the comments from the Chair during the previous part were that KiwiSaver can, of course, be debated in Part 2 because there is a clause for that. But it would not be appropriate to give the committee the ability to rehash everything in clause 1 aspects of KiwiSaver because, of course, that’s been dealt with and voted on and completed under that part. So it should indeed be constrained to this part.

CHAIRPERSON (Maureen Pugh): We’re all in agreement. I think everyone understands as it—and I did listen to the previous Chair and she has provided me with confirmation of her ruling. So I think you’re correct, Dr Russell, that we can refer back to clause 1 as it relates to the KiwiSaver. But I think we’ll just see how the substantive questions come through. To your point about the repetition, we will be very alert to that. Thank you.

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