In a media statement jointly released by the Minister of Revenue Peter Dunne and the Minister of Finance Bill English, it was conceded that New Zealand’s tax system was not forseen to handle the repercussions of disasters to the scale of the Christchurch earthquake, and several proportional changes will be added in the face of new realities. Bill English explained, saying, “…with the end of the tax year rapidly approaching, businesses and employers in Christchurch and around New Zealand need some certainty about the tax issues arising from the Canterbury earthquakes.”

The New Zealand Inland Revenue Department (IRD) had already previously announced that it would be providing selective concessions for tax payments and filing requirements. The government has now added that the Commissioner of IRD will be bestowed with a greater range of powers to extend statutory tax dates on a case or class-of-cases basis, in the occurrence of future unforeseen events or disasters.

According to Peter Dunne, it is important to ensure that businesses and individuals should receive relief from both income tax and gift duty on donations of trading stock to Christchurch relief charities. The Ministers announced that the Cabinet has agreed to several measures which address tax issues arsing in the wake of the diasaster, including: ensuring that welfare contributions made by employers to their employees should be tax free; extending the redundancy tax credit to September 30th 2011; and, exempting some payments from income calculations for families receiving Working for Families tax credits as a direct result of employment loss due to the earthquake.

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New Zealand will have to wait an extra year before returning to a budgetary surplus, and will have to endure a further widening of its deficit. The announcement was made by the New Zealand Minister of Finance Bill English while speaking at the ANZ Capital Markets Conference on March 17th.
In order to cover the repairs and arising costs from the recent Christchurch earthquake the government will have to resort to much greater levels of spending, raising the national budget deficit to approximately 8 percent of GDP, or a level of NZD 16 billion. The Minister stated that the country is not expected to see a budgetary surplus until 2016.

Bill English remained optimistic, saying that the national economy will experience a pick up after the first quarter of the year. Even with an initial growth drop in the first quarter, the country is expected to see an overall GDP increase for the 2011 year. The Minister made mention of the fact that international credit rating agencies were currently reevaluating the country’s economic outlook after the quake, but did not comment on the anticipated outcome.

Bill English concluded his speech on a note of optimism, saying “…our economy has the capacity to absorb the impact of the quake and I am optimistic about its potential once the recovery starts to kick in.”

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Tackling current imbalances in the New Zealand economy will not be a short-term task, and will require “relentless” long-term focus and policy reform. The analysis and the Government’s future policy outlook was released on August 11th, in a speech to the New Zealand Council for Infrastructure Development, by Bill English, Finance Minister of New Zealand.

The international credit environment is too constrained for New Zealand to readily address economic imbalances, and the recovery will be based on stable growth of earnings sectors, like exports. Attention also needs to be paid by individuals, businesses and the Government to repaying the country’s overwhelming levels of debt.

In an attempt to achieve sustainable economic growth the Government’s policy decisions will revolve around six key factors: strengthening the tax system, providing more efficient public services, reforming economic regulations, raising national education and skill levels, increasing business innovation, and investing in productive infrastructure projects. According to Bill English, for the last 18 months the Government has been working to prepare new policies in line with the six new focuses, which are scheduled to be released in September.

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Within fifteen years, advanced economies like the US and the UK will face the repercussions and ill-effects from their recession-stage economic reforms and policies, according to Bill English, Finance Minister of New Zealand. Speaking at a National Party conference on July 16th, the Minister said that if over the coming five years New Zealand continues with a well-considered and consistent economic policies, the country will be “a stand-out” among developed economies.

Bill English warned delegates at the conference that New Zealand’s economic recovery would be a slow and incremental approach, without the “big hit” reforms anticipated by some analysts. He stated that New Zealand currently holds the relative advantage of a very low level of national debt, in comparisons to comparable economies. Further, the national export sector is showing signs of steady recovery, and public debt is steady.

Despite admitting that many individuals would have hoped for a quicker recovery, Bill English said that New Zealand’s economy is showing “hopeful signs” of an independent and unaided recovery.

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On July 2nd Bill English, Finance Minister of New Zealand, praised the country’s planned corporate tax rate decrease. The statement came as a response to the Australian Government’s announcement that its national corporate tax rate will not be reduced below 29 percent until fiscal conditions permit.
According to Bill English, the New Zealand 28 percent tax rate, combined with previously announced Budget measures will aid national businesses with the incentives to invest and increase exports. The Minister explained that New Zealand’s relative advantage over Australia will allow the country to draw greater international investments. He elaborated further, saying that New Zealand’s corporate tax rates will be 2 percent lower than Australia’s for at least two years.

Bill English continued to say that New Zealand has a unique tax package, which has allowed significant tax rate decreases in an international environment of tax rate increases. The Government will also “tilt” the economy away from unsustainable increases in spending, continued borrowing, while increasing investing in productive elements of the economy.

