Capital gains tax best, Endace co-founder
Endace's "other" co-founder, Neil Richardson, says a broad- based capital gains tax would be the best way to ensure taxpayers got their cut when firms that received grants from the government were sold overseas.
Fellow co-founder Selwyn Pellett got in a Twitter stoush with Economic Development Minister Steven Joyce last week when he said he had "very mixed feelings" over the pending sale of the Waikato University spinoff to the United States' Emulex Corporation for £80 million (NZ$.
Pellett said it would have been better if the government had provided the millions of dollars of assistance it had given the company in the form of an investment rather than as grants.
Then taxpayers would have received a share of proceeds from the Emulex takeover.
Richardson said technology grants were a vital source of capital for high-growth businesses. He said he would be opposed to a move foreshadowed by Joyce last week to cut the size of grants to individual businesses and to instead spread them more widely to get more "leverage".
Joyce said the Government was reviewing the technology grant scheme and might move to a system of funding only 20 per cent of recipients' qualifying spending rather than 50 per cent, as now.
A capital gains tax would be a better option, Richardson said.
"It doesn't affect anyone acquiring a company or negotiating to buy one."
Such a tax should also apply to property so as not to skew the investment market, he said. He did not have a view as to what rate the tax should be set at.
"I have lived under the Australian capital gains tax regime and started businesses under that and found it fiscally logical, but I think you have got to look at the New Zealand context."
Richardson said he was the first to put money into Endace and remained its largest New Zealand shareholder with just under 7 per cent.Fairfax NZ