1 00:00:00,080 --> 00:00:02,880 Speaker 1: A United Nations committee has questioned the fairness of world 2 00:00:02,920 --> 00:00:06,640 Speaker 1: tax systems and GST and New Zealand system. A statement 3 00:00:06,680 --> 00:00:09,280 Speaker 1: from the Committee for Economic, Social and Cultural Rights calls 4 00:00:09,320 --> 00:00:13,360 Speaker 1: for countries to check the taxes being applied proportionally to 5 00:00:13,520 --> 00:00:16,959 Speaker 1: the wealthiest individuals, and it says countries could focus on 6 00:00:17,000 --> 00:00:20,360 Speaker 1: more direct income taxation rather than taxes like our GST, 7 00:00:20,800 --> 00:00:24,040 Speaker 1: and they should tax large companies, particularly multinationals. So I've 8 00:00:24,040 --> 00:00:26,920 Speaker 1: got the partner from PwC, Sandy down with me right now, 9 00:00:26,920 --> 00:00:27,800 Speaker 1: good one to your Sandy. 10 00:00:28,920 --> 00:00:29,720 Speaker 2: Good morning Andrew. 11 00:00:29,880 --> 00:00:33,480 Speaker 1: So the UN says tax policies could disproportionately affect low 12 00:00:33,520 --> 00:00:36,519 Speaker 1: income households, women and disadvantage groups. 13 00:00:36,720 --> 00:00:43,239 Speaker 2: How look, I think the topic around fairners and the 14 00:00:43,280 --> 00:00:45,599 Speaker 2: tax system is not a new one, and in particular 15 00:00:45,640 --> 00:00:48,239 Speaker 2: you'll probably remember there was quite a lot of discussion 16 00:00:48,280 --> 00:00:51,560 Speaker 2: around this in New Zealand in twenty twenty three, where 17 00:00:52,400 --> 00:00:56,600 Speaker 2: in then Revenue that a research project on the high 18 00:00:56,640 --> 00:01:00,440 Speaker 2: wealth individuals and where they found that group there effective 19 00:01:00,480 --> 00:01:03,760 Speaker 2: tax rate across their economic income was around nine percent, 20 00:01:03,880 --> 00:01:07,840 Speaker 2: while the average income family was about around twenty percent. 21 00:01:08,040 --> 00:01:11,560 Speaker 2: But it's not as simple as looking at the tax 22 00:01:11,640 --> 00:01:15,440 Speaker 2: rate across different income levels. While the idea of sen 23 00:01:15,880 --> 00:01:18,240 Speaker 2: is important, we also need to make sure that the 24 00:01:18,319 --> 00:01:22,280 Speaker 2: tax system doesn't create additional barriers for economic growth. So 25 00:01:22,280 --> 00:01:24,520 Speaker 2: there's a little bit more nuanced than that than just saying, 26 00:01:24,560 --> 00:01:26,440 Speaker 2: you know, we want to increase our corporate tax rate 27 00:01:26,520 --> 00:01:31,560 Speaker 2: while putting a higher personal tax rate, because in the 28 00:01:31,600 --> 00:01:35,160 Speaker 2: front of corporate tax rate, our company tax rate needs 29 00:01:35,160 --> 00:01:37,800 Speaker 2: to be competitive so that we can attract that really 30 00:01:37,840 --> 00:01:41,479 Speaker 2: important foreign investment in New Zealand as well. So it's 31 00:01:41,480 --> 00:01:45,119 Speaker 2: really a case of growing the pie is probably likely 32 00:01:45,160 --> 00:01:49,120 Speaker 2: to be better for everyone. So it's important when we 33 00:01:49,160 --> 00:01:50,960 Speaker 2: think about our tax system we don't end up with 34 00:01:51,040 --> 00:01:54,440 Speaker 2: one that creates more barriers for us to achieve that growth. 35 00:01:54,960 --> 00:01:58,080 Speaker 1: True enough, enough, the fundamental foreign our economy though, is 36 00:01:58,120 --> 00:02:00,400 Speaker 1: that the government does not have enough revenue to sustain 37 00:02:00,440 --> 00:02:03,080 Speaker 1: our development, just to fund you know, just a business. 38 00:02:03,120 --> 00:02:06,760 Speaker 1: So politicians are reticent to get rid of GST. The 39 00:02:06,840 --> 00:02:10,560 Speaker 1: question is and what this UN committee asked, should they? 40 00:02:11,120 --> 00:02:14,120 Speaker 2: Yeah? Now, the GST one is an interesting angle because 41 00:02:14,120 --> 00:02:18,399 Speaker 2: from New Zealand's perspective, our GST system is often seen 42 00:02:18,440 --> 00:02:22,120 Speaker 2: as world class, and that's because it applies so broadly 43 00:02:22,200 --> 00:02:24,240 Speaker 2: and at pretty much everything. At the same rate. So 44 00:02:24,280 --> 00:02:27,360 Speaker 2: there is a very efficient tax and as you alluded to, 45 00:02:28,280 --> 00:02:30,840 Speaker 2: it does bring in quite a lot of taxes collected 46 00:02:31,639 --> 00:02:33,520 Speaker 2: for New Zealand. It's about a quarter of it so 47 00:02:34,160 --> 00:02:36,520 Speaker 2: over the last years around twenty nine billion dollars. It's 48 00:02:36,560 --> 00:02:39,560 Speaker 2: not small bookies, And I guess the key question is 49 00:02:39,560 --> 00:02:42,240 Speaker 2: that it's not as simple as just reducing that GST 50 00:02:42,400 --> 00:02:45,840 Speaker 2: rate or maybe we will record discussions around it making 51 00:02:45,880 --> 00:02:51,160 Speaker 2: certain things GST free, because one that's very expensive and 52 00:02:51,400 --> 00:02:55,040 Speaker 2: to the other things that's not very well targeted. And 53 00:02:55,080 --> 00:02:59,120 Speaker 2: it's not really entirely clear from evidence that that whether 54 00:02:59,160 --> 00:03:01,919 Speaker 2: that reduction will get pass on to your end customers, 55 00:03:01,960 --> 00:03:04,320 Speaker 2: which is your lower income households and things like that. 56 00:03:04,840 --> 00:03:07,240 Speaker 2: But there might be something in it because GS is 57 00:03:07,720 --> 00:03:10,840 Speaker 2: quite regressive. It can be regressive, and so looking at 58 00:03:10,840 --> 00:03:14,639 Speaker 2: how we make that more progressive could be a good idea. 59 00:03:15,080 --> 00:03:16,640 Speaker 1: So Andy, thank you so much for your thoughts and 60 00:03:16,639 --> 00:03:20,680 Speaker 1: your expertise. Today. For more from earlier edition with Ryan Bridge, 61 00:03:20,760 --> 00:03:24,359 Speaker 1: listen live to News Talks it'd be from five am weekdays, 62 00:03:24,480 --> 00:03:26,519 Speaker 1: or follow the podcast on iHeartRadio.