Indian Weekender canvassed a cross section of the Indian community for its reactions on the National government’s second budget, Budget 2010. Most respondents gave the budget a thumbs up while some were cautiously positive being a bit wary of the inflationary consequences some of measures are bound to result in. A few of the respndents, though, took a bleak view, saying it would hurt low and medium income earners. Here are some of the responses:
Ashok Darji MNZM ex-president NZICA who currently operates a successful superette business in central Auckland considered the current budget as okay – given the way the economy is currently performing. He said the budget was “reasonable” for everyone and felt that the the GST rise will have a more pronounced affect on big ticket items like plasma TVs, cars and other luxury items. When asked if the budget would affect his own superette business, he said sales of daily consumption items would not be affected – most items at the superette level were around the $5 mark.
Prominent jewellery and fashion products businessman Harish Lodhia considerable gave the budget a thumbs up. Mr Lodhia said this budget was well balanced and was future focused. He was also optimistic about his own business and felt that business would improve.
Senior community leader and Chairman of the Bharatiya Samaj, Jeet Suchdev QSM, a felt that this budget was a “failure as it is not a budget benefiting the common people”. He said he personally felt for the common man and seriously hoped that the budget would have done more for the masses. The increase in GST, cut down on the early childhood sector funding and the unabated borrowing by the government were most concerning, he said. Mr Suchdev felt that one of the persons getting the most benefit of this budget was the Prime Minister himself. For the common man he felt it is giving with one hand and taking from the other – thus leaving the person worse off.
Ram Vasisht, a leading commercial insurance specialist and former managing director of New India Assurance in New Zealand considered the budget to be overall a good budget. Asked if there was anything more the government could have done, he said there could have been more emphasis on new job creation. He suggested that KiwiSaver should be made compulsory and the administration of these savings should be brought under the direct ambit of the government and not in private hands as the case now. He recommended KiwiSaver should be compulsorily invested within New Zealand thus increasing investment which would have a positive effect on job creation.
Kuldip Arora who runs a couple of Nandos restaurants in Hamilton and also owns a property development business in Auckland gave this budget full marks. He said even though he is in the property business himself – he felt that taking the depreciation off was a balanced move especially since personal and corporate tax rates have been lowered, thereby leaving more money in everybody’s pockets.
Daljit Singh JP who is a real estate agent with Barfoot & Thompson and actively involved in the management of Sikh Temples at Otahuhu and Takanini commented that the tax switch in the budget favours the well paid and unfairly affects low and medium earners. “Despite the tax cut lower and medium income earners are not fully compensated for the increase in GST. It is not widely realised that the government is funding the tax cut by borrowing money overseas. The government has not come up with any plan to grow the economy but is hoping that the tax cut will themselves result in economic growth. I can’t see how the budget addresses any of the interest of the ethnic sector. I am worried about the cut in the early childhood education and the health,” he said.
Mandeep Gill, top sales person with the award winning Ray White Manukau (Don Ha Group) office gave full marks to this budget. He felt that all sectors of the population had been taken care of and this would have a positive long term effect on the overall economy of the country. When asked particularly as to how real estate prices would be affected, he said it would make no difference to the residential real estate market and might have some insignificant effect on the commercial segment. Mr Gill further commented that overall consumer confidence was high and they were processing a record number of transactions every week which was a clear indication of the direction the economy is taking.
Roshan Nauhria MNZM who runs a successful multi-million dollar business in the concrete precast and steel sector felt very buoyant, especially due to the reduction in corporate tax rates. He felt the current government had presented the best ever budget which had positive wide ranging benefits for all. He was confident that every sector of the population had been presented with extra spending power in their pockets unlike the past government which increased GST from 10 to 12.5% without decreasing the income tax rate. Mr Nauhria is also the president of the Bharatiya Mandir in Balmoral and also heads United Indianz.
Harshad Patel, President of the Auckland Indian Association based out of the Mahatma Gandhi Centre gave this budget a thumbs up. His said even though GST had gone up, overall personal and corporate tax had come down, thus translating into spare money in everyone’s pockets. He also operates a successful Lotto business and when asked if this budget would have any effect on his business, he said Lotto would be unaffected but maybe the other business he has of magazines, toys and gifts would be affected to some extent.
Thakorbhai Parbhu, a respected senior member of the community who leads a semi retired life working as a legal consultant, commented that GST was the most efficient tax collection method and thus supported this move. He also supported the abolition of the depreciation on buildings.
