Another tax group looks set to be ignored

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The Government is set to reject another set of demands for radical tax reform today as a Victoria University-led group of experts outlines its proposals.

The Government-sanctioned tax working group, chaired by Victoria University professor Bob Buckle, will discuss its findings at an all-day seminar. It believes the current tax system is unsustainable, unfair and lacks integrity.

Its final report will be presented to the Government before Christmas and will be made public in January.

But Revenue Minister Peter Dunne urged it yesterday to focus on its original aims; finding ways to fund tax cuts that will allow the Government to line up the top personal, business and trust rates at 30 per cent.

"The 30-30-30 alignment was the starting point for this exercise and we have got to look at the most effective way of replacing revenue at that alignment or something akin to it," Mr Dunne said.

"This was never an exercise in bold or scorched-earth tax reform – it is more balanced than that."

Any changes had to be politically saleable as well as economically sound.

He welcomed the debate about tax changes, and said that in future he wanted to expand the use of Victoria University.

"But once the crunch comes, they need to remember what the exercise was all about."

The Government would have to decide changes by next year's Budget, which left little time.

Professor Buckle said the group would report to ministers before Christmas, and had not yet decided how firmly it would recommend one or two options over others.

However, while it would look at ways to fund the 30-30-30 target, it also believed that "base-broadening" options – which include new property taxes, or increases to GST – could improve the efficiency of the overall tax system

"What we will say is that designing a good system for collecting revenue for government you need to have a coherent and principle-based tax system.

"One has to be careful about changes going forward because you can easily undermine them by piecemeal changes to the tax system," Professor Buckle said.

The group had a diverse range of members, including tax accountants, officials, private sector and academic experts. All had given their time free of charge.

Finance Minister Bill English said the report would be considered alongside yesterday's conclusions of the 2025 Task Force, and reports on infrastructure and capital markets that are due in coming months.

- © Fairfax NZ News