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9/3/2018 — Economics, Politics and Government
Tax inquiry could crimp investment
By Dene Mackenzie

A Dunedin tax expert said the uncertainty being created by the Tax Working Group about the future tax system may make people hesitant about investing, causing the economy to stall.

Polson Higgs partner Michael Turner was responding to reported comments by working group chairman Sir Michael Cullen which seemed to suggest a wealth tax, a tax on financial transactions, a broader capital gains tax, a land tax and new environmental taxes were in the mix.

Turner said there were no surprises in what Sir Michael was saying.

''He appears open to newer and broader taxes. We would expect a working party to kick around all sorts of ideas, but I guess the key is what they ultimately recommend.

“I think, reading between the lines, we can expect reasonably significant changes to the tax system in the working party's recommendations, and it will be interesting to see which of these the Government proceeds to implement.”

Federated Farmers was calling on its members to speak up about tax issues.

Vice-president Andrew Hoggard said the working group was considering whether the tax system operated fairly in relation to taxpayers, income, assets and wealth, and whether it struck the right balance between supporting the productive economy and the speculative economy.

The last review of the tax system was in 2010 when farmers were outspoken in opposing the idea of a land tax, he said. A land tax was one of the options before the new working group.

“Eight years have gone by since the last review. Our farmer membership has changed as has the economic and agricultural landscape. We aim to vigorously represent our members' views in our submission and to the Government when it considers the working group's final report.”

To do that, Federated Farmers was asking members to think about the issues and make the organisation aware of their views, Hoggard said.

A survey had been designed so farmer members could tell the federation about what they felt were the shortfalls, pluses or omissions in the current tax system and what changes, if any, were desirable from their point of views.

The survey went out on Monday and in less than 24 hours, nearly 500 farmers had responded. The survey closes next Wednesday.

A Tax Working Group ''background paper'' would be published on that day. The public would be able to make submissions until the end of April, ahead of a draft report in September and a final report in February next year.

The Government established the working group in December to consider ways the tax system could be overhauled after the 2020 election.

*Dene Mackenzie is political and business editor of the Otago Daily Times.

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