“There is more to do.”
These are the words of outgoing chief executive and secretary to the Treasury Dr Caralee McLiesh, who believes cutting spending here and there won’t be enough to put the Government’s finances on a sustainable path forward.
Rather, McLiesh says “structural” changes are required to address the Crown’s “structural” deficit.
What does she mean? New Zealand needs new ways of generating revenue and cutting expenditure – a capital gains tax and a more efficient superannuation scheme. . .
I hope her replacement is more focussed on encouraging economic growth and productivity rather than adding another tax.
“With an ageing population, we’re seeing an increasing share of government transfers going to the wealthy, because of course, we have an increase in population of the over-65s, and some of those are in the higher income categories.”
That sounds like wanting to means test superannuation which is a disincentive to thrift.
The very wealthy would be able to look after themselves and the poor would get help but in the middle are the people who are too rich to be poor and too poor to be rich.
Those who worked hard, spent less and saved more would be penalised by receiving little or no superannuation and those who through bad luck or bad management had little, would get more.
A better idea would be to, as was National Party policy under Sir Bill English, very gradually increase the age at which people get superannuation by a couple of years until in a couple of decades it would be 67.
When superannuation was first introduced life spans were shorter, fewer people lived to receive it and more died after receiving it for a shorter time. A small increase in the pension age would go some way to compensating for that.
While I support universal superannuation I don’t support universal eligibility for the extras and cutting those could be done much sooner.
The winter energy payment, not having to pay the $5 prescription fee and free public transport for which gold card holders are eligible ought to be at the very least opt-in rather than universal and better still, means tested.
That would be a saving for the public purse without causing hardship to those wealthy enough to not be eligible.
Ele Ludemann is a North Otago farmer and journalist, who blogs HERE - where this article was sourced.
1 comment:
Capital Gains Tax is not just "another tax". It's a gaping hole in our tax net that allows blatant tax avoidance to divert billions of dollars away from the coffers of Government. It's a game all classes can play, but the rich are so much better at it because they can afford to hire clever lawyers and accountants to dream up the avoidance schemes. And guess what. The super-rich who haven't paid a dollars income tax in their lives, still don't have to pay PAYE when they qualify for National Superannuation because their clever advisers will be able to offset it against tax losses they have had squirreled away for decades agaist the awful possibility that some taxable income might actually slip into their tax returns one day. And IRD had the nerve to claim it was their job to be fair!
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