2010-11-02

Gift Duty’s end will help ‘save our farms’

Federated Farmers is applauding the Government’s decision to abolish the arcane gift duty tax. The decision will help ‘save our farms’ by smoothing farm succession.

"News the Revenue Minister, the Hon Peter Dunne, intends to abolish Gift Duty is the best I’ve heard in very a long while," says Philip York, Federated Farmers economics and commerce spokesperson.

“Abolishing Gift Duty has been one of the longest held policy objectives of Federated Farmers.

“It’s been something like a 42 year slog for us against this envy tax. While Government deserves a bouquet for this, so to do all of our staff and elected members who over decades, have kept the pressure on.

“Because it can take decades to gift a farm from parents to their children, farm succession, rather than land prices, is a major factor if we are to farm for generations.

“Yet Gift Duty itself is one example of poor regulation we’d avoid if we had a Regulatory Responsibility Bill in place.

“After the costs of administering it were deducted, Gift Duty only brought in around $750,000 a year. But it made taxpayers spend $70 million a year on lawyers and accountants to get around it, as long as time was on their side.

“On the topic of ‘saving our farms’, the Kiwi dollar’s appreciation against the greenback is of concern. We’re simply not seeing the high returns overseas translate into farm incomes, despite the ANZ Commodity Price Index lifting 3.5 percent in October

“Yet any intervention in the Kiwi or radically changing policies just because of the current US economy is madness. Pegging the dollar would slaughter our exporters with hedge positions.

“We ought to get some relief against the Australian dollar at least, if the Reserve Bank of Australia tomorrow increases its cash rate to 4.75 percent.

“The only long term recipe for our economy is for politicians to fundamentally get the need for economic reform. It’s long overdue and urgent as our economic performance shows.

“Our warning alarms went off with the UK’s ‘uninsulated’ June quarter growth being four times that of New Zealand’s ‘insulated’ June quarter result.

“We’ve got to stop pussy footing around the fact Government is too big with our economy now running on ‘Government time’.

“We need a root and branch review of all Government spending.

“The Conservative-Liberal Government in the United Kingdom has done just that and won public respect for brutal honesty. If we’re to develop a lean and efficient economy we need the same and we need it now,” Mr York concluded.

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