The investment industry appears unfazed by the election of a centre/left Government in New Zealand and has adopted a ‘business more or less as usual’ approach to the result.
The investment industry appears unfazed by the election of a centre/left Government in New Zealand and has adopted a ‘business more or less as usual’ approach to the result.
In an election that produced few surprises the Labour party is now the senior partner in a coalition Government with the left-leaning Alliance party.
Head of the Investment Savings and Insurance Association (ISI), Vance Arkinstall, says the election of a Labour/Alliance Government has some positive elements for the industry.
“Overall we’re mildly optimistic,” Arkinstall says.
He says Labour will look at the issues concerning the industry such as inequities in the taxation of private savings, the possible introduction of a TET regime for long-term savings and reform of the entire tax system.
Arkinstall also expects Labour will move quickly on its promise to establish a fund to finance New Zealand Superannuation payments and to increase the current pension back to 65 per cent of the average wage.
“While the details are unknown the super plan should at least provide a degree of certainty around superannuation,” Arkinstall says.
“On the downside, the higher income tax for those earning over $60,000 and the re-moval of the ACC workplace insurance reforms are causing some concern.”
IPAC chief David van Schaardenburg says the election result was much as predicted and has caused little concern to the investment world.
“The result caused a sigh of relief, it could have been worse,” van Schaardenburg says. “Nevertheless, the outcome is not a thriller.”
He says only time will tell how business-unfriendly the new Government will be and in particular how much influence the Alliance will have on policy.
Investment adviser Murray Weatherston says the election has very few implications for the financial planning industry.
He says the new tax on high earners could create some work for advisers as clients may need to restructure their affairs.
“But I can’t point to the election and say to clients that this has created a good oppor-tunity or that is something bad to look out for.”
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