Owner-occupiers see give-and-take working better for them

Businessmen Graham Collie and Graham Boult are at the sharp end of the Government's decision to give with one hand and take with the other.

They operate their businesses from buildings they own, which no longer qualify for depreciation, and they get a cut in the company tax rate from 30c to 28c in the dollar.

Mr Collie, whose company Atlas Concrete supplies concrete from seven plants across Auckland, said he preferred the tax cut.

He said he could understand the Government's moves on depreciation to help rebalance the economy toward productive investment.

Besides, he said, buildings tended to appreciate in value.

Mr Collie said he was in the process of buying more property for the company, but the new property regime would not affect the business deal.

Mr Boult, who sells women's clothing from a mail order outlet in Albany, said the two measures just about balanced out in the longer term, but his company would be slightly better off.

"It's more of an incentive for business because a building is a fixed asset sitting there. In some ways with commercial buildings you have to say they don't really depreciate too much. In fact, they appreciate."

Mr Boult, who also chairs the North Harbour Business Association, said the Government had made a good decision by doing away with depreciation and reducing company tax.

"The incentive then is, the better you do with your business the more profit you are going to keep," he said.

Greg Haddon, a tax partner with Deloitte, said the net effect of the two measures meant a business that owned a $100,000 building would be better off if it made a profit of more than $50,000 and worse off if the profit was less than $50,000.