Advertising group says it will get creative to stop 'unfair' move on small businesses.

Media and advertising businesses have joined opponents of the carpark tax, fighting a proposal they claim would see costs spiral by as much as 50 per cent in Auckland and Wellington.

Paul Head, chief executive of the Communications Agencies Association, said his organisation had joined the Fringe Benefit Tax Action Group to fight the Government's proposed tax on employee carparks.

The Property Council, Employers and Manufacturers Association (Northern), Tournament Parking and Unite Union are against the tax on employer-provided carparks in Auckland and Wellington.

Head said his organisation represented about 100 media and advertising businesses and he backed the campaign because the proposed tax was unfair.


"It's the kind of campaign where I think our members would enjoy applying their combined creative talents to opposing what seems to be a petty and quite selective tax. A few years ago some of our members got very creative in successfully opposing Auckland Council proposals to ban billboards in downtown Auckland."

Mike Rudd, taxation director at Staples Rodway Auckland, said the tax would hit small and medium-sized enterprises, which make up about 80 per cent of the commercial sector.

"It looks like a tax aimed at senior people in high-level positions in larger companies, and at that level you can say it probably works and is reasonably fair. But it has unintended consequences for the SMEs that tend to be more flexible in the way they operate. Therefore it catches many in the SME sector and especially those lower-paid shift workers who might be in the city working and using carparks in the hours specified in the proposals (6am-10pm), even when those workers get no real benefit."

The proposals were too broad and would catch many people accidentally, he said.

A two to three-person Auckland operation leasing a carpark for less than the standard rate would be dragged into the new regime by these new rules, for what would work out to be hardly any payable tax.

Revenue Minister Peter Dunne said employee carparks would soon be recognised as income but Head said smaller businesses would be particularly hard hit by the proposed tax.

"Most of our members are in small to medium-sized businesses and one of our members did a back-of-the envelope calculation that immediately added $30,000 a year to his compliance costs. The idea of having to work out where every employee is parking, and why, is ridiculous. Add that to another ridiculous proposal to track and tax cellphone and computer use and you'd have to wonder what a supposedly more business-friendly Government is thinking," Head said.

Small Business Minister and Act leader John Banks has criticised the Government's proposal as "petty" - criticism that may make it more likely National will pull the unpopular policy. "It just doesn't make sense," Banks said. "I'm very hopeful that it's going to run out of steam."


Parking cost hike
Support: Revenue Minister Peter Dunne
Oppose: Employers and Manufacturers Association (Northern), Tournament Parking, Unite Union, Property Council, Communications Agencies Association, Act leader John Banks