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PM John Key -
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Prime Minister John Key is expected to put New Zealand's tax system in the spotlight when parliament sits for the first time this year on Tuesday.
Key says the speech will outline the government's agenda for the wider economy and will give clear signals on the government's intentions.
"When it comes to tax, I think we will come out with a system that's more robust, that's fairer and puts the right incentives in the economy," Key says.
The government has been considering recent recommendations by the Tax Working Group which includes taxing residential investment properties, a land tax, increasing GST from 12.5 to 15%, and aligning top personal tax rates with company and trust rates.
Finance Minister Bill English and Key have both highlighted the problem with property investment. Last year over $200 billion was invested but due to a $500 million loss the tax take fell $200 million.
Key says some investors can avoid paying tax altogether if they write-off their income against the property.
"We're not saying people shouldn't have rental properties, they should.... but there are hundreds and hundreds of thousands of Kiwis then who are paying for you (investment property owners) to drive on the roads, you to access the health system, you to have superannuation in your retirement, you to educate your kids. That's not fair," he says.
Key says the government is in favour of putting "a little more
balance" in the economy.
