The NZ Newswire report today on the gains to be had by both New Zealand and Australia if they mutually recognise each other’s franking and imputation credits gives real oxygen to the issue, says the Employers & Manufacturers Association.
“Its great to see the research numbers stack up high in favour of doing this,” said EMA’s chief executive Kim Campbell.
“The report by Sydney’s Centre for International Economics and the New Zealand Institute of Economic Research shows mutual recognition would propel the trans-Tasman economy upwards by $A5.3 billion or $NZ6.9 billion by 2030.
“Why wouldn’t you suffer the reported short-term hit to tax revenues to achieve this? The report says the hit would be just $NZ494 million for Australia and $NZ156 million for New Zealand.
“We understand it was sent to the productivity commissions of both countries last Monday as a contribution to a project being carried out by them.
“We have supported our government’s work to get this accepted in Australia for over a decade. A draft report is said to be made public on September 18.
“A change would let people claim personal refunds on the tax that companies have already paid on the dividends they distribute to their shareholders.
“Currently a trans-Tasman imputation regime permits trans-Tasman companies to allocate franking or imputation credits but shareholders are only able to use credits from their home jurisdiction, rather than receiving a full credit for the company tax paid in either country.”