The Budget lockup
Well I’m at my first budget lockup. All went smoothly getting in except my name was down as Farrah. Arrgh – memories of high school teasing about Farrah Fawcett Majors. A few media types joke with me about lowering the standards with bloggers being allowed in.
Have given up my cellphone and Blackberry but am allowed to keep my Vodafone data card on condition I do not use it until the embargo time has passed. I don’t think I have ever been separated from my Blackberry for so long. Well maybe when I sleep but it is of course at the bedside table!
Working out exactly what Kiwisaver means for employers and employees was my main challenge and the Treasury staff were superbly helpful in checking my calculations and correcting them. The one who helped me (she was referered to as a Kiwisaver expert) was a devastating combination of intelligence and beauty. Sigh – back to the budget.
Some of the Treasury staff remembered me from the days when I was part of the team putting together the budget communications package for the two months in advance. It was interesting being on the other side back then as not all your colleagues were cleared for budget secrets so you have to spend a couple of months being very careful who one could or could not discuss the budget with.
Dr Cullen took questions from the media and analysts present. I got to ask two question to him about Kiwi Saver – asking him whether there is a political risk for him that a future Government could convert the Cullen Fund into Kiwi Saver accounts (I suggested such a move would have his Foreign Minister’s support) if the take-up in the future reaches say 90% or so. He said he would fight that with all his strength. He did not disagree though with my assertion that employees would have to be very stupid not to take up Kiwi Saver, and it may be seen as de facto compulsory over time.
They put on a small lunch for us and had a nice chat to NZUSA people who were also in the lockup, plus various media people.
I thought I found a mistake in the Budget Economic and Fiscal Update to do with income from the Superannuation Fund but it turned out not be a mistake – the fund does technically make a tax loss one year. I managed to keep the excellent Treasury staff busy with a series of inquiries.
OBERAC has been renamed OBEGAL just to annoy us. Also the new international financial reporting standards mean that accounts from previous years will not be directly comparable to accounts from 2007 onwards which is a pain for people like me who like to study the trends.
Anyway Dr Cullen is just finishing his speech so time to go. Very much enjoyed being in the lockup. Having three hours to read all the info was really needed to usefully comprehend it, and being able to ask the staff for clarification was also very useful. Most of all getting to directly question the Minister of Finance on his budget, is very cool. I can’t see it happening in most countries! So thanks to Dr Cullen’s office for letting me in the lockup as media.
May 17th, 2007 at 3:48 pm
With Stuff pages dying after a while I can’t find last year’s version, but doesn’t this lock-up story:
http://www.stuff.co.nz/4063082a10.html
have a large number of similarities to last year’s?
“The tables are full and friends who wanted to sit with their mates find they should have arrived earlier. The best seats in the house are long gone.
The magic hour arrived and lots of class helpers quickly circulated the room, handing out the exam papers – err, the Budget.
These days Budgets are not quite what they used to be. Once full of secrets that would determine the price of cigarettes and alcohol, nowadays all the big stuff emerges weeks earlier.
Still, a buzz ran through the hall as around 200 brains quickly clicked on and began reading. Little gasps broke the silence as the implication of some policy change was gulped down. Keyboards began clicking as reporters facing deadline pressures boiled down a vast volume to 800 words.
…
It all was all so anti-climactic. Every journalist loves to break a big story – and while we sit here, tied to our tables, we are in possession of major state secrets. We cannot phone anybody but if we could, what would we say?
The truth is, unless you are one of those seventh form economic students, this is not a great conversation stopper.”
May 17th, 2007 at 6:20 pm
http://www.youtube.com/watch?v=fAQlNtHLbWk
May 17th, 2007 at 7:32 pm
Great stuff, David.
I got lucky the first time I went to a lock-up – renovations in the Beehive meant that we had to have it at the stadium, where they served fantastic food. The food at the Beehive is, unfortunately, pretty mediocare by comparison.
Anyway, good to have a blogger on the frontline, and your effort is appreciated.
May 17th, 2007 at 8:24 pm
$133.4m for 702 extra Year 1 teachers to bring the teacher to pupil ratio down to 1:18 by the start of the second term in 2008;
Key says its all a ‘money go round’
May 17th, 2007 at 9:11 pm
What were NZUSA people doing there? Were they guests of Labour? They couldn’t possibly be there because they represent the views of all students.
May 17th, 2007 at 9:35 pm
Okay. All very good.
Now, let’s get down to the detail, for that is where the devil resides.
