Tax free savings in NZ?

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Forums › Finance and wealth management › Tax free savings in NZ?

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#1171189 7-Nov-2014 21:39

So, why do we think kiwis are not offered something available in many comparable countries?

charsleysa

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#1171195 7-Nov-2014 21:54

Geektastic: So, why do we think kiwis are not offered something available in many comparable countries?

National government, government decides and national is all about business making money not individuals (in my opinion anyway).

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Stefan Andres Charsley

hangon

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#1171216 7-Nov-2014 23:32

Geektastic: So, why do we think kiwis are not offered something available in many comparable countries?

don't think right now we can afford it. we are not even contributing to the super fund.

arguably last Labour government could have afforded that, or at least put deferred tax on kiwisaver contributions, instead they gave a block of cheese tax cut after 9 years, and bought a broken train set.

then there is the GFC and earthquakes.

however, even if the kiwisaver contribution is not tax free, the incentives are good enough (a plus for the Labour). government contribution is essentially making a portion of personal contribution tax free, albeit now it's half of what Labour started with.

wikipedia says the "member tax credit" (i.e. government contribution) is not a true tax credit, but a monetary contribution mainly to offset tax paid on interest earned. makes no really difference to average joe though.

Geektastic

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#1171217 7-Nov-2014 23:33

charsleysa:
Geektastic: So, why do we think kiwis are not offered something available in many comparable countries?

National government, government decides and national is all about business making money not individuals (in my opinion anyway).

That does not really explain why no Labour government has every introduced the measure...

This is the sort of thing I am talking about.

Just to show it is not a right wing/left wing thing, the UK plan type I linked to above evolved from one introduced in 1986 when Margaret Thatcher was PM in the UK!

Batman

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#1171237 8-Nov-2014 07:44

surely tax free is an oxymoron

Geektastic

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#1171240 8-Nov-2014 07:59

joker97: surely tax free is an oxymoron

Why?

Batman

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#1171252 8-Nov-2014 09:31

Has anyone come up with an answer to the original post? If they have I will take it back.

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charsleysa

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#1171253 8-Nov-2014 09:37

Geektastic:
charsleysa:
Geektastic: So, why do we think kiwis are not offered something available in many comparable countries?

National government, government decides and national is all about business making money not individuals (in my opinion anyway).

That does not really explain why no Labour government has every introduced the measure...

This is the sort of thing I am talking about.

Just to show it is not a right wing/left wing thing, the UK plan type I linked to above evolved from one introduced in 1986 when Margaret Thatcher was PM in the UK!

That example is basically kiwisaver just without tax on investment returns and fewer restrictions on when you can withdraw.

Kiwisaver could easily be tweaked to get the same result.

Regards
Stefan Andres Charsley

Geektastic

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#1171286 8-Nov-2014 11:40

charsleysa:
Geektastic:
charsleysa:
Geektastic: So, why do we think kiwis are not offered something available in many comparable countries?

National government, government decides and national is all about business making money not individuals (in my opinion anyway).

That does not really explain why no Labour government has every introduced the measure...

This is the sort of thing I am talking about.

Just to show it is not a right wing/left wing thing, the UK plan type I linked to above evolved from one introduced in 1986 when Margaret Thatcher was PM in the UK!

That example is basically kiwisaver just without tax on investment returns and fewer restrictions on when you can withdraw.

Kiwisaver could easily be tweaked to get the same result.

Of course it could.

There are now people in the UK with over $2 million tax free equivalent in those plans!

If we want people to save for their retirement, why are we almost unique in not making that saving tax free?

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#1171289 8-Nov-2014 11:43

Or at least reduced, which I think it is?

charsleysa

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#1171309 8-Nov-2014 13:02

joker97: Or at least reduced, which I think it is?

The tax on kiwisaver returns is the same as any PIE investment as far as I know.

PIE investment returns have lower tax rates than your standard income tax.

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Stefan Andres Charsley

JimmyH

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#1171614 9-Nov-2014 12:30

Geektastic: So, why do we think kiwis are not offered something available in many comparable countries?

I guess because:

1. The revenue loss would have to be made up by higher taxes on something else - assuming people want government services and entitlements to be maintained, and

2. The Treasury and successive governments (rightly or wrongly, on which I have no view) are of the view that tax incentives that apply only to certain favoured savings types just cause savings to be moved around from one option to another, rather than achieving all that much in terms of increased savings or better outcomes.

JimmyH

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#1171617 9-Nov-2014 12:44

charsleysa:
Geektastic: So, why do we think kiwis are not offered something available in many comparable countries?

National government, government decides and national is all about business making money not individuals (in my opinion anyway).

How does that comment relate, even vaguely, to the question?

Whether or not there is a concessional tax rate on certain types of savings schemes has nothing whatsoever with "making money over individuals". Plus, it's not just National governments that have actively maintained the current system - National governments, Labour governments, Labour/alliance coalitions, Labour/NZ First coalitions, National/NZ First coalitions, and National/United coalitions have all kept the status quo.

So it's neither something driven by the National Government, nor is it about "making money over individuals".

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#1171660 9-Nov-2014 14:57

JimmyH:
Geektastic: So, why do we think kiwis are not offered something available in many comparable countries?

I guess because:

1. The revenue loss would have to be made up by higher taxes on something else - assuming people want government services and entitlements to be maintained, and

2. The Treasury and successive governments (rightly or wrongly, on which I have no view) are of the view that tax incentives that apply only to certain favoured savings types just cause savings to be moved around from one option to another, rather than achieving all that much in terms of increased savings or better outcomes.

There is a reasonable case to be made that it is a good idea to forgo a bit of tax revenue in order to encourage retirement saving - it could be less costly than using taxes later to support retired people who did not make adequate provision.

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#1171697 9-Nov-2014 16:52

but the way the left looks at it only the rich ie right supporters can afford to save so its a policy that favors those on higher incomes

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