Daniel Webster, Host: Hello, I'm Daniel Webster, New Zealand public affairs manager at
Daniel Webster, Host: Chartered Accountants ANZ. And this is Small Firm, Big Impact.
Peter Vial FCA, CA ANZ NZ Country Head: It's not surprising that it's the no frills budget that
Peter Vial FCA, CA ANZ NZ Country Head: government had touted it as. One also called it a
Peter Vial FCA, CA ANZ NZ Country Head: bread and butter budget. And that's exactly what it is.
Peter Vial FCA, CA ANZ NZ Country Head: There weren't any changes to the personal marginal tax rates
Peter Vial FCA, CA ANZ NZ Country Head: or the personal marginal tax rate thresholds. No change to
Peter Vial FCA, CA ANZ NZ Country Head: take GST off food. Also no wealth tax, no capital
Peter Vial FCA, CA ANZ NZ Country Head: gains tax. But what we have got is a little
Peter Vial FCA, CA ANZ NZ Country Head: surprise in there with the tax, the trustee tax rate.
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Daniel Webster, Host: can email podcast at chartered Accountants anz.com. Today's guest is
Daniel Webster, Host: CA ANZ, NZ country head Peter Vial, FCA, who has
Daniel Webster, Host: just stepped out of the Beehive budget lockup. Peter, welcome
Daniel Webster, Host: to small, firm Big Impact.
Peter Vial FCA, CA ANZ NZ Country Head: Kia ora Daniel, great to join you. After an intense few
Peter Vial FCA, CA ANZ NZ Country Head: hours and the budget lock up at the Beehive. As usual,
Peter Vial FCA, CA ANZ NZ Country Head: it was freezing in the banquet hall there, but at
Peter Vial FCA, CA ANZ NZ Country Head: least they laid on the sausage rolls and lamingtons.
Daniel Webster, Host: Yeah, good to hear. So on a food theme, ask
Daniel Webster, Host: the government have described themselves as a bread and butter
Daniel Webster, Host: government and that this would be a bit of a
Daniel Webster, Host: no frills budget. From what you've seen there. Is that
Daniel Webster, Host: the case?
Peter Vial FCA, CA ANZ NZ Country Head: Absolutely, yes. Daniel, this is a no frills budget fit
Peter Vial FCA, CA ANZ NZ Country Head: for the constrained circumstances that the country is in. It's
Peter Vial FCA, CA ANZ NZ Country Head: not surprising that it's the no frills budget. The government
Peter Vial FCA, CA ANZ NZ Country Head: had touted it as. One also called it a bread
Peter Vial FCA, CA ANZ NZ Country Head: and butter budget. And that's exactly what it is. It
Peter Vial FCA, CA ANZ NZ Country Head: does have four overarching themes. The first is supporting New
Peter Vial FCA, CA ANZ NZ Country Head: Zealanders with the cost of living pressures. They're all we're
Peter Vial FCA, CA ANZ NZ Country Head: all experiencing at the moment and then delivering services that
Peter Vial FCA, CA ANZ NZ Country Head: New Zealanders need and rely on. A third theme was
Peter Vial FCA, CA ANZ NZ Country Head: recovery and resilience, obviously in relation to or directly in
Peter Vial FCA, CA ANZ NZ Country Head: response to the cyclone and floods with experienced earlier this year.
Peter Vial FCA, CA ANZ NZ Country Head: And then of course fiscal sustainability, which picked up quite
Peter Vial FCA, CA ANZ NZ Country Head: a few other aspects. The challenge, I guess for Grant
Peter Vial FCA, CA ANZ NZ Country Head: Robertson as Minister of Revenue again this year was to
Peter Vial FCA, CA ANZ NZ Country Head: deliver a budget that continued to invest as needed infrastructure
Peter Vial FCA, CA ANZ NZ Country Head: in health and education and to throw in some quite
Peter Vial FCA, CA ANZ NZ Country Head: big cost of living measures to assist people who are
Peter Vial FCA, CA ANZ NZ Country Head: really struggling. But to do all of that without exacerbating
Peter Vial FCA, CA ANZ NZ Country Head: inflation or increasing household debt, or adding, as I say,
Peter Vial FCA, CA ANZ NZ Country Head: to inflationary pressures. So that's why he's had to go
Peter Vial FCA, CA ANZ NZ Country Head: with a no frills approach and reprioritise budget allocations from
Peter Vial FCA, CA ANZ NZ Country Head: one place to another in a number of cases.
