Kirk Hope: Financial Services Commission CEO on the case for making changes to the Fringe Benefit Tax

New research from the Financial Services Council reveals that New Zealanders are quick to insure their cars, homes, and gadgets - but they're far less likely to protect their health, income, and lives.

The report, titled Money & You: Valuing Belongings Over Ourselves, shows New Zealanders are twice as likely to have car insurance over life or health insurance.

FSC CEO Kirk Hope says expanding access to private insurance through workplace schemes would help improve coverage across the population." 

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Episode Transcript

Speaker 1 (00:00):
Bright and bread.

Speaker 2 (00:02):
Kiwis we are quick to ensure our belongings, but less
keen to ensure ourselves. A new report from the Financial
Services Council shows that we're twice as likely to have
insurance protection for our car than we are for our
health or life. They say small changes to FBT to
fringe Benefit tax could increase the number of employees with

(00:23):
medical insurance covered and that would be good for productivity,
that would be better for New Zealand. Kirk Hope is
the Chief Executive of the Financial Services Council and is
with me tonight.

Speaker 1 (00:33):
Hey Kirk, hey, right, hey you do yeah, good, thank you.
Good to have you on the show. How many people
have health insurance in New Zealand?

Speaker 3 (00:43):
So about thirty percent of the population has health insurance.
So again, so if you look at comparable OECD countries
like Australia, it's about fifty percent in Australia. So we
are pretty under insured in terms of in health insurance.

Speaker 1 (01:01):
I suppose it's different from compared to ensuring your car
or whatever. We do have a public health system, right,
so that presumably people are relying on that.

Speaker 3 (01:11):
Yeah, I think possibly over relying on it as well,
because Again, the idea you know, that we've pushed out
there today is that if you enable more people to
access private health insurance by making it cheaper, and that's
by removing fringe benefit tax on it, which is a
tax on an employer who is providing health insurance to

(01:33):
their employee of fifty percent. So it's not inconsequential, right,
It's quite different in New Zealand compared to say Australia,
where if you as a person, as an individual you
don't have health insurance, you by the age of thirty
get taxed more. So we create a disincentive for employers

(01:54):
to provide it, whereas places like Australia they say, actually
personally we're going to provide a distance interview, not to
have it. So there are some opportunities here to kind
of do things a little bit differently. I think, what
is that.

Speaker 1 (02:09):
Have you obviously got some ideas, You've got this report,
have you taken it to the government. What are they
telling you?

Speaker 3 (02:17):
I mean, I guess the key thing for any government
is what is it going to cost us? Right, So
we're working through that with the government. At the moment.
We have a view that actually the overall economic benefits
would be a lot more than the fiscal cost and
particularly over time. The other thing that I think enabling

(02:38):
more employer provided schemes what it would do is enable
kind of lower income workers to access private health insurance.
And that's probably one of the biggest things because if
you talk to people who have had it in the
impact on your families when they can get back to
it and they can get an operation that is an
elective peace of elective surgery might not be covered by

(03:00):
acc you might not be able to access the public
health system in a timely fashion. Whatever, you've got some
form of private health insurance. And as to get back
into the workplace, the biggest thing is impact understantly. So
those things are I think critically we genuinely had to
think about this in a different way and other countries

(03:21):
that have done it it is making a big difference.
As I said, in Australia, fifty percent of people have
private health insurance and it means that they can get
back into the workplace pretty quickly.

Speaker 1 (03:30):
Kirk, interesting stuff. Appreciate your time tonight, Kirk hop Financial
Services Council Chief Executive. For more from Heather Duplessy Alan
Drive Listen live to news talks.

Speaker 2 (03:39):
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