Source: Taxpayers Union
5 MAY 2020FOR IMMEDIATE RELEASE
Responding to the release of the National Party’s alternative business support package, the Taxpayers’ Union Executive Director Jordan Williams said:“We weren’t given a heads up on the contents of the package, but at first glance, it appears more generous and more targeted than the rough and ready loan scheme the Government has announced.”“It’s more targeted because it requires a business to be down by 50% over two months, rather than 30% over one. That makes it harder to game or shift invoice timing to qualify.”“It’s fairer to taxpayers as support is better proportioned to the size of a business’ revenue rather than just dependent on the number of staff. By using GST return data, which IRD already has, to asses the size of a business, the support is likely to better reflect the cost structure of recipients.”“The package is generous but not over the top. If a business is down by 50% over two months, they effectively get back 7.5% of last year’s revenue. If a business requires more, they have access to a loan.”On moving capital expensing cap from $5,000 up to $150,000, Mr Williams said:“This is something the Taxpayers’ Union has been calling for years. It’s what Donald Trump did in the US and lead to a surge in capital investment.”“Capital expensing the best way to shift the economy from relying on cheap labour and increase productivity. But why lift to $150,000? They should have scrapped it entirely.”An explainer on full capital expensing, Policy in 60 seconds – the best tax idea you’ve never heard of, is available at: https://www.facebook.com/nztaxpayers/videos/1556890201113980/The Taxpayers’ Union corona-response paper published in mid-March recommended giving lump-sum payments to taxpayers by retrospectively cutting the bottom tax rate for the 2019/2020 tax year. “Using the tax system – and existing data held by IRD – offers significant advantages over ‘high trust and audit’ models,” concludes Mr Williams.