Daniel Webster, Host: Interesting. So what about, first of all, can you talk
Daniel Webster, Host: us through some of the economic projections or fundamentals that
Daniel Webster, Host: the government laid out?
Peter Vial FCA, CA ANZ NZ Country Head: Yeah. So there's interesting numbers there. Daniel So the Treasury
Peter Vial FCA, CA ANZ NZ Country Head: is forecasting GDP growth of 3.2% this year, falling to 1%
Peter Vial FCA, CA ANZ NZ Country Head: next year and then 3% levelling out at 3% in
Peter Vial FCA, CA ANZ NZ Country Head: 2026 and 2027. So over the long term, that average
Peter Vial FCA, CA ANZ NZ Country Head: looks looks reasonable. There are Treasury's no longer forecasting a recession,
Peter Vial FCA, CA ANZ NZ Country Head: which is good news. Obviously a recession is two quarters
Peter Vial FCA, CA ANZ NZ Country Head: of success of two successive quarters of negative growth and
Peter Vial FCA, CA ANZ NZ Country Head: they're not forecasting that we'll have that. Then they've had
Peter Vial FCA, CA ANZ NZ Country Head: to defer the expectation of a surplus by one year
Peter Vial FCA, CA ANZ NZ Country Head: to 2025, 2026. And that's no surprises there. One of
Peter Vial FCA, CA ANZ NZ Country Head: the most interesting figures, of course, for everyone is inflation,
Peter Vial FCA, CA ANZ NZ Country Head: that Treasury is forecasting that it will fall to 3.3%
Peter Vial FCA, CA ANZ NZ Country Head: in 2024 and then to 2.6% in 2025. Those numbers
Peter Vial FCA, CA ANZ NZ Country Head: look or forecasts look quite ambitious to me. I'm not
Peter Vial FCA, CA ANZ NZ Country Head: an economist, but given we've had just come through a
Peter Vial FCA, CA ANZ NZ Country Head: period of 6.7%, 7% inflation and we're still seeing the
Peter Vial FCA, CA ANZ NZ Country Head: cost of living rising, particularly with food costs, I was
Peter Vial FCA, CA ANZ NZ Country Head: a bit surprised to see that inflation is predicted to
Peter Vial FCA, CA ANZ NZ Country Head: drop to 3.3 and then to 2.6. And some good news.
Peter Vial FCA, CA ANZ NZ Country Head: Net government debt to GDP proposed to peak at only 22%
Peter Vial FCA, CA ANZ NZ Country Head: and 2024, which is way lower than comparable economies or economies.
Peter Vial FCA, CA ANZ NZ Country Head: We often compare ourselves to Australia, the UK, the US,
Peter Vial FCA, CA ANZ NZ Country Head: which have much higher debt to GDP ratios, and then
Peter Vial FCA, CA ANZ NZ Country Head: Treasury's forecasting that will reduce to 18.4% in four years
Peter Vial FCA, CA ANZ NZ Country Head: time at the end of the budget forecast period. So again,
Peter Vial FCA, CA ANZ NZ Country Head: that might look a bit ambitious, but Grant Robertson and
Peter Vial FCA, CA ANZ NZ Country Head: Treasury are trying to deliver a cautious conservative budget. They
Peter Vial FCA, CA ANZ NZ Country Head: don't want to be accused of running amok and having
Peter Vial FCA, CA ANZ NZ Country Head: profligate spending, and that's one of the reasons why they're
Peter Vial FCA, CA ANZ NZ Country Head: obviously very keen to keep that net government debt down
Peter Vial FCA, CA ANZ NZ Country Head: below 20%. Unemployment is expected to peak at 5.3% next year.
