A lot of SMEs don't make much profit therefore relief on tax and provisional tax is almost meaningless, writes Trevor Burgess. Photo / File
As a SME owner, the package announced Wednesday — whilst sounding very generous — doesn't help us. What we need help with is making cash payments to staff and creditors. The two things that will sink us quickest are: 1) default of a debtor, and 2) the monthly impact of paying the IRD PAYE and GST. A lot of SMEs don't make much profit therefore relief on tax and provisional tax is almost meaningless, but finding the cash for PAYE and GST when turnover is a fraction of what it was is a mountain that could quickly become too high to climb. Income tax, provisional tax, PAYE and GST are all just taxes, and they all go into the consolidated fund, so it makes no difference to the overall tax take what category it comes from, but relief from this twice a month burden would offer the quickest and most effective relief possible to save our SMEs.
Some sort of debtor default reimbursement system would plug the other hole.
Trevor Burgess, Snells Beach.
While it is true that we have temporarily lost some of our democratic rights, it is not true that it is part of a socialist agenda. It is surely and simply part of a health agenda. The Prime Minister opines the view almost daily that her priority is the health of the people. And she is right to do so.
John L R Allum, Thames.
One really despairs that there are people who think other people's ability to pay tax is limitless. Even in the current crisis where possibly one third of businesses might fold, someone thinks "we must now collect more tax" to pay for an increase in "essential public services"! (NZ Herald, April 16). The wicked moral dilemma we are confronted with at the current time is a potential immediate real cost in premature deaths, along with a harder-to-define future cost.
People who pride themselves in being "caring" talk about lives versus "the economy" assuming "the economy" is merely some kind of abstract ideological notion. But other people intuitively understand that "the economy" IS "lives" in the future. Including the consequences of not having many billions of dollars in the future, to spend on "essential public services". The last place the several billions of dollars can be made up from is the multitudes of businesses and value-creators destroyed here and now.
Philip G Hayward, Naenae.
It's time to drop the minimum wage to around $15 per hour and also have a 0 per cent income tax rate up to $15k.
The rationale for this is that minimum wage increases reduce the number of employees (I think Treasury said the recent raise would cause 6000 people to be unemployed — and that was pre-Covid), thus businesses in this awful time would be more inclined to employ extra staff. Eliminating income tax on the first $15k gives low paid a higher post-tax income, increasing salary available to spend — and thus generating GST and other taxes. Finally, having more people employed will also reduce the number being paid benefits (better on the bottom of the ladder than not on it at all).
Andrew Parsons, Orakei.
When we look at all the billions that the Government has allocated to every man and his dog since the virus struck, we have noted with discontent the amount that the pensioner was allocated. Wage subsidies, business subsidies, beneficiary subsidies and even Destiny Church all were given handouts. Yes the winter energy payment was doubled, but that was not pensioners alone, others got it as well.
Even in Australia the pensioners were given an allocation to assist during the time of lockdown. What did the pensioner get here? A married couple received the paltry amount of $9.75 each per fortnight after tax. That that is about the amount that you pay to have your groceries delivered when you order online, and most specials have disappeared. We are doing our bit by staying at home and only go out to assist my brother who is also home isolated, which puts him in our bubble. We know the Government and other authorities are doing their best under the current circumstances, but somewhere along the line they have sidestepped the pensioners.
Bob Marsh, Mangere East.
Wouldn't it be a good if our business leaders, top public servants and politicians decide to accept only the minimum wage during the months of uncertainty that lie ahead. Losing 20 per cent of their salaries still leaves them paid greatly more than the average worker will ever earn. Maybe seeing how lower-paid workers are forced to live every week they might be more sensitive to what "minimum wage" actually means.
Just a thought.
James Archibald, Birkenhead.
It was distressing to read the article by Fran O'Sullivan in your Business section (April 15) about the proposal from Troy Bowker (investment banker, who else?) to allow the super-rich to buy their way into New Zealand.
