Key needed in the back office

Prime Minister John Key. Photo / Mark Mitchell.

So John Key's "bold" vision for the future wasn't quite as radical as the pre-announcement hype led us to believe.

Key's 'most important speech ever' was more about what the government was not going to do than what it was going to do: no capital gains tax; no land tax; no risk-free rate of return tax for residential property investors.

Property investors will now have to wait for the detail in the May budget to see how they'll be slugged. Everyone else's attention has been expertly diverted to worrying about a GST increase.

Away from the main theme, however, Key's speech strayed from making vague assertions about closing property tax loopholes to voicing loose ideas on how to help New Zealanders reduce their "heavy reliance on property investment".

"We want New Zealanders from all walks of life to be able to invest their savings in productive businesses, either directly or through funds, with more confidence in the regulation of those capital markets, and with the knowledge they need to make informed choices," Key said.

I liked that last bit - the "knowledge they need to make informed choices" - it is particularly obtuse. Do New Zealanders know they have to make more informed choices about investments and, if so, who is going to inform them?

Key was short on detail in regards to this but he did have a lot to plough through including promoting this obscure idea of making New Zealand "a hub for financial services in the Asia Pacific region, specialising in providing high-value middle and back office functions for the funds management industry".

This is not vote-winning territory, or vote-losing territory either. High-value mid and back office providers to the funds management industry don't have much of a public profile. Key really had nothing to lose by giving these mysterious 'industries' his whole-hearted support but even in this he came down on the side of further consultation.

"The Government is keen to see if this or similar new industries could be developed here and we have asked officials to determine what steps we would need to take to make that a reality," Key said.

How about giving them a tax break?

David Chaplin