Peter Vial FCA, CA ANZ NZ Country Head: It's currently around 3.4%. So that is a reasonable increase,
Peter Vial FCA, CA ANZ NZ Country Head: up to 5.3 and then level off a bit and
Peter Vial FCA, CA ANZ NZ Country Head: wages are expected to grow at 5.2% a year over
Peter Vial FCA, CA ANZ NZ Country Head: the four year forecast period. So those were the headline
Peter Vial FCA, CA ANZ NZ Country Head: economic fundamental numbers. Economists around the country will have different
Peter Vial FCA, CA ANZ NZ Country Head: views as to whether they think Treasury's, you know, landed
Peter Vial FCA, CA ANZ NZ Country Head: in the right place on all of those numbers. But
Peter Vial FCA, CA ANZ NZ Country Head: it's just interesting to think, think about them and reflect
Peter Vial FCA, CA ANZ NZ Country Head: on how ambitious potentially some of them are.
Daniel Webster, Host: Cost of living was obviously their first priority priority on
Daniel Webster, Host: that list of four. What does the government doing to
Daniel Webster, Host: help people afford the essentials?
Peter Vial FCA, CA ANZ NZ Country Head: So good question, Daniel. We we were promised a no
Peter Vial FCA, CA ANZ NZ Country Head: frills budget, and that's what we've got. What is, I
Peter Vial FCA, CA ANZ NZ Country Head: think really good to see is that most of the
Peter Vial FCA, CA ANZ NZ Country Head: cost of living measures are very targeted, much more targeted than,
Peter Vial FCA, CA ANZ NZ Country Head: for example, last year's cost of living payment, which went
Peter Vial FCA, CA ANZ NZ Country Head: out to a whole or a large number of people
Peter Vial FCA, CA ANZ NZ Country Head: earning below 70,000, regardless of the source of that income
Peter Vial FCA, CA ANZ NZ Country Head: and regardless of asset and wealth testing. That was all
Peter Vial FCA, CA ANZ NZ Country Head: all not in the mix. And we we read the
Peter Vial FCA, CA ANZ NZ Country Head: stories about people overseas who were receiving that payment and
Peter Vial FCA, CA ANZ NZ Country Head: various other people who didn't didn't need to receive it.
Peter Vial FCA, CA ANZ NZ Country Head: So it's good to see this year that the the
Peter Vial FCA, CA ANZ NZ Country Head: focus is a much more targeted one. There are a
Peter Vial FCA, CA ANZ NZ Country Head: few platforms here, so one is early childhood education. The
Peter Vial FCA, CA ANZ NZ Country Head: government is extending the subsidy for early childhood education to
Peter Vial FCA, CA ANZ NZ Country Head: two year olds. Currently, the subsidy is only for 3
Peter Vial FCA, CA ANZ NZ Country Head: to 5 year olds. It will drop down to cover
Peter Vial FCA, CA ANZ NZ Country Head: two year olds and so will provide some much needed
Peter Vial FCA, CA ANZ NZ Country Head: assistance to parents with very young children, allowing them to
Peter Vial FCA, CA ANZ NZ Country Head: return to the workforce earlier should they choose to do so,
Peter Vial FCA, CA ANZ NZ Country Head: which is good, obviously good for the the country's productivity.
Peter Vial FCA, CA ANZ NZ Country Head: There's the government's going to remove the $5 prescription charge,
Peter Vial FCA, CA ANZ NZ Country Head: which we've all had to pay for many years from.
Peter Vial FCA, CA ANZ NZ Country Head: From my recollection, that will be removed in this budget.
Peter Vial FCA, CA ANZ NZ Country Head: And that's obviously not targeted because everyone's eligible for it.
Peter Vial FCA, CA ANZ NZ Country Head: But it is progressive in the sense that those with
Peter Vial FCA, CA ANZ NZ Country Head: the most critical health needs, the higher health needs who
Peter Vial FCA, CA ANZ NZ Country Head: need more prescriptions than other healthier people will benefit the most.
Peter Vial FCA, CA ANZ NZ Country Head: So it does seem to be a sensible measure. There's
Peter Vial FCA, CA ANZ NZ Country Head: some subsidies and public transport which will be of interest.
