Chartered accountant Geoff Stoddart says in his view, the government and CINSF have to be proactive on behalf of the CINSF 10,000 or so members and engage senior New Zealand legal representation to make representations to the NZ Ministry of Social Development.
Representing 10 per cent of the national wage bill, Stoddart says the superannuation fund is actually a negative for the economy.
“It all goes straight to New Zealand and straight to Russell Investments offshore. It doesn’t contribute to the economy here, because only around120 pensions are currently being paid.”
He says in recent times the government has incurred heavy criticism from a few dozen people who were getting taxed in Rarotonga on their NZ national superannuation once the local tax department identified what they were getting here.
A single taxation clip on an income source without docking the same person’s entitlement to another income stream is acceptable for almost everyone.
“But what we have looming here is that over 4000 people will be docked on their New Zealand Super even before tax comes into it. And double-taxed on their CINSF part if they stay in New Zealand.
“Because contributors paid tax on their contributions when their money went into the CINSF and New Zealand will tax it when it comes out. This taxation realisation is simply unacceptable to people, but the initial abatement is the heavier cost.
“What happened before was small fry.
Now it’s going to be huge. Any savings scheme (such as the CINSF) that loses all of its payout by deduction against another income stream which you would have got anyway, is not worth paying into.
“Its money down the drain.”
- Florence Syme-Buchanan