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Reflections on 30 years of tax reform – lessons from history

Reflections on 30 years of tax reform – lessons from history 2560 1707 Taxpolicy

Three former Treasury heads came together to discuss NZ’s approach to tax reform over the past 30 years, at a forum hosted by the Tax Policy Charitable Trust.

The Tax Policy Charitable Trust, funded by Tax Management New Zealand (TMNZ) aims to promote broader tax thinking for the public good, helping to shape discussion on positive tax policy for all New Zealanders.

This year, the Trust brought together three of New Zealand’s great economic leaders to discuss New Zealand’s approach to tax reform and to reflect on tax policies developed during their time as the Secretary to the Treasury.

Dr Graham Scott, Dr Murray Horn and Dr Alan Bollard led Treasury from 1986 to 2002, a period of significant change across all aspects of the New Zealand economy. Facilitated by Sir Rob McLeod, they discussed changes they oversaw during their time, and shared their views on the tax challenges and opportunities facing the country today.

The session was a great opportunity for to hear about the benefits good tax reform processes have delivered over the past three decades.

Chris Cunniffe, CEO of TMNZ said “Their shared observations on that massive period of economic change in New Zealand’s history is invaluable knowledge for young tax policy stakeholders. It was fascinating to reflect on how the tax system was restructured in that time for the better.”

The evening was attended by leaders in tax, professional services firms, public service and academia. The insightful commentary from Dr Alan Bollard, Dr Murray Horn, Dr Graham Scott and Sir Rob McLeod sparked many conversations on the current economic challenges of the country.

John Shewan, Chair of the Tax Policy Charitable Trust said “Collectively the presentations and associated Q&A shone the light on a remarkable period of New Zealand history. We can learn a great deal from history.

Young professionals expressed astonishment at Dr Graham Scott’s description of New Zealand’s situation in 1984, and at the speed and depth of reform that followed. We sometimes assume that everyone knows what happened back then, but clearly not. One of the core objectives of the Tax Policy Charitable Trust is to engender interest in policy among young professionals, and the evening achieved that in spade loads.”

Tax Policy Scholarship showcases the next generation of talent

Tax Policy Scholarship showcases the next generation of talent 2048 1365 Taxpolicy

Four bright young industry minds have emerged as finalists in this year’s Tax Policy Scholarship Competition, an annual prize hosted by the Tax Policy Charitable Trust. 

From left: Jordan Yates, Mitchell Fraser, Daniel Doughty, Vivien Lei, Michelle Redington – IR Chief Tax Counsel, John Shewan – Tax Policy Charitable Trust Chair, Ian Kuperus – TMNZ Founder.

The biannual competition, which supports the continuation of leading tax policy research and thinking in New Zealand, enters its fourth round in 2022. The first competition was run in 2015. 

The scholarship is designed to inspire the next generation of tax industry leaders. This year, entrants under the age of 35 were invited to propose significant reforms to our current tax system or analyse potential weaknesses and unintended consequences from existing laws, and propose changes to address them.

Entrants were asked to tackle one of three topics: environmental taxation, tax administration, or the powers granted to the Commissioner of Inland Revenue to collect information for tax policy purposes. Participants were invited to address the topics with creative ideas backed up by reasoned research and analysis.

We are delighted to announce the four finalists for this year’s competition, selected by our panel of leading tax industry professionals.

Daniel Doughty

Daniel is a Senior Consultant with EY in Wellington. He has proposed the introduction of a small business consolidated reporting regime to simplify tax reporting for small companies.

The regime would consolidate pre-existing tax obligations into a single report to be filed every second month. Inland Revenue would send an automated income summary out at the end of the year, similar to those currently prepared for individuals.

Mitchell Fraser

Mitchell is a Tax Solicitor with Mayne Wetherell in Auckland. Mitchell is concerned that the recently-expanded powers granted to Inland Revenue to collect information for tax policy purposes could create unintended consequences.

He believes the new powers risk political interference, conflicting with the IR’s need to be politically neutral. Mitchell proposes identifying alternative means to collect this information, including through Statistics New Zealand.

Vivien Lei

Vivien is Group Tax Advisor with Fisher & Paykel Healthcare, and finance lead with the Fisher & Paykel Healthcare Foundation.

Vivien proposes to change New Zealand’s environmental practices through the introduction of an impact-weighted tax regime. Under this model, organisations would be taxed on their net positive or negative impact on the environment.

Jordan Yates

Jordan is a Senior Tax Consultant with ASB in Auckland.

Jordan believes the tax policy landscape is fractured, and suffocated by political roadblocks. His proposal is to establish an independent statutory authority that would be responsible for the independent management of fiscal policy, as it relates to the tax base.

Selecting a winner

The finalists were announced on 2 June, and each will go on to develop a 4,000-word submission on their proposal.

