Asset tax proposed

Press, 14 August 1980, Page 4

Asset tax proposed

PA Wellington People who invested in land purely as a capital gain and big companies which benefited hugely from export incentives would have their sails trimmed by a Labour government, the Leader of the Opposition (Mr Rowling) told the Institute of Chartered Secretaries and Administrators yesterday. He hinted that Labour would introduce , an asset tax which would enable a fair level of exemption to protect basic equity in asset? such as a house. The greatest obstacle towards a move into asset tax was the over-valued price of land, he said. New Zealand’s greatest economic opportunity lay in varied farm production “and its spin-offs” but the price of land directly hindered that development. “The price of land is going to have to be stabilised at a true economic level, and

there is no doubt that changes in the present taxation system will have to be applied in whatever combination of the carrot and the stick is finally appropriate. “Those who invest in land as a capital gain cannot say they have not been warned,” he said. For the business and manufacturing sector, Mr Rowling promised negotiation over the structure of company tax and a “ruthless and continuous assessment” of export incentives. He said he was unhappy about the growth and the level of direct payments that had now been reached with industry incentives. The sum paid out annually in export incentives was for some reason a Government secret but they were 14c for every dollar added locally. “If manufacturers succeed in their targets for expansion over the next five years, then, on the present system, the taxpayer is going to be

loaded with an incredible bill.

“Major companies, with skilled accountants, could well be operating into a virtual no-tax basis,” he said.

New Zealand must continue to have a strong investment in its export drive but a Labour government would assess export incentives and alter them to give the smaller business “a fair go.”

Mr Rowling said Labour did not believe that New Zealand’s tax system should continue to maintain a builtin reward for those who were able to ride and benefit from inflation.

“A good tax system must be fair and equitable to all concerned, easy to, understand, cheap to administer, hard to avoid or evade; and, of greatest importance, has to contribute to the over-all economic and social objects of a growing economy.” he said. _