More tax for country's 14 billionaires 'inevitable'
The number of billionaires in New Zealand has risen to 14, including individuals and families, who collectively hold wealth of $36.8 billion, according to NBR’s latest Rich List.
The richest of them, Graham Hart has wealth of $12b.
Of the 14 richest New Zealanders, only former Xero chief executive Rod Drury had his wealth decrease over the past year. The wealth of 11 billionaires increased, and two stayed the same.
But a tax expert said the uber-wealthy needed to start paying their fair share of tax, before wealth inequality became baked into the economic system.
Tax consultant Terry Baucher said with an infrastructure deficit and climate change to reckon with, the way New Zealand taxed the wealthiest individuals needed to change.
“Treasury has said that in the coming years we will need more tax, so where is that going to come from? We have to change our mix of tax, that means that some sort of taxing the wealthier more is inevitable,” Baucher said.
Baucher said the New Zealand tax system was unusual on the global stage, because a large amount of tax was collected through GST and income tax, while property holdings, often a person’s most valuable asset, were virtually untaxed.
While it was inevitable that billionaires needed to be taxed more, the boundary lines around how much more, and how the tax would be paid still needed to be worked out, he said.
“If we don’t think hard about the way we tax capital, then wealth transfer will just become hereditary and inequality will become baked into our economic system.”
Infometrics chief forecaster Gareth Kiernan said new billionaires could become a more infrequent occurrence over the next 18 to 24 months.
“In the near future I think there will be very few people increasing their wealth, with interest rates rising as they are,” Kiernan said
While there was some economic benefit to having billionaires operating in your economy, the foremost benefit was to themselves, he said.
“Billionaires are the type of people looking for opportunities to grow their wealth, which by its nature can feed through into more employment and incomes.
“But I wouldn’t want to under emphasise the possibility that you are still getting uneven distribution of wealth. They may be creating more wealth, but they are also capturing an outsized share of it.”
New Zealand’s 14 billionaires
Graeme Hart – $12b
Todd family – $4.3b
Goodman family – $3.5b
Mowbray family – $3b
Sir Michael Friedlander – $2.1b
Sir Peter Jackson and Dame Fran Walsh - $1.7b
Talley family - $1.6b
Bruce Plested - $1.45b
Rod Drury - $1.3b
Sir Robert Jones - $1.15b
Rod Duke – $1.1b
Manson family – $1.1b
Mark Stewart – $1.05b
Peter Cooper – $1b
Source: NBR’s Rich List.