Tax package dropped
The NewZealand Government has ruled out offering tax incentives for retirement savings, as it promised, because it can not afford them at present.
Finance Minister Michael Cullen has been keen to change the tax system so that there was some sort of incentive for people to save, either when they invested their money or while it was in an investment, as opposed to the current system where the exemption comes when the investment is redeemed.
“Big structural changes for general retirement savings away from the current regime toward a new regime, will not be proceeded with this term, as there is simply no fiscal room in this year’s budget.”
In the past, he has flagged his preference to change the tax system for savings from the current, where exemptions are granted at redemption, to where they are granted beforehand.
Investment Savings and Insurance Association chief executive Vance Arkinstall says if some sort of incentives are going to be introduced, the exemption has to be at the front.
The logic behind this is that it is the option which is most obvious to savers.
AUTHOR
Phil Macalister
Recommended for you
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
The Senate economics legislation committee has recommended Schedule 1 of the Delivering Better Financial Outcomes legislation be passed as it is a “faithful implementation” of the recommendations.
Treasurer Jim Chalmers has handed down his third budget, outlining the government’s macroeconomic forecasts and changes to superannuation.