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On June 24th the New Zealand Government released a statement announcing a GDP growth figure of 0.6 percent for the March quarter. Additionally, the Government revised its growth estimates for the December quarter, from 0.8 percent to 0.9 percent. Bill English, Finance Minister of New Zealand, commented on the economic results, saying, “The continuing recovery is good news. A growing economy is the only way to create new jobs and raise New Zealanders’ living standards.”

The growth was reportedly led by an outstanding rebound and expansion of the manufacturing industry. Bill English claimed that the Government has implemented numerous economic policies to ensure sustained national growth, and the latest results are proof of their effect. Throughout the next four years the Government expects the policies to result in the creation of an additional 170 000 jobs.

Bill English continued too say that the only way to see continued growth is for appropriate support to be given to New Zealand exporters, increase the number of national jobs, lift business confidence, and raise effective national income levels. The Finance Minister urged caution in the face of the economically fragile world environment and endorsed a restraint in Governmental expenditures.

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On June 5th Cameron Brewer, CEO of the Newmarket Business Association, issued a statement supporting Ann Lockhart, CEO of the Queenstown Chamber of Commerce, who on the same day called for a revised GST-exemption program to be instituted for foreign visitors. Under the proposal, overseas nationals could present their purchase invoices at a New Zealand international airport and be granted an exemption on any GST paid on purchases throughout their visit.

The comments were sparked by a speech given by Bill English, Finance Minister of New Zealand, in which he refuted the possibility of a GST-exemption system being created in the near future. Bill English stated that he is not in favor of contributing complications to the country’s current “clean” GST system. He added further opinion, saying he does not believe that tourists would not cease visiting New Zealand simply because of a lack of GST refunds.

According to Ann Lockhart, the refunds would not be aimed at attracting new tourist to the country, but increasing the amount of spending that visiting tourist do, during their visits. Cameron Brewer’s statement claimed that even if only 5 percent of tourist utilized the scheme, an additional NZD 30 million extra spending would occur as a direct result. Cameron Brewer added a note of consolation, saying that despite Bill English’s words, John Key, Prime Minister of New Zealand and national Tourism Minister, is interested in perusing the matter further.

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On May 7th the New Zealand Government issued a statement revealing a 2.4 percent fall in tax revenues, compared to earlier Half-Year Update in December. The Government has revealed that it now expects tax revenues to be below previous expectations for the entirety of 2010, and perhaps also 2011. According to the statement the lowered tax revenues are due to decreased corporate income collections, and decreased provisional tax payments from individuals and source deductions. Commenting on the new results, Bill English, Finance Minister of New Zealand, said “Just two weeks out from the Budget, it underscores the brittle fiscal position faced by the Government and how finely balanced the situation is.”

According to the New Zealand Government, tax collections for the nine months reached NZD 530 million. Although, these take into account the NZD 400 million made in one-off gains from the Government’s legal action against four New Zealand banks. Provisional tax payments were NZD 309 million lower than expected. Company taxes and PAYE deductions were down NZD 349 million and NZD 537 million respectively. Although Goods and Service tax revenue is reported to have increased by NZD 314 million above forecast.

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A document has recently been leaked to the media containing a number of proposed alcohol legislation reforms. Key among the changes is a 50 percent increase in alcohol excise duties. The newest report comes as an extension of discussions conducted in 2009, which recommended the current 50 percent increase, regular reviews of excise taxes, and transferring all revenues collected to alcohol-harm-prevention organizations. The report also recommended changes to allowable liquor sale hours, and minimum age of sale requirements.

The alleged report Review of the Regulatory Framework for the Sale and Supply of Liquor is allegedly an early version of a Law Commission document due to be released on March 27th. Bill English, New Zealand Finance Minister, has confirmed that the report is due and is expected to contain excise tax recommendations, but refused to comment on whether current speculations are correct.

Despite the unconfirmed nature of the legislative proposals, numerous New Zealand political figures have already commented on the report. Lianne Dalziel, the Labour Party’s Justice Spokesperson, said, “New Zealand will not develop a culture around alcohol that works for the benefit of society if we are not prepared to be politically courageous.”

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On March 22nd at a speech given at the Wellington Chamber of Commerce, Bill English, New Zealand Finance Minister, revealed that a further NZD 1.8 billion worth of public spending will be cut by the Government, in an effort to eradicate “lower quality government spending” and improve the national fiscal situation. The new cuts are slated to be executed in addition to the NZD 2 billion of spending decreases announced earlier.

The spending reductions are scheduled to occur throughout a four year time period and coincide with the introduction of a new Government-spending limit. Bill English indicated that some of the money that would be directed away from “low quality” spending would be transferred to “high priority” sectors. Indication was given that the health and education sector would see immediate benefits from the decision. Any unused funds would be utilized to lower New Zealand’s budget deficits in the next four years.

Indicating that similar spending cuts could occur in the foreseeable future, Bill English said, “…I think there will be a continuing sorting out of the public sector… there was a reduction of about 1500 [public sector] jobs in the last 12 months and I expect that process is likely to continue.” He also revealed that some public services could even be eradicated completely, though did not mention specific examples.
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