by Paul McBeth
Solly, speaking at the Society for Independent Financial Adviser's annual meeting in Wellington, told advisers that both Australia and New Zealand were "lucky" with very different economies, but investors' returns were threatened by the mining tax across the ditch and the changes to property tax in New Zealand.
The resources sector of the Australian economy had underpinned much of its support in the past 18 months as Chinese, Indian and other emerging nations' demand for raw materials, and the introduction of the super profit tax on mining would damp returns for investors and was a "big risk," he said.
Similarly, Solly was critical of the proposed changes to the tax treatment on property in New Zealand's budget, due to be unveiled this week. The likely removal of depreciation on buildings would have "unintended consequences" and the best way to broaden the tax base, if not the most popular, was to lift GST.
Still, he remained bullish on the outlook for New Zealand and Australian equities with strong commodity prices and signs of more confident businesses underpinning the two economies' revivals, while merger and acquisition activity is set to ramp up over the coming year, and will provide opportunities for investors, he said.
Paul is a staff writer for Good Returns based in Wellington.
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