Sure, business gets a drop in the tax rate from 33 to 30 cents in the dollar but starting April 2008 the guvment is enforcing a compulsory 1% employer contribution to the Kiwisaver coffers for each employee involved. This grows to a 4% compulsory contribution by 2011. Each employee gets a measly $20 p/week 'tax credit' but only if you are in Kiwisaver. Gee 20 bucks - thanks Michael. On top of that employers get a $20 p/week credit for each person enrolled. What a joke and just another example of 'Labour knows best' policy. What happened to tax free contributions?
So, I giveth 4% of my gross salary and then am still taxed at the same gross amount. Michael, I just did the sums and $20 just doesn't cut it for me. As an employer I have to way up the consequence of what happens financially if all my staff opt for Kiwisaver. An initial look suggests that my company will be financially worse off than what we are now.
Simple solution I just cut back on pay rises. If the employee opts for Kiwisaver I take into account my employer contribution when considering any pay reviews. Or I just cut one off the head count, that would save money.
You see Michael I can be just as measly as you, you scabby old scrooge!
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Comment by antoniosk, on 17-May-2007 17:59
The problem is that you earn too much. Because you're not on the bread line at $40k/pa but actually on something a shade better, than you are BAD BAD BAD and deserve to be penalised.
Success is NOT good - best you take any spare money you have and get your lawyer to help you structure tax vehicles to legitimately reduce the tax you pay.
The regional petrol tax is fun - I'm going to fund electrification of a service I don't use, for the benefit of a small proportion of the community. There is no light rail from inner wellington to get me around - I have to fight it out on a bus (yeah right) or drive, as most people do and will continue to do so.
The stage is set for Mr Key to storm to victory - and no promise of tax cuts next year will take away from the core message presented today.
Comment by sbiddle, on 17-May-2007 20:54
Antonios hit the nail on the head and you yourself pointed out the way to succeed in this country - have two kids and earn $30k per year. You'll be far better off than somebody who tries to get ahead. Retail sales in March hit a new record and all indications are that April will be very strong as well, hardly a coincidence that those who's lives revolve around buying home appliances on interest free deals all got a tax cut (oops working for families) yet those of us who apparenty earn too much have to suffer.
I agree with the concept of the petrol tax but find the biggest con the fact that Dr Cullen has been leaching the petrol tax over the past few years and not giving any back. While petrol prices have steadily risen from 90c/l to around the 1.40c/l-1.70c/l mark the government tax take has increased considerably. It's hardly surprising we're having record budget surpluses.
As for health I think we all agree that spending more money is a wise move however will throwing more money at a fundamentally flawed health system that's too top heavy and bloated due to excessive middle management really fix anything? Look at the UK where even throwing billions at the NHS can't even produce significant changes.
Comment by paradoxsm, on 17-May-2007 21:10
ha ha ha, "D" For "Dumb Arse" Very nice!
@ell, we must admit that the government just don't know what they are doing.
The biggest thing they seem to forget is that all those sold-off state owned "services" like Telecom, Power, Metrowater etc, now charge much much more than they did back in the old days, the GOV't owned days, effectively placing our "Tax take" up into the high figures!
They sold those off to promise "tax breaks" same with bringing in GST, what happened,,, nuttin.
Comment by sbiddle, on 17-May-2007 21:23
The Stuff reader feedback is getting some well written comments and as of now (21:23) nothing positive!
Comment by lugh, on 18-May-2007 09:15
I agree that MC has certainly knocked in the last nail on Labour's coffin. Personally, I think that the principle of Kiwisaver is a good idea but I'd rather he address our runaway economy before implementing any changes like this.
But at the end of the day, would a change in tax thresholds really make that much difference? IMHO, Low income families and a good chunk of middle NZ would probably get less than they would through Working for Families (I'm also guessing less than the $20pw credit MC's offering) and really only the higher earners will be better off. Put the breaks on the economy - we need that more than anything!!
I do apologise for voting for them last time - I needed the student loan break. I think that they've lost touch with their constituents and it's really time for Hellz to move on (Goff for leader? Seems the best of the bunch).
Sbiddle - the Ministry of Health is currently going through a restructure where they do appear to be trimming some of the management fat. With alignment more towards functions rather than speciality areas (e.g Policy Directorate), they're making some management positions unnecessary. The danger with this approach is that lower profile areas like mental health or disabilities may potentially get less attention (and therefore funding) than before as they will lose the internal advocates. Still, IMHO this can't be blamed on the govt (whoever is running the country at the time) - the govt depts are being run as organisations, with CEOs and all, and they run independently in a lot of areas.
Comment by TinyTim, on 18-May-2007 11:16
Goff for leader? The man who introduced those high university fees in the first place, the ones you now have to get a loan in order to pay? You are more forgiving than I am...
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