Speaker 1: You're listening to a share these podcast.
Speaker 2: I'm sure you don't want to announce any policy here today.
Speaker 2: Maybe you can let us in on what kind of
Speaker 2: process you might go through when you are determining your
Speaker 2: tax policy.
Speaker 1: So the question I always ask, and it's a fairness question,
Speaker 1: is that why should a salary and wage earner be
Speaker 1: taxed for every dollar that they earn, but someone that
Speaker 1: can dispose of their third fourth residential property or rental
Speaker 1: property gets that profit tax free. There is a fairness
Speaker 1: in there. Also. The element when it comes to tax
Speaker 1: is we work in a tax system here in New
Speaker 1: Zealand that is based off the framework of broad base,
Speaker 1: low rate. You tax a whole bunch of things, a
Speaker 1: whole lot of things at the base broad you make
Speaker 1: it broad so that you can keep the rate of
Speaker 1: tax low, so low rate, it's quite clear in New
Speaker 1: Zealand that there are elements missing from that broad base.
Speaker 1: And it's no secret that we are one of three
Speaker 1: OSCD countries that doesn't have a capital gains tax. And
Speaker 1: there's also no secret that actually only six jurisdictions in
Speaker 1: the world have a wealth tax. And actually the conversation
Speaker 1: around a wealth tax is starting to flare up a
Speaker 1: lot more in other jurisdictions such as the UK for example.
Speaker 1: We have to take all of that in our stride
Speaker 1: as we develop our tax policy. Having a tax lawyer
Speaker 1: that's in there helps with the policy decision making element
Speaker 1: because I can say, if you tax this, this is
Speaker 1: what the outcome is. These are the deductions that a
Speaker 1: business or a person will should be applicable for, etc.
Speaker 1: But ultimately we have to think about that in a
Speaker 1: political sphere as well, because we want to win the
Speaker 1: election and we know the tax system is unbalanced. We
Speaker 1: know that there is unfairness for some people. So we
Speaker 1: need to come to the country with a policy that
Speaker 1: meets those objectives, but also one that we're not going
Speaker 1: to scare everybody. Can reassure everybody that this is how
Speaker 1: it's going to impact you. If I can't explain that
Speaker 1: as a tax lawyer, then that's not great.
Speaker 2: Do you think that there's a path there that that
Speaker 2: can be impactful and popular?
Speaker 1: I think so. I mean, and ultimately, the thing I
Speaker 1: really give credit for to New Zealanders over the last
Speaker 1: year since being the finance spokesperson and in particular the
Speaker 1: business community, is they can see where the inequity lies
Speaker 1: in some places. And there also if you'll see a
Speaker 1: few quite senior business leaders have come out saying well
Speaker 1: we need some changes in this space, or we should
Speaker 1: have a capital gains tax, or this is why we
Speaker 1: don't think a wealth tax might work, or or what
Speaker 1: about land tax or something else tax. But again you
Speaker 1: need to for me, as the finance spokesperson, I need
Speaker 1: to look at it all as a package. What's the
Speaker 1: society that we want to live in, the priorities, in
Speaker 1: the basics, which person in New Zealand should be expected
Speaker 1: to have, and then how we pay for it. And
Speaker 1: that requires the using of the government balance sheet to
Speaker 1: its full purpose, not just sort of superficial discussions around
Speaker 1: you know, tax and spend debt, you know overspending or underspending.
Speaker 1: All of that. We need to I take a very
Speaker 1: considered look when I look at this together.
Speaker 2: You know, we run an employee share program. It also
Speaker 2: helped many other businesses run employee share schemes. So that's
Speaker 2: where your team get a portion of shares as part
Speaker 2: of their remuneration package. And it's a great way to
Speaker 2: kind of share the ups or the potential gains of
Speaker 2: what's going on for the hard work that people are
Speaker 2: putting in. Is anything on your mind around how we
Speaker 2: might look at the tax around those employee share schemes
Speaker 2: for people.
Speaker 1: So I've been around during two forms of changes quite
Speaker 1: recent changes to employee share schemes. Is back when National
Speaker 1: had put through some changes because there were integrity risks,
Speaker 1: and then more recently when Labor had tightened it. So
Speaker 1: I was in the Finance Expenditure Select Committee at time
Speaker 1: those changes that kind of happened in twenty twenty two.
Speaker 1: I have had some feedback from different businesses that they
Speaker 1: do want to be able to get more employee share
Speaker 1: schemes up and running, but sometimes the tax, the tax
Speaker 1: element in the way that it was changed, is a
Speaker 1: concern for them. So I'm more than happy to listen
Speaker 1: to what people think should be changed. There is always,
Speaker 1: like when I was working for the National government, that
Speaker 1: integrity risk. But the other element, which I think we
Speaker 1: also need to be mindful of is that there have
Speaker 1: been employees share schemes that have worked overseas off shore,
Speaker 1: but where the executives did really well, but you know,
Speaker 1: for some reason the company whatever liquidated or it closed down,
Speaker 1: where the executives did really well, but the everyday worker
Speaker 1: didn't do well, So we want to be able to
Speaker 1: protect some of those rights well. But I am open
Speaker 1: and I think that it definitely has a place employee
Speaker 1: share schemes because I think, as a worker, how cool
Speaker 1: is that that you own part of this business that
Speaker 1: you're working in and that actually there are productivity gains
Speaker 1: from having those incentives that you want to do your
Speaker 1: best job because you know that this is going to
Speaker 1: return back to you through a return through your shares.
Speaker 1: So definitely open to it. The tax stuff is always
Speaker 1: complicated because integrity risks, et cetera. But open to hearing
Speaker 1: solutions from those that practically work through it about some
Speaker 1: of the challenges for them. Some of the integrity risks
Speaker 1: that was brought up during my time when I worked
Speaker 1: under a national government is that some particularly and sort
Speaker 1: of more newer businesses, they were using it as a
Speaker 1: form to be income without it being taxed. So that
Speaker 1: was why the rules changed around twenty fifteen sixteen, so
Speaker 1: there was a big discussion document on it. So it's
Speaker 1: an element of where the integrity is that you're basically
Speaker 1: using the share scheme to be a form of income
Speaker 1: without it returning is income and therefore being taxable. But
Speaker 1: I think some of that's changed. So I think some
Speaker 1: of the rules that have been that have happened since
Speaker 1: that those earlier days have tightened that integrity risk. It's
Speaker 1: a question those where's the balance. Have we tightened the
Speaker 1: screws too much on the integrity side and therefore we're
Speaker 1: sort of mulling the productivity elements of what employee share
Speaker 1: schemes are and I'm not quite sure. I'm still a
Speaker 1: little bit out there as to where that balance is,
Speaker 1: but really keen to hear from others around where there
Speaker 1: should be some changes, because actually it's not about integrity,
Speaker 1: it's actually about the productivity gain for the employees.
Speaker 2: Investing involves the risk you might lose the money you
Speaker 2: start with. We recommend talking to a licensed financial advisor.
Speaker 2: We also recommend reading product disclosure documents before deciding to invest.