The budget news is largely uninteresting: a few key promises have been delayed, funding for all kinds of the usual things are up, and unlike most of National's budgets, this one at least appears to be balanced. There is one funny bit though:
The most ridiculous policy is Winston forcing the Government to make horse purchases tax deductible if the horse is good looking.
No I’m not making it up. That really is the policy. A horse can be deemed tax deductible “by virtue of its bloodlines, looks and racing potential”. IRD is going to need a new division that can assess how good looking a horse is, and hence whether it can be tax deductible.
The Taxpayers Union elaborates on the change though, and it's not just for laughs. The general principle behind full expensing of capital investments seems to be a good thing.
"Allowing full expensing of capital investments is the best tax reform no one has heard of,” says the Union’s Economist Joe Ascroft.
“This is the rocket Donald Trump has put under the American economy in its recent tax reform. The economic advice is that it would massively increase business investment in capital and accelerate productivity growth. Productivity growth is the most relevant factor in determining income growth – the measure will lead to increased wages.”
“The obvious question is why the Government would choose to favour just a single industry or special interest? That’s an outrageous way to run a tax system, and isn’t fair to the hard working employees and employers in other sectors.”
The Taxpayers Union also added a note at the bottom of their press release to clarify that full capital expensing also doesn't really increase overall tax breaks.
The fiscal impact of full capital expensing is largely temporal. Full expensing pulls forward any existing tax benefits into a single year, rather than increasing the total value of any tax benefits.
All said and done, it's a good laugh and goes to show just the kind of crazy stuff that someone with power like Winston can pull off. It's just a pity he's too selfish to use it to benefit anyone but himself.