Ranjana Patel QSM, a senior community leader gave a green light to this budget as she felt that the budget had achieved its purpose. She also felt that this was a real budget which had dealt with all the real issues and taken out all the prevailing unfairness and other discrepancies. She felt that in the past it was more about bureaucracy but this budget was a step in the direction of making it equal for all New Zealanders. She considered the drop in corporate tax rates as very motivating for the local businesses and this would want companies to grow in New Zealand which would be a good thing. Since she is closely associated with the health sector through East Tamaki Healthcare, Indian Weekender asked her how she felt the budget had dealt with the healthcare sector. “Government is trying to do something but changing entrenched systems in this area are a bit difficult,” she said and that she would wait and watch to see how effective those steps prove to be.
Manpreet Sodhi (Manu) a cabbie with Corporate Cabs considered this as a promising budget which would have long term positive effects. The nature of the job gets Manu to hobnob with the top business leaders of this country and he commented that almost everyone had spoken highly of this budget. He was also personally impressed with the personality and flair of Prime Minister John Key.
Paul Singh Bains President of the NZICA was not particularly impressed with the budget. He felt that the well to do would benefit and the lower to middle class would suffer. He was confident that the GST increase would negatively affect most Indians as they are in the lower to middle class.
Virender Bralli, a leading liquor retailer, community leader and sports club owner of South Auckland felt that this budget would adversely affect their business which is already under pressure due to increased competition. The rise in GST will lead to increase in prices of all products thus making it difficult for the common man to buy. He also feared that the duty on liquor will go up in June which will multiply the negative effect of this budget.
Outgoing president of the NZICA, Ratilal Champaneri felt that the middle class was worst affected as the increase in GST would have an adverse effect on them.
Jaspal Singh termed the budget “as best as it could get” in the given economic environment. He works as an office assistant earning $52,000 a year and his wife is a retail assistant earning $35,000 a year. They have a mortgage payment of $820 per week and after hearing the radio talk back shows he went to the site www.taxguide.govt.nz to calculate how he would be affected. As per this site, the Singh family will be $37.92 per week better off and nearly $2000 better off over the year. Mr Singh said the tax rate of 17.5% up to a salary of $48,000 was pragmatic on the part of this government and felt that there would be very few countries in the world that had such an encouraging tax rate for the middle class.
Varinder Singh an IT professional working in a senior position at the University of Auckland as Sytem Design Manager, felt that the tax rate of 17.5% for income up to $48,000 was a very pragmatic move on part of the Government which will positively affect the middle income earners who were reeling from the after effects of recession.
KiwiBank manager Shashi Srivastava said that by virtue of lower taxation, the budget would likely spur expenditure, which was good for the retail industry. He said the budget was a positive one and would encourage both investment and growth in the New Zealand economy.
Avtar Singh Andrew who owns a chain of Supervalue Supermarkets feels that this budget will adversely affect the lower income groups and benefit the rich.
The increase in GST will put pressure on their cash flows in the supermarket business, but felt that overall sales will not be affected.
Ace Golfer and Four Square Supermarket owner Kharak Singh considers this as a positive budget and a step in the right direction. The reduction in income tax rates will surely add to the disposable income in people’s pockets and the increase in GST will not eat up all this surplus. He also did not see any major issues with the scrapping of the depreciation on buildings.
--
I am pleased with the budget. It represents a positive change for every New Zealander with lower tax, while businesses will be pleased also with the drop in company tax. These changes in our tax system will incentivise people to work hard and invest more in their business. The property depreciation and tax changes are not a surprise given the rorting taking place. Those in Auckland will like the progress for broadband and rail electrification too. Over the next five years, I hope to see that top rate of tax for individuals and trusts drop to the 28c corporate rate too.
Aaron Bhatnagar, Auckland City councillor
--
Very clever and economic growth focused budget. This budget creates a fairer tax system that encourages savings and productive investment, keeps skilled Kiwis in New Zealand, and helps families to get ahead.The reduction in income, company and investment taxes – and the hike in GST – should encourage savings and restrain spending. It is impossible to please everyone, but the National Government has tried to spread the benefits to wider cross section of the society. This should cheer the nation in the present global economic turmoil.
