NZ Finance Minister: Equity And Fairness Key To Tax Changes

by Mary Swire, Tax-News.com, Hong Kong

21 October 2009

Equity and fairness will guide the government's consideration of the Tax Working Group's options for changes to the tax system, New Zealand’s Finance Minister, Bill English, has said.

"The benefits must clearly outweigh any potential difficulties to warrant significant changes," he said in a speech to the Institute of Chartered Accountants in Auckland. "Equity and fairness will be key considerations, alongside benefits for the economy and for households."

The Tax Working Group, led by Victoria University's Centre for Accounting, Governance and Taxation Research, is taking a first principles look at the tax system. It is also considering how tax can contribute to economic growth based on exports, investment and sustainable jobs.

"The group is looking at proposals that, when taken together, are fiscally neutral," Bill English said. "The Government has a strong preference not to increase taxes to close the budget deficit. We prefer more efficient taxes over higher taxes. And, unlike other many other countries, we have no desire to increase the tax take."

The Tax Working Group is due to report in December and its options will be considered by the Government early next year, English said. New Zealand would also need to be mindful of international developments – particularly the Henry Tax Review in Australia.

"Australia is our largest trading partner, the source of much of our foreign investment and a destination that lures large numbers of Kiwi workers abroad, so we are keeping a close eye on developments,” English concluded. “If the Henry Review results in Australia moving to lower its taxes, our own review will leave us well placed to consider options that maintain our international competitiveness."

Recommended