1 00:00:01,000 --> 00:00:03,640 Speaker 1: You're listening to a share these podcast. 2 00:00:04,000 --> 00:00:06,680 Speaker 2: I'm sure you don't want to announce any policy here today. 3 00:00:08,160 --> 00:00:09,680 Speaker 2: Maybe you can let us in on what kind of 4 00:00:09,840 --> 00:00:12,319 Speaker 2: process you might go through when you are determining your 5 00:00:12,360 --> 00:00:13,080 Speaker 2: tax policy. 6 00:00:13,760 --> 00:00:18,120 Speaker 1: So the question I always ask, and it's a fairness question, 7 00:00:18,960 --> 00:00:21,799 Speaker 1: is that why should a salary and wage earner be 8 00:00:22,000 --> 00:00:25,840 Speaker 1: taxed for every dollar that they earn, but someone that 9 00:00:25,920 --> 00:00:30,360 Speaker 1: can dispose of their third fourth residential property or rental 10 00:00:30,400 --> 00:00:34,640 Speaker 1: property gets that profit tax free. There is a fairness 11 00:00:34,680 --> 00:00:37,800 Speaker 1: in there. Also. The element when it comes to tax 12 00:00:37,960 --> 00:00:39,879 Speaker 1: is we work in a tax system here in New 13 00:00:40,000 --> 00:00:42,680 Speaker 1: Zealand that is based off the framework of broad base, 14 00:00:43,080 --> 00:00:46,040 Speaker 1: low rate. You tax a whole bunch of things, a 15 00:00:46,040 --> 00:00:48,559 Speaker 1: whole lot of things at the base broad you make 16 00:00:48,600 --> 00:00:50,960 Speaker 1: it broad so that you can keep the rate of 17 00:00:51,000 --> 00:00:54,240 Speaker 1: tax low, so low rate, it's quite clear in New 18 00:00:54,280 --> 00:00:57,640 Speaker 1: Zealand that there are elements missing from that broad base. 19 00:00:58,360 --> 00:01:01,160 Speaker 1: And it's no secret that we are one of three 20 00:01:01,360 --> 00:01:04,720 Speaker 1: OSCD countries that doesn't have a capital gains tax. And 21 00:01:04,720 --> 00:01:07,800 Speaker 1: there's also no secret that actually only six jurisdictions in 22 00:01:07,840 --> 00:01:11,520 Speaker 1: the world have a wealth tax. And actually the conversation 23 00:01:11,640 --> 00:01:13,600 Speaker 1: around a wealth tax is starting to flare up a 24 00:01:13,640 --> 00:01:17,520 Speaker 1: lot more in other jurisdictions such as the UK for example. 25 00:01:18,400 --> 00:01:20,920 Speaker 1: We have to take all of that in our stride 26 00:01:20,959 --> 00:01:24,400 Speaker 1: as we develop our tax policy. Having a tax lawyer 27 00:01:24,440 --> 00:01:28,280 Speaker 1: that's in there helps with the policy decision making element 28 00:01:28,360 --> 00:01:31,000 Speaker 1: because I can say, if you tax this, this is 29 00:01:31,040 --> 00:01:33,320 Speaker 1: what the outcome is. These are the deductions that a 30 00:01:33,440 --> 00:01:36,720 Speaker 1: business or a person will should be applicable for, etc. 31 00:01:37,680 --> 00:01:40,800 Speaker 1: But ultimately we have to think about that in a 32 00:01:40,840 --> 00:01:43,120 Speaker 1: political sphere as well, because we want to win the 33 00:01:43,120 --> 00:01:48,640 Speaker 1: election and we know the tax system is unbalanced. We 34 00:01:48,680 --> 00:01:51,280 Speaker 1: know that there is unfairness for some people. So we 35 00:01:51,320 --> 00:01:54,520 Speaker 1: need to come to the country with a policy that 36 00:01:54,840 --> 00:01:58,440 Speaker 1: meets those objectives, but also one that we're not going 37 00:01:58,480 --> 00:02:03,040 Speaker 1: to scare everybody. Can reassure everybody that this is how 38 00:02:03,040 --> 00:02:05,680 Speaker 1: it's going to impact you. If I can't explain that 39 00:02:06,000 --> 00:02:09,040 Speaker 1: as a tax lawyer, then that's not great. 40 00:02:09,520 --> 00:02:11,840 Speaker 2: Do you think that there's a path there that that 41 00:02:12,240 --> 00:02:15,000 Speaker 2: can be impactful and popular? 