POLITICAL & REGULATORY REPORT for March 2010
POLITICAL & REGULATORY REPORT for March 2010
POLITICAL & REGULATORY REPORT for March 2010
TAX ON PROPERTY INVESTORS - Reaffirmed
During the month the Revenue Minister the Hon Peter Dunne (19 March) and the Minister of Finance (23 March) reaffirmed that there would be a “crack down” on tax treatment of rental property.
Mr Dunne said: "This is not an attack on landlords, as some have protested, but a rebalancing act designed to address the concerns highlighted by both the Tax Working Group and the Governor of the Reserve Bank over the years about distortions favouring property investment over other forms of investment".
Evidently, the Government is still developing proposals and final decisions on the overall shape of any tax changes would be announced in the Budget on May 20.
Separately, a short tax briefing paper was developed for general briefing work with members of Parliament (see Appendix).
The paper outlined three potential increases or changes to rental property taxation namely:
· Ring fencing
· A two year period for applying a capital gains tax
· Depreciation
The paper also states the Federation position and key arguments against each of the proposed tax measures.
BENEFIT REFORM BILL – To select committee
During the month (30 March) the Government introduced a bill to reform New Zealand's welfare system. In advance of the Bill the Federation had written to the Hon Paula Bennett the Minister for Social Development and Employment proposing some constructive non-legislative options.
A case was put to the Minister for the Social Assistance (Future Focus) Bill, to include consistent front-line staff procedures to better assist tenants who are beneficiaries to have their rent paid directly to the landlord through direct debiting from Work and Income.
The Federation highlighted that the direct debiting of rent monies through WINZ was an effective method of alleviating the biggest problem facing tenants and rental property owners, namely rent arrears. Although this process is automatically available for Housing New Zealand, it is not generally available for private sector landlords, as current provisions require “good cause” for redirection of benefit.
Whilst the Social Services Select Committee has yet to publicly invite submissions, the Federation has sought an early opportunity to brief the Minister and her officials on Federation perspectives. It is expected that the draft legislation will be passed around August with implementation due in September.
The Select Committee is required to report back to Parliament its findings by 30 July 2010.
HOUSING MINISTER - Meeting
During the month the Federation received informal advice from the office of the Minister of Housing that a meeting would be invited once the Prime Minister has confirmed the portfolio responsibility.
It will be recalled that the Hon Maurice Williamson is currently the Acting Minister of Housing. At this time, he is in charge of progressing the Residential Tenancies Amendment Bill and the Unit Tiles Bill through their remaining legislative phases. Mr Williamson took on a caretaker role when Phil Heatley resigned suddenly in February.
Finally as the Parliamentary session concludes for the Easter break (and resuming again mid-April), the Prime Minister has announced (30 March) that Phil Heatley is to be reappointed to Cabinet with his Ministerial Housing warrant on 1 April.
Published: April 2010