Peter Vial FCA, CA ANZ NZ Country Head: So free public transport for children under 13 and permanent
Peter Vial FCA, CA ANZ NZ Country Head: half price fares for people between 13 and 25. So
Peter Vial FCA, CA ANZ NZ Country Head: for a number of years now, we've had free public
Peter Vial FCA, CA ANZ NZ Country Head: transport for the national superintendence and this is looking at
Peter Vial FCA, CA ANZ NZ Country Head: the other end of the demographic curve and extending that
Peter Vial FCA, CA ANZ NZ Country Head: free program to under 13 year olds help those who
Peter Vial FCA, CA ANZ NZ Country Head: travel by public transport to school or around the urban
Peter Vial FCA, CA ANZ NZ Country Head: areas and rely on public transport. It's also a sound
Peter Vial FCA, CA ANZ NZ Country Head: measure from an environmental environmental perspective, obviously. And then obviously
Peter Vial FCA, CA ANZ NZ Country Head: for people like tertiary students or young people who are
Peter Vial FCA, CA ANZ NZ Country Head: in work who need to rely on public transport or
Peter Vial FCA, CA ANZ NZ Country Head: rely on public transport, this is a good outcome for them.
Peter Vial FCA, CA ANZ NZ Country Head: And for when you think about it, for a family
Peter Vial FCA, CA ANZ NZ Country Head: with a few children travelling to school by bus or
Peter Vial FCA, CA ANZ NZ Country Head: for tertiary student families with, you know, several tertiary students,
Peter Vial FCA, CA ANZ NZ Country Head: this is a really good way of cutting their weekly costs.
Peter Vial FCA, CA ANZ NZ Country Head: So that will be helpful. Um, you'll recall a couple
Peter Vial FCA, CA ANZ NZ Country Head: of years ago we had the winter energy payment, which
Peter Vial FCA, CA ANZ NZ Country Head: was a payment that went out to a broad group
Peter Vial FCA, CA ANZ NZ Country Head: of people, including all national superannuation funds. It was effectively
Peter Vial FCA, CA ANZ NZ Country Head: a lump sum payment spread over a few months to
Peter Vial FCA, CA ANZ NZ Country Head: cover people's winter energy costs. It wasn't targeted and even
Peter Vial FCA, CA ANZ NZ Country Head: wealthy people, people who didn't need the subsidy, were receiving it. And. WHEREAS,
Peter Vial FCA, CA ANZ NZ Country Head: Now with this budget, the government has chosen to be
Peter Vial FCA, CA ANZ NZ Country Head: more targeted. It's going to fund 100,000 new heating and
Peter Vial FCA, CA ANZ NZ Country Head: insulation retrofits and an interestingly 5 million LED light bulbs,
Peter Vial FCA, CA ANZ NZ Country Head: both of these aimed at reducing the power bills of
Peter Vial FCA, CA ANZ NZ Country Head: those that are most in need. So we think the
Peter Vial FCA, CA ANZ NZ Country Head: more targeted approach is sensible. One obvious question is whether
Peter Vial FCA, CA ANZ NZ Country Head: we have the workforce to do the retrofits, the heating
Peter Vial FCA, CA ANZ NZ Country Head: and insulation retrofits. One thinks that it might well be
Peter Vial FCA, CA ANZ NZ Country Head: the same workforce that has been relied on to do
Peter Vial FCA, CA ANZ NZ Country Head: a lot of the cyclone recovery work. So that will
Peter Vial FCA, CA ANZ NZ Country Head: be that will time will tell whether we do have
Peter Vial FCA, CA ANZ NZ Country Head: the workforce to do those retrofits. One other change here
Peter Vial FCA, CA ANZ NZ Country Head: under this cost of living area and the cost of
Peter Vial FCA, CA ANZ NZ Country Head: living area was we tweak to the KiwiSaver rules that
Peter Vial FCA, CA ANZ NZ Country Head: it will ensure that Kiwisavers who are on parental leave
Peter Vial FCA, CA ANZ NZ Country Head: won't miss out. They will not be disadvantaged by being
Peter Vial FCA, CA ANZ NZ Country Head: on parental leave, so their long term savings through KiwiSaver
Peter Vial FCA, CA ANZ NZ Country Head: will not be affected. And that's from a gender equity
Peter Vial FCA, CA ANZ NZ Country Head: perspective as a really good change. It's not a big change.
