Beehive Bulletin – 31 March 2006

1 April heralds positive changes for business . . .

Finance Minister Dr Michael Cullen has this week been outlining tax changes that will see thousands of businesses enjoying significant reductions in compliance costs. Dr Cullen said that when the changes come into effect tomorrow (1 April) businesses will also find it easier to recruit skilled labour from overseas.

The government wants to make sure tax policy is not a barrier to economic growth. To reflect the decline in real motoring costs over the past 20 years, the valuation rate on motor vehicle fringe benefits reduces from 24 per cent to 20 per cent of the vehicle's cost price. Day-to-day work tools such as cellphones and laptops may be exempt from fringe benefit tax.

The government is also improving access to highly skilled people by reducing the tax costs associated with international recruitment. In another 1 April change, ACC Minister Ruth Dyson said over 180,000 small businesses will able to get discounts on their ACC levy payments. The initiative - offering a 10 per cent levy discount to small

. . . student loan borrowers . . .

>From 1 April no further interest will be charged on student loans for those who live in New Zealand. Students who borrow from that date will only have to repay what they borrow. Those with existing loans will not be charged any further interest.

Students and graduates will no longer be burdened with the compounding cost of interest provided they remain in New Zealand. This will save them thousands of dollars in many cases, and knock years off repayment times. The change continues the government's progress in making tertiary education more affordable.

. . . older New Zealanders . . .

People receiving New Zealand Superannuation and Veterans Pension will be better off by up to $420 extra a year from 1 April. New Zealand Superannuation and the Veterans Pensions will increase by 3.16 per cent following the increase in the cost of living for 2005, as measured by the Consumers Price Index.

In announcing the boost, Social Development Minister David Benson-Pope and NZ First leader Winston Peters (also Associate Senior Citizens Minister), estimated about 490,000 older New Zealanders will benefit from the changes. The increases to NZ Super and the Vets Pensions are in line with the agreement between Labour and NZ First. The increase to these payments will cost the government about $44 million in 2005/06 rising to over $229 million by 2008/09.

. . . and families with children.

Almost three in every four New Zealand families with dependent children will be entitled to Family Assistance tax credits from 1 April. Social Development Minister David Benson-Pope this week outlined how the Working for Families package is delivering targeted tax credits to Kiwi families to help them raise their children.

Around 85,000 more families will benefit as a result of this extension to the family tax relief package - this means that about 350,000 families will be receiving family tax relief in 2006.

Most families with children, earning under $70,000 a year are likely to be eligible for family tax relief, but many families earning up to $100,000 may also be able to claim some family assistance. The package also includes assistance through accommodation supplements and childcare subsidies. People are urged to check their eligibility for extra assistance by either visiting online www.workingforfamilies.govt.nz or freephone 0800 257 477.

NZ maintains apple pressure on Australia

Trade Minister Phil Goff continued to apply pressure in continued efforts to get New Zealand apples access into Australia. The government this week delivered a detailed submission to Biosecurity Australia on its revised draft Import Risk Analysis (IRA) of New Zealand apples.

The submission involved intense consultation with the New Zealand apple industry, and expressed shared concerns about the conditions proposed by Australia for our apple access.

While the draft IRA acknowledges in principle that New Zealand apples should be allowed access, the government and the apple industry still have serious concerns that Kiwi apples will be required to meet conditions that are not justified. Mr Goff said New Zealand's response focuses on the science and analysis presented in the draft IRA, and addresses perceived errors in fact and reasoning. Australia will review comments on the draft IRA, before producing a final analysis.

PM congratulates Margaret Mahy

Prime Minister Helen Clark this week congratulated popular New Zealand children's author Margaret Mahy on winning the 2006 Hans Christian Andersen Author Award. The prestigious international award was fitting recognition of a writing career that has spanned almost half a century and covered fantasy and adventure, junior and adolescent fiction, picture books and poetry, Helen Clark said.

The Awards are presented every two years by IBBY (International Board on Books for Young People) to an author and an illustrator whose complete works have made an important and lasting contribution to children's literature.

ENDS

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