Consultation
Given the unusual timeframes around these changes, consultation was not as extensive as it would have been under the Generic Tax Policy Process (GTPP). However, despite a very limited timeframe, consultation was done among relevant government departments for each of the changes; and where possible proposals were discussed with other stakeholders.
Personal tax
Although not a formal requirement, in normal circumstances the full GTPP would be undertaken in developing these legislative proposals. This would typically entail the development of a Government discussion document, the receipt and analysis of public submissions, and the subsequent refinement of policy proposals. However, given the timing of the election, the policy objectives of reducing the damage caused by high tax rates, and the need to provide fiscal stimulus as soon as is practicable, the passing of urgent legislation will be required prior to the end of 2008 in order to bring the proposals into timely effect. This leaves insufficient time to follow the full GTPP process. Notwithstanding the fact that there has been limited time to consult, the proposals for personal tax cuts and threshold changes were signaled well in advance of the 2008 election in the National Party's election Manifesto. Inland Revenue and the Treasury have been consulted in connection with these proposals. The Department of the Prime Minister and Cabinet has been informed.
R&D tax credits
The repeal of the R&D tax credit to fund a reduction in personal tax rates was included in the National Party's election Manifesto. Since the election no additional consultation specifically on the repeal of the R&D tax credit has been undertaken. However, there has been public comment that the R&D tax credit may not result in additional R&D. Other public comment has been made to the effect that the removal of the tax credit may reduce productivity growth (although using the resulting revenue to reduce personal taxes will also increase productivity). There has also been public comment from those who potentially benefit from the tax credit supporting its retention. Inland Revenue and the Treasury were consulted, and the Ministry of Research, Science and Technology was informed, in connection with these proposals. The Department of Prime Minister and Cabinet has been informed.
KiwiSaver
The National Party's KiwiSaver and Superannuation election Manifesto policy was released in October 2008. This policy statement underpins the proposals outlined above. The National Party did not consult external stakeholders in connection with its Manifesto policy. The following departments were consulted in connection with these proposals: Inland Revenue, the Treasury, the State Services Commission, the Department of Labour, the Ministry of Economic Development, and the Securities Commission. The Investment Savings and Insurance Association, the Financial Services Federation and the Association of Superannuation Funds of New Zealand have also been consulted in relation to any transitional relief with compliance with other legislation and the Securities Regulations 1983. The Department of Prime Minister and Cabinet has been informed.
