Small business views

September 5th, 2014 at 1:30 pm by David Farrar

MYOB had Colmar Brunton do a poll of 1,000 owners.  Some findings:

Preferred Policies

  1. Reduced prices for unlimited data broadband 69% support
  2. Simplification of Provisional Tax rules 67% support
  3. Tighter controls on foreign investment 54% support

Least Favoured

  1. Capital Gains Tax 60% against
  2. Raising age of super 43% against
  3. Remove 90 day trial period 39% against

Trust to manage the economy

  1. National 63%
  2. Labour 8%

 

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19 Responses to “Small business views”

  1. Sir Cullen's Sidekick (890 comments) says:

    I guess they will vote Internet-Mana who have promised free internet…Just sayin…don’t vote me down fellows…

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  2. Grizz (605 comments) says:

    Under CGT scenario, I wonder how much KDC is up for? The way he suggested that he did not need to repay a quarter million dollar loan because of the capital gain he thinks the loaner earned from investing in him makes me wonder that he will go all Penny Bright when it comes to paying any tax on realised capital gain.

    The other problem I have with CGT is that as it will be a lower rate to that of dividends, businesses will retain earnings, disguise it as some sort of business cost and shareholders will forgo dividends in lieu of lower taxed capital gains.

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  3. Grizz (605 comments) says:

    Free internet probably an entry level slow option. If you want a proper data plan with fast speeds, then you will have to pay for it like now.

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  4. waikatogirl (420 comments) says:

    Just give us as litte compliance as possible so we can concentrate on business instead of paperwork. Please please vote National back in as we need a STABLE, consistent business environment with as little government interference as possible.

    And to all those lefties who believe National do nothing but give businesses handouts. I dont know anything about this, but from experience this is Utter Rubbish for 98% of struggling businesses who make it happen without any assistance from anyone. Owning a business takes working all hours without much to live on for many who work for themselves.

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  5. michaelmouse (15 comments) says:

    ’nuff said.

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  6. Ed Snack (1,872 comments) says:

    Well well well, would like more “free” things paid for by others. Do they really think that broadband bandwidth is free ? Bandwidth, especially bandwidth out of NZ to the rest of the world is in limited supply and we do get charged a hefty whack for it. This won’t improve until there is competition.

    Sure legislation can mandate lower prices and the like, but in the end we will pay what the market demands. And that demand will be best managed by competition, or as an ersatz form, the threat of competition.

    If we really want better and cheaper internet access outside NZ, perhaps one action the government could undertake would be to promote one of the alternative cable ideas and guarantee as a cornerstone customer; at a good rate of course. Watch the prices tumble and the bandwidth rise.

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  7. lastmanstanding (1,297 comments) says:

    Noone should under estimate that the CGT is designed to be the biggest transfer of wealth in the history of NZ. Think about it for a moment.

    And forget the family home being exempt. It wont be. For example what is a family in 2014. In long ago times a family was defined and accepted as a Mother a Father and their Children.

    Fact is there are now many other combinations of Adults and Children who define themselves as a Family.

    Let me tell how I see it.

    Labour leads the next Government. They set up an Expert Panel ( their own hand picked people who have been instructed as to the Report they deliver).

    The Expert Panel report back that the problems with defining a Family and therefore a Family Home are such that they recommend ALL Homes no matter how the ownership is constructed will be subject to CGT BUT they recommend that the CGT for a home occupied by one of the sellers or a Trust in which one of the sellers is a beneficiary will be subject to CGT at ONLY 10%. Any other home will be subject to CGT of 15%.

    In other words they will apply the Muldoon Tax Principle……… Tell them you are going to Rape Pillage and Burn them and then tell them only One of these will apply.

    As Muldoon said They will be eternally grateful to you that they got off so lightly.

    Betcha Im right.

    And that why Cunliffe and Parker are being so vague. They know what they want to achieve but don’t want to frighten the horses b y telling voters now.

    They will use the Expert Panel as the whipping boy for them passing it all of to them.

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  8. Grizz (605 comments) says:

    @lastmanstanding

    This CGT is being far too narrow focused on the family home. With Kiwisaver and retirement savings, a lot of people are going to die with a considerable amount of other assets, such as shares. When these get divided up amongst family and then sold they will also come under CGT scrutiny. The average worker who saved regularly will accumulate several hundred thousand, if not millions by the time of retirement. Many will die with much of it still left. It is not just the home at stake, it is the legacy this provides for the family that will be at stake.

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  9. lastmanstanding (1,297 comments) says:

    Of course you are correct Grizz I was just focusing on the Family Home.

    As regards SMEs Labour policy is that if you are aged 54 years and 11 months and sell your SME it will be subject to CGT.

    However if you are 55 years and one month your SME will be exempt. how arbitrary is that.

    And that’s before we get to DPs statement that selling at 50 years will attract the tax. What about the tradies who after working since their teens at say building plumbing sparkie et al have health issues at around 50 and what to sell and use the funds for an other business that’s not so stressful on their bodies.

    TOUGH SHIT TRADIES You will pay the TAX even though you intended to use the proceed for another business.

    The Agenda behind this TAX is to take from those who have created wealth contributed to society and the economy paid more than their fair share of taxes already taken responsibility for themselves and their families by taking out health insurance so they are not a drain on their fellow taxpayers AND give their hard earned cash to the SELFISH ENTITLEMENT MORONS who say the Gumint must give me anything and everything I demand.

