New Zealand stories

Cash jobs crackdown by IRD

Sixteen cash-dominated industries including restaurants and electricians are being targeted by Inland Revenue as part of its crackdown on the underground "cash" economy.

Stuff,,

26 March, 2012

The tax department has released "benchmarks" or expected financial ratios for a range of industries, including cafes, painters or decorators, electricians, and taverns and bars.

Benchmarks for up to 34 more industries are expected later this year.

Tax advisers described the targeted sectors as ones dealing with a lot of cash and having "more scope" to under-report their income.

IRD assurance manager Tony Morris said the benchmarks were part of a 10-year plan to target the "hidden economy".

Cash trade jobs, crimes and wages under the table are thought to cost the Government more than $7 billion a year in lost tax.Although the IRD will not put a figure on the hidden economy, it is aiming to collect an extra $600 million tax over the 10-year period, and last year netted an extra $120m for its efforts.

Morris said the benchmarks would highlight what sort of gross profits businesses in various industries were expected to earn.

Being outside a benchmark did not mean a business was dodging its tax obligations but could reflect other reasons such as insufficient product markup or difficult trading circumstances.

He hoped business owners would see the benchmarks as a tool.

"A lot of people in these industries, they think they know what everyone else is doing in the industry and they think they have to do the same as them to remain competitive. The benchmarks are one way for us to give some transparency so they can see where they fit in the industry."

The Institute of Chartered Accountants said IRD had been using the benchmarks internally for some time so it was good to see them made public.

"The poor old PAYE earner has no choice to pay the correct amount of tax so it's pleasing to see they're following up on those industries that have a bit of flexibility in terms of what they can return," said Craig Macalister, the institute's tax director.

Wellington-based tax adviser Jeff Owens also welcomed the benchmarks, given the considerable risks involved of flying under the IRD's radar.

"If someone has a tax shortfall and it is subject to late payment penalties and interest, the effective compounding rate is somewhere between 25 and 30 per cent per annum ... That's before you have any penalties for tax avoidance or evasion. And then you end up with an amount that someone can't pay."

Tax Agents Institute spokesman Terry Baucher also hoped the benchmarks would be seen in a positive light.

"The IRD have enormous resources and often people don't realise just how big their resources are until it's too late. I think people should look at this as a good business tool and not just a `we're watching you, so beware'."

NZ's preventable death rate sixth worst

New Zealand rated sixth worst in new rankings focusing on preventable deaths due to treatable conditions in 19 leading industrialised nations.

Stuff,

4 April, 2012

France, Japan and Australia were the best and the United States the worst in the study.

If the US health care system performed as well as those of those top three countries, there would be 101,000 fewer deaths in the United States per year, according to researchers writing in the journal Health Affairs.

Researchers Ellen Nolte and Martin McKee of the London School of Hygiene and Tropical Medicine tracked deaths that they deemed could have been prevented by access to timely and effective health care, and ranked nations on how they did.

They called such deaths an important way to gauge the performance of a country's health care system.

Nolte said the large number of Americans who lack any type of health insurance - about 47 million people in a country of about 300 million, according to US government estimates - probably was a key factor in the poor showing of the United States compared to other industrialised nations in the study.

"I wouldn't say it (the last-place ranking) is a condemnation, because I think health care in the US is pretty good if you have access. But if you don't, I think that's the main problem, isn't it?" Nolte said in a telephone interview.

In establishing their rankings, the researchers considered deaths before age 75 from numerous causes, including heart disease, stroke, certain cancers, diabetes, certain bacterial infections and complications of common surgical procedures.

Such deaths accounted for 23 per cent of overall deaths in men and 32 per cent of deaths in women, the researchers said.

France did best, with 64.8 deaths deemed preventable by timely and effective health care per 100,000 people, in the study period of 2002 and 2003. Japan had 71.2 and Australia had 71.3 such deaths per 100,000 people. The United States had 109.7 such deaths per 100,000 people, the researchers said.

After the top three, Spain was fourth best, followed in order by Italy, Canada, Norway, the Netherlands, Sweden, Greece, Austria, Germany, Finland, New Zealand, Denmark, Britain, Ireland and Portugal, with the United States last.

PREVIOUS RANKINGS

The researchers compared these rankings with rankings for the same 19 countries covering the period of 1997 and 1998. France and Japan also were first and second in those rankings, while the United States was 15th, meaning it fell four places in the latest rankings.

All the countries made progress in reducing preventable deaths from these earlier rankings, the researchers said. These types of deaths dropped by an average of 16 per cent for the nations in the study, but the US decline w as only 4 per cent.

The research was backed by the Commonwealth Fund, a private New York-based health policy foundation.

"It is startling to see the US falling even farther behind on this crucial indicator of health system performance," Commonwealth Fund Senior Vice President Cathy Schoen said.

"The fact that other countries are reducing these preventable deaths more rapidly, yet spending far less, indicates that policy, goals and efforts to improve health systems make a difference," Schoen added in a statement.