No rift between ministers on tax: Dunne

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Revenue Minister Peter Dunne says perceptions of a gap between him and Finance Minister Michael Cullen on the changes to the investment tax regime are wide of the mark.

Friday, June 23rd 2006, 5:58AM

by Rob Hosking

Dunne says there are likely to be changes to the tax bill at select committee level but adds that “in the 15 years I spent on that select committee I never saw a tax bill emerge unscathed from that select committee process and I don’t imagine this will be any different.”

“Look, this wasn’t my policy – I took it over last year. But having been through the issues this seems to be the best we can come up with. What I’m saying to people is I actually don’t want to know whether you’re in favour of what is proposed or against it – what I want to know is what alternatives you can put up. And we’ll have a look at those.”

Dunne says the whole generic tax reform process which has been evolved by the Inland Revenue Department since the late 1980s is designed to put out ideas and consult as widely as possible.

The complexity of the area makes that good practice, he says, and it avoids the political difficulty of a situation developing where people paint themselves into corners they can’t get out of.

“This is the third attempt we’ve had in 20 years to have a look at this particular area of the tax regime, and all I’m saying is let's get it right.”

The bill is currently before a Parliamentary select committee – submissions close on 7 July – and that means Dunne is reluctant to comment about specifics.

“But you don’t’ need to be a rocket scientist to see what areas are going to get the most attention.”

One which has generated a lot of heat is the move by UK-based investment trusts to get the same sort of sweetheart deal of a five-year holiday as that gained by Guinness Peat Group.

Dunne won’t comment on that specific gripe except to say it is difficult to find a solution which will address all the concerns.

The most common suggestion he hears is people saying “let's just cut through the whole thing and have an across the board capital gains tax”.

“I don’t know how serious people are when they say that but I can tell you that’s the one thing that is just not going to happen.”

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

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