Bank CEO calls for tax incentives for savers

18 May 2013

Bank CEO calls for tax incentives for savers

Full Transcripts and video will be on our website at 0900 Sunday May 19.

BNZ CEO, Andrew Thorburn is calling for tax incentives for saving.

Speaking on TV3’s “The Nation” Mr Thorburn said that because of the high current account deficit the country was vulnerable to international and external market shocks.

“ I do think we need to save a lot more, and I think we need to see – whilst I support the government's track to fiscal surplus and the discipline they're showing --- I think we need some structural reform in the tax system to incentivise people to save more,” he said.

“Firstly the tax system has to change so that it fundamentally incentivise or at least equalises the options that people have.

“At the moment if you are a residential investor, your effective tax rate is a lot lower than if you have money in the bank or you get dividends from a company.”

Mr Thorburn also said Kiwisaver contributions needed to be increased even if that was compulsory so that we built up a bigger pool of funds.

And he said the listing of state owned enterprises like Mighty River Power and Meridian on the stock exchange gave people something other than property to invest in.

But the impact of the current account deficit on the exchange rate was discounted by two business leaders also speaking on “The Nation”.

Tatua Co-op Dairy Co CEO Paul McGilvray, said that despite the company being a major exporter and the exchange rate being a big issue, the company was adapting to it.

“We have to be competitive so we keep adding value,” he said.

“So we keep adding value more than the exchange rate takes away from us, and then if we do get economic growth at higher rates than they're being predicted and things improve for us, then we're going to be in great shape to capitalise on that.”

Mr McGilvray was confident about the year ahead for the dairy industry and said the drought had had little impact on his company’s production.

“Milk production this year will probably only be down half a percent on last year,” he said.

“Last year was a record.

“From my company we probably had the third or fourth biggest milk production in our history.”
.The Nation will be repeated on TV3 at 0900 Sunday.

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