MPs pass biggest tax support package

Parliament has passed the biggest single tax support package in modern New Zealand history as businesses of all sizes continue to be hit by Covid19.

The reforms passed under urgency in the House yesterday provide businesses with more than $3 billion in tax relief and takes the total Government planned spending to more than $23b.

With the Government’s “recovery Budget” just over two weeks away, Revenue Minister Stuart Nash says there is more support to come.

Finance Minister Grant Robertson has previously stated the Budget will contain “significant” new measures for businesses to help them recover from Covid-19.

As the Government continues its economic fight against Covid-19, its health response looks to be on solid footing.

There were just three new cases of Covid-19 yesterday — the 13th day in a row where the number of new cases has been in single digits.

There were no additional Covid19-related deaths yesterday and 84 per cent of all confirmed cases have now recovered.

Prime Minister Jacinda Ardern was optimistic about another day of low new cases but continued to advise people to act as if they have Covid-19.

“We all have a responsibility to make this new phase of this Covid19 response work.”

Speaking in the House yesterday Nash called the Government’s response to Covid-19 the “most significant peace-time economic plan in modern New Zealand history”.

The measures include a $3b tax loss carry-back scheme which will allow a large number of businesses to access their previous tax payments as cash refunds.

Essentially, according to Nash, this means a forecast loss in the current financial year can be offset against the tax paid on a profit from the year prior.

The omnibus bill also has measures to support commercial tenants and landlords and $25 million to further support businesses over the next year.

Nash said the tax plan, and its speedy passage through Parliament, means cash could start flowing to businesses via the tax system as early as next week. The tax bill had unanimous support in the House.

“Many small and medium enterprises (SMEs) are feeling the pain now. We are moving urgently to get cash into their hands as quickly as possible,” Nash said.

The tax package changes are in addition to the Government’s more than $10b wage subsidy scheme. Ardern said more than $1.25b has been paid to about 188,000 sole traders through the scheme.

A further $4.27b has gone to 160,000 small businesses that employ between one and 19 staff and almost 8900 medium-sized firms, with 20-99 staff, have been paid $1.3b. She pointed out that those businesses receiving the subsidy have had their revenue cut by at least 30 per cent due to Covid-19 and the lockdown.

Ardern also had a message for fast food operators — the Government expected them to ensure physical distancing among their customers. .

“We all have a responsibility to make this new phase of this Covid-19 response work. Jacinda Ardern