The four will be invited to present their final proposals and answer questions at a function in October 2022. The winner will be announced that evening.

Our Tax Policy Scholarship Competition celebrates creative thinking from young professionals and also provides a springboard for the brightest industry minds to develop their careers.

Nigel Jemson, the winner of the 2019 competition, says: “Entering the competition was a terrific opportunity for me to grow and develop my tax policy thinking and connect with leading minds in the tax community.  Winning the competition has given my career a boost and since, I have enjoyed a range of great roles in tax for leading businesses, Spark and PwC, and continued my involvement in and passion for New Zealand tax policy.”

Chris Cunniffe, Tax Policy Charitable Trust Committee Member and TMNZ Chief Executive, says this year’s entries underline the strength of the next generation.

“We’re consistently delighted with the breadth and the freshness of thinking young people bring to this competition. The competition provides a forum to share ideas, and secondly, ensures that creative tax policy is not the sole domain of people who have worked in the industry for a long time. As an industry, we are open to fresh thinking and new ideas.”

Tax Policy Charitable Trust Chair John Shewan says the entries prove the industry’s future is in good hands.

“New Zealand has been very fortunate to have so many competent tax leaders involved in developing policy for the betterment of our country. It’s very exciting to be around the next generation of future tax policy influencers, who are already, at a young age, focused on innovative opportunities to enhance the tax landscape.”

Michelle Redington, Chief Tax Counsel at Inland Revenue, who was the guest speaker at the event where the four finalists were announced, says it is fantastic to see the Tax Policy Charitable Trust create opportunities for the next wave of tax policy thinkers.

“Throughout my career, I have been very lucky to be supported by some of New Zealand’s preeminent tax leaders, who have been fantastic teachers and mentors,” she says. “I’ve enjoyed a diverse career in tax, spurred on by a need to solve complex problems, and I’m proud to be able to give back to the next generation of talented tax enthusiasts.”

Find out more about the Tax Policy Scholarship Competition, here.

Minister of Revenue announces tax policy competition finalists

Minister of Revenue announces tax policy competition finalists 510 300 Taxpolicy

Minister of Revenue Judith Collins was on hand to announce the finalists for this year’s Tax Policy Competition.

They are Talia Smart and Nicholas Coyle (both from Inland Revenue), Treasury’s Matt Woolley, and PwC’s Chris Park.

The finalists for the competition, which has been organised by the Tax Policy Scholarship Charitable Trust (TPSCT), were announced during a live stream of events simultaneously held in Wellington and Auckland.

Smart’s proposal looked at removing the business income exemption for charities, while Coyle’s reconsidered the claw back of interest deductions. Woolley discussed full corporate-personal tax integration and Park revisited the idea of a land tax.

As well as Minister Collins, other notable attendees were Inland Revenue Commissioner Naomi Ferguson and TPSCT Chair and former PwC Chair John Shewan, who delivered the opening address.

The finalists will present their full proposals in front of a heavyweight panel of judges during the awards dinner in Wellington on 17 October.

Joining Shewan on the panel are ex-Bell Gully Tax Partner Joanne Hodge, former IRD Deputy Commissioner Robin Oliver, Victoria University Business School Dean Bob Buckle and ex-Secretary of Treasury John Whitehead.

The winner will receive $10,000, the runner-up $4000 and the other finalists $1000 each.

Late last year, the TPSCT invited tax professionals under the age of 35 working in the public and private sector or academia to submit progressive and innovative reform ideas for the New Zealand tax system.

Given 2017 is an election year, proposals had to outline a significant reform of the New Zealand tax system in terms of its bases, method of collection, interface with taxpayers, legal framework or structural amendment.

Twenty-five applications were received by the judges.

The TPSCT was established in 2012 by Tax Management NZ and its Founder Director Ian Kuperus. Its aim is to inspire the next generation of leaders in New Zealand tax policy and administration.

Joel Slemrod talks weird taxes of the past

Joel Slemrod talks weird taxes of the past 422 300 Taxpolicy

Taxes on beards, bachelors, wigs and windows.

As outlandish as these might sound, these taxes did exist at one point and were discussed recently by Robin Oliver Tax Policy Scholarships visiting lecturer and Professor of Business Economics and Public Policy at the University of Michigan’s Ross School of Business Joel Slemrod at a luncheon with a group of leading New Zealand tax professionals in Auckland.

The event, which was held at the Northern Club, was organised by the Tax Policy Scholarship Committee (TPSC).

Mr Slemrod – who was dubbed ‘The Rolling Stones’ of the tax world – talked about how farfetched taxes of the past provided lessons for tax policy today, especially how tax policy settings can drive certain behaviours.

The idea of his presentation was to highlight how the basic principles of taxation are hard to see when people are familiar with taxes or they are distracted by political rhetoric.

