Sports organisations score from govt handouts but truck shop operators are nobbled by new lending rules

Finance Minister Grant Robertson, wearing his Sport and Recreation ministerial hat, can show he can be a big spender and draw voters’ attention to his largess each time he dispenses money from the funds under his control – or the control of an agency within his ministerial bailiwick.

Yesterday he announced the first distributions from the $265 million Sport Recovery Package, in contrast to colleague Kri Faafoi, who was winning his brownie points by crimping the incomes of mobile traders and truck shops.

Faafoi advised us that mobile-traders and truck shops since June 1 are covered by the lending protections in the Credit Contracts and Consumer Finance Act. This means that all mobile-traders must meet requirements such as assessing affordability, before agreeing to sell any goods on credit.

We can only wonder why it took Faafoi a few days before he cranked up his publicity machine to inform us how borrowers are being protected – by a cap on interest and fees at a maximum of 0.8% a day, for example.

Further rules governing mobile lenders , to take effect in October next year, will require directors and senior managers of these lending entities to be certified as ‘fit and proper’ persons and all mobile traders to be registered on the Financial Service Providers register, even if they don’t charge interest.

More information about changes to consumer credit law are available here.

Other Beehive announcements advise us that –

  • The Taxation (Annual Rates for 2020-21, Feasibility Expenditure, and Remedial Matters) Bill, just introduced to Parliament, proposes that businesses can get tax deductions for ‘feasibility expenditure’ on new investments.
  • A survey of more than 90,000 businesses that have received the wage subsidy show is has been a significant job-saver – 94% of firms say wage subsidy had positive impact on cashflow; 62% say support helped to manage non-wage costs like rent; and 89% say the wage subsidy meant they would be able to keep operating for the foreseeable future.
  • Police Minister Stuart Nash attended a ceremony where officers of Recruit Wing 337 were formally sworn in at the Royal New Zealand Police College without the normal support of their family and friends as witnesses (because of the Covid-19 response measures which the 57 new cops will be expected to police).

Harking back to the distributions to sports people, it should be noted that the beneficiaries may well be struggling with their cash flows but the money is not doing much to deal with poverty.

Robertson said Sport NZ has announced $4.6 million in funding will go to the Wellington Phoenix, NZ Warriors, Super Rugby teams and the ANZ Premiership Netball League and teams. The investment is to help them return to competition and keep the teams viable.

He didn’t say so, but the figures he supplied show the money gives effect to the government’s efforts to favour the female gender.  The Wellington Phoenix will receive $950,000 and Vodafone Warriors $200,000 while $1.25 million will go to New Zealand Rugby for its five Super Rugby teams and Netball New Zealand will receive $2.2 million to support the running of the ANZ Premiership Netball League and teams.

The vast bulk of the first phase of funding allocated in the recovery package, approximately $78 million, will be devoted to community, regional and national organisations, Robertson said.

Is there any other sort?

Oh – Robertson also said the process for allocating this funding “will be made in the near future”.  We can’t wait to learn the details.

As for the new police recruits, the ceremony which Nash attended gave him a platform to draw attention to the anticipated cost of the Covid-19 response for Police – it’s $124 million, largely from the need to purchase personal protective equipment and to cancel annual leave.

He also drew attention to the diversification of the Police frontline: 45% of the new officers are female, 19% are Maori, 7% are Pasifika and 12% are Asian. The youngest is 19 years old and the oldest is 47.

There are now 10,072 fulltime officers in Police, an increase of around 14% since the start of the 2017/18 financial year.

Replacing his Police hat with his tax one to talk about the new tax bill, Nash said the government already has introduced R&D tax credits to support investment in research and development. The new proposal is the next step in giving businesses the confidence to invest in growth – even when some of their ideas don’t work out.

The bill also contains proposals that have previously been subject to public consultation:

  • New rules governing purchase price allocation, where parties to the sale of two or more assets with different tax treatments allocate the sales price between the assets for tax purposes.
  • New rules from the ongoing review of the taxation of land, particularly in relation to investment property and speculators. The changes will improve efficiency of the tax system and encourage productive use of land and properties.
  • Allowing dairy and beef cattle farmers who have unexpected taxable income as a result of their herd being culled (in pursuit of eradicating Mycoplasma bovis from New Zealand), to evenly spread that income forward over six years.

More information is available here. 

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$4.6 million financial relief for professional sports

Sport and Recreation Minister Grant Robertson has welcomed the first release of funds from the $265 million Sport Recovery Package announced as part of Budget 2020.

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