42 00:02:16,080 --> 00:02:19,440 Speaker 1: I think so. I mean, and ultimately, the thing I 43 00:02:19,600 --> 00:02:22,400 Speaker 1: really give credit for to New Zealanders over the last 44 00:02:22,520 --> 00:02:25,400 Speaker 1: year since being the finance spokesperson and in particular the 45 00:02:25,440 --> 00:02:30,320 Speaker 1: business community, is they can see where the inequity lies 46 00:02:30,360 --> 00:02:33,880 Speaker 1: in some places. And there also if you'll see a 47 00:02:33,919 --> 00:02:37,160 Speaker 1: few quite senior business leaders have come out saying well 48 00:02:37,160 --> 00:02:40,040 Speaker 1: we need some changes in this space, or we should 49 00:02:40,120 --> 00:02:42,560 Speaker 1: have a capital gains tax, or this is why we 50 00:02:42,560 --> 00:02:45,600 Speaker 1: don't think a wealth tax might work, or or what 51 00:02:45,720 --> 00:02:49,880 Speaker 1: about land tax or something else tax. But again you 52 00:02:50,000 --> 00:02:53,000 Speaker 1: need to for me, as the finance spokesperson, I need 53 00:02:53,040 --> 00:02:55,600 Speaker 1: to look at it all as a package. What's the 54 00:02:55,639 --> 00:02:58,880 Speaker 1: society that we want to live in, the priorities, in 55 00:02:58,960 --> 00:03:02,200 Speaker 1: the basics, which person in New Zealand should be expected 56 00:03:02,200 --> 00:03:05,119 Speaker 1: to have, and then how we pay for it. And 57 00:03:05,360 --> 00:03:08,280 Speaker 1: that requires the using of the government balance sheet to 58 00:03:08,360 --> 00:03:12,400 Speaker 1: its full purpose, not just sort of superficial discussions around 59 00:03:13,040 --> 00:03:18,600 Speaker 1: you know, tax and spend debt, you know overspending or underspending. 60 00:03:18,800 --> 00:03:21,240 Speaker 1: All of that. We need to I take a very 61 00:03:21,320 --> 00:03:23,800 Speaker 1: considered look when I look at this together. 62 00:03:24,240 --> 00:03:27,680 Speaker 2: You know, we run an employee share program. It also 63 00:03:27,760 --> 00:03:31,760 Speaker 2: helped many other businesses run employee share schemes. So that's 64 00:03:31,800 --> 00:03:37,560 Speaker 2: where your team get a portion of shares as part 65 00:03:37,560 --> 00:03:40,240 Speaker 2: of their remuneration package. And it's a great way to 66 00:03:40,320 --> 00:03:44,600 Speaker 2: kind of share the ups or the potential gains of 67 00:03:44,640 --> 00:03:46,320 Speaker 2: what's going on for the hard work that people are 68 00:03:46,320 --> 00:03:50,160 Speaker 2: putting in. Is anything on your mind around how we 69 00:03:50,240 --> 00:03:53,320 Speaker 2: might look at the tax around those employee share schemes 70 00:03:53,360 --> 00:03:53,880 Speaker 2: for people. 71 00:03:54,120 --> 00:03:58,040 Speaker 1: So I've been around during two forms of changes quite 72 00:03:58,080 --> 00:04:01,120 Speaker 1: recent changes to employee share schemes. Is back when National 73 00:04:01,200 --> 00:04:03,920 Speaker 1: had put through some changes because there were integrity risks, 74 00:04:04,440 --> 00:04:07,880 Speaker 1: and then more recently when Labor had tightened it. So 75 00:04:07,920 --> 00:04:10,440 Speaker 1: I was in the Finance Expenditure Select Committee at time 76 00:04:11,200 --> 00:04:13,640 Speaker 1: those changes that kind of happened in twenty twenty two. 77 00:04:14,000 --> 00:04:17,159 Speaker 1: I have had some feedback from different businesses that they 78 00:04:17,240 --> 00:04:20,800 Speaker 1: do want to be able to get more employee share 79 00:04:20,800 --> 00:04:24,240 Speaker 1: schemes up and running, but sometimes the tax, the tax 80 00:04:24,279 --> 00:04:26,560 Speaker 1: element in the way that it was changed, is a 81 00:04:26,560 --> 00:04:29,279 Speaker 1: concern for them. So I'm more than happy to listen 82 00:04:29,360 --> 00:04:34,240 Speaker 1: to what people think should be changed. There is always, 83 00:04:34,320 --> 00:04:36,640 Speaker 1: like when I was working for the National government, that 84 00:04:36,720 --> 00:04:39,960 Speaker 1: integrity risk. But the other element, which I think we 85 00:04:40,040 --> 00:04:43,120 Speaker 1: also need to be mindful of is that there have 86 