Adam Bennett

Adam is a political reporter for the New Zealand Herald.

Asset cash spent on Parliament

Millions earmarked for leaky roof and IRD help with US tax crackdown

Money from asset sales will be spent on Parliament's leaky roof. Photo / Mark Mitchell
Money from asset sales will be spent on Parliament's leaky roof. Photo / Mark Mitchell

Millions of dollars in assets sales cash earmarked by the Government for new schools and hospitals will go instead on obscure projects like repairs to Parliament's leaky roof and on assisting the US Government's controversial global crackdown on tax evasion, Budget documents show.

In this year's Budget, the Government announced $1 billion in spending from the Future Investment Fund, the "notional" pool of $4.7 billion raised from selling half stakes in power companies and a sell down of Air NZ shares.

But although the Government said asset sales cash would be used to fund "high priority future investment" in assets like schools, hospitals and broadband, documents released this week show spending on items that appear to fall well outside that.

Parliamentary Service received $7 million for "Crown Capital work" and recently confirmed much of that would go on extensive repairs to Parliament Building's exterior stone cladding, windows, doors and roofing to remedy leaks.

Three years ago Parliamentary Service "reprioritised" $5 million of its budget to repair the Beehive roof and windows which were also leaking.

The Budget documents also show just under $5 million this year has been committed to implement New Zealand's compliance with the US Foreign Account Tax Compliance Act (Fatca). The act requires overseas financial institutions including New Zealand's banks to submit information about their customers who may be subject to US taxes to the US Internal Revenue Service (IRS).

The law is detested by many expat Americans and may affect a significant proportion of the estimated 20,000-30,000 US citizens or tax residents living in New Zealand.

The money in the Budget is being used to fund Inland Revenue to collect the information before passing it on to the IRS.

Wellington IT consultant Simon Titheridge, who fears his financial records will be harvested and sent to the US because of the joint bank accounts he holds with his US born wife, said the Fatca money was "very poor" spending.

"It's appalling that the Government has sold these assets supposedly for the benefit of taxpayers but is instead using it to comply with the requirements of a foreign government."

Labour's state owned enterprises spokesman Clayton Cosgrove said the Government had "conveniently neglected to identify" what he called a "grab bag" of spending funded by asset sales cash in the Budget, including $23 million to pay for New Zealand's subscription to the World Bank.

He said the money was being used as a "slush fund" to cover up holes left in the Government's revenue resulting from its 2010 tax cuts.

- NZ Herald

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