1. Company makes $1000, pays $300 tax and distributes a $700 dividend. Can that company call upon its Imputation Credit Account to impute that dividend at 33%. That is, can it attach $344.78 imputation credits to that dividend?
2. What impact will these changes have on the Foreign Investment Tax Credit regime?
3. The tax credits for employers’ contributions to Kiwisaver; What will be the impact of them to a company that, say, made $30,000 but had tax losses brought forward of $70,000?
4. What is the impact of Kiwisaver on shareholder employees of closely held companies?
5. Will Kiwisaver money due to the estate of a person who died before reaching the age of 65 have unpaid Student Loans deducted from it?
6. Will Kiwisaver money due to the estate of a person who died before reaching the age of 65 have unpaid fines deducted from it?
7. Will the exemption figure in the Administration Act for an estate not needing probate to be obtained be lifted, now that the Kiwisaver scheme will have some impact upon people’s net assets that die before age 65?
I thought that those questions will be put to me tomorrow from interested people, but I have no idea how to answer them. Hopefully some knowledgable person on this blog will know. I would have loved to put the questions to Treasury’s intelligent sex kitten that David referred to.
May 17th, 2007 at 9:38 pm
Okay. All very good.
Now, let’s get down to the detail, for that is where the devil resides.
1. Company makes $1000, pays $300 tax and distributes a $700 dividend. Can that company call upon its Imputation Credit Account to impute that dividend at 33%. That is, can it attach $344.78 imputation credits to that dividend?
2. What impact will these changes have on the Foreign Investment Tax Credit regime?
3. The tax credits for employers’ contributions to Kiwisaver; What will be the impact of them to a company that, say, made $30,000 but had tax losses brought forward of $70,000?
4. What is the impact of Kiwisaver on shareholder employees of closely held companies?
5. Will Kiwisaver money due to the estate of a person who died before reaching the age of 65 have unpaid Student Loans deducted from it?
6. Will Kiwisaver money due to the estate of a person who died before reaching the age of 65 have unpaid fines deducted from it?
7. Will the exemption figure in the Administration Act for an estate not needing probate to be obtained be lifted, now that the Kiwisaver scheme will have some impact upon people’s net assets that die before age 65?
I thought that those questions will be put to me tomorrow from interested people, but I have no idea how to answer them. Hopefully some knowledgable person on this blog will know. I would have loved to put the questions to Treasury’s intelligent sex kitten that David referred to.
May 17th, 2007 at 9:40 pm
Okay. All very good.
Now, let’s get down to the detail, for that is where the devil resides.
1. Company makes $1000, pays $300 tax and distributes a $700 dividend. Can that company call upon its Imputation Credit Account to impute that dividend at 33%. That is, can it attach $344.78 imputation credits to that dividend?
2. What impact will these changes have on the Foreign Investment Tax Credit regime?
3. The tax credits for employers’ contributions to Kiwisaver; What will be the impact of them to a company that, say, made $30,000 but had tax losses brought forward of $70,000?
4. What is the impact of Kiwisaver on shareholder employees of closely held companies?
5. Will Kiwisaver money due to the estate of a person who died before reaching the age of 65 have unpaid Student Loans deducted from it?
6. Will Kiwisaver money due to the estate of a person who died before reaching the age of 65 have unpaid fines deducted from it?
7. Will the exemption figure in the Administration Act for an estate not needing probate to be obtained be lifted, now that the Kiwisaver scheme will have some impact upon people’s net assets that die before age 65?
I thought that those questions will be put to me tomorrow from interested people, but I have no idea how to answer them. Hopefully some knowledgable person on this blog will know. I would have loved to put the questions to Treasury’s intelligent sex kitten that David referred to.
May 17th, 2007 at 10:11 pm
“A few media types joke with me about lowering the standards with bloggers being allowed in.”
Perhaps I need an invite- I have both pistols and sword- plus a bullwhip to deal with lesser persons such as insolent journos or finance ministers…
May 17th, 2007 at 10:12 pm
Sorry it is posted three times. I have as much knowledge of computers as I have of the intricate detail of the Budget.
May 17th, 2007 at 10:38 pm
DPF, how does one pronounce OBEGAL? Is it Oh Beagle, Oh Beg All, Obe Gal..?
May 18th, 2007 at 5:43 am
“The one who helped me (she was referered to as a Kiwisaver expert) was a devastating combination of intelligence and beauty.”
Who works for the government? Rare!!! Just look at Helen Clark.
June 12th, 2007 at 7:13 am
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June 12th, 2007 at 7:14 am
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June 12th, 2007 at 7:15 am
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