Hon Peter Dunne
Minister of Revenue

Embargoed until 7.30pm Speech

Address to NZICA Awards Dinner

SkyCity
Auckland
Tuesday, 30 November 2010

Thank you very much for inviting me to be here with you today.

I am especially delighted to be part of tonight’s proceedings honouring leadership in an organisation whose objectives align so closely with my own and those of the Government.

Tonight, we pay tribute to a small group of your members who have demonstrated excellence in leadership, but I want to talk about the leadership that NZICA itself demonstrates in the accounting community in New Zealand and even beyond our borders.

In her recent visit to New Zealand, US Secretary of State, Hillary Clinton said that “In a world where solving problems takes more partners than ever before, New Zealand punches way above its weight in every sector of the challenge today.”

This is a very accurate description of New Zealand, but I think it can also be applied to NZICA and its members.

When it comes to looking for partners to help solve problems, NZICA, for my money, is a very solid partner.

NZICA has some 32,000 members and it is therefore no great surprise to me as Minister of Revenue that I am constantly finding NZICA members cropping up in some highly influential spots.

I want to take this opportunity of thanking NZICA as an organisation, and its individual members, for the contribution that you make to the public policy debate about a range of issues in the broad taxation and financial domains.

Fir its part, the Government is focused on increasing New Zealand’s growth prospects as well as encouraging savings and prudent investment and moving away from a reliance on foreign capital to fund investment and consumption.

I do not think I need to remind anyone here that being reliant on overseas borrowing leaves an economy woefully exposed as it responds to overseas financial crises.

We need only look at Ireland; not too long ago, hailed as an economic miracle.

Today sadly, the miracle has faltered.

While our circumstances are different, and the parallels a little limited, the Irish experience is nonetheless a very salutary lesson for New Zealand.

To avoid suffering a similar fate, we need New Zealand businesses to be more productive and we need to focus on accumulation of capital.

The Government cannot do everything – we need to be working positively and constructively alongside the business community to achieve our objectives to boost productivity and overall production.

Where the Government can help is by minimising the distortionary effect of taxation, thus allowing businesses to invest and expand.

Budget 2010 went a long way to helping us in this regard, promoting growth in the economy and integrity and fairness of the tax system.

The most critical aspects of the Budget were the reduction in personal tax rates, the rise in GST and the measures to limit depreciation on non-residential buildings.

These changes are already paying off for our economy, tilting it towards savings and away from the unsustainable borrowing, consumption and over-investment in housing of the past decade.

And that rebalancing will improve overall incentives to work.

The role of accountants in the new economic agenda is clear.

In the private sector, accountants help raise productivity by providing businesses with the financial acumen and information to allow them to make sound business decisions making the business more productive.

You also have a huge role in promoting savings and investment.

Reliable financial statements that investors and savers can trust are absolutely essential.

Accounting standards are of critical importance and the work done by Kevin Simpkins as Chair of the Accounting Standards Review Board has been of especial value to the profession as a whole.

And let us not forget NZICA’s role in the public sector.

New Zealand’s public sector standards and accountability accounts set the standard for world best practice due largely to the work by NZICA.

New Zealand and the New Zealand accounting profession have everything to gain from your international work.

With free trade agreements and double taxation agreements unlocking global markets, the accounting profession is now, more than ever, an international one observing international standards.

For these reasons, the accounting profession is fortunate indeed to have Warren Allen, Vice President of the International Federation of Accountants, Keith Wedlock, Deputy President of the Confederation of Asian and Pacific Accountants and Ken Warren, Member of the International Public Sector Accounting Standards Board amongst your number.

I recognise and very much appreciate the work all of you have done in this area.

I encourage you, Chair, Graham Crombie, President Dinu Harry and Chief Executive Terry McLaughlin to continue to lead the Association along this path.

Meanwhile, closer to home, as Minister of Revenue, I am particularly conscious of the role that NZICA plays in the development and implementation of tax policy.

Your Tax Committee headed by Geof Nightingale I assure you, is relied upon by me, the Minister of Finance and the Finance and Expenditure Committee to provide a sounding board for policies.

I strongly value our regular interactions – from the annual conferences, through to our formal meetings, and even now the structure of informal meetings that has developed in recent years to supplement these other mechanisms.

Some recent instances regarding tax policy where we have worked closely together come to mind:

1. Work on the Victoria University Tax Working Group. NZICA members were strongly represented in the group and as part of the discussions. The working group of course was very influential in the development and implementation of Budget 2010.

2. Contributing to change in the qualifying companies regime. NZICA made it clear that for practical reasons, the Government needed to continue with qualifying companies until problems for small to medium enterprises with dividend rules were sorted out. We listened and we reacted.

3. The GST Advisory Panel. Craig Macalister was a member of this panel, chaired by Frank Owen.

4. The Panel’s recommendations with regard to the issues facing businesses as the GST rate changed was invaluable and made for a smooth transition.

However, this involvement of NZICA is not a recent development.

Successive governments have recognised the added value from including NZICA in the room.

If memory serves me correctly, I think NZICA has been part of the conversation as far back as the 1980s.

I think that your involvement in these fora has displayed true leadership for your profession as your involvement was driven not out of self-interest, but an altruistic objective of the betterment of New Zealand and the accounting profession.

In so many fields of human endeavour, New Zealand punches well above its weight, as Hillary Clinton says.

NZICA is no exception, having a far greater impact on the international profession than you might expect from a modest-sized economy such as ours.

As we look ahead to the economy recovering and the challenges in the future, I look forward to NZICA’s continued involvement and leadership.

Tonight you are gathered here to pay tribute to your colleagues for the leadership they have shown.

I join you in honouring their contributions, and saluting their achievements.

Their recognition is well deserved and I extend my warmest congratulations to them bestowed upon them.

ENDS

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