Ram Rai, Kiwi Indian and Businessman
--
The budget decimates the lower and middle-income workers by increasing the GST as it will result in inflation accelerating to 6%. To further inflict destruction of the low and middle-income workers the ominous and enormously unpopular Emission Trading Scheme (ETS) to be introduced soon will rocket propel the inflation and cause dire economic and social hardship to the most vulnerable in our society – the lower and middle-income earners. The higher income earners are the only winners. What the government should have done to help the lower and middle workers was to have no increase in GST, taxation thresholds of income up to $14,000 and from $14,001 to $40,000 be taxed at zero and 12.5% respectively.
Alton Shameem, President of Fiji Club of New Zealand (FCNZ)
--
Budget 2010 has come at a time when New Zealand is emerging out of the recession. In my opinion it is a budget that has something for everyone. It rewards those who work hard, as employees, employers or businesses. It leaves all of us with extra cash thanks to the tax cuts. This budget is a bold effort by this government to boost the economy and encourage people to save at the same time. Allocation of money in Science was much required as robust scientific progress is a precursor to economic growth. For People of Indian origin this budget brings the incentive to go a further mile. However the changes in GST may bring some logistic difficulties to businesses.
Dr Anil Channa, immediate past president, Manukau Indian Association; Deputy Chairman, Global Indians
--
The budgets biggest announcement on income tax changes send an excellent sign suggesting economic growth for New Zealand; about the reward of working hard and saving more, however the disproportion of $4 vs. $4000 is basically bordering on “inequality” in anyone’s mind. Are we therefore looking at more migration to Australia or will this opportunity see rise in pay packs to save the skilled workforce who are still considering the move? Inland Revenue will not have an easy job finding tax evaders, but it’s worth a try. Exemption of GST on food should have been allowed maybe it’s in the “too hard” basket. Only time will tell.
Ann Pala QSM, community advocate on social development issues; Co-Director, WinMac Computer Solutions Ltd.
--
Having just come out of recession, it is hard for any government to please the voters when the budget comes out. When comparing apples with apples, it is a fair enough say that from this budget everyone will be receiving some sort of tax cuts. I believe, and time will tell, whether this budget will deliver debt reduction, lift New Zealand productivity, increase household savings, encourage first home buyers with emphasis on investment in infrastructure and attract investors into the New Zealand economy to be seen as one of the places to live in the world.
Sunil Kaushal, Waitakere resident; board member of Waitakere Indian Association and Waitakere Ethnic Board.
--
The John Key government seems to preparing a lot early for the next term. It is good that he has brought the tax threshold down across the board. Even after GST increase, people will have some more money to spend. I hope that businesses (and people in higher income groups), who got the highest tax cut, invest that back into business which in turn could create more jobs and get the economy moving. I think apart from tax cuts, there is nothing fundamental done to secure the momentum of economy going in the long term. Overall, it is an okay budget that will help National swing some more voters away from Labour.
Prashant (Shaun) Tijore, financial planner and event organiser
--
I do believe that this budget is a positive one, and is a step toward economic growth and increase in productivity. There have been talks about this budget leading to investment in other productive areas of the economy, including exports. As a business that provides export services, I am hoping that it is true, and that the high income earners who benefit from this budget, will invest in export oriented projects/businesses. My immediate reaction to this budget was ‘is this for real! What’s the catch Mr. English?’ I am not sure if that concern has been addressed yet – and I hope that the proverbial saying “if it’s too good to be true, then it most probably is,” does not hold true for this budget!
Raga D’silva, Managing Director, Global Village Unlimited
--
This budget’s theme is basically to encourage saving. By providing tax cuts across the board the government is putting more money into one’s pocket and on the other hand it has increased GST, which should act as deterrent for expenditure. Thus one would end of saving the extras. The downside here is it can raise inflation, if expenditure is not controlled. For corporates, the tax cut is definitely welcome. With the change in laws pertaining to the property market a conscious attempt has been made to shift the focus of investors from property market to other markets like the finance market or stock market. This move (if it works and is progressed further) will enable all New Zealand companies to generate funds within the country which in turn will improve the Capital Markets in the country.
Harish Srinivasan, management professional
--
I am looking it as a positive move by national government. They have tried to cover the entire spectrum from lower to higher income. Even opposition leader can’t find anything against it – of course they have something to say but nothing major. As a property investor I am disappointed with the depreciation part, but as a higher income group will be able to get some tax benefit compared to tax paid in past. Short and sweet, one more term of National government can bring some positive changes for the country.
Deepesh Parekh, management professional
ISSUE
Leave a Comment