Leader Simon Bridges says if the National Party was in government it would offer GST refunds to small businesses.
In a speech to BusinessNZ ahead of the Government's May 14 Budget, Bridges said New Zealand needs to get cash flowing into small businesses forced to close in the national interest to combat Covid-19. Such businesses have been "left shouldering a disproportionate amount of the economic burden," he said.
“To reduce the damage and to save jobs, National would offer a GST cash refund of up to $100,000 – based off the GST they paid in the six months to 1 January 2020 - to the small businesses most affected. They would need to demonstrate a revenue drop of more than 50% across two successive months due to the lockdown rules," Bridges said.
“We estimate this could benefit up to 160,000 businesses and save countless jobs. If the business paid more than $100,000 in GST over that period, then they would be able to claim up to an additional $250,000 as a repayable loan over five years."
Bridges also said the key to growing the economy is to encourage and incentivise business investment.
“That’s why we would temporarily lift the threshold to expense new capital investment for firms. The Government lifted the threshold from $500 to $5000 as part of its Covid response. We’d go much further and lift it to $150,000 for two years. For example, if a company spends $145,000 on a new machine to improve its productivity, rather than depreciating that asset over many years, it will be able to expense the full $145,000 in this tax year," said Bridges.
“What we do in the next few months is critical to help businesses survive and save jobs."
62 Comments
Absolute shocker. Bridges has his chance to differentiate himself from Labour, and all he can think up is a bigger fire hose of money sprayed at the problem.
How about tackling the root cause, and getting us back to L1 immediately. By the government's own criteria, we should be there already.
some regions could be at level one now, but they are reluctant to set up road blocks using the army and one policemen at each
Taranaki, lakes, whanganui have no active cases , west coast would be one of the easiest to close off to outsiders and keep track of people in and out.
far northland is another that would be easy to cutoff by roadblocking three roads
No point expecting originality of thought from Predictable Soimon. In the past weeks, he has further proven himself incapable of leading the opposition, let alone running our government.
I wouldn't be surprised if the man's post-Covid policy propositions remain the same old: more corporate welfare to sunset industries, less public benefits, more migration, lower income taxes, higher GST.
He IS suggesting move quicker to a lower level. A fire hose IS whats needed. I think too many people are wanting to see the death nell of others so they might be able to pick up a cheap house.
If we sit and watch the business people of NZ get destroyed who exactly is going to pick up the slack and employ all those people again. Generally those that run businesses do so coz they can. Those that are employees do so coz they cant run businesses.
And no I dont need a helping hand. But even if I did get something out of this my partner in crime, one of my offspring would be spending money on something he could make more money out of.
Level 3 is about finding out if there is community transmission. eg Community transmission might e happening. This is correct, community transmission might still be happening, so level 3 is the appropriate level. So I can't see how level 1 or 2 fulfills that criteria. I do wonder if people have actually been watching the press releases and reading all the information on the Covid website
Have you seen the savage takedown of the noted Epidemiologist D Garner?
https://www.news.com.au/world/coronavirus/closures/nz-pm-jacinda-ardern…
Applicable to all the other jumped up epidemiologists experts including Rewi Woodford (adding it to his byline for virus articles was just crass for an ex professor in an unrelated field), Hosking, Ximon and all.
The PM is taking advice from specialist trained professionals, not someone who has watched "Contagion" 3 times.
Level 1 isn't going to open the borders and bring back the money from tourism and international students.
It's also not going to change that most of our export markets (in fact the whole world) is headed for deep recession.
The fire hose of money is a good idea for those businesses that are viable and can recover once lockdown ends. For some of the others it's just throwing good money after bad, they have no immediate future so unfortunately will fail and government money just delays adaptation.
If a business is going to fail anyway, should the state be basically giving away money that could be used to support and retrain their workers? Businesses fail all the time, its not the government's job to support bad businesses.
Maybe they would be better to just fund the wage subsidy longer. At least that way it will directly go to keeping workers employed, rather than taking cost out of a business owners plan to wind up their business anyway.
Agree they are not - but for a business that has made a lot of money for many years from the lucrative high-end tourism trade, shouldn't they have deep enough pockets to support their staff on the wage subsidy?
that is also an extreme example, there will be many more businesses that have just been poorly run, even before this happened. Why should they be allowed to pilfer of the tax payer with basically no conditions. At the very least it should be tied to a business plan and commitment to keeping your workers employed.