Peter Vial FCA, CA ANZ NZ Country Head: It won't cost the government that lot, but it does
Peter Vial FCA, CA ANZ NZ Country Head: send a very positive signal that that gender equity as
Peter Vial FCA, CA ANZ NZ Country Head: is and savings. And there's very good research which confirms
Peter Vial FCA, CA ANZ NZ Country Head: that women end up with with lower retirement savings than men.
Peter Vial FCA, CA ANZ NZ Country Head: And this will be a way of helping address that.
Peter Vial FCA, CA ANZ NZ Country Head: So as I say, we're pleased that the cost of
Peter Vial FCA, CA ANZ NZ Country Head: living measures are largely pretty targeted and they're not. You know,
Peter Vial FCA, CA ANZ NZ Country Head: that is sensible and the constrained economic circumstances that the
Peter Vial FCA, CA ANZ NZ Country Head: government and we are all in at the moment. There
Peter Vial FCA, CA ANZ NZ Country Head: isn't money to spray around as there was in COVID.
Peter Vial FCA, CA ANZ NZ Country Head: And as I said, with last year's cost of living payment,
Peter Vial FCA, CA ANZ NZ Country Head: it has to be targeted.
S3: Right.
Daniel Webster, Host: There wasn't meant to be any major tax changes. They
Daniel Webster, Host: ruled those out. But was there something?
Peter Vial FCA, CA ANZ NZ Country Head: Well, there was something. Daniel But I'll save my breath
Peter Vial FCA, CA ANZ NZ Country Head: for a second before talk about something and just talk
Peter Vial FCA, CA ANZ NZ Country Head: about what? There wasn't. So and that was no surprise.
Peter Vial FCA, CA ANZ NZ Country Head: There weren't any changes to the personal marginal tax rate
Peter Vial FCA, CA ANZ NZ Country Head: or the personal marginal tax rate thresholds. No change to
Peter Vial FCA, CA ANZ NZ Country Head: take GST off food. All of those have been ruled
Peter Vial FCA, CA ANZ NZ Country Head: out by the Prime Minister, the Minister of Revenue and
Peter Vial FCA, CA ANZ NZ Country Head: others before the budget. So no surprises there. Also, no
Peter Vial FCA, CA ANZ NZ Country Head: wealth tax, no capital gains tax. We might see something
Peter Vial FCA, CA ANZ NZ Country Head: in Labor's policy leading into the election, but certainly nothing
Peter Vial FCA, CA ANZ NZ Country Head: in the budget. Again, no surprises there. Of course many
Peter Vial FCA, CA ANZ NZ Country Head: people are struggling with the effects of bracket creep whereby
Peter Vial FCA, CA ANZ NZ Country Head: their incomes are pushed into, their incomes increase, but they
Peter Vial FCA, CA ANZ NZ Country Head: don't get the full benefit because they're pushed into the
Peter Vial FCA, CA ANZ NZ Country Head: next marginal tax rate bracket. That's been a problem that
Peter Vial FCA, CA ANZ NZ Country Head: we've had for decades. It's been particularly acute in the
Peter Vial FCA, CA ANZ NZ Country Head: last few years with wage inflation. So people who are
Peter Vial FCA, CA ANZ NZ Country Head: on average incomes are paying tax at reasonably higher rates.