00:04:43,200 --> 00:04:46,039 Speaker 1: been employees share schemes that have worked overseas off shore, 87 00:04:46,520 --> 00:04:50,120 Speaker 1: but where the executives did really well, but you know, 88 00:04:50,200 --> 00:04:53,440 Speaker 1: for some reason the company whatever liquidated or it closed down, 89 00:04:53,800 --> 00:04:56,640 Speaker 1: where the executives did really well, but the everyday worker 90 00:04:56,640 --> 00:04:58,359 Speaker 1: didn't do well, So we want to be able to 91 00:04:58,360 --> 00:05:01,560 Speaker 1: protect some of those rights well. But I am open 92 00:05:01,800 --> 00:05:04,719 Speaker 1: and I think that it definitely has a place employee 93 00:05:04,720 --> 00:05:07,800 Speaker 1: share schemes because I think, as a worker, how cool 94 00:05:07,880 --> 00:05:10,440 Speaker 1: is that that you own part of this business that 95 00:05:10,480 --> 00:05:14,280 Speaker 1: you're working in and that actually there are productivity gains 96 00:05:14,320 --> 00:05:16,520 Speaker 1: from having those incentives that you want to do your 97 00:05:16,560 --> 00:05:18,680 Speaker 1: best job because you know that this is going to 98 00:05:19,279 --> 00:05:22,400 Speaker 1: return back to you through a return through your shares. 99 00:05:23,000 --> 00:05:26,479 Speaker 1: So definitely open to it. The tax stuff is always 100 00:05:26,560 --> 00:05:30,839 Speaker 1: complicated because integrity risks, et cetera. But open to hearing 101 00:05:30,880 --> 00:05:34,240 Speaker 1: solutions from those that practically work through it about some 102 00:05:34,279 --> 00:05:36,680 Speaker 1: of the challenges for them. Some of the integrity risks 103 00:05:36,680 --> 00:05:40,080 Speaker 1: that was brought up during my time when I worked 104 00:05:40,200 --> 00:05:44,840 Speaker 1: under a national government is that some particularly and sort 105 00:05:44,880 --> 00:05:48,400 Speaker 1: of more newer businesses, they were using it as a 106 00:05:48,480 --> 00:05:53,120 Speaker 1: form to be income without it being taxed. So that 107 00:05:53,240 --> 00:05:56,680 Speaker 1: was why the rules changed around twenty fifteen sixteen, so 108 00:05:56,680 --> 00:05:59,719 Speaker 1: there was a big discussion document on it. So it's 109 00:05:59,760 --> 00:06:02,920 Speaker 1: an element of where the integrity is that you're basically 110 00:06:03,000 --> 00:06:05,680 Speaker 1: using the share scheme to be a form of income 111 00:06:05,960 --> 00:06:09,120 Speaker 1: without it returning is income and therefore being taxable. But 112 00:06:09,200 --> 00:06:11,359 Speaker 1: I think some of that's changed. So I think some 113 00:06:11,400 --> 00:06:13,520 Speaker 1: of the rules that have been that have happened since 114 00:06:13,680 --> 00:06:17,080 Speaker 1: that those earlier days have tightened that integrity risk. It's 115 00:06:17,120 --> 00:06:20,640 Speaker 1: a question those where's the balance. Have we tightened the 116 00:06:20,680 --> 00:06:23,840 Speaker 1: screws too much on the integrity side and therefore we're 117 00:06:23,920 --> 00:06:27,560 Speaker 1: sort of mulling the productivity elements of what employee share 118 00:06:27,560 --> 00:06:31,440 Speaker 1: schemes are and I'm not quite sure. I'm still a 119 00:06:31,440 --> 00:06:33,480 Speaker 1: little bit out there as to where that balance is, 120 00:06:33,560 --> 00:06:38,560 Speaker 1: but really keen to hear from others around where there 121 00:06:38,560 --> 00:06:40,960 Speaker 1: should be some changes, because actually it's not about integrity, 122 00:06:40,960 --> 00:06:43,560 Speaker 1: it's actually about the productivity gain for the employees. 123 00:06:43,720 --> 00:06:46,279 Speaker 2: Investing involves the risk you might lose the money you 124 00:06:46,320 --> 00:06:49,600 Speaker 2: start with. We recommend talking to a licensed financial advisor. 125 00:06:50,320 --> 00:06:54,159 Speaker 2: We also recommend reading product disclosure documents before deciding to invest.