1
00:00:00,160 --> 00:00:02,960
Speaker 1: Right. Nikola Willis has spent the past three days hinting

2
00:00:03,200 --> 00:00:05,680
Speaker 1: at changes to company taxes. It all started when I

3
00:00:05,680 --> 00:00:06,880
Speaker 1: asked her about it on Monday.

4
00:00:08,080 --> 00:00:10,639
Speaker 2: We're not as competitive as we used to be. We

5
00:00:10,720 --> 00:00:14,200
Speaker 2: can't take tax off the table because it could make

6
00:00:14,240 --> 00:00:17,360
Speaker 2: a difference to our competitiveness. We always have to balance

7
00:00:17,400 --> 00:00:19,280
Speaker 2: that against our other pressing needs.

8
00:00:19,680 --> 00:00:23,119
Speaker 1: We are at twenty eight percent, Singapore is at seventeen,

9
00:00:23,400 --> 00:00:26,040
Speaker 1: and Ireland, which we love to compare ourselves to, at

10
00:00:26,079 --> 00:00:29,319
Speaker 1: eleven and a half percent. From memory. Since then, the

11
00:00:29,480 --> 00:00:31,560
Speaker 1: Finance Minister has been leaving a few more clues in

12
00:00:31,640 --> 00:00:34,360
Speaker 1: Jane tips Trainey is The Herald's Wellington business editor. She's

13
00:00:34,360 --> 00:00:35,840
Speaker 1: with me tonight, good evening.

14
00:00:36,240 --> 00:00:36,880
Speaker 3: Evening, Ryan.

15
00:00:37,040 --> 00:00:39,440
Speaker 1: What else has the Finance Minister been saying?

16
00:00:40,560 --> 00:00:43,480
Speaker 3: Well, I had a chat to Nichola Willis after you did,

17
00:00:43,600 --> 00:00:48,000
Speaker 3: and I asked her about the foreign Investment fund tax regime.

18
00:00:48,320 --> 00:00:52,800
Speaker 3: Now this sounds awfully dry and boring, but the Inland

19
00:00:52,840 --> 00:00:57,840
Speaker 3: Revenue has actually been consulting on tweaking this. These tax rules. Now,

20
00:00:57,960 --> 00:01:00,400
Speaker 3: these tax rules mean that if you have more than

21
00:01:00,400 --> 00:01:04,280
Speaker 3: fifty thousand dollars invested in offshore entities and companies and

22
00:01:04,319 --> 00:01:08,240
Speaker 3: shares you could be penalized with the way you have

23
00:01:08,280 --> 00:01:11,080
Speaker 3: to pay tax. So rather than pay tax on the

24
00:01:11,160 --> 00:01:13,920
Speaker 3: dividend income that you receive, you pay tax on a

25
00:01:13,959 --> 00:01:16,680
Speaker 3: certain portion of what your investment is worth. So it's

26
00:01:16,720 --> 00:01:18,320
Speaker 3: a bit like a wealth tax. You know, you pay

27
00:01:18,400 --> 00:01:21,200
Speaker 3: tax on the value of the investment, even if you're

28
00:01:21,200 --> 00:01:23,920
Speaker 3: not actually getting any money from that investment. Now, the

29
00:01:23,959 --> 00:01:27,720
Speaker 3: concern among some people is that that rule could deter

30
00:01:29,120 --> 00:01:32,560
Speaker 3: wealthy migrants from staying in New Zealand. All Kiwis who

31
00:01:32,560 --> 00:01:35,280
Speaker 3: have earned lots of money overseas and invested overseas from

32
00:01:35,319 --> 00:01:39,360
Speaker 3: returning back here, you know, because migrants are more likely

33
00:01:39,400 --> 00:01:43,160
Speaker 3: to have more money invested overseas, and if the tax

34
00:01:43,200 --> 00:01:46,800
Speaker 3: burden on them is you know, fairly heavy handed due

35
00:01:46,800 --> 00:01:49,720
Speaker 3: to these rules, then that could cause them to leave.

36
00:01:50,480 --> 00:01:52,240
Speaker 3: And you know, same with kis. If they have a

37
00:01:52,240 --> 00:01:55,320
Speaker 3: bunch of money invested in offshore companies, that could prevent

38
00:01:55,360 --> 00:01:58,080
Speaker 3: them from from coming back to New Zealand. Now there's

39
00:01:58,120 --> 00:01:58,480
Speaker 3: a bit of it.

