Message to Superannuitants re Tax Changes

Recently, in a speech to North Shore Grey Power, John Key outlined how tax changes would increase incomes for superannuitants.
The National-led Government is considering across-the-board personal tax cuts and changes to property tax as part of a tax package that might include a rise in GST from 12.5 per cent to 15 per cent.
If the Government decides to increase GST, Superannuation payments will immediately rise in two separate ways.
1. Superannuitants would get an income tax cut, which would apply both to Superannuation and to any other income they receive, such as interest, dividends, or part-time earnings.
2. On top of this tax cut, Superannuation payments would be increased up front, by just over 2 per cent, to reflect the general rise in prices. The increase in Super payments would be immediate from the day GST went up, without waiting for the usual annual inflation adjustment.
This double-whammy increase means that superannuitants would have their incomes lifted quite significantly, and at a rate that exceeds the increase in prices.
In addition to the two immediate increases, across-the-board tax cuts would lift the after-tax average wage – raising the floor for Superannuation payments, which are linked to 66 per cent of the after-tax average wage. In his speech, the Prime Minister also reiterated that National is committed to maintaining Super payments linked to 66 per cent of the after-tax average wage from age 65.

Income Tax and GST

Over the past eight months, the Tax Working Group has looked at our tax system and found that the mix of taxes is not ideal. We want to fix that, to improve our economic performance, help create sustainable jobs, and lift family incomes. We'll be making some changes to the way property is taxed. Those changes will be fairer for taxpayers. We'll announce details in the Budget in May. As part of the overall package we are also considering increasing the rate of GST to 15 per cent, together with a reduction in personal income taxes across the board, and up-front increases in benefits, New Zealand Superannuation, and Working for Families payments. What would be the effect of this tax switch? Prices would rise by just over 2 per cent, but at the same time people would have more money in their pockets through income tax cuts, and increases in benefits, Super, and Working for Families. As a Government, we are working to ensure that the extra money in people's pockets would be more than the increase in prices. If we can't make sure that happens for the vast bulk of people, we won't be increasing GST.

ACC Changes Necessary

I have been quite involved in the policy and Select Committee work that resulted in the ACC amendment Act being passed recently. This will ensure ACC is affordable, sustainable, and fair for current and future generations.
ACC claim costs have risen 57 per cent in the past four years - five times the rate of inflation - and the unfunded liabilities have grown from $4 billion to $13 billion.
The scale of levy increases required this year without these law changes would be crippling for workers, motorists, and businesses. The law changes enable the levy increase this year for the average worker to be reduced from $550 to $150. The levy increase for motorists is $30 a car, down from $104. And for employers the average levy increase is 12 per cent instead of 44 per cent.
This law change is part of the Government’s objective to secure the long-term future of ACC as an effective and fair 24/7 no-fault insurance scheme for all New Zealanders.
More information:
http://www.beehive.govt.nz/release/affordable+sustainable+and+fair+acc

Welcome Back to Otago Uni Students

Two things can always be guaranteed in the third week of February in Dunedin. The first is that the weather will be fabulous and the second is the returning students get up to a certain number of hi-jinx as they return to the city for the start of the academic year.

It’s always great to have them back. They are the lifeblood of our city and provide a colour and atmosphere that is frankly missing over the Christmas recess.

Last year we had the disappointing behaviour on the day of the Freshers toga party and the Students Association and the University have taken some steps to prevent the sort of mass gathering events that give rise to public disorder. I support those initiatives. That’s not to say that I’m a wowser and I fully expect, if not encourage, students to let their hair down during Orientation Week. It’s just important that their rights to have fun don’t impede on other Dunedinites’ rights to go about their business without being impeded.

Thursday 25 February is Clubs day at the University of Otago and my colleague Simon Bridges and I will be supporting the Young Nats at their stand in the Clubs and Societies building. Feel free to come along and meet the second sexiest in Parliament. Simon will also be there!

Wellington Not The Only Show In Town

I notice that Wellington Central MP Grant Robertson has started a petition to the New Zealand Rugby Union requesting that the NZI International Sevens remain in Wellington as it is the best venue to host the event in New Zealand.

Not so fast Mr Robertson – indeed when he stands in front of the mirror saying “Mirror, mirror on the wall who’s got the best stadium of all?” it will only be for another year that the mirror replies “Wellington”.

The Forsyth Barr Stadium at the University Plaza in Dunedin, once completed, will be without doubt the most impressive stadium in the county.

Wellington will probably continue to be the sevens venue for the foreseeable future, but it should not consider itself to have a mortgage over the Sevens for all time. It certainly isn’t the show in town and Dunedin will be well positioned to be the venue for the NZI Sevens in future years.

Ash Wednesday in Dunedin – 24 February

Although in Wellington today, I’m advised that Dunedin is completely shrouded in smoke and ash from the Mt Allen forest fire. More than 400 hectares of pine forest in Mt Allen has burnt so far, and the smoke and ash from the fire has drifted over the city.

In my previous life I was a member of the Dunedin Civil Defence and Rural Fires medical advisory committee and saw first-hand the excellent work that Neil Brown and the team at the DCC Civil Defence do. I'm sure they will have the fire under control as soon as is practically possible.

Members Bill Withdrawn from Ballot

This week I withdrew the New Zealand Public Health and Disability (Change of Electoral System for District Health Boards) Amendment Bill from the Members Bill ballot. The Bill sought to amend the voting system for district health boards from a single transferrable vote (STV) system to a first past the post (FPP) system.

The next DHB elections are scheduled for October this year. If the Bill was drawn in the next few weeks it would no doubt have been either before the Health Select Committee or being debated by the House at the time of the election. This could have been a confusing factor in that election so I have decided to defer the Bill for 12 months and reintroduce it into the ballot after the elections are over.