Peter Vial FCA, CA ANZ NZ Country Head: So in an ideal world we would have seen that
Peter Vial FCA, CA ANZ NZ Country Head: problem tackled. But those changes are very expensive and they
Peter Vial FCA, CA ANZ NZ Country Head: just aren't affordable in the current environment with the pressures
Peter Vial FCA, CA ANZ NZ Country Head: of the cyclone and flood relief and and also they
Peter Vial FCA, CA ANZ NZ Country Head: would be inflationary potentially. So they're off the table and
Peter Vial FCA, CA ANZ NZ Country Head: we knew they were off the table. So we haven't
Peter Vial FCA, CA ANZ NZ Country Head: got any of that. But what we have got is
Peter Vial FCA, CA ANZ NZ Country Head: a little surprise in there with the tax, the trustee
Peter Vial FCA, CA ANZ NZ Country Head: tax rate. So the trustee tax rate has for a
Peter Vial FCA, CA ANZ NZ Country Head: number of years been 33%. This government and this budget
Peter Vial FCA, CA ANZ NZ Country Head: has announced that it will move the trustee tax rate
Peter Vial FCA, CA ANZ NZ Country Head: from 33% to 39% to align with the top personal
Peter Vial FCA, CA ANZ NZ Country Head: marginal tax rate of 39% that came in from 1st
Peter Vial FCA, CA ANZ NZ Country Head: April 2021. Why is the government doing this? The government
Peter Vial FCA, CA ANZ NZ Country Head: is doing this because it has identified a loophole and
Peter Vial FCA, CA ANZ NZ Country Head: the evidence is very clear. The budget documents confirm that
Peter Vial FCA, CA ANZ NZ Country Head: in the first year of the increase in the to
Peter Vial FCA, CA ANZ NZ Country Head: the 39% for the top personal marginal tax rate, there
Peter Vial FCA, CA ANZ NZ Country Head: was a sudden spike in income earned by trustees. So
Peter Vial FCA, CA ANZ NZ Country Head: trustees were earning $5.7 billion more of income in that
Peter Vial FCA, CA ANZ NZ Country Head: year than they had in the previous income year. So
Peter Vial FCA, CA ANZ NZ Country Head: that was the evidence the government needed to to show
Peter Vial FCA, CA ANZ NZ Country Head: that there was a loophole and it was being used or,
Peter Vial FCA, CA ANZ NZ Country Head: you know, in their view, abused. So that is that
Peter Vial FCA, CA ANZ NZ Country Head: opportunity has been removed with effect from one April 20th, 24.
Peter Vial FCA, CA ANZ NZ Country Head: Those rates will be aligned. Personally, I was very pleased
Peter Vial FCA, CA ANZ NZ Country Head: to see or hear Minister Robertson announce that that change
Peter Vial FCA, CA ANZ NZ Country Head: will go through the select committee process. So there will
Peter Vial FCA, CA ANZ NZ Country Head: be the opportunity for submissions, one assumes, and that will
Peter Vial FCA, CA ANZ NZ Country Head: be reviewed by the the finance and Expenditure Select Committee
Peter Vial FCA, CA ANZ NZ Country Head: as normal tax change naught tax changes normally are. There
Peter Vial FCA, CA ANZ NZ Country Head: could well be, you know, peripheral issues, there could be
Peter Vial FCA, CA ANZ NZ Country Head: collateral damage, things that officials perhaps haven't thought about that
Peter Vial FCA, CA ANZ NZ Country Head: need to be brought to their attention and to the
Peter Vial FCA, CA ANZ NZ Country Head: Government's attention to Parliament's attention. So those things can be
Peter Vial FCA, CA ANZ NZ Country Head: ironed out through that select committee process. But the key
Peter Vial FCA, CA ANZ NZ Country Head: change here is that the trustee rate will move to 39%
Peter Vial FCA, CA ANZ NZ Country Head: to align with the top personal marginal tax rate. A
Peter Vial FCA, CA ANZ NZ Country Head: few other things I should have mentioned that weren't in there.
Peter Vial FCA, CA ANZ NZ Country Head: There had been some kind of scuttlebutt or gossip about
Peter Vial FCA, CA ANZ NZ Country Head: whether the government might introduce a higher personal marginal tax
Peter Vial FCA, CA ANZ NZ Country Head: rate to apply to very high incomes of, say, 45%.
