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Tax working group recommendations like cold porridge
20 Feb 2019
Chris Leitch


The report of Michael Cullen's tax working group will be about as innovative and forward looking as a bowl of yesterday's cold porridge.
It will be as complicated to work through, and the recommendations will leave as unpleasant an after-taste for the vast majority of New Zealanders.
The innovations it could have shone the way on, like the scrapping of GST at 15% and the introduction of a financial transaction tax at under 1% will be sadly missing. 
A FTT would automatically haul into the net the likes of Google and Facebook, along with a raft of speculative fancy financial transactions that currently escape GST. 
Without GST, businesses would face less accounting and compliance costs, would have a level playing field with overseas internet sellers, and consumers would get a significant reduction in the price they pay at supermarkets and retailers across the board.
There will be no major tax cuts for those earning less than $50,000 per year, which there could have been if the working group had recommended the government fund it's borrowing, and it's infrastructure spending needs, from the Central Bank (Reserve Bank) as recommended by an IMF report in 2012, a mechanism that would currently save $4.6 billion annually.
Instead of floating the idea of a home carers wage that would allow one parent to stay at home and invest time into the most important period of a child's development, the first five years, the working group will recommend an increased range of taxes that, far from being tax neutral, will ensure that parents have to work harder just to maintain their present financial position, spending less time with their children.
The irony is that the working group will have cost taxpayers several million dollars to propose a more complex tax system that will extract more money out of their pockets and benefit only accountants and tax lawyers.

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