And like the flaw in the CGT - if your wealth drops - do you get a massive refund?
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Where there’s smoke there’s often fire. The activist left seem to be slowly imploding through various means, will be interesting to see what remains by the time the next election rolls around. Who knows, perhaps it will be like Trump in the US where all news is good news for popularity.While I'm hoping this isn't true that private information was used by Te Pati Maori, this could cause far more issues in NZ Politics than some of the other "corruption" theories circulating at the moment....
Watch Live: Chris Hipkins responds to Te Pāti Māori allegations
The party is welcoming an investigation into the claims.
The TPM don't realise how damaging all their rhetoric is to Labour and the Greens.
It looks like Labour made the complaint.
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You haven’t read about the shambles that was kiwirails governance? That Labour would have probably made the same decision?Extremely poor decision making
Engine parts for mega ferries already built and tested when contract cancelled
Three other people joined KiwiRail chief executive Peter Reidy on a trip to South Korea.
Engine parts for Interislander’s mega ferries were built and tested before KiwiRail terminated its contract with Hyundai Mipo Dockyard (HMD), the Herald can reveal.
The Government announced on December 13 it would not give the state-owned enterprise more money for the new ferries - leaving the plan to replace its ageing Cook Strait fleet dead in the water.
However, KiwiRail did not officially cancel the $551 million fixed-price ship-building contract with HMD until February 8 after receiving a letter from Finance Minister Nicola Willis.
In a written Parliamentary question, Labour asked Minister for State-Owned Enterprises Paul Goldsmith what work had been completed on the ferries by that point.
Discover more
KiwiRail advised 87 per cent of drawings for the two ships had been submitted, Goldsmith said.
- Budget 2024: Money to investigate emergency towing ...
- KiwiRail finally cancelled Cook Strait mega ferry contract ...
- Briefing floats possibility of KiwiRail exiting Cook ...
- KiwiRail’s Cook Strait mega-ferries project scrapped ...
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“For the first ship, the four generator sets (diesel engine and alternators), frequency converter for azimuth thruster system (propulsion) and azimuth thruster mounting seats had been built, tested and accepted,” he said.
“For the second ship, all four alternators were built, tested, and accepted.
“The safety management and control system for both ships had been tested and accepted. The dockyard also blasted and primed some metal for later stages and produced five plates.”
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Minister for State-Owned Enterprises Paul Goldsmith said all four alternators were built, tested and accepted for one ship. Photo / Mark Mitchell
The mega ferries were being designed with a hybrid technology using electrical propulsion from generators fuelled by diesel and batteries recharged by electrical shore power.
KiwiRail chief executive Peter Reidy said they were still “considering options” for the mega ferries up until February 8.
“Until the final decision to cancel the contract, the shipyard made its own decisions about production schedules,” he said.
The contract with HMD was signed in 2021. The vast majority of design work and selection and approval of components was completed by December 2023, Reidy said.
Most of the work Goldsmith listed in his response was accepted or about to be accepted when the Government refused further funding, he said.
“A small amount of work planned by HMD and their suppliers, such as the testing and acceptance of the first ship’s frequency converter for the azimuth thruster system and testing and acceptance of the second ship’s alternators, happened in the period between December 13, 2023 and February 8, 2024.”
The work completed during this period would make no material difference to confidential cancellation negotiations, Reidy said.
Labour transport spokesman Tangi Utikere said this revealed a significant amount of work on the ferries had already happened.
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“That work will be a cost to the Government if the contract is scrapped. KiwiRail secured the ferries contract at a competitive price three years ago, and costs have gone up since then. So, if any aspect of it is being renegotiated, those rising costs will be put straight back on Government.”
It has previously been reported Reidy travelled to South Korea earlier this year.
The Herald can now reveal three other people joined him.
They were KiwiRail ships programmes director Massimo Soprano, Treasury projects, financial and commercial director Chris White and ferry Ministerial Advisory Group chairman Mark Thompson.
Treasury said the purpose of the trip was to meet with Hyundai Mipo Dockyard as part of contractual discussions.
“Chris White’s travel with Peter Reidy to Korea reflects that the Treasury is working to support an appropriate commercial outcome of the negotiations and, with KiwiRail and the Ministerial Advisory Group, to understand and advise ministers on replacement ferry options,” Treasury said in a statement.
Utikere said it was curious the Ministerial Advisory Group was part of a trip focused on terminating the contract when the group is tasked with looking at replacement options.
There was no word in the 2024 Budget on what will replace the cancelled mega ferries, and Treasury said exiting the contract to build them is a fiscal risk.
Utikere also noted the contingency to fund the cost of breaking the contract with HMD was not disclosed.
“The Government had an opportunity in the Budget to signal a plan moving forward and they have chosen not to do that.”