Answer to the question is no. Modern business dictates are that if you make a profit you either take that profit out or more likely leverage off that profit to either get bigger or to take out more money from the enterprise. Remember debt is great, till it's really not.
I dont think bungy jumping is lucrative high end tourism. High end in the other meaning of the words.
Suddenly being stopped from earning anything is a massive kick in the guts. The deep pockets can be in charge of all the other expenses.
Even if a business is poorly run thats not to say it shouldnt exist. Poorly run businesses can still be successful employers. They can still be a contributing part of society. They just may limp along not making a lot of money as well as being employment and earning for the nation. And there is nothing wrong with that.
Why is it the flavour of the month to dis a struggling business. Not everyone is a Buffett. But lots of mums and dad businesses make enough to be worthwhile.
It's $275 to have a tourist thrown off a bridge. 150,000 customers a year according to the following article. $41 million per year in revenue assuming every customer sticks with the basic bridge jump. Provided over $1 billion to New Zealand in foreign earnings over the past 20 years. I'd say it's very lucrative. Just a shame those numbers aren't off the back of something more productive, like New Zealand's own IKEA.
https://www.stuff.co.nz/business/117132993/aj-hackett-takes-over-taup-b…
It is for receiving a tax refund each year (for those that get them). While not the same as GST, they can surely use it as a means of returning GST to the "consumers". Call it a tax credit i guess?
Let's say the average household outgoings for rent/mortgage is 30% of income. Give everyone 0.15 * (Net Income * 0.7) as a tax rebate.
Yeah all parties seem obsessed with trying to keep businesses going... and the only reason for that is to keep people employed so they keep paying taxes instead of sitting on dole queues. It's why it's being suggested all around the world.
But why not just go straight to the source of the problem and create a UBI which actually encourages people to work? With TOPs plan, everyone earning under something like 200k is better off with the UBI they suggest (13k UBI, flat income tax of 33%) and they would need to put in some asset taxes to support it and push investment into productive industries. But it would flip the game towards workers and productive investment, instead of kicking the can down the road by supporting zombie companies who are adept at gaming the system and propping up over valued assets.
For it to work fairly it wouldn't be simple. What if a business hasn't paid much gst because they had just made a large capital item purchase?
We are going to have to really target any business welfare or it will be too costly. I hope the subsidies to date are all really scrutinized and fraudsters publicly outed. Look how many accounting firms have plunged their snout in the trough collecting the subsidy.....ffs they will be working from home and busier than ever.
The simplicity is in the administration, the IRD just post a credit to your account. In Australia the ATO post it as part of your existing PAYG return, so as close to zero overhead and complexity as possible.
By contrast the idea of making the IRD the functional equivalent of a retail bank with a loan portfolio is an ocean of complexity and cost. Goodness knows what the admin overhead costs of such a scheme will be over the years, like giving a charity donation only to find out the system takes 25% of the donation in admin.
You’re probably right. Adern did the Labour turn around in 7 weeks? But it feels like Labour are riding a decent wave. I’m an Independent voter and would just like to have two good leaders to pick from with different policies. Simon Bridges was not a consideration for me after the Jamie Lee Ross fiasco.
This leaked poll says the nation wants Labour back in power by themselves.
Given we're months away from election day and althought we may have won the health crisis but the economic crisis is just about to begin, Labour might lose some of this momentum but nothing right now suggests we won't see the coalition in power for another term.
Oh well, there will be a silver lining for Simon, the National party and its followers. NZ won't get communist China, but we will get a communist labour party. So not all bad news for them.
Must be much the same if they desperately want to be governed by a particular ideology.
Its only taken weeks and weeks, but we finally see some policy from the National Party. Admittedly its one small (but terribly expensive) piece of the puzzle.
I've said it all along, they need to present themselves as a credible alternative government. All they have shown up to now is how to be a trainwreck.
One thing is for sure - the wallet is wide open.
I am not averse to this. I guess if you help a business owner, even if that business is now rooted, they can come back from the disaster with another business plan. But if they are bankrupted and destroyed they probably wont. They are in business for a reason. And if they were paying gst they were making money. Entrepreneurs will start again.
