And another clear stance

March 13th, 2013 at 4:00 pm by David Farrar

The great carpark tax debate is one of those issues where any government will take a hammering (like PC lightbulbs and shower heads) and where any opposition should be having a field day.

Already, one of National’s support partners, Act, has come out against it and the Maori Party probably won’t be far behind.  Ministers are already distancing themselves.

So, can make the most of it?

Well, when the tax was first proposed, Labour’s then Revenue Spokesman, the Rev. Dr David Clark, was quick to see the politics and attacked it.

Then, on Monday, when the bumper-sticker campaign against the tax was announced, current Revenue Spokesman, David Cunliffe, called it a “catastrophe”.

But, this morning we learn in the Herald from Cunliffe’s rival David Parker that Labour hasn’t decided what to do on the tax.

It’s a bit like asset sales.  They make lots of noise, but seem unable to articulate what they will do differently and are unable to speak with one coherent voice.

22 Responses to “And another clear stance”

  1. Rick Rowling (892 comments) says:

    Labour: Forced nationalisation of all car parks.

    NZ First: Forced nationalisation of all car parks. Provided free of charge to SuperGoldCard holders.

    Greens: Forced nationalisation of all car parks. Asphalt to be dug up by willing workers and converted to organic mini gardens.

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  2. Mark (1,614 comments) says:

    Fucking stupid tax and very difficult to enforce. I dont care which party proposed or intends to enforce it still doesn’t make it a sensible tax

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  3. anonymouse (891 comments) says:

    Sigh, I really wish people who oppose this( politicans included) , would actually look at the current situation regarding the current situation regarding car parks and FBT and propose something constuctive….

    If tomorrow I as an employer goes and rents a car park in the parking building across the road from Wilson’s and then says to an employee you can use that park as part of you employment, I pay FBT on it –

    But If I make a deal with my building owner to lease a park in the building as part of my office lease for that carpark – I do not pay FBT,

    Unless people are arguing that there should be no FBT on carparks for staff ( which is not the current situation), there is a glaring hole in the tax system….. how would they solve it

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  4. wreck1080 (5,017 comments) says:

    This is not so much like shower heads or lightbulbs in that those issues affected 100% of the population.

    The carpark tax affects only a minority of the population and even people unaffected by the tax can see it is petty petty petty!!!!

    This is nationals “jumped the shark” moment (google that!). It is time for change (question is, to what???).

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  5. SPC (8,704 comments) says:

    It’s a catastrophe, but we take no position on whether we will support it or not.

    Not all disasters are natural ones, some we agree to them with our consent or ommission to oppose.

    Sounds like Labour is straddling that fence between opposition and supporting anything that raises tax revenue (they must expect to win in 2014).

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  6. willtruth (245 comments) says:

    When you say “the great carpark tax debate is one of those issues [like light bulbs and showerheads] where any government will take a hammering” it sounds like you are saying that National don’t deserve to get a hammering on it, and admitting that the Labour Government didn’t deserve to be hammered on lightbulbs and showerheads.

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  7. Cactus Kate (550 comments) says:

    The whole FBT regime is a nonsense. The only reason you need a carpark is to earn income. Otherwise you would stay at home not incurring the expense. Why can’t employees deduct all their costs in getting to and staying at work or if employers pay then the IRD keep their sticky mitts off it? Include public transport costs as well. We can’t all work from home.
    The reason we should oppose this pettiness is first they come for the carparks of hotel cleaners next they come for the cellphone you are commenting on blogs with.
    DPF your stance on this is just as confusing.

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  8. willtruth (245 comments) says:

    CT. I agree that we should include public transport if we are to be consistent with having a FBT on carparks. But where would it end? The cost of shoes for those who walk to work?

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  9. willtruth (245 comments) says:

    I guess it depends on whether you want progressive taxation or regressive taxation. If you don’t levy a FBT on carparks then aren’t you effectively giving a tax break to those who are probably already a bit more wealthy than those who have jobs that don’t offer a carpark? So its a kind of tax break for (some of ) the wealthy, and means that income tax for the less wealthy would have to be raised a little bit, or spending would have to be cut a little bit.

