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Pensioner supports tax reduction

Friday May 03, 2013 Written by Published in Economy

A Cook Islander who receives the Australian pension is voicing concern the tax here on receiving the NZ pension is too high.

Ngarima George, who now lives in Melbourne, said it is difficult for New Zealand beneficiaries to pay the current tax, and it will be even harder for them to make back-payments.

The Cook Islands government’s new tax compliance programme, which focuses on the 260 elderly here who collects the New Zealand superannuation or veteran’s pension, requires New Zealand beneficiaries to pay 25 per cent of the sum to the Cook Islands government.

While the Ministry of Finance and Economic Management (MFEM) says the tax has always been in place, many pensioners say they were not informed of this and some have since formed a Grey Power chapter to lobby for the removal of back taxes.

George said the tax rate on the pension is too high.

“The nation needs tax. But the 25 per cent is too high, people can’t afford it. That’s my personal opinion. Tax is good if implemented to help the development of the nation, but not when implemented to (the detriment of) people.”

He said it will be difficult for many pensioners to back-pay tax, which the government want to enforce as far back as the 2010-2011 financial year.

“That’s hard, because people don’t have that much. To go back that far, it’s hard.”

George lived in Australia for 18 years before 2005, and has been back and forth between Australia – where his children live – and the Cooks ever since.

He and his wife both qualified for the Australian pension, and the 67 year old says they each receive more than $700 a fortnight.

Tax on pensions in Australia depends on the person’s other sources of income.

George said he pays $20 to the government each fortnight, and his contributions are reviewed at the end of each financial year.

“They are flexible. If you’ve underpaid, you can increase your payments. If you’ve overpaid, you’ll get it back at the end (of the financial year).”

George has permanent residence status in Australia, which means he receives the pension only while he is in the country.

“When we leave for overseas, it stops. Even if it’s just for a week – for the simple reason that we are only permanent residents.

“To bring it back to Raro, we can’t. The agreement is only between Australia and New Zealand. Even though we have New Zealand passports, we can’t.”

George said he hopes to eventually be able to move back to the Cook Islands.

“If the Australian pension is portable, I want to come back home. It’s true there’s big money in Australia and the cost of living is very low. But you need a job to live,” said George, who hopes to return to the Cook Islands in 2015 after gaining Australian citizenship.

He said the Australian pension is generous, but since he moved there the laws have changed to make it more difficult for foreign residents to receive welfare.

“I would say, if you want to come to Australia, make sure you have a job. You wait years to qualify for all the benefitsthat’s hard,” he said.

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