Latest news with #ThinkBig
Kiwiblog
4 days ago
- Business
- Kiwiblog
It's a tax delay, not a tax break
Newsroom reports: It's audacious. It's astounding. We're doing the time warp again. Even ministers struggled to comprehend the scale of the tax incentive scheme they'd signed off in the Budget. Shane Jones left his own noisy beer-and-crayfish Budget night party, upstairs in Parliament Buildings, to return to the House to check with other ministers whether there really was no cap on the size of an asset that could receive the 20 percent tax deduction. Then he calls back, jubilant. Yes, he confirms, even a massive gas rig will be eligible. 'These gas rigs, it's a billion dollars for one. It's been 600 or 700 hundred million, can go up to a billion.' Yes, he agrees, combined with the $200 million for equity shares in gas fields, it's Think Big all over again. 'It's certainly got elements of the Crown coming back into the market in a way that Muldoon formally helped develop natural resources and de-risk co-investors,' he says. Got your eye on a fleet of company cars? Or a nice shiny skyscraper to house your business? Commercial buildings are also eligible. Developers are just talking through the nitty-gritty, now, like whether that extends to seismic strengthening. There's a debate to be held about whether or not there should be a cap on the Investment Boost scheme, but the article sort of misses the point when it paints this as a bottomless hole. The scheme just really allows depreciation to be claimed earlier than is normally the case. This affects cashflow, but doesn't in the long run change the amount of tax paid. Let's say you purchase a $100,000 asset with a 20% straight line depreciation rate. You would currently get the following 'back' for it: Year 1 – $20,000 x 28% = $5,600 Year 2 – $20,000 x 28% = $5,600 Year 3 – $20,000 x 28% = $5,600 Year 4 – $20,000 x 28% = $5,600 Year 5 – $20,000 x 28% = $5,600 So after five years you have claimed back $28,000 from tax. Under the new scheme it is: Year 1 – $40,000 x 28% = $11,200 Year 2 – $20,000 x 28% = $5,600 Year 3 – $20,000 x 28% = $5,600 Year 4 – $20,000 x 28% = $5,600 So after four years you have also claimed back $28,000 in tax. The same amount of tax gets paid. From a business point of view, it is definitely useful for cashflow getting that extra 20% in Year 1 – especially for longer lived assets which might only depreciate say 7% a year. From the government's point of view of view, it doesn't cost much in the longterm. There is a cash flow impact as you get less tax early on, but over time you end up collecting the exact same amount of tax. The only real fiscal impact long-term on the government is the cost of borrowing over the time period. If we take the example above, the government has to wait five years for its $5,600. It borrows at 3.5% so the cost is $196 a year or $784 so a $100,000 asset costs the government around $800 not $20,000.
Newsroom
22-05-2025
- Business
- Newsroom
Govt's ‘Think Big' Investment Boost: There. Is. No. Limit.
Go now, says Nicola Willis. 'It starts today.' The economic growth minister has waved the start flag on a race to the stars for commercial building developers, oil and gas exploration firms, dam builders and right down to the smallest sole traders. Ahead of the Budget, Newsroom had reported the Government would support business cashflow and productivity growth with some form of accelerated depreciation; accountancy firms like BDO and Xero had backed such a policy. But nobody anticipated this scale. This is budgeted to effectively subsidise businesses to the tune of $6.6 billion dollars over four years for investing in their assets, or bringing in overseas investment. By the Government's own admission, it's inspired by the Think Big schemes of Willis' predecessor, Sir Robert Muldoon. Businesses will be allowed to immediately deduct 20 percent of the cost of a new asset from their taxable income, on top of depreciation. This means a much lower tax bill in the year of purchase. The only real caveats are that it must usually meet Inland Revenue's definition of a depreciable asset, so residential property, intellectual property and inventories are excluded, and it must be new to New Zealand. For businesses buying those assets, Willis says there is no limit. At least, until there is a limit. For it seems likely the scheme could blow out; at that point, the Government will have to cap it or shut it down. But Willis isn't yet contemplating that possibility. She has budgeted $1.7 billion a year. The details of what happens when that money runs out haven't been nailed down. Inland Revenue admits, in its regulatory impact statement, that there's been no consultation on the design of this scheme. Run out, it surely must. It would take just a handful of billion-dollar oil rigs or commercial developments to swallow up most of that money in any given year. Or all New Zealand's 500,000-plus small businesses each making a paltry $10,000 investment in computer hardware or machinery. Added to that, it's understood the Minister and Inland Revenue are yet to decide whether earthquake remediation to existing commercial buildings will be included; 20 percent of that work could swallow up $1.7b in a blink. This is intended to woo foreign investors, and it should work. With the promise of a 20 percent tax deduction dramatically lowering their effective marginal tax rates, they'd be mad not to. Such schemes are common around the world, but New Zealand's one is unusual in including commercial property. Not to mention petroleum assets, which might yet to be found to be a subsidy in breach of our international agreements and free trade deals. Of 38 OECD countries, New Zealand has some of the highest costs of capital for tangible assets (including plant, machinery and equipment), and the highest cost of capital for non-residential buildings. The Treasury and Inland Revenue estimate Investment Boost will improve economic growth, lifting New Zealand's GDP by 1 percent, wages by 1.5 percent and the country's capital stock by 1.6 percent over the next 20 years, with around half these gains expected in the first five years. In addition to those depreciable assets defined under the Income Tax Act, the Government has also added in oil and gas mining assets, and certain primary sector assets like fencing, planting of listed horticultural plants, and improvements to aquacultural businesses. The oil and gas mining assets are understood to have been signed off by associate finance minister Chris Bishop, as Willis declared a conflict: her father James Willis is a lawyer representing oil and gas interests. Resources minister Shane Jones is jubilant. The inclusion of mining wasn't in the headline press releases, but could be even more valuable to the sector than the $200m set aside for the Government to take equity shares in gas fields. Is this Sir Robert Muldoon's Think Big again? 