    This is either a good thing or a bad thing depending on your political persuasion. But can we agree that it is choice between regressive and progressive taxation?

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  10. virtualmark (1,603 comments) says:

    From a tax point of view I can’t help wondering if the IRD shouldn’t be focussing on bigger fish. Like focussing on taking at least $17m pa out of compliance costs …

    From a political point of view this strikes me as National’s first big attack of second-termitis. They’re losing a whole lot of political capital over an inconsequential amount of tax revenue (in the big picture), which would disproportionally hit their own voter base. The general public shakes their head and thinks this is all nickel and dime “fiddle while Rome burns” stuff. And the National voter shakes their head and thinks “Why did I vote for these guys again? How are they helping me?”

    Frankly, John Key should be on the phone to Peter Dunne saying “WTF are you doing???” and threatening to take a number 1 clipper to his (pride and joy) hair do.


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  11. Cactus Kate (550 comments) says:

    Will truth – not quite true. Even Unionists can see their hard won privileges going down the Dunney here. Unite may have public transport using burger flippers but they also represent shift workers at Sky City who have cheap parking. That even a Union can see how petty and stupid this is, should ring alarm bells to anyone who even claims to be on the centre right.
    As I said, next stop is that smartphone you are holding and using for personal matters.

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  12. Akld Commercial Lawyer (166 comments) says:

    The debate is not being assisted by a few miscues about key facts. First, insofar as it relates to carparks, this is not a new frontier for FBT. It is to correct an existing anomaly. The general policy is that carparking benefits are already subject to FBT. However, there is a carve out that applies if the carparking is provided on the employer’s premises. Secondly, the lighting rod is Sky City where a lot of low-wage workers were provided with carparking onsite. I understand that many of those folk are members of Unite Union. Now the benefit of those carparks will attract FBT. Thirdly, the existing exemption is seen as unfair – because it penalises those who provide carparking but not in their own premises (typically SMEs). What amounts to own premises includes where the employer leases the carpark as part of their lease of a CBD building (rather than just meets the employee’s costs of doing so). Yes, the levelling of the playing field adds another admin burden and has the potential to add even more to the employment costs of some bigger employers. But, without FBT, we will be back to the rorts of the 80s where a laundry list of employment benefits were provided in a non-taxable form which generated a great many distortions.
    The accommodation issue is clouded by the Christchurch situation. Possibly the better (political) approach might have been to implement the policy subject to a special exemption for temporary relocations to Christchurch with a specific time limit (say 12 months). But then the very (IMHO) even-handed Mr Tubb is not engaged to deal with political connotations.
    As for deductibility of employment costs such as getting to work – is there another OECD example where this has been achieved? I don’t believe so – for good reason.

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  13. Redbaiter (11,656 comments) says:

    What a load of worthless time consuming crap this all is- BRING IN A POLL TAX..!!!

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  14. burt (11,468 comments) says:

    7 years from now when a “Penny & Hooper” style case has spent 5 years in the high court the IRD will be able to announce that they have spent $3b defending a tax that nets $1m/Year.

    Of course the lefties will be happy beyond belief that 30,000 people were employed as carp park inspectors and therefore removed from the unemployment benefit under the great leap backward of creeping socialism.

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  15. Cactus Kate (550 comments) says:

    Aklcommlawyer – you’ve nailed this nonsense with one comment. Stuff all people understand FBT in the first place. Is a fiddly messy area of tax legislation.
    In all my years watching tax law evolve around the world not one person has been able to justify eloquently why the cost of getting to work is not deductible for PAYE earners. If I am taxed on income I earn I should be able to take a deduction for the cost of getting to and from there and staying there.
    Although I have now hijacked the thread with a side issue, it’s a natural consequence of nit picking your tax law and $17million in revenue for probably just as much in compliance costs is pathetic.
    If Bill English wishes to die in the ditch for $17m then let him. My question is quite simple – when has he last paid for any parking, let alone at work?

