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Government backs down on car park tax

Monday 18th March 2013

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The Government has abandoned controversial plans to impose a tax on employee- paid carparks in Wellington and Auckland after a backlash that rallied opponents ranging from unions to business lobbies.

Finance Minister Bill English said today in a statement that while the proposed tax was made as a matter of fairness, the government needed to be pragmatic in a situation where compliance costs may outweigh likely returns.

"Common sense has broken out everywhere," said Kim Campbell, a senior manager at the Employers and Manufacturers Association (Northern) and a member of the FBT Action Group formed to oppose the inclusion of a carpark tax under the Fringe Benefit Tax bracket.

The tax would have affected everyone from cleaners and hotel workers, to businesses, universities, schools, government departments, councils and hospitals.

"We set out to get rid of what is clearly a stupid tax. We came out really strong at the beginning because it is very difficult to get rid of a tax once it's been put in," Campbell said.

The FBT Action group raised concerns that the tax would be passed on to low paid workers, as well as decreasing safety if employees had to park off sight.

Revenue Minister Peter Dunne said today that for expected revenue of about $17 million, the difficulties around ensuring the policy would not have adversely impacted workers made it seem sensible not to proceed.

"We will continue to focus on fairness in the tax system but we also think that there are bigger and more important tax matters for officials to focus on,' says Dunne.

But Campbell says the FBT Action group has its eye on other potential tax changes, including one that could affect cellphones and laptops.

"This is only the beginning," he said.

The FBT Action Group are a mix of business and union representatives including the Council of Trade Unions, the Unite Union, the Employers and Manufacturers, Creative Agencies Association of New Zealand, car parking company Tournament and the Property Council New Zealand.

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