Targeted budget delivers small tax surprise

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The recent tightly targeted Budget delivers support for those who need it most, as well as a small tax surprise says Chartered Accountants ANZ NZ Country Head Peter Vial FCA.

“Delivering support to those that need it without stoking inflation, while responding to the cyclone and flooding was always going to be the challenge in this Budget.”

“Although this looks like one of those budgets where no one will be hugely happy, that’s an indication of the constrained situation the country is in.”

“Unlike last year’s budget which included a heavily criticised one-off cost of living payment that went to a lot of people who didn’t need it, this year’s budget is much more targeted.”

“Some measures such as removal of the prescription charge will benefit everyone, but most are aimed at those most in need.  Public transport subsidies for children and young people have the added benefit of encouraging better environmental outcomes.”

“Tax cuts were obviously unaffordable and would have stoked inflation, but there was a little tax surprise in the alignment of the trustee tax rate with the 39% top marginal tax rate.”

“Whether this is a ‘major tax change’ is a moot point.”

“The $5.7 billion spike in income taxed at the 33% trustee rate in the first year of the 39% top marginal tax rate is all the evidence that the Government needed to respond.”

“It is a relief to hear that the trustee rate change will be subject to full Select Committee scrutiny.
This should allow the opportunity for any unexpected consequences and issues to be addressed.”

“Not addressing other distortions in the tax system confirms that this Government, like others before it, has put broader issues with the tax system in the too hard basket.”

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