From RNZ · RNZ | Te Reo Irirangi o Aotearoa · · 1m
Investment Boost Cost Debate
Labour and National clash over Investment Boost's true fiscal cost.
In brief
Labour and National clash over Investment Boost's true fiscal cost. Labour claims $7.7b savings from canceling Investment Boost, but National's Finance Minister says the cost is only $5.5b, leaving a $2.2b gap. Originally reported by RNZ.
Investment Boost Savings Claim
Labour says cancelling Investment Boost saves $7.7 billion by allowing businesses to claim immediate 20 percent tax deductions on new assets.
National's Fiscal Cost Figure
National's Finance Minister Nicola Willis states Investment Boost costs only $5.5 billion over the forecast period, leaving a $2.2 billion gap.
Expert Analysis on Timing
Dentons partner Bruce Bernacchi explains Investment Boost accelerates tax deductions but reduces future depreciation, making the $5.5 billion net cost intuitive.
Simplicity Economist's View
Simplicity chief economist Shamubeel Eaqub says the repeal's timing and claw-back effects matter more than the net cost for accurate fiscal assessment.
Tax Expert Confusion
An unnamed tax expert states Investment Boost has no permanent fiscal impact, only a timing shift in depreciation, making the cost debate unclear.
The key point
Labour claims $7.7b savings from canceling Investment Boost, but National's Finance Minister says the cost is only $5.5b, leaving a $2.2b gap.
