By Trevor Ammundsen.
These thoughts are written from Port Douglas, sitting by the pool in a relatively cool 25-degree morning. When the day heats up, I will retire to the cool of a bar somewhere and sip margaritas, but until then, I thought I would offer some thoughts and opinions.
I read details of our budget online and noticed a significant attack on middle New Zealand, myself included. This attack is disguised as an attack on “nontax paying rich pricks” who pay themselves through family trusts. This description is fallacious as it affects all family trusts who are now to pay tax at 39% regardless of your income level. Think about this. If you do something for your kids such as loan them an amount at a nominal interest rate, which they don’t pay back, you will be forced to pay tax of 39% on the interest. If you borrowed money for them against your Trust assets, the same would apply. Likewise, for income earned from other sources, such as Air BnB. What will be the effect on your disposable funds should this come in?
Moving forward, it is apparent that Labour is seeking to introduce Capital Gains tax (CGT) should it win another term. It would be a brave person who doesn’t believe the 39% tax rate on Family Trusts is not preparatory for the CGT introduction.
For those of lesser means, I feel saddened that a bunch of politicians who promised to be the most transformational government ever; are doing nothing to enrich the lives of those on lesser incomes. They could be severely reducing, even eliminating, tax at the poorer levels and offsetting this by cost savings, by the elimination of contrived benefits such as Working for Families and Day-care allowances, but this is at conflict with Labour’s apparent desire to keep the population dependent on politically controlled benefits. No real gains in freedom for the masses.
Another disappointment is the infrastructure commitment where details are quite light. The problem we have as a country is that successive Governments have different ideas regarding what should be invested in what infrastructure. What the country needs is a plan agreed to by both parties that is adhered to, becoming the development blueprint for our nation for the foreseeable future. I shouldn’t be surprised that we didn’t get this as Governments do not like to share kudos with Oppositions. I am however quite disappointed at the opportunity lost.
The sun however shines brightly and margaritas beckon, so it’s time to pour the first, lean back and wait for the opportunity October offers.
Latest Economic Data
• In provisional estimates from Infometrics, an independent economic analysis firm, our Council shows economic growth in the Coromandel was just 0.5 per cent per annum in the quarter to March 2023, compared to the 2.7 per cent increase nationally.
• Card spending data from Marketview shows a drop of 11 per cent per annum in the same quarter, which equates to nearly $22 million less spent in the Coromandel compared to the same time last year.