Doing the capital expense 100% depreciation rate would really get things ticking along. $5000 from labour was peanuts. Buy a new piece of machinery to make something to sell, then having to pay tax on that money that you have spent on a business expense is bad for starter businesses. And a lot of businesses are going back to the beginning.
Not bad Si. Not bad.
Not sure how I could do that and get away with it. But if I did I would buy NZ made. What I do know is that there are a lot of young people out there who have just had the guts kicked out of them. Enable them to survive this. A lot of the tourist sector is young folk doing all manner of interesting things.
Instead of always finding the negative vman, sorry I dont mean you personally, I mean everyone in general, this time round we really need to be extra curly positive. We really have to throw caution to the wind. Forget a lot of the ridiculous tax laws. And just give everyone the best chance there is to make a go of something. Anything.
We had that opportunity post GFC Belle and we decided that expensive houses were our priority so a segment of society feels wealthy. Now its paramount they stay expensive or economically we crash and burn. Those decisions can't be easily undone by just 'making a go of something'. We now have a large private debt burden as a result that doesn't go away. We're all in. People that are owed money will want it and if they don't get it, the whole house of cards falls to the ground.
Yes we did didnt we. Faceplant. I dont know how to fix things IO but I reckon our kids should be let off the leash to try stuff. The way we are taxed at every turn should be sat on its ass for a couple of years. Perhaps for the under 40s throw the rule book out. After the 30s depression every man and his dog would have been out there giving it stick.
But now everywhere you turn there is a rule a law a fee or a tax to slow you down. Could you open up a lemon drink stand on your street in the 30s? Of course. Not now. So most dont. They are caught in the headlights of bureaucracy.
I'm actually a bit of a fan of Ronald Reagan. Some would say we're in the mess we are now because of the neoliberal type economics the he and Thatcher set up in the '80s. But the good times (can I call them that? experienced in the 1990's - asset prices were too high, interest rates were fairly balanced) were possibly (probably) as a result of the economic reforms that took place in the 80's. The problem I see now is that non-productive parts of the economy are too much of a deadweight loss and with too much debt associated to them. For example too much central and local government (and wages are far to high, with thee councils drowing in debt...how the hell did that happen?), too many non-productive individuals such as landlords that are leaches on productive enterprise for young families looking to get established without excessive debt.
Get rid of some of those excesses and put people back to work (i.e. things that actually add real productive output that could increase wages - selling and renting out houses to each other doesn't do that - its just creates non productive debt). If we did that we could drop taxes and increase wages. We're over regulated and over taxed - mostly so that we can pay high wages to government entities and councils, then welfare and subsidies that end up in the hands of property speculators. I'd actually put a limit on the number of RESIDENTIAL dwellings any individual/trust/company could own. High density apartments, they can fill their boots. But property speculation and landlordl'ism on residential dwellings that should be purchased by young FHB's to get established and raise families, is a rot on our country.
I agree whole heartidly on the positivity...we all need to just get on with it,forget all this petty political garbage & point scoring,I for one think 'this lot' as so many call them,have done a pretty good job dealing with this.We can all say shoulda,coulda,woulda...but we weren't in the hot seat,they were.
And all the died in the wool Nat supporters,it is probably time to let go of the last election,MMP delivered us a Government and they have done a damn good job through 3 different crisises.There are talented people on both sides,hard to believe for some in here.
People like Mike Hosking who just looks for the negative with this Government as opposed to when his mate JK was in,never any 'probing' questions when he was in charge,Mike used to wax lyrical about us needing to be positive,what a great country we have...all the armchair epidemiologists & amateur finance ministers who all know sooo much...as they say lets be kind,work together and get out of this together :-)
What's with businesses and fiddling with gst?
Businesses don't even pay gst. They collect it from sales and what they don't pay to suppliers they send on to the govt. Even though we had the CEO of zero suggesting otherwise this surely makes it the last tax you want to hand back, along with PAYE which again businesses don't pay.
Simon Bridges and the National Party's idea of immediate GST refunds, is a very good one and shouldn't be dismissed by the Looney Lefties that infest this site. A refund of a business's GST paid over the last 6 months would be cash in hand for SME's right now, rather than some time months away when it's too late.
It's particularly clever in that not only does it give much needed cash back, but save the IRD issuing endless GST refund payments later on as SME's book real cash losses. The idea may need a tweak or two, but any fair minded observer, who isn't mentally clouded by party politics, would see the advantages of this idea and would support it.
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