Attendees found his presentation to be entertaining and informative.

Mr Slemrod also spoke at Wellington’s Victoria University and the IFA Conference in Queenstown, and met with officials from Inland Revenue, Treasury and the minsters of finance and revenue during his visit to New Zealand.

About the TPSC

The TPSC was established by TMNZ and its founder director Ian Kuperus to encourage future tax policy leaders and support leading tax policy thinking in New Zealand.

The trust sponsors a leading international tax policy thinker to visit New Zealand to engage in debate and discussion, and a New Zealand tax professional to undertake research and study overseas.

Young tax guns to talk alternatives to CGT, GST on imports

Young tax guns to talk alternatives to CGT, GST on imports 453 300 Taxpolicy

Taxation of houses under a capital gains tax (CGT) and GST on imports are among the ideas four young tax professionals will showcase to respected tax leaders in Wellington in October.

Auckland trio Jeremy Beckham, Matthew Griffin and Peter North along with Wellington’s Caleb McConnell submitted proposals which outlined a significant reform of the New Zealand tax system as part of a competition run by the Tax Policy Scholarships Charitable Trust (TPSCT).

Each will present to, and field questions from, a heavyweight judging panel comprising the following:

  • Robin Oliver, former Inland Revenue Deputy Commissioner
  • John Shewan, TPSCT and former PricewaterhouseCoopers Chair
  • John Whitehead, former Secretary of Treasury
  • Oliver Hartwich, New Zealand Initiative Executive Director
  • Joanne Hodge, former Bell Gully Tax Partner.

As well as GST on imports and CGT, other ideas to be discussed at Victoria University on 8 October are a system where company tax losses can be purchased and sold, and a schedular tax base to promote savings and growth.

Shewan says judges were impressed with the calibre of the 14 proposals they received.

“It was great to see applicants thinking outside of the square and promoting policy ideas to tackle huge challenges such as the inability of traditional taxes to cope with the digital economy.

“Applications reflected a wide range of ideas, from growth-oriented and tax base protection initiatives to corrective taxes to deal with problems such as runaway Auckland house prices, environmental issues and disparities in regional economic and population growth.”

The winner will receive $10,000 and the other finalists $2000.

Tax professionals under the age of 35 working in the public and private sector or academia in New Zealand were eligible to enter the competition.

Proposals had to take into account future challenges facing the New Zealand tax system and detail how they could simplify tax and reduce compliance costs for taxpayers.

The TPSCT was established in 2012 by Tax Management New Zealand and its founder director Ian Kuperus to encourage future tax policy leaders and support leading tax policy thinking in New Zealand.

The finalists

Jeremy Beckham

Age: 27

Occupation: Senior tax consultant – Deloitte

Proposal: Schedular tax base to promote savings and growth

Matthew Griffin

Age: 28

Occupation: General manager – Hobby Co

Proposal: GST on imports using software and behavioural economics

Caleb McConnell

Age: 24

Occupation: Solicitor – Chapman Tripp

Proposal: Purchase and sale of company tax losses

Peter North

Age: 23*

Occupation: Tax consultant (transfer pricing) – Ernst & Young

Proposal: Different approach to the treatment of houses under a capital gains tax

*Turns 24 on 25 July.

Young tax professionals submit future policy ideas

Young tax professionals submit future policy ideas 549 300 Taxpolicy

Fourteen young New Zealand tax professionals have submitted proposals showcasing new ideas in tax policy and administration as part of a competition organised by the Tax Policy Scholarships Charitable Trust (TPSCT).

A heavyweight judging panel comprising former Inland Revenue Deputy Commissioner Robin Oliver, TPSCT and former PricewaterhouseCoopers Chair John Shewan, former Secretary of Treasury John Whitehead, New Zealand Initiative Executive Director Oliver Hartwich, and former Bell Gully Tax Partner Joanne Hodge will now review the entries.

Four finalists will be announced on 13 July.

They will present to, and field questions from, the judges at Victoria University in Wellington on 8 October.

The winner will receive $10,000 and the other finalists $2000.

The competition was open to tax professionals under the age of 35 working in the public and private sector or academia in New Zealand.

About the TPSCT

The TPSCT was established by Tax Management NZ and its founder director Ian Kuperus to encourage future tax policy leaders and support leading tax policy thinking in New Zealand.

Previously, it sponsored a leading international tax policy thinker to visit New Zealand to engage in debate and discussion, and a New Zealand tax professional to undertake research and study.

The Deputy Director of the International Monetary Fund’s Fiscal Affairs Department, Michael Keen, talked global tax policy issues with a select group of young tax professionals in Wellington and Auckland last year.

Professor Alan Auerbach of the University of California, Berkeley was the first visiting lecturer in 2013, while the IRD’s Carolyn Palmer was the inaugural scholarship recipient.