You're listening to a share these podcast.
I'm sure you don't want to announce any policy here today. Maybe you can let us in on what kind of process you might go through when you are determining your tax policy.
So the question I always ask, and it's a fairness question, is that why should a salary and wage earner be taxed for every dollar that they earn, but someone that can dispose of their third fourth residential property or rental property gets that profit tax free. There is a fairness in there. Also. The element when it comes to tax is we work in a tax system here in New Zealand that is based off the framework of broad base,
low rate. You tax a whole bunch of things, a whole lot of things at the base broad you make it broad so that you can keep the rate of tax low, so low rate, it's quite clear in New Zealand that there are elements missing from that broad base. And it's no secret that we are one of three OSCD countries that doesn't have a capital gains tax. And there's also no secret that actually only six jurisdictions in
the world have a wealth tax. And actually the conversation around a wealth tax is starting to flare up a lot more in other jurisdictions such as the UK for example. We have to take all of that in our stride as we develop our tax policy. Having a tax lawyer that's in there helps with the policy decision making element because I can say, if you tax this, this is
what the outcome is. These are the deductions that a business or a person will should be applicable for, etc. But ultimately we have to think about that in a political sphere as well, because we want to win the election and we know the tax system is unbalanced. We know that there is unfairness for some people. So we need to come to the country with a policy that meets those objectives, but also one that we're not going to scare everybody. Can reassure everybody that this is how
it's going to impact you. If I can't explain that as a tax lawyer, then that's not great.
Do you think that there's a path there that that can be impactful and popular?
I think so. I mean, and ultimately, the thing I really give credit for to New Zealanders over the last year since being the finance spokesperson and in particular the business community, is they can see where the inequity lies in some places. And there also if you'll see a few quite senior business leaders have come out saying well we need some changes in this space, or we should have a capital gains tax, or this is why we don't think a wealth tax might work, or or what
about land tax or something else tax. But again you need to for me, as the finance spokesperson, I need to look at it all as a package. What's the society that we want to live in, the priorities, in the basics, which person in New Zealand should be expected to have, and then how we pay for it. And that requires the using of the government balance sheet to its full purpose, not just sort of superficial discussions around you know, tax and spend debt, you know overspending or underspending.
All of that. We need to I take a very considered look when I look at this together.
You know, we run an employee share program. It also helped many other businesses run employee share schemes. So that's where your team get a portion of shares as part of their remuneration package. And it's a great way to kind of share the ups or the potential gains of what's going on for the hard work that people are putting in. Is anything on your mind around how we might look at the tax around those employee share schemes for people.
So I've been around during two forms of changes quite recent changes to employee share schemes. Is back when National had put through some changes because there were integrity risks, and then more recently when Labor had tightened it. So I was in the Finance Expenditure Select Committee at time those changes that kind of happened in twenty twenty two.
I have had some feedback from different businesses that they do want to be able to get more employee share schemes up and running, but sometimes the tax, the tax element in the way that it was changed, is a concern for them. So I'm more than happy to listen to what people think should be changed. There is always, like when I was working for the National government, that
integrity risk. But the other element, which I think we also need to be mindful of is that there have been employees share schemes that have worked overseas off shore, but where the executives did really well, but you know, for some reason the company whatever liquidated or it closed down, where the executives did really well, but the everyday worker didn't do well, So we want to be able to
protect some of those rights well. But I am open and I think that it definitely has a place employee share schemes because I think, as a worker, how cool is that that you own part of this business that you're working in and that actually there are productivity gains from having those incentives that you want to do your best job because you know that this is going to return back to you through a return through your shares. So definitely open to it. The tax stuff is always
complicated because integrity risks, et cetera. But open to hearing solutions from those that practically work through it about some of the challenges for them. Some of the integrity risks that was brought up during my time when I worked under a national government is that some particularly and sort of more newer businesses, they were using it as a form to be income without it being taxed. So that was why the rules changed around twenty fifteen sixteen, so
there was a big discussion document on it. So it's an element of where the integrity is that you're basically using the share scheme to be a form of income without it returning is income and therefore being taxable. But I think some of that's changed. So I think some of the rules that have been that have happened since that those earlier days have tightened that integrity risk. It's
a question those where's the balance. Have we tightened the screws too much on the integrity side and therefore we're sort of mulling the productivity elements of what employee share schemes are and I'm not quite sure. I'm still a little bit out there as to where that balance is, but really keen to hear from others around where there should be some changes, because actually it's not about integrity, it's actually about the productivity gain for the employees.
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