'It's certainly got elements of the Crown coming back into the market in a way that Muldoon formally helped develop natural resources and de-risk co-investors,' Jones tells Newsroom. BDO tax partner Iain Craig attended the media lockup in the Beehive with Willis, ahead of Thursday's Budget. 'The Investment Boost initiative is a bold move; a positive tax incentive for New Zealand businesses with no upper limit on expenditure which could give businesses the confidence to invest in new assets of varying scale,' he tells Newsroom. 'It also applies to new commercial and industrial buildings which currently have zero percent depreciation. What will be interesting to see is if the move is sustainable over the long term, or is a short-medium term initiative to help stimulate business growth.'
Time of India
12-05-2025
- Politics
- Time of India
'What kind of son have I created?': A look at Donald Trump's relationship with his mother Mary on Mother's Day
On his first day back in the White House, President Donald Trump made a personal statement through the décor of the Oval Office, filling it with sentimental items that spoke to his deep family ties. As he signed a series of executive orders just hours after taking the oath of office, the Resolute Desk became the backdrop for framed family portraits and meaningful memorabilia. Among the items on display were photographs of his parents, Mary Anne and Fred Trump, whose influence shaped his journey into the real estate world. These images, nestled alongside a collection of challenge coins and military insignia, offered a glimpse into the president's personal history and the legacy of those who helped guide him to power. His father, who died in 1999, and his mother, who passed away in 2000, are both prominently featured in this intimate arrangement, reflecting a side of the president not often seen in the corridors of power. A Less Examined Influence For years, Donald Trump has frequently spoken about the profound impact his father had on his life. Fred Trump, a tough and ambitious real estate developer, pushed his son hard, leaving an indelible mark on his personality and success. In his 2007 book Think Big , Trump wrote, 'That's why I'm so screwed up, because I had a father that pushed me pretty hard.' In contrast, Mary Trump has often been depicted in a more passive light, a quiet, devoted housewife who fulfilled her role without imposing much influence on her son's ambitious nature. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like [Click Here] - 2025 Top Trending Search - Local network access Esseps Learn More Undo However, such a portrayal risks oversimplifying her role in shaping Donald Trump. Mary Trump: A Woman of Resilience Mary Anne MacLeod, born in 1912 on the rugged Isle of Lewis in Scotland, grew up in an environment marked by poverty and hardship. The youngest of ten children, her early life was shaped by the challenges of subsistence farming and the impact of World War I, which devastated the local male population. At the age of 18, Mary emigrated to America, seeking better opportunities than those available in her isolated Scottish hometown. She arrived in New York in 1930 and worked as a domestic servant before marrying Fred Trump in 1936. The couple settled in the affluent neighbourhood of Jamaica Estates in Queens, where Mary quickly adapted to the role of a supportive housewife. While Fred Trump focused on building his real estate empire, Mary managed their household and became known for her social gatherings and occasional charity work. Despite this, her son, Donald, would later recall that his mother 'wanted me to be happy,' but that she did not play as active a role in shaping his business ventures or ambitions as his father did. A Complex Dynamic During the late 1980s, as Donald Trump's very public divorce from Ivana Trump unfolded and his affair with Marla Maples made tabloid headlines, his mother, Mary Anne MacLeod Trump, was reportedly mortified by her son's conduct. According to a Vanity Fair account, she once turned to Ivana and asked plaintively, 'What kind of son have I created?' Donald Trump's relationship with his mother, though less visible, was undoubtedly shaped by moments of emotional tension. One key event was Mary's near-death experience after complications from childbirth when Donald was just a toddler. This traumatic episode may have had a deep psychological impact on the young boy, as he was at an age when children begin to form a stronger sense of independence from their mothers. Psychologists suggest that disruptions in the maternal bond at this stage can lead to emotional insecurities that later manifest in attention-seeking behaviour. While Fred Trump's influence was marked by stern discipline and a focus on achievement, Mary Trump's role seems to have been more about creating a sense of stability, even if she wasn't as directly involved in her son's professional pursuits. As his biographers note, the absence of a strong emotional connection with Mary may have contributed to Donald Trump's reliance on his father's approval and guidance, while his mother remained a more peripheral figure in his life.
