Trotter on Labour’s education policy

Chris Trotter doesn’t seem too enamoured with Labour’s education policy.

THERE’S A HOLE in Labour’s emerging policy framework – through which too little light is getting in. The party’s latest big announcement: three years of free post-school education; is a case in point. As a headline, it’s fantastic. But, Labour supporters’ euphoria is unlikely to survive the policy’s fine print. Nearly a decade will pass before the plan is fully implemented – but only if  Labour wins the 2017, 2020 and 2023 elections on the trot. It’s not quite a case of  giving something with one hand, only to snatch it back with the other – but it’s close.

And why is Labour unwilling to offer three years of free tertiary level education in its first budget? Because it’s not yet ready to adopt a social-democratic fiscal policy to pay for its social-democratic education policy. That’s the hole – and it’s a bloody dangerous one!

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New bill needed to enforce a law we already have?

We already have a law that says you have to pay tax on any income derived from commercial or investment interest.

So the law isn’t the problem.

As usual with this country, it’s enforcement.

The Government has introduced a bill designed to make sure people who buy and sell property pay tax on their gains.

Current tax law says they should but it’s been difficult to enforce.

The Government has previously announced its intention to tighten the rules.

The new bill will set up a “bright-line” test, which makes it clear all property buyers, including overseas buyers, who buy and sell a residential property within two years will be taxed on their gains.    Read more »


Time to shoot the Sherriff – A Special Investigation Ctd

grant thornton

by Stephen Cook

A LEADING accountancy firm has been implicated in an alleged plot to swindle hundreds of thousands of dollars from Inland Revenue.

Liquidators from Grant Thornton, which boasts annual worldwide earnings of $4.7 billion and has been acclaimed as one of the best managed international firms, are among those under investigation by IRD and the Serious Fraud Office for their part in an alleged conspiracy to rip off the taxman.

IRD has invoked wide-ranging powers under section six of the Tax Administration Act to investigate experienced liquidators Greg Sherriff and Tim Downes and their handling of what should have been a relatively simple company liquidation back in 2013.

Two years on the case is attracting plenty of attention with claims liquidators in conjunction with an Auckland law firm systematically robbed the company blind and withheld money that should have gone to the taxman.

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IRD bribery & fraud scandal: A Special Investigation, Ctd


by Stephen Cook

INLAND REVENUE is officially investigating the actions of those implicated in a messy bribery scandal currently threatening the integrity of the New Zealand taxation system.

Top-level discussions were held in Auckland yesterday between senior IRD investigators and a number of complainants over the alleged criminal conduct of those involved in what appears to be an elaborate plot to defraud taxpayers out of millions of dollars.

But more importantly, at stake is the integrity of the taxation system and the right of all taxpayers to have their liability determined “fairly, impartially and according to law”.

If IRD were to ignore the allegations, it could open itself up to potentially billions of dollars worth of claims from aggrieved taxpayers wanting the same preferential treatment enjoyed by the company at the centre of the latest scandal.

The company had tax liabilities of close to $300,000 but successfully negotiated a final settlement of $30,000 after involving a man who claimed at the time he was a ‘lawyer’ with considerable influence over IRD.  Read more »


Corruption, bribes and two IRD officials – A Special Investigation

by Stephen Cook

CORRUPTION ALLEGATIONS have been levelled against two rogue Inland Revenue staff involved in investigating the tax affairs of an Auckland company at the centre of a messy bribery scandal.

The department is refusing to confirm or deny claims the two forensic investigators were part of an elaborate plot to defraud the taxman out of nearly $200,000.

The bribery allegations form part of the murky backdrop to a complex web of betrayal and deception implicating liquidators, an Auckland lawyer, the two IRD staff along with another man, who for legal reasons cannot be named.

Whaleoil understands complaints have now been filed with the Police, IRD and the Law Society over the actions of various parties involved in the scandal.

An IRD spokesman said due to taxpayer secrecy provisions in the Tax Administration Act it was unable to comment “on matters relating to the tax affairs of individuals, organisations or businesses”.

Even in cases involving Inland Revenue and high-profile customers, the department could not comment on a customer’s affairs, the spokesperson said.

The comments do nothing to shed any light on claims two staff conspired with an Auckland man posing as a lawyer to rip off the tax department to the tune of almost $200,000.    Read more »

Quote of the Day

Today’s quote of the day is from The Donald:

Trump did not say what percentage of his income he pays in taxes, and was open about the efforts he makes to keep his rates low.