    Labour and Green Voters are either selfish self centred entitlement morons or they support selfish self centred entitlement morons.

    Now is the time for hard working Kiwis who have contributed to the society and economy to stand up against these parasite politicans and call them out for what they are.

    Lets OUT them.

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  10. Grizz (605 comments) says:

    @lastmanstanding

    The other thing to consider is that business owners are not stupid. The CGT is approx half the income tax and company tax rate. Would it not be better to retain earnings and grow the capital of the business than pay out dividends. In the end the tax in the long run would be less. So businesses and owners would pay less tax in the short term but perhaps accept a tax bill when the time comes to sell if the overall tax is less. This is not good for revenues of a government that work in 3 year cycles.

    Overall, the CGT on homes will be tiny compared to CGT from elsewhere, which is profoundly grey and will erode assets when businesses sell up or people die.

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  11. lastmanstanding (1,297 comments) says:

    Grizz Yes and also what will happen is that tax lawyers and accountants will come up with loop holes that the government will have to close only to find another loop hole to close an so on and on. But all of this adds nothing to economic growth its enriches the lawyers and accountants.

    I worked in the UK as a chartered accountant in the mid 1970s with income tax rates of up to 85% on earned income and 95% on unearned income with VAT rates from zero to 25%.

    I was paid handsomely to find ways to avoid ( not evade that’s illegal) or reduce my clients tax bill.

    I have already a dozen ideas of how to avoid CGT and that’s without thinking about it too hard.

    The point is good tax principles are that a tax must be simple, hard to avoid and perceived byt the majority as fair.

    So far Labours CGT with very little details looks to be complicated easy to avoid and not fair for a number of reasons but to start no allowance for inflation therefore a tax on inflation that the taxpayer has no control over.

    I could go on but there are more holes than a Swiss cheese and my antenna tells me the devil as they say will be in the details and most taxpayers wont like the details that’s why DC and DP aren’t giving us this.

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  12. pidge (56 comments) says:

    Trust to manage the economy

    National 63%
    Labour 8%

    Oooh, that’s gonna leave a mark!

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  13. Grizz (605 comments) says:

    @lastmanstanding

    I am not an authority on tax. I just pay it like the next man. As you can see, with my non-authority glance at this policy, even I can find more holes in it than you can shake a stick at. I am told that Garner has again just given DC a hard tie about it. As they say, explaining is losing.

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  14. seanmaitland (500 comments) says:

    @Grizz – won’t the KiwiSaver already have been taxed on realised gains while they’ve been running it? How will a CGT apply to it after that?

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  15. lastmanstanding (1,297 comments) says:

    seanmaitland Most KS schemes are PIES that is they are taxed on the income from investments like shares at the marginal rate of the KS up to a max of 28%. So if you are on over $70K from your employment or other income your KS income is taxed at 5% less than your PAYE earnings.

    Capital Gains in KS are tax free. that’s why IMHO most KSers should be in growth funds rather than balanced moderate or conservative funds unless they are very near to retirement.

    Its madness for a 20/30/40 yr old to be in a default scheme that’s conservative but that’s another matter.

    IMHO if Labour/Greens get into government it wont be long before they scrap the PIE regime and impose CGT on ALL KS investments.

    They are going to have to do this to raise the Billions they need to meet their spending promises.

    That’s why DC/DP aren’t telling you the details. They will appoint an Expert Panel who will tell them the family home and KS CGs must be taxed to produce a level playing field.

    AND that’s gonna be the crunch. It will all be about A LEVEL PLAYING FIELD.

    This will be the ripper that you wont be able to argue against. And they know it.

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  16. seanmaitland (500 comments) says:

    Cheers, I’m not too worried about KiwiSaver as I wouldn’t touch it with a bargepole, even though I’m reasonably young (35) – I run my own investments and without needing to put any money in at all, I’m making gross profit a month of around $1,000, which is being offset against backdated losses, so isn’t taxed either.

    I still haven’t found someone my age with a KiwiSaver who are making money with no fees and without having to make contributions :-)

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  17. Grizz (605 comments) says:

    @seanmaitland

    Congrats on your investments. I thought you were a Tokoroa boy who now plays right wing for Scotland. Anyway, my beef with Kiwisaver is what happens to the assets once the owner dies. To put it simply these will be shares, cash and other investment properties. Once 65 of course you can cash out of kiwisaver but you would be wise to have these funds provide you with an income. Whatever you might have saved or left when you die will be subject to inheritance as per the norm with most people’s estates upon death. The recipients of these assets will be liable to a CGT payment upon cashing up these investments, hence a death duty. Depending on what has been saved, this could be substantial.

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  18. waikatogirl (420 comments) says:

    Duncan Garner just uncovered 2 lies by Cunliffe.

    1 He said last time Duncan interviewed him that Labore officials had been in touch with IRD re the CGT. Today IRD have notified Duncan in Writing that this is not so.

    2. McCartenhas been speaking to Whale Oil in the past few months, but Cunliffe says he has spoken to McCarten and nothing to see here! Tui Ad Yeah Right

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  19. ross411 (838 comments) says:

    waikatogirl (52 comments) says:
    September 5th, 2014 at 5:15 pm
    2. McCartenhas been speaking to Whale Oil in the past few months, but Cunliffe says he has spoken to McCarten and nothing to see here! Tui Ad Yeah Right

    Oh waikaogirl, how many times do you need to be told? The same standards do not apply when it is not a left wing party. It’s simple and easily understandable. Well, strangely convenient, at least.

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