The Budget did reveal one thing related to Cook Strait’s future - there is $600,000 to investigate emergency towing options, which the maritime union says is an ambulance at the bottom of a cliff.
Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.
www.nzherald.co.nz
Does it surprise you??Trustee dividend payments double to nearly $50 billion ahead of tax rate rise
A tax minimisation trick has ironically seen the Government’s tax take unexpectedly spike.
Companies owned by trusts appear to have flushed out excess retained earnings ahead of the trustee tax rate rising from 33 to 39 per cent on April 1, 2024 (for trusts that earn more than $10,000 a year).
The value of companies’ dividend payments more than doubled, from $23.6 billion to $49.4b, in the tax year to March 31, 2024, according to figures Inland Revenue gave the Herald.
Baker Tilly Staples Rodway’s head of tax services, Mike Rudd, in February told the Herald he was encouraging companies owned by trusts to pay out excess retained earnings to make the most of the 33 per cent trustee tax rate before it rose.
Not only would this lower their tax bills, but Rudd believed it was also a good way of freeing up money that could be reinvested.
Companies similarly flushed out excess retained earnings a few years ago, ahead of the Government introducing a new top income tax rate of 39 per cent for income over $180,000.
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The value of companies’ dividend payments doubled in the 2020/21 tax year before the new rate took effect. It then dropped back down.
The previous Government decided to lift the trustee tax rate to prevent people from using trusts to avoid paying the top income tax rate.
The current Government softened the change a little by allowing trusts that earn less than $10,000 a year to keep paying tax at 33 per cent.
The spike in dividend payments that occurred just before the trustee rate change took effect was such that it contributed towards the Government collecting $1.7b (1.7 per cent) more tax in the 10 months to April 30 than the Treasury expected.
Another contributor to the overshoot was the fact more tax was paid on income from Portfolio Investment Entities (PIEs), such as KiwiSaver and other investment funds.
Rudd believed some trustees would, over time, shift their money to PIEs, as the highest tax rate applied to income from this type of investment is only 28 per cent.
He noted many individuals choose to invest in PIEs so they only pay 28 per cent on their returns, rather than their marginal income tax rates, which could be as high as 39 per cent.
Inland Revenue didn’t know whether trustees shifted money to PIEs ahead of the trustee tax rate rising, and whether this contributed towards the tax paid on PIE income surpassing the Treasury’s expectations.
Inland Revenue wouldn’t be surprised if trustees invested more in PIEs. Nor is it shocked companies owned by trusts have changed their dividend payments in response to the trustee tax rate rising.
Indeed, it issued advice earlier in the year clarifying that provided these actions aren’t contrived or artificial, they’d most likely be legal.
“An example of where Inland Revenue might have concerns is where, despite it being possible for a company to ‘pay’ a dividend by crediting shareholder current accounts, the company objectively has no real ability to pay those credit balances if it was to be liquidated,” Inland Revenue said.
Tax minimisation trick sees billions shifted ahead of trustee tax hike
Trust-owned companies appear to have flushed out excess retained earnings to save on tax.
So, those earning over $180,000 and paying the top rate of 39% had moved a lot of their assets and income into trusts which were only taxed at 33%. Now, they're moving their assets into PIE funds which are only taxed (PIR) at 28% for anyone with an income over $48,000 PA. Should the government look at increasing the PIR rate to 33% for those earning over $180,000? I actually think the government should and also adjust the PIR rates like they have the tax income brackets.
At the moment, the PIR (tax rates on PIE investments) are...
View attachment 7698
It's interesting that the Maori Party had no policy on trusts, the Greens wanted to tax all trust assets at 1.5%, Labour introduced the law to increase tax on trusts from 33% to 39% and the coalition changed the Labour policy to not tax the first $10,000 of trust income at 39% but not one party looked at adjusting the PIR rates or introducing a new rate for the highest earners. That actually does really surprise me... that would bring in a huge amount of tax money without the need for a wealth or CPT, would be far easier to administer and be far more efficient. Adjusting the brackets would increase the attractiveness of PIE funds (such as most KiwiSaver and managed funds) over property investment. All what will now happen is the flood of undertaxed money into PIE funds without the additional tax revenue.
Volunteers leaving post the election campaign - wow, hardly surprising & not even close to what the left have dished up recently. Btw I heard some more very concerning things about very senior Greens politicians recently as well, no idea on accuracy.Stuff
www.stuff.co.nz
Act in the spotlight now. Heard something very concerning surrounding this party and a senior member the other day, but certainly not something you’d put out there until the story has broken to avoid any repercussions
Is it related to Waititi's breech of court suppression orders in Parliament last year?Stuff
Act in the spotlight now. Heard something very concerning surrounding this party and a senior member the other day, but certainly not something you’d put out there until the story has broken to avoid any repercussions