Peter Vial FCA, CA ANZ NZ Country Head: That's not in the budget. Again, it could come through
Peter Vial FCA, CA ANZ NZ Country Head: in the election policies of different parties, the Labor Party
Peter Vial FCA, CA ANZ NZ Country Head: and obviously might consider that. And it's and it's in
Peter Vial FCA, CA ANZ NZ Country Head: the lead up to the election mentioned. I think there's
Peter Vial FCA, CA ANZ NZ Country Head: no decision to remove GST off fresh food. Often there
Peter Vial FCA, CA ANZ NZ Country Head: are calls for that and particularly in times of economic pressure,
Peter Vial FCA, CA ANZ NZ Country Head: there are calls for that to happen to reduce the
Peter Vial FCA, CA ANZ NZ Country Head: food bill for households that are struggling. I think it's
Peter Vial FCA, CA ANZ NZ Country Head: the right thing not to go down that route because
Peter Vial FCA, CA ANZ NZ Country Head: New Zealand has the most efficient GST system in the world,
Peter Vial FCA, CA ANZ NZ Country Head: according to the OECD, and that's been the case for decades.
Peter Vial FCA, CA ANZ NZ Country Head: It's a very comprehensive tax. It's hard to avoid and
Peter Vial FCA, CA ANZ NZ Country Head: relatively easy to comply with and we don't have all
Peter Vial FCA, CA ANZ NZ Country Head: the definitional issues that come when you start to make
Peter Vial FCA, CA ANZ NZ Country Head: further exemptions and exclusions. And also fundamentally, there's no guarantee,
Peter Vial FCA, CA ANZ NZ Country Head: excuse me, that of GST were taken off food that
Peter Vial FCA, CA ANZ NZ Country Head: that would that price reduction would flow through to the
Peter Vial FCA, CA ANZ NZ Country Head: end consumer. So great to see the government resisting the tax.
Peter Vial FCA, CA ANZ NZ Country Head: To do something in that area. So yeah, so that's
Peter Vial FCA, CA ANZ NZ Country Head: what's happened in tax one. One little surprise and no
Peter Vial FCA, CA ANZ NZ Country Head: big surprises.
Daniel Webster, Host: Yeah, a lot left out there.
S4: That will still be on the table for future discussions.
Daniel Webster, Host: There were signals that small business wouldn't get much. That
Daniel Webster, Host: was that was the expectation. Was that true on first blush?
Peter Vial FCA, CA ANZ NZ Country Head: Certainly on first blush, there's no significant direct support for
Peter Vial FCA, CA ANZ NZ Country Head: small business. So, you know, measures that are specifically targeted
Peter Vial FCA, CA ANZ NZ Country Head: at small business generally, small business, there will be implications
Peter Vial FCA, CA ANZ NZ Country Head: for small business, for example, And all the money that's
Peter Vial FCA, CA ANZ NZ Country Head: being invested in resilience and recovery from the cyclone and
Peter Vial FCA, CA ANZ NZ Country Head: the floods that will have some flow on effects for
Peter Vial FCA, CA ANZ NZ Country Head: those small businesses affected by those events and also the
Peter Vial FCA, CA ANZ NZ Country Head: small businesses that support or work with those businesses affected.
Peter Vial FCA, CA ANZ NZ Country Head: But they did. The government, interestingly, the government did pick
Peter Vial FCA, CA ANZ NZ Country Head: one winner here in the small business area. They've decided
Peter Vial FCA, CA ANZ NZ Country Head: to give the gaming development sector. So video gaming entities
Peter Vial FCA, CA ANZ NZ Country Head: or companies a businesses, a 20% rebate for video game
Peter Vial FCA, CA ANZ NZ Country Head: development studios. So the sector brought in $400 million in
Peter Vial FCA, CA ANZ NZ Country Head: revenue in 2022, and it's growing rapidly. I understand it's
Peter Vial FCA, CA ANZ NZ Country Head: quite a big sector. And the Wellington region, for example.
