Thursday, 24 May 2012 15:05

Budget closes livestock loophole

Written by 

An extra $410 million is to be squeezed from bach and boat owners, and farmers, among others, over the next four years under Budget measures tightening tax rules.

As expected, the Budget will cut the amount of tax deductions available for mixed-use assets such as holiday homes, boats and aircraft.

Also as flagged, a loophole allowing farmers to cut their tax bill by switching livestock valuation methods from year to year will be closed.

The measure was announced in March but will now be enshrined in legislation.

Revenue Minister Peter Dunne said the previous rules were too loose and allowed farmers switching from the "herd scheme" to the "national standard cost scheme" to receive an "unfair tax advantage".

The change will plug an estimated revenue "leakage" of $184m over four years.

Other key points include:

* Closing a tax loophole for those who rent out their bach and boat, saving $109m over four years

* An excise tax hike on tobacco, taking the price of a pack of 20 cigarettes to more than $20 by 2016

* Scrapping the annual inflationary increase to early education funding

* Deferring KiwiSaver auto enrolment

* New KiwiSaver rules requiring more disclosure from fund managers.

* Increasing student loan repayment rate to 12 per cent

* Increasing cost of prescription items to $5 each

* 154,000 new jobs over the next four years, unemployment to below 5 per cent by 2015

* Government debt to rise from $50b to more than $70b before return to surplus

* A return to surplus by 2014/15 (of $197m)

* New spending totals $26.5m to 2015/16

* Reprioritising $4.4b of spending

* Holiday home tax deductions cut, saving $109 million over four years

* Livestock valuation rules tightened, saving $184 million over four years

* Three tax credits abolished, saving $117 million over four years.

* Extra $78.4m funding for IRD audit and compliance.

* Future Investment Fund established to use proceeds of SOE selldowns

» Connect with Rural News

More like this

Set Fonterra free – Nats

The time has come to reduce aspects of Fonterra’s regulatory burden, National’s Agriculture spokesperson Todd Muller says.

Standing up for the primary sector

Our national debate needs to move from condemnation to celebration of our primary sector, explains new National Party spokesman for primary industries and forestry, Todd Muller.

» The RNG Weather Report


Vaccinations protect people, animals

As we struggle to fathom how we ended up in the throes of a measles outbreak again, we’re reminded of the importance of vaccinations to protect us from life-threatening diseases.


» Connect with Rural News

» Connect with Rural News

» The RNG Weather Report

» Latest Print Issues Online

The Hound

Chipping in

The Hound was intrigued to read an article recently, on the Newsroom website, that shows that Education Minister Chris ‘Chippy’…

I'm alright

This old mutt has been contacted by many concerned individuals about the role the former Synlait boss John Penno is…


» Connect with Rural News