Bryce Wilkinson: Former Treasury Director and NZ Initiative Fellow on the government potentially cutting the corporate tax rate

New Zealand’s taxes aren’t as competitive as they once were. 

Finance Minister Nicola Willis has floated potential tax cuts for corporations in the wake of the latest Treasury report. 

Speaking to Ryan Bridge on Newstalk ZB last night, she says our corporate tax rate is reasonably high compared to the rest of the world. 

Former Treasury Director Bryce Wilkinson told Mike Hosking that it could be a good move. 

He says the Government is trying to attract foreign investment and capital to try and compare with Singapore and Ireland, who have corporate tax rates within the 10-20% range compared to our rate of 28%. 

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Episode Transcript

Speaker 1 (00:00):
So according to a Treasury report, the government got themselves
in a fiscal hole. There's no surplus. They need to
cut more. They may even need to look.

Speaker 2 (00:05):
At tax If you compare in New Zealand with the
rest of the world, we're not as competitive as we
used to be, which is to say that our corporate
taxt level is reasonably high when you compare it to
the rest of the development.

Speaker 1 (00:16):
Which of course is true. Treasury say we need significant
reform and reductions to public services. Former Treasury Director in
New Zealand and the should have seen your fellow Bryce
Wilkinson back with us. Bryce morning, Good morning, Michael. At
the two point four billion operating that she talked about
in the budget last year, this iss Nichola Willison was
always going to be tight. Is this coming back to
bite them a bit?

Speaker 3 (00:36):
Yes? I think so, And that was the conclusion after
last year's budget as it was a grim outlook. The
parameters she set herself are very tight and arguably too
tight to keep within. So you're going to struggle to
keep on that on that target. It's good to see
that Treasury is blowing the whistle on it. They seem

(00:59):
to be on the ball, which is good because this
issue is really important.

Speaker 1 (01:03):
You're hanging out with the business community more than I am.
But even I'm hearing there's a general consensus. Correct me
if I'm wrong that the government should have gone harder
earlier and we may not be in the mess we're
in there. Is that fair or not?

Speaker 3 (01:16):
Well, yeah, that's certainly it my view and the view
of men as my colleagues. So and that was why
it was such a good budget as it left an
outlook which looked very difficult for the minister.

Speaker 1 (01:30):
Why is she talking now about corporate tax and if
there's a move, what would it do?

Speaker 3 (01:38):
This could be good? Is Hillman's corporate tax raid is
high compared to other jurisdictions, And in particular, the government's
looking for more foreign direct investment to help stimulate economic
growth and improve infrastructure. And that's good and applaud them
for that, But they're just an answer setting up an

(02:00):
institute to attract foreign capital and try and compare with
Singapore and Ireland. But Singapore and Ireland the tax rates,
the corporate tax rates are more than the teen to
twenty percent range.

Speaker 1 (02:13):
So text does matter, Yes, it does. Can you set
it at twenty cents to compete while having a top
rate of thirty nine.

Speaker 3 (02:23):
I think that would be very difficult. I'd be worried
that people would find ways around that to exploit exploit
it exactly.

Speaker 1 (02:32):
So you go to twenty what do you do with
thirty nine? And then of course the opposition go nuts
because they say you've run the economy into the ground.
You've got yourself a recession, you're cutting You know that.
That's a massive fight an election year, isn't it.

Speaker 3 (02:44):
Yes, it's yeah. And you've got to find the money
from somewhere else. So you've got to have a credible
physcal playan and the expenditures are it has to be
part of that.

Speaker 1 (02:55):
Interesting to talk as always, Bryce preciated very much Bryce Wilkinson,
Form of Treasury Director and Use Initiative Senior Felly. For
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