English tips high income tax move

Finance Minister Bill English looking over copies of his 2012 Budget hot off the press at Printlink in, Wellington. Photo / Mark Mitchell

Tax base broadening measures in Budget 2012 will target high income New Zealanders who structure their financial affairs in ways to avoid their obligations, Finance Minister Bill English says.

Speaking to media ahead of tomorrow's Budget, English would not be drawn on what those measures might be, or how much revenue the Government expected to raise with those measures. Prime Minister John Key has said there will be one new base-broadening measure in Budget 2012.

English confirmed the new measure would not be anything like a capital gains tax. The Government is already tightening up on the use of trusts, and how mixed-use assets such as baches attract tax.

Meanwhile, the theme of Budget 2012 was confidence in uncertain times, English said.

"Things haven't all gone New Zealand's way, but the Budget shows the Government's confidence in getting its own books in order, [and] also in being able to support a growing economy that generates more jobs and better incomes," English said this morning.

"Just because things are a bit tough hasn't diminished our confidence, and we think that reflects the resilience of New Zealanders. They adapted pretty well to difficult times, and I think we continue to show that confidence that we are going to see results," English said.

The Budget would be a sensible one, not an austerity budget, which would show steps to stop the Government's debt rising while improving New Zealand's longer term growth prospects.

English said he expected the credit ratings agencies to respond "pretty positively" to the Budget.

"What's important there is, we're a small, highly indebted nation, and foreign lenders are getting pretty uneasy about who they can lend money to, because they need to know they're going to get it back," he said.

"The Budget will show a credible path to surplus, and that it's achievable and under control. I think that will be pretty well received."

INTEREST.CO.NZ