| Low Income Savers Receive Benefit |
30 October, 1998
"The confirmation by NZ First of its support for the
Tax Credit System (TOLIS) legislation is good news for low income savers. This provides
the Government with the necessary numbers to move quickly and pass this legislation,"
says Vance Arkinstall, Acting Chief Executive of the Investment Savings and Insurance
Association.
"It has long been recognised that New Zealanders
paying tax at the lower marginal rate of 21.75 cents in the dollar have been disadvantaged
in their retirement savings efforts because the superannuation and investment funds they
place their savings with, pay tax on investment earnings at the higher rate of 33 cents in
the dollar".
"The delays in introducing this legislation have been
a major frustration to the investment and savings industry at a time when we and the
Retirement Commissioner are attempting to encourage increased savings for retirement.
The industry supported the Tax Credit System, even though
it was not its preferred option due to its complexity and the high costs of
implementation, because we were keen to see assistance for low income savers. We see this
Tax Credit System as an important step towards a level playing field. We expect to work
with Government towards a simplified taxation system and the removal of all barriers to
saving" Mr Arkinstall said.
"The Tax Credit System will provide low income
earners with much needed direction and encouragement to save. The recent moves to lower
the New Zealand Superannuation floor from 65 per cent to 60 per cent serves to reinforce
the importance of increased personal savings for retirement" said Mr Arkinstall.
New Zealanders should recognise the efforts of the
Government in bringing this legislation to the House and acknowledge the commitment of the
NZ First party in putting aside their differences with the Government in the support of
this legislation.
For further information contact:
Vance Arkinstall
Acting Chief Executive
Investment Savings and Insurance Association