40
00:01:58,600 --> 00:02:02,960
Speaker 1: Yeah, really interesting point. I mean, as you say, fifth,

41
00:02:03,000 --> 00:02:06,120
Speaker 1: we haven't heard much about fifth, but for those people,

42
00:02:06,200 --> 00:02:09,000
Speaker 1: it would be hugely beneficial if the rules were to

43
00:02:09,000 --> 00:02:09,519
Speaker 1: be changed.

44
00:02:10,280 --> 00:02:12,400
Speaker 3: Yeah, for sure, And I mean, it's a tricky one

45
00:02:12,440 --> 00:02:14,600
Speaker 3: because for a lot of people you might be thinking, well,

46
00:02:14,600 --> 00:02:18,079
Speaker 3: if you have more than fifty thousand dollars invested offshore,

47
00:02:18,160 --> 00:02:20,560
Speaker 3: then you know you don't really need a tax break.

48
00:02:20,600 --> 00:02:24,000
Speaker 3: You know, you're probably doing okay. But if the government

49
00:02:24,120 --> 00:02:28,320
Speaker 3: does want to attract wealthy foreigners to New Zealand, which

50
00:02:28,320 --> 00:02:31,160
Speaker 3: it says it does, then this is something that could

51
00:02:31,240 --> 00:02:33,280
Speaker 3: be changed now. I talk to Robin Walker, who's a

52
00:02:33,320 --> 00:02:36,480
Speaker 3: Deloitte tax partner, and she said it could be changed

53
00:02:36,520 --> 00:02:39,919
Speaker 3: so that you actually just pay tax on the income

54
00:02:40,000 --> 00:02:42,680
Speaker 3: you receive rather than paying tax on a certain portion

55
00:02:42,760 --> 00:02:47,200
Speaker 3: of your investment. Nikola Willis said that she was receptive.

56
00:02:47,360 --> 00:02:51,959
Speaker 3: That was a word, receptive to hearing concerns and possibly

57
00:02:52,000 --> 00:02:54,480
Speaker 3: making a change. I believe a whole bunch of people

58
00:02:54,560 --> 00:02:57,799
Speaker 3: have actually submitted to the ID on this, so it's

59
00:02:57,800 --> 00:02:59,359
Speaker 3: definitely a live issue.

60
00:03:00,320 --> 00:03:00,519
Speaker 2: Yeah.

61
00:03:00,760 --> 00:03:03,120
Speaker 3: The Finance Minister also spoke to me a little bit

62
00:03:03,440 --> 00:03:08,600
Speaker 3: about potentially phasing in any tax changes. So she said

63
00:03:08,600 --> 00:03:10,840
Speaker 3: that she should make announcements at the budget on May

64
00:03:10,919 --> 00:03:15,280
Speaker 3: twenty second, and she suggested whilst she wanted to look

65
00:03:15,320 --> 00:03:18,560
Speaker 3: at some tax settings in the here and now, there

66
00:03:18,600 --> 00:03:21,359
Speaker 3: could also be some phasing, so you know, I'm reading

67
00:03:21,360 --> 00:03:23,760
Speaker 3: into I'm reading into it a lot, but that could

68
00:03:23,800 --> 00:03:26,840
Speaker 3: suggest she might they might signal something at the budget

69
00:03:26,840 --> 00:03:29,519
Speaker 3: but only implement it in the future, because of course,

70
00:03:29,760 --> 00:03:32,760
Speaker 3: you know, the books are not in good shape, and

71
00:03:32,840 --> 00:03:35,640
Speaker 3: they'll be cognizant that if they're providing any tax breaks,

72
00:03:35,920 --> 00:03:40,480
Speaker 3: then you know, will that actually generate enough economic growth

73
00:03:40,520 --> 00:03:43,640
Speaker 3: and then enough additional tax revenue to not put the

74
00:03:43,640 --> 00:03:44,920
Speaker 3: books further in the read And.

75
00:03:44,880 --> 00:03:46,840
Speaker 1: It's how quickly that can happen too, isn't it. Janay,

76
00:03:46,880 --> 00:03:49,520
Speaker 1: thank you very much for that excellent reporting. Jane hips Trainey,

77
00:03:49,560 --> 00:03:51,800
Speaker 1: who's with us in New Zealand Herald Running and Business editor.

78
00:03:52,480 --> 00:03:55,640
Speaker 1: For more from Heather duplessy Ellen Drive, listen live to

79
00:03:55,760 --> 00:03:58,800
Speaker 1: news talks. It'd be from four pm weekdays, or follow

80
00:03:58,840 --> 00:04:00,600
Speaker 1: the podcast on I Hard Radio