Peter Vial FCA, CA ANZ NZ Country Head: And so they've been a winner out of this. They've
Peter Vial FCA, CA ANZ NZ Country Head: got the support, the support aligns the New Zealand treatment
Peter Vial FCA, CA ANZ NZ Country Head: with or puts them on a more level playing field
Peter Vial FCA, CA ANZ NZ Country Head: with this kind of support and subsidy that the Australian
Peter Vial FCA, CA ANZ NZ Country Head: equivalent industry receives. So and they are competing on a
Peter Vial FCA, CA ANZ NZ Country Head: global stage for this. So it's great to see that
Peter Vial FCA, CA ANZ NZ Country Head: this has happened for them. But the bigger question or
Peter Vial FCA, CA ANZ NZ Country Head: the obvious question is what is being done to support
Peter Vial FCA, CA ANZ NZ Country Head: other sectors that are made up predominantly of small business,
Peter Vial FCA, CA ANZ NZ Country Head: like the video gaming sector? They might not be as
Peter Vial FCA, CA ANZ NZ Country Head: sexy as the video gaming sector, but they are making
Peter Vial FCA, CA ANZ NZ Country Head: equally important contributions to the New Zealand economy and are
Peter Vial FCA, CA ANZ NZ Country Head: also having to compete with global competitors, including for for labour,
Peter Vial FCA, CA ANZ NZ Country Head: just in the same way as the video gaming sector has.
Peter Vial FCA, CA ANZ NZ Country Head: So what I'd like to see is if the support
Peter Vial FCA, CA ANZ NZ Country Head: for the video gaming sector is successful and does that
Peter Vial FCA, CA ANZ NZ Country Head: grow that industry and give a decent return on investment,
Peter Vial FCA, CA ANZ NZ Country Head: then that should be a model that's looked at to
Peter Vial FCA, CA ANZ NZ Country Head: see whether it can be rolled out to other sectors.
Peter Vial FCA, CA ANZ NZ Country Head: Some of the other sectors that are interesting here are
Peter Vial FCA, CA ANZ NZ Country Head: tourism and horticulture, for example, got relatively small, pretty, pretty
Peter Vial FCA, CA ANZ NZ Country Head: small because support for technology development, for example, and their
Peter Vial FCA, CA ANZ NZ Country Head: sectors and innovation. So not a lot for them. And
Peter Vial FCA, CA ANZ NZ Country Head: they are big industries, really critical to New Zealand's economy.
Peter Vial FCA, CA ANZ NZ Country Head: So again, I say let's see how this gaming sector
Peter Vial FCA, CA ANZ NZ Country Head: support works and if there are lessons to be learned
Peter Vial FCA, CA ANZ NZ Country Head: there that can be and the money's there to roll
Peter Vial FCA, CA ANZ NZ Country Head: them out more widely, then then the government, the government
Peter Vial FCA, CA ANZ NZ Country Head: should should go for it. There is a focus on
Peter Vial FCA, CA ANZ NZ Country Head: technology and science with $400 billion invested in some sorry,
Peter Vial FCA, CA ANZ NZ Country Head: 400 million invested in several multi institution science hubs. Again,
Peter Vial FCA, CA ANZ NZ Country Head: that's the type of investment that ultimately in the long
Peter Vial FCA, CA ANZ NZ Country Head: term will have ripple effects around the economy. The more
Peter Vial FCA, CA ANZ NZ Country Head: research that has done in those science hubs that's commercially
Peter Vial FCA, CA ANZ NZ Country Head: that can be commercialized, the better and there'll be flow
Peter Vial FCA, CA ANZ NZ Country Head: on effects for small business and and the hubs around
Peter Vial FCA, CA ANZ NZ Country Head: those or the networks, the clusters around those science hubs.
Peter Vial FCA, CA ANZ NZ Country Head: So that's that's a sizable investment.
Daniel Webster, Host: Okay, Peter. Well, that's all we've got time for today.
Daniel Webster, Host: To all the listeners out there, if you want to
Daniel Webster, Host: know more, Peter's full perspective is on our 2023 budget
Daniel Webster, Host: page on chartered accountants ANZ. And you can check out
Daniel Webster, Host: a recording of our Sharing Knowledge session that will also
Daniel Webster, Host: be up there. So thank you for joining us, Peter.
Peter Vial FCA, CA ANZ NZ Country Head: Pleasure, Daniel, Good to talk to you.
Daniel Webster, Host: Yes, and bye for now.
Peter Vial FCA, CA ANZ NZ Country Head: Ka kite ano .