tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Tuesday, July 16th, 7:46PM

News

rss
Latest Headlines

Tax incentives years away

Budget Coverage: Another savings Taskforce is being established by the Government. This time it's to look at tax incentives.

Thursday, May 24th 2001, 4:04PM

by Rob Hosking

Finance Minister Michael Cullen’s second Budget makes one thing clear: don’t expect any tax incentives for savings until the 2003/2004 financial year.

The table of "fiscal risks" included in the Budget tables – a table which covers items likely to alter the government’s projected operating balance over the next few years but which the Treasury cannot yet put numbers on – includes a new item for tax changes for superannuation funds.

Those tax rules are under review at present, but "any impacts from the review would not be expected to occur prior to 20003/2004.

For the savings industry, that is about the only hard new information in the Budget.

"I have, in a number of speeches, explained various options with regard to the reform of our savings regime," Dr Cullen said in his Budget speech.

"It is now time to start moving towards action." It is, he said, time for another report. Treasury officials are about to receive instructions to work with savings industry representatives on the best ways to boost private savings – the so called second and third tier savings to complement the government’s superannuation fund.

That review is to report back by the end of the year, so its recommendations can be worked in with the government’s broader Tax Review, and included in any subsequent changes to the overall tax regime.

There has been hope from the savings industry that the government will extend tax incentives for retirement savings. While starting from a view that special tax breaks for any particular activity are undesirable, Dr Cullen has indicated he is willing to consider changes if a tax regime can be devised which does not lead to leakage from government revenue or distort the normal functions of the markets.

While there is a tax break for high income earners if they put their earnings of above $60,000 into a superannuation scheme, there is no similar break for those in lower tax brackets.

Dr Cullen also again announced the initial contribution of $600 million to the New Zealand Superannuation Fund – an allocation which has become very well announced in recent weeks.

Budgeted allocation for further years is $1.2 billion, $1.8 billion and $2.5 billion respectively. The money will initially sit in the Treasury’s Debt Management Office, earmarked for the New Zealand Superannuation Fund. But the Fund itself, and the governance arrangements for it, would not be formally established until the New Zealand Superannuation Bill, now before the Finance and Expenditure Select Committee, was passed.

Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.

« Budget to flag new savings incentivesSovereign takes regulation bull by the horns »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.74 7.35 6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 8.74 7.74 7.09 6.95
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 7.14 6.49 6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Lender Flt 1yr 2yr 3yr
Westpac 8.64 ▼7.49 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - ▼6.89 6.75 6.39
Median 8.64 7.14 6.82 6.65

Last updated: 15 July 2024 11:47am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com