New investment tax regime
The government is introducing a fairer regime for taxing New Zealanders who invest in New Zealand and overseas which will mean a tax cut of $110 million a year from next April, Finance Minister Michael Cullen and Revenue Minister Peter Dunne announced this week. The system is designed to remove a tax advantage arising from investing in certain countries. The changes will also remove distortions that favour sophisticated direct investors over those who choose to invest through managed funds and unit trusts. The Ministers said the government's decisions followed extensive consultation after the Stobo Report, and listening to the concerns of the investment community. The Ministers believed the new regime struck the right balance. The changes are in three areas: 1. The new rules will remove a number of tax disadvantages for investors using managed funds, many of whom are ordinary, middle-income savers. 2. Capital gains on New Zealand and Australian shares held via a vehicle like a managed fund will