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Taxing the Governor-General

December 18th, 2009 at 12:00 pm by David Farrar

The Law Commission has reviewed the Civil List Act 1979, as it pertains to the Governor-General. Their major recommendation is that the Governor-General no longer be exempt from income tax.

The exemption is traditional, based on a belief that you can’t tax the Crown. However even the Queen pays tax in the UK now, so it seems overdue for the Governor-General to do the same. Now this will not mean a pay drop for the next GG, as the Remuneration Authority will take account of the tax status in setting the salary.

A summary of their major recommendations:

  1. Pass a separate Governor-General Act defining the office, term and appointment, removing them from the Civil List Act.
  2. Have a permanent legislative authority for the funding of the Governor-General and their office and travel.
  3. Remove the exemption from income tax on the salary (but the allowance to cover expenses remains tax free).
  4. Remove Section 7 of the Civil List Act which allows the Minister of Finance to exempt the Governor-General from paying any public or local tax, duty, rate, levy or fee.
  5. Have an annuity determined by the Remuneration Authority for former GGs, and upon their death half that level paid to a surviving spouse or partner.
  6. When the Chief Justice (or other Judge) acts as Administrator of the Government they stay on their current salary, rather than the current law where they get paid 50% of their judicial salary and 50% of the GGs salary.

All looks pretty good to me.  A small but useful modernisation of our constitutional structure.

Related posts:

  1. The GG Bill
  2. Who do you think should be NZ’s next Governor-General?
  3. Next Governor-General
  4. New Governor-General
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8 Responses to “Taxing the Governor-General”

  1. Graeme Edgeler (2,938) Says:
    December 18th, 2009 at 12:53 pm

    If Governors-General will have the obligation to pay tax, will they also gain the ability to vote?

    Wars have been fought over that =)

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  2. Tassman (238) Says:
    December 18th, 2009 at 1:00 pm

    I am really not comfortable with this; first it was the flag, and then it was a separate welfare system, and now the governor-general?#$%&… Let me guess, Peter Sarples and Tariana Turia to be the King and Queen next…..cheeseee! I’ll have Obama anytime and you can have Key..

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  3. Graeme Edgeler (2,938) Says:
    December 18th, 2009 at 1:28 pm

    Having gone back and re-read my submission on this proposal, I see the Commission has disagreed with me on just about everything I submitted.

    And newly-elected replacement list MPs still don’t get paid (or get back-pay to the start of the term – I can’t work out which).

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  4. david (2,305) Says:
    December 18th, 2009 at 1:36 pm

    Well it certainly would put a stop to the rorts that GGs over the years have run with regards to GST and duties on big ticket items like expensive cars. From memory one GG bougt and onsold 2 or 3 each year of their time in office, copping a tax-free gain on each trade.

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  5. anonymouse (495) Says:
    December 18th, 2009 at 1:46 pm

    Remove Section 7 of the Civil List Act which allows the Minister of Finance to exempt the Governor-General from paying any public or local tax, duty, rate, levy or fee.

    I hear a very rusty can of worms being prised open with this point

    Once you have the Governor-General liable for local taxes or rates, then you will require the payment of local body rates on government house in Wellington and Auckland.

    Once this occurs the sanctity of crown land is removed and Local authorities will demand that central government be liable for rates on government properties. ( now most government departments have rented buildings, so this will not be a huge gold mine for the Wellington City Council,) But schools/polytechs/Universities are going to get slapped with an expected consequence of this….

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  6. deanknight (262) Says:
    December 18th, 2009 at 2:23 pm

    DPF:

    Might be worth re-checking point 1? Unless I’m missing something, the Bill doesn’t address “term and appointment” (but in my view it should) – rather it addresses “terms of appointment”.

    d

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  7. Sean (269) Says:
    December 18th, 2009 at 4:51 pm

    If we’re going to pass an Act, why not just abolish the office altogether and make a large but useful modernisation to our constitutional structure.

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  8. MT_Tinman (2,228) Says:
    December 19th, 2009 at 12:30 am

    Yep, declare NZ a republic and remove one more leech from the system.

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