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  • Robert MacCulloch

As if it isn't enough to pay high parking fees in central Auckland, now we find out our tax dollars are being used to subsidize Wilson Parking. Stuff news reports (below) that the company, which is chaired by billionaire Hong Kong property developer Raymond Kwok, "received $3.1 million in government wage subsidies in the past year at the same time as profit increased 43 per cent to $16.7 million".


I don't blame the company at all, since it was acting fully within its legal rights to claim the subsidy. Indeed, companies with shareholders are practically obliged to maximize their value. Instead, my gripe is with the NZ Treasury which only had to write a few words into the wage subsidy scheme along the lines that "should any company claiming these funds during the period of the lock-downs report end-of-year profits that are not materially lower than previous years profits, then the government reserves the right to claw-back the subsidy".


Failure to include those words cost you and me, the tax-payer, many, many billions of dollars. Just shows the price one pays for not having good economic advisers.


https://www.stuff.co.nz/business/123588475/wilson-parking-reports-43-per-cent-profit-rise-takes-covid19-wage-subsidy

  • Robert MacCulloch

Stuff has just reported that "National leader Judith Collins is open to taking GST off the sale of new build homes to encourage developers to build extra housing ... Collins noted that developers said that it makes it harder for them to sell new builds because they’re competing with existing homes that don't have to pay the 15 per cent tax .... I’m not saying we’re going to do it or anything but I'm aware there is an inequity there,” Collins said.


When GST was introduced an important part of its design was that it applied to final sales of all goods and services. The Kiwi architects of our GST knew that should one start allowing exemptions, it would open the door to lobby groups wanting their products excluded to help them make more money. From the report above, it seems that is exactly what property developers are trying to do, namely persuade politicians to take GST off their industry!


It's also unclear why there is an "inequity" in the tax, as the Leader of the Opposition argues ... since value added taxes like GST are simply levied on the sale of all goods and services that have had - yes - "value added" to them. Existing homes have not been newly constructed or produced - its a second hand market - so they don't attract GST when sold. Isn't that the whole point of the tax?


https://www.stuff.co.nz/national/politics/300172742/judith-collins-open-to-taking-gst-off-new-builds-to-encourage-building


 

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