TWG Review - Maori and Tax

We all know that Maori collectively own large clumps of land in New Zealand.  Some of it more productive than others.  We all know that Maori own collectively tens of billions of dollars of assets in New Zealand.  A lot of it currently paying zero tax and rates at all.  Not surprisingly the TWG found the 17.5% tax rate for Maori authorities "appropriate" although they wanted it extended to subsidiaries!

The TWG have in other words bent over backwards to exempt Maori as much as possible.

The TWG remember is meant to be designing a system of tax that uses resources more efficiently.  That is why they dug into residential housing because there is a belief that your $ in providing rental housing is less efficient and not as good as your $ investing to artificially prop up our underperforming company CEO's and boards with compulsory Kiwisaver.

So how did the TWG deal with Maori?  They effectively hospital passed it with many waffly references back to the politicians to deal with.  The language is highly amusing if you read between the lines.

c) considers that some types of transactions relating to collectively owned Māori assets merit specific treatment in light of their distinct context.
c) recommends that the Government engages further with Māori to determine the most appropriate treatment of transactions relating to collectively owned Māori assets.

The section headlined "Te Ao Māori perspectives on wellbeing and living standards" is a right doozy. Leading into this entirely meaningless diagram titled "He Ara Waiora - A Pathway towards Wellbeing".  I hate to claim I am an expert in much in life as those who do are usually immediately proved wrong, but I am an expert in cutting through waffle and euphemisms.

Dollars to donuts this "pathway towards wellbeing" will not involve the tangata whenua sticking their hands up in one of the many pricey hui with pricier consultants offering to pay more tax themselves will it?!!

Figure 2.1: He Ara Waiora - A Pathway towards Wellbeing

Cheers thanks for that.

So the TWG have considered (but not really) that in a report on tax that consideration must be made to all manner of things Tikanga and environmental.  Then fails to actually do that as it is not their job to make statements about natural resources

76. If Māori rights and interests can be addressed, there could be a role for making greater use of tax instruments to address water quality with current tools, especially for nitrogen, and especially for regions struggling with excessive discharges. Even tax instruments using simple estimation approaches are likely to be preferable to having no tax instruments.

Say what?

Māori rights and interests

85. Any potential water taxes will need to take account of Māori rights and interests in water. There are well established concerns about questions of access, as well as ownership. Māori have less access to water than other land owners. Analysis from the Ministry for Primary Industries (MPI) suggests that in drier regions of New Zealand, only 3% of good quality Māori-owned land is irrigated, compared to 27% of all good quality land. There is ongoing work to better address Māori rights and interest in water, including through the Waitangi Tribunal and discussions between the Crown and iwi/Māori.

If Maori wish to have irrigation they can pay to have it and they have enough money to do so. Quite why it is in the scope of the TWG to make comments about Maori access to water or its ownership, is beyond me.  In any case there is a library of submissions in Appendix C that will have consultants able to live like Kings for years with this process.  Bottom line is because Maori collectively own assets and are unlikely to sell those assets, capital gains is unlikely to apply in any instance so it is much fuss about nothing unlike say any form of wealth tax.

Māori issues

Tikanga framework (Draft)
Māori authorities
Extending of taxation of capital gains and Māori interface
Extending the taxation of capital income: implications for Māori collectively-owned assets
Understanding impacts for Māori and update on Te Ao Māori framework
Māori collectively held assets and capital income

In essence Maori should have the same rights as any other race when it comes to collective ownership of assets and should pay tax in the same way and at the same rate.  Of course they will not as politically they get preferential treatment but the pandering in the TWG to look politically correct and woke is rather humorous.  

Māori collectively owned assets

24. The Group recognises that taxation of capital gains could create an impediment to a Māori organisation's ability to regain ownership over land lost as a result of historical Crown action. Accordingly, rollover should be provided for transactions relating to recovery by Māori authorities of such land.

The best they have come up with is what is called 'rollover" treatment, which basically means Maori can put off paying taxes forever.  More engagement with Maori in addition to the five hui that the TWG undertook is required which as we know means - more cash for Maori consultants and experts to come up with the outcome that Maori can end up paying nothing.

Sigh.  At a time there is a new digital services tax where Google and Facebook etc have to pay their "fair share", effectively our largest group involved in largest legitimate tax avoidance in New Zealand  (being Maori owned assets worth more than $50 billion) get to pay stuff all tax.

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