This will create a class where ordinary NZers become the servants/serfs of the super-rich and the gap between rich and poor increases, not what it was like when many immigrants came here in the 1950s. Then all the Government asked was for skilled and unskilled to settle, roll their sleeves up and get to work. Wages between skilled and unskilled were not great and many took secondary jobs to better their life style. Unemployed, child poverty, beggars and many social problems did not exist. I understand the need for foreign investment into this country but to offer the super-rich residence on their very fickle resources is not the way to go.
John Addis, Green Bay.
I reject those who say rights mean nothing to them. They are stoking the ugly in us. We've got Hone Harawira stopping people on State Highway 1. "Ambassadors" are undertaking interrogations in my city, including of my own children. A neighbour felt free to chase down my car to ask me to justify where I was going. Vigilantes are patrolling beaches. These are not small prices to pay. Some of the sacrifices we are being told to make are not necessary, or worth whatever unproven benefit they supposedly bring.
Juliet Golightly, Whangarei.
Fran O'Sullivan's article on inviting millionaires to move to "Sanctuary New Zealand" is interesting if not misguided. The problem is not so much that the idea should be dismissed without consideration, rather it will be hamstrung as to what it can realistically achieve. The primary issue that will hold back New Zealand post-Covid-19 is not solely related to capital. Most of the challenges can be laid at the feet of our bureaucratic and contestable regulations. So rather than pining for overseas saviours to fix New Zealand's economy, maybe we should get our own house in order first? For example, the RMA has become, despite its initial promise, a twisted mess of red tape. It is neither fit for purpose to manage the environment nor to optimise sustainable development. Let's consider the case of building an irrigation dam. A dam can improve food security (now rediscovered as the critical economic activity for New Zealand) while also maintaining low flows during droughts. Yet, as it currently stands, such infrastructure is unlikely to ever get built in New Zealand. No amount of overseas investment will remedy that.
Dr Murray Boardman, Browns Bay.
While the Government continues to roll out massive financial support packages to help us survive the fallout of the Covid-19 lockdown, one has to ask why there is almost no discussion of bank interest rates. Given we are facing a prolonged period of negative growth and the biggest loss of wealth in living memory, surely there is a compelling case for mortgage and business rates to be virtually zero? The Governor of the Reserve Bank, who seems unbelievably optimistic about our current situation, has ruled out any further change in the OCR for the foreseeable future. Mortgage holidays and business lending packages are all very well, but when interest is still accruing at 4 per cent (or 6-7 per cent for business) any relief is short-lived. It is surely time that the Finance Minister, the Select Committee (and our news media) asked hard questions of the Reserve Bank.
Graham M. Upton, Freemans Bay.
On Peters
I want to thank Winston Peters for his decision to go with Labour and Ardern after the election. Enabling her steady hand to be on the tiller in these days must have been the best decision of his career.
Helen McCracken, Glenfield.
On haircuts
I read with some dismay that hairdressers may not be permitted to open until Level 2. Now would be the time for clever engineers to build haircutting robots. If Massey University can develop a kiwifruit-picking robot, hair cutting should be a doddle?
Graeme Samson, Whangarei.
On the border
Why are we still accepting more New Zealanders back in to the country to risk more Covid-19 infection? I would like to know how long they have been away. Over 12 months, then they should stay where they are. The borders are shut.
Karola Wheeler, West Harbour.
On resilience
We expect our farmers to be resilient, able and willing to tough it out. Meanwhile some foreign-owned businesses habitually operate so close to insolvency they have to throw in the towel as soon as their cash flow hits a speed bump.
Arch Thomson, Mt Wellington.
On pay cuts
Jacinda's announcement she and her ministers will be taking a 20 per cent pay cut is insulting when there are small business owners who have taken a 200 per cent cut, and wage and salary earners struggling to pay rent or mortgage.
Merv Lowe, Remuera.
ANZ survey shows over 50% of NZ firms plan to raise prices.