Welcome to our Weekly Digest – stay in the know with some recent news updates relevant to business and the economy.
Much going on in the world of tax
At an event for the Young International Fiscal Association, the Revenue Minister, Simon Watts announced the Government’s Tax and Social Policy Work Programme. These work programmes are a working document updated frequently so that after a change of government they reflect the new government’s priorities in tax policy and social policy areas.
Directors see NZ economy on the up
Produced by the Institute of Directors (IoD) in association with ASB, the survey takes the pulse of New Zealands governance community to identify governance issues and challenges. Confidence in the economy has nearly doubled among Kiwi directors over the past year to reach a historic high, the 2024 Director Sentiment Survey reveals.
Government’s rates cap idea not popular with councils
Mayors and councillors from around the country have opposed the idea of the Government capping rates, and have come up with their own suggestions. At a meeting in Wellington on Thursday, Local Government New Zealand (LGNZ) president and Selwyn mayor Sam Broughton said LGNZ is exploring alternatives after suggestions the Government could introduce such a cap.
Treasury says Capital gains tax the best way to raise revenue as NZ ‘s population ages
A capital gains tax is the only tax base-broadening measure likely to raise a significant amount of revenue, Treasury has told the government. Treasury and Inland Revenue have this year highlighted the potential need to rethink New Zealand’s tax system. An ageing population is expected to significantly reduce the number of working-age New Zealanders who are net taxpayers compared to the older, retired population.
Public sector wages grew faster than private sector wages in September quarter
Public sector workers are reaping the benefit of collective bargaining agreements and pay increases. Overall quarterly wage growth across the private and public sector is the lowest since December 2021. A Public Service Commission report found public sector wages rose 0.9% in the September quarter. Meanwhile, private sector pay saw quarterly wage growth of 0.6% this quarter, from the June quarter.
The age of magical thinking: Taxation of the NZ Super Fund
The NZ Super Fund (NZSF) was set up in 2001, a time when the government had spare money from budget surpluses. The intent was to tax smooth the future costs of the universal NZ Super by paying a bit more today, to pay a bit less tomorrow. Certainly, the NZSF has performed well enough but it is no magic bullet. The issue of whether the NZSF should pay tax is largely one of smoke and mirrors. Under the formula, if NZSF retains tax in the fund, government would simply be required to contributes less when the fund is building up. Thus, the lower contribution offsets the government’s loss of tax revenue. Likewise, when the fund is drawn down, those payments back to the state are larger, and act to offset the tax loss.
New Zealand Treasury likely to cut economic and fiscal forecasts
NZ economy continues to soften as unemployment bites
The New Zealand economy is still slowing down and rising unemployment is not helping, according to new data. Infometrics’ quarterly economic monitor shows activity was flat in the three months to September compared to a year ago, showing a longer term trend of softening.
Crypto Down Under: Is New Zealand becoming a cryptocurrency hotspot?
In recent years, New Zealand has emerged as a key player in the global cryptocurrency scene. With a tech-savvy population, forward-thinking regulation, and a growing community of crypto enthusiasts, the country seems poised to solidify its position as a cryptocurrency hotspot. But how does New Zealand truly compare to other nations in the crypto space?
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