NBC Sports
03-05-2025
- Sport
- NBC Sports
Think Big rallies to win Twin Spires Turf Sprint
Michael Stidham trainee Think Big surges late to cross the wire first in the Twin Spires Turf Sprint at Churchill Downs.
The Citizen
30-04-2025
- Business
- The Citizen
Trump tariffs created unprecedented uncertainty — trade expert
The trade expert said the Trump tariffs destroyed all levels of trust and confidence in the US and effectively shot the US in the foot. US President Donald Trump's tariffs have created unprecedented uncertainty and are reshaping the global economy as his administration wields them aggressively as a political and economic tool, with South Africa among the many countries caught in the crosshairs. Trade economist Matthew Stern, founder of DNA Economics, who previously worked for the Department of Trade, Industry and Competition, National Treasury and the World Bank, says the shocks Trump's tariffs are having on the world's trading system are significant, substantive and far from fair. He was speaking at the latest PSG Think Big webinar, where he unpacked the erratic and far-reaching implications of Trump's protectionist policies. 'Looking at America's growth and development over the last 90 years, America has undoubtedly been one of the greatest beneficiaries of a world trading system that is open and enables and facilitates trade.' Stern says while Trump's justification for tariffs lies in correcting trade imbalances and reviving American manufacturing, he believes the policy is as much political as it is economic. 'Trump will eliminate the trade deficit, but this will not be a good thing as it will stifle the US economy and innovation. 'Trump sees tariffs as something that he can impose on countries, whether they are friend or foe, and he sees this as a way to get leaders and countries to come to Washington, bend the knee and engage with him on a much wider variety of issues that for whatever reason aggrieve him.' ALSO READ: Global trade war's potential blow to Southern African Customs Union revenue SA not the only country suffering under Trump tariffs Stern pointed out that South Africa's experience reflects the broader volatility created by this approach. Before the 90-day pause, the US included South African imports in a sweeping 30% import tax. While the potential impact on overall exports is far from insignificant, the broader uncertainty it creates for investors and exporters is the real concern, he said. The US' trade with South Africa is only about 0.4% of its trade with the world, and therefore, South Africa does not have enough economic muscle to retaliate. 'The much bigger issue is how this plays out through the rest of the world economy. The longer, larger global impacts are important. They are far more worrying than the short-term impacts that this might have on South Africa's exports to the US.' He said the International Monetary Fund's (IMF) recent downward revision of South Africa's growth forecast is evidence of this. 'This week, we have already seen the IMF halve their forecast growth rate for South Africa for the next year, from a paltry 2% to around 1%. That is a 1% cut that we cannot afford.' ALSO READ: IMF warns all countries will be caught in crossfire of trade war Retaliating in kind to Trump tariffs will not work for SA However, Stern said, despite these risks, he believes retaliating in kind would be a strategic error for South Africa. 'A wide scale US-style tariff increase is not going to work for us as it will hurt South African consumers. It will provoke the beast in Trump, and it is unlikely to have any long-term positive gains.' Instead, he advises that South Africa use a multipronged strategy that includes deepening trade ties with historical partners, such as the European Union (EU), maximising opportunities in African regional trade, and exploring new relationships with high-growth markets like China and India. South Africa does not currently have trading agreements with the Brics countries, he pointed out. 'We already have a very deep historical and strong relationship with the EU. Working with the EU to establish or deepen our existing trade relationships is a good place to start.' Regional trade can also fill the gap, he said. 'We have a nascent free trade agreement in place across all of Africa. Investing more time and effort in dealing with outstanding obstacles to trade in Africa is equally important.' ALSO READ: Reserve Bank warns global trade tensions can cut GDP by 0.7% SA must find other opportunities with EU and Brics There are also opportunities to be found in the disruption itself, even in the US, Stern said. 'We need to look out for spaces or products where perhaps the tariff that they impose on China is two or three times the tariff that they impose on South Africa, and it is on something that we actually produce.' He said that despite all the challenges, this period may serve as a much-needed catalyst for introspection and self-sufficiency. 'Rather than focusing on the local market, this creates a massive opportunity to look at the region where we are in, Southern Africa and consider the real obstacles to developing regional value chains.' Looking ahead, Stern cautioned that the US may remain unpredictable for years to come. 'We will be dealing with a much more nationalist agenda coming out of America. We already see the damage that Trump is doing not just to the world trading system, but the multilateral system in general, whether we are talking health, development, sport or trade.' ALSO READ: Trump tariffs' seesaw impact on Southern Africa World can control how it responds to Trump tariffs However, he pointed out, while businesses and investors cannot control global trade policy, they can control how they analyse and respond to it. 'As businesses and investors, we must try to get a sense [of ] which sectors are going to be affected most. We must watch that carefully and in real time because they change daily.' As uncertainty continues, Stern encourages investors to move beyond crisis response and take a forward-looking approach. 'Our analysis must also move on from the destruction and start to think about where some of these new openings and new opportunities might emerge as a result of some of these global shifts.' While the US will now sit with a huge amount of soya beans that used to be exported to China, Stern warns that countries like South Africa must also watch out that this extra stock is not dumped here.