“I fight like hell to pay as little as possible for two reasons,” Trump said. “Number one, I’m a businessman. And that’s the way you’re supposed to do it. And you put the money back into your company and employees and all of that. But the other reason is that I hate the way our government spends our taxes. I hate the way they waste our money. Trillions and trillions of dollars of waste and abuse. And I hate it.”

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Labour’s ‘new’ company tax policy is the same as what is allowed already

Company tax? Wouldn't know, never run a company

Company tax? Wouldn’t know, never run a company…next question

Good grief, after signalling a ‘new’ company tax policy focussed on making life easier for small business we find out that Andrew Little and the Labour party know three fifths of five eights of stuff all about existing systems and tax arrangements.

He launched a discussion document on the policy at a speech to the Hutt Valley Chamber of Commerce this morning.

“This proposal gives business owners the option to pay up to 100 per cent of their tax through regular withholding payments, at the rate they set themselves,” Mr Little said.

“Alongside this, I’m also announcing that we would be scrapping late penalties for provisional tax and increasing the threshold for when provisional tax applies, from $2500 to $5000.”

At present, provisional tax rules require a business to estimate, in advance, its taxable profits for the year and pay tax in three large instalments over the year.

“If they guess wrong, they can be faced with a big bill at the end of the year which can push a small business to the wall,” Mr Little said.

“Under Labour’s proposal, businesses will have the option of choosing to pay their tax through regular instalments at a rate they can adjust. This means businesses can align their payments to suit their circumstances.    Read more »

Rodney Hide explains why the Taxpayers’ Union is so important

Rodney Hide discusses why organisations like the taxpayers’ Union and presumably the Auckland ratepayers’ Alliance are so important.

Recently they have been highlighting waste in government departments; that while they are small in the overall scheme of things these small amounts add up.

But that spending is peanuts compared to the true waste of government. Try explaining to a journalist the deadweight cost of tax. That’s the loss of all the wealth-creating trades nixed because of tax.

Taxes hike the cost of everything. That means fewer people employed, less bought and sold, and a multitude of investment projects that never get off the ground. In the absence of government all those trades would fly. The cost is in the billions. The waste is horrific. And it’s never seen, nor remarked upon.

Think of the businesses and projects that never happen because of red tape. That’s the waste of government.

The kids who can’t read, write and do arithmetic. That’s because the state runs the schools. Think of the lost human potential because of that.

Look at the families, broken and busted, neighbourhoods, indeed entire communities, left without hope and opportunity because the government thinks it a good idea to pay mums to have children and dads to do nothing.

The resulting hopelessness and despair, and their tragic consequences, are the true waste of government.   Read more »

Now they’re fighting the dictionary?


My good friend John Key reckons he is honouring his election pledge about no new taxes.

When is a tax not a tax? When the Prime Minister says so.

John Key has denied going back on his word by introducing a “border clearance levy”, which will sting travellers with $22 in arrival and departure taxes.

Key deflected questions on the matter from reporters following his annual post-Budget speech.

Asked what the difference was between a tax and a levy, he replied “many”, and when pressed, to “Google it”.   Read more »

Why bother with it at all then, John?

John Key reckons his new capital gains tax rules won’t have much of an impact.

New measures to tax capital gains on residential property will help weed out speculators and foreign investors who trade Kiwi homes just to turn a quick buck.

But some commentators are questioning what effect the new tax rules will have on Auckland’s heated property market or how many traders will be “caught in the net”.

Prime Minister John Key announced a raft of new measures yesterday aimed to help curb spiralling house prices and track the number of foreign buyers purchasing Kiwi homes.

From October, anyone selling a residential property that is not their main home within two years of purchasing will face tax on the capital gain.

This morning John Key told Newstalk ZB he wasn’t a fan of a capital gains tax and the new tax rules were not such a tax.

“What we do in New Zealand is have an intentions-based test so if you buy an investment property, then the question is did you intend to rent it or did you intend to buy it and sell it?

“If you intended to buy it and you sell it then you were taxed at the marginal rate.

“What we are now saying is forget about if you buy it and sell it within two years what your intentions were. Your clear intentions were to buy it to make a profit so you have to pay tax on it.”

Mr Key said the new laws would make it easier for IRD to catch residents and foreigners trying to cheat the system.    Read more »