Goldsmith Update - April 2016
This Parliamentary session was notable for the first of the pre-Budget announcements of a tax package that makes paying tax easier and more certain for small businesses and reduces the burden of interest and penalties.
Prior to entering Parliament four and a half years ago, I ran my own business producing business histories and biographies. I loved it. It was very satisfying, every year or so, to deliver a book that told an inspirational story and would last forever. It was a stress-free existence, with one exception. The nightmare of provisional tax.
Anyone who has been self-employed or run a business knows the cash flow challenges of provisional tax payments, as well as the sheer difficulty of correctly predicting future profitability.
We are going to give small businesses – those with a turnover of less than $5 million – the opportunity to choose a new “pay-as-you-go” option for provisional tax. This new option drops the estimation part and instead works out your tax payments on an ongoing basis throughout the year.
Penalties for late payment are an essential part of a tax system that’s fair to everyone. So under the proposals, the immediate penalty that applies to late payments, and the 4 per cent penalty after a further week, will remain, as will use-of-money interest on overdue tax. But a 1 per cent monthly penalty on top of all this, as we have at the moment, makes the combination of penalties and interest very burdensome. This will be scrapped for new debts after 1 April 2017. Building up a very large debt to Inland Revenue is often an ineffective way to get individuals and businesses to resolve their tax situation.
As a government we understand that small businesses are the backbone of our economy. We want them to grow into big businesses, if that’s what their owners desire. That is why we are constantly looking for new ways to reduce the burden of government and free up people to concentrate on what they do best.
In Parliament I talked about the general economic environment and the government’s programme in two general debates. You can view my speeches here
In the previous Goldsmith Update I wrote about the animated series It’s All Good as one example of the work the Government is doing to improve financial capability and money skills in our communities.
The Commission for Financial Capability is another agency that is working to help people to manage their finances better.
In the past fortnight we announced the relaunch of the popular financial planning website Sorted. One million New Zealanders use the free website every year, which was originally designed for viewing on a desktop computer. It has now been re-created from the ground up so it’s mobile-friendly and easy to use.
The new Sorted website provides a personalised range of tools, such as mortgage calculators, debt management, retirement planning and the KiwiSaver Fund Finder.
You can access the website at: www.sorted.org.nz.
Retirement Income Policy
The Retirement Commissioner’s 2016 review of retirement income policies is now underway. The cost of New Zealand Super, which is taxpayer funded, will double by mid-century. It is important we take the time to look at what we are doing now and how this will affect future generations of New Zealanders.
Some of the questions being asked include:
• How will a future government manage NZ Super?
• As a society what do we owe our children and grandchildren?
• What, if anything, do our children and grandchildren owe us?
I spoke on the review when I recently met with the Retirement Commissioner, Diane Maxwell. You can watch my video here: www.cffc.org.nz/retirement/retirement-policy/the-2016-review.
If you are interested in learning more about the Retirement Income Policy review, you can visit www.cffc.org.nz/retirement/retirement-policy. Submissions can be made directly to the Retirement Commissioner by emailing firstname.lastname@example.org.
It’s been the month for local school fairs. Just about every weekend there is a fair offering an afternoon of plate smashing, water slides and sausage sizzles. I for one enjoy taking my kids along to attend these great community events.
We recently attended the Mt Eden Normal School and Cornwall Park School fairs. I was struck by the way parents and kids alike were getting into the community spirit: having a fun day while raising extra funds for the school.
The first of April marked the centenary of the opening of Auckland Grammar School’s main block. The distinctive ‘Spanish mission’ style colossus visible from the Southern Motorway is an Auckland landmark, but more importantly it is a building that has helped inspire generations of boys.
A couple of hundred of us went along on a wet night to a ceremony to mark the occasion. Old boy Professor Sir Peter Gluckman gave one of the speeches, and he made the point that while the size and scale of the assembly hall has an impact, the dominating impression for anyone sitting in the stalls is that one is surrounded by names. Honours boards tower over the stage and encircle the stalls, mainly of university scholarship winners. I remember gazing up during my time there in the 1980s.
Last night my colleague Hon Nikki Kaye and I went to the official opening of the Joyce Fisher Sports Centre at Epsom Girls Grammar. The centre provides world class facilities for the school and local community and boasts two full sized netball courts, a health and well-being suite, and fitness centre. The Sports Centre is a wonderful asset for our community and is testament to the hard work put in by the individuals and organisations who made it possible.
Hon Paul Goldsmith
National List MP based in Epsom
P: (09) 524 4930