MEDIA RELEASE
25 October 2001
TAX REVIEW – OPPORTUNITY FOR RIGOROUS
DEBATE
"The investment and savings industry hopes that the
invitation to subject the Tax Review 2001 Final Report to rigorous scrutiny and lively
open-minded debate will be exercised," said Vance Arkinstall, CEO, Investment Savings
and Insurance Association (ISI).
"We support the view expressed in the report that the use of
tax concessions should be measured by the net positive externalities produced by the
activity. This is a position our industry has long advocated," said Mr Arkinstall.
"The Review Committee has glossed over the very low personal
savings rate that exists in this country and the advantages to the economy from
encouraging higher personal savings levels. NZ has the lowest savings rates as measured by
the OECD and this is occurring at a time when there is much political debate regarding the
positive advantages of generating individual savings accounts. Clearly, incentives should
be considered in a carefully measured way as part of the solution to increased savings to
benefit the economy and satisfy political objectives," said Mr Arkinstall.
"Whilst the report contains many thought provoking
suggestions, we are disappointed that the Review Committee have not been able to harness
their collective wisdom to produce solutions to the ongoing problem that many savers are
taxed at unduly high levels on their savings, and that they have not provided a solution
to the capital gains disadvantage that has historically resulted in significant
over-investment in residential housing."
"It would appear that the Review leaves the challenge of
creating a level taxation playing field in which all savings can compete efficiently in
the hands of the politicians. This creates the feeling that a marvellous opportunity may
have been lost," Mr Arkinstall said.
"It is to be hoped that as the community considers the many
areas covered by this report, vigorous and open-minded debate will lead to solutions for
some of the gaps that appear to exist."
Ends
Vance Arkinstall
Chief Executive
ISI
