Call for a permanent tax system body

The head of last year's Tax Working group has repeated an earlier call for a permanent body to focus on the integrity of the tax system.

The Tax Working Group report recommended such a body and this week the chair, Victoria University economist Bob Buckle, said there should be some permanent "institutional arrangement" to focus on "achieving and sustaining efficiency, fairness, coherence and integrity of the tax system when tax changes are proposed".

"The reason I go back to this is I don't think New Zealand can afford to take the foot off the tax reform accelerator," he told the forum.

The current government had proved receptive to tax reform and appeared willing, in principle, to go further than it did in the 2010 Budget, he said.

"But history has shown we can't expect continuous improvement - in fact history has shown us the opposite."

Overall the Tax Working Group had been "pretty happy" with what the government had done with its recommendations.

Some were ruled out fairly early on - he noted that Prime Minister John Key had ruled out a capital gains tax and land tax proposals.

Other areas he suggested could do with more work, including the interface between welfare payments and tax - "some people are still paying some fairly high effective marginal tax rates".

The other area was the impact of inflation on the tax system in pushing people into higher tax brackets - and again he suggested having an institutional arrangement which kept its "foot on the accelerator" of tax reform could be of help in that area.

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