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  16. Akld Commercial Lawyer (166 comments) says:

    Also, whilst I’m not a tax expert (an industry best suited to keener minds than my own) you need to know enough to know when you need expert input. And from where I sit, to keep the system free of the sort of wrinkles that see some getting an unfair advantage and 80s style distortions – the arguments the economists make about the advantages of having a low marginal rate of the sort that encourages exactly the sort of behaviours that this funny little economy needs right now probably mean that the good Mr Tubb will continue to find things that cause those affected to huff and puff about. But whilst I have no wish to personalise this thread – we should not get misty-eyed about the Penny & Hooper case. The conservative estimate of the amount of tax at stake was approx $150k over just 3 tax years. One comment I have seen is that there may have been as many as 1,000 such schemes in place….
    The lesson we should be taking from overseas is that the GFC has changed everything. To show how much the world has changed, we now have major brands saying (in tender programs) “we pay our taxes in your country, and we don’t see why we should have to compete against those who have ordered their affairs to pay little or no tax.” Very effective on a Govt. tender – and I can see the trend spreading. Sermon over.

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  17. slijmbal (1,270 comments) says:

    @Akld Commercial Lawyer

    I feel you miss the point and assume that the current approach to FBT on parking is correct in that paying offsite should attract FBT and thus onsite should also attract FBT.

    Parking is a matter that an employer will typically provide because it makes commercial sense not because he can circumvent the tax system. These types of tax chasing initiatives are entirely predicated on the proposition that it is constructed to reduce tax.

    If I provide a parking space for my employee because it provides me a benefit then the tax man does not give a s**t. He only cares that I co-incidentally provide an employee benefit.

    I do the same providing internet at work but they cannot separate and tax that so they don’t – but I also don’t have my employees walking own the road to an internet cafe and working less for me.

    The basic premise is flawed on the current tax approach and the reaction to the ‘logical’ extension merely highlights that.

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  18. Akld Commercial Lawyer (166 comments) says:

    (I wasn’t intending to comment again.) Make no mistake about it, I sympthathise because this stuff drives a lot of employers mad – as the last post has accurately pointed out Auckland is not London or New York or any other modern city where public transport provides much of an alternative for many. Worse still, it is the sins of a few that have caused a headache for the many. But the alternative seems to be, as someone suggests above, a legion of inspectors. So in the interests of fairness and equity, we all wear it. Perhaps this is exacerbated by the rents in Auckland where the privilege of parking the car is starting to approach the sorts of nosebleed multiples seen in a major overseas city. And it will get worse, the results of the census will probably point to this with a little more accuracy. (And don’t start me on the mayor’s train set).

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  19. Monique Watson (1,299 comments) says:

    I’m not saying it’s gonna win votes but I am saying it is in line with current tax policy:

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  20. rightoverlabour (515 comments) says:

    What about teachers parking at school? If its taxed and we park outside, does that count, or will the Nazis put restrictions around all the schools? Sounds like the most stupid piece of crap ever envisaged.

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  21. Fisiani (1,185 comments) says:

    rightoverlabour try reading the legislation which is online. Schools DO NOT RENT carparks.

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  22. slijmbal (1,270 comments) says:

    @Akld Commercial Lawyer

    The cost of early bird parking is circa $13 a day. If, for instance, you live on the shore and can use the mythical bus service to get to and from work in a time not measured by the 1/2 life of lead then it costs about $8.50 a day.

    Parking does not seem particularly expensive to me based on the above as there is a fixed minimum cost of about $2K to get to and from work p.a. in that example.

    Not sure why you think parking is mega expensive – certainly short term parking king is parking is mega expensive but typical parking not.

    I’m with Cactus – the fact that travelling to and from work is not a legitimate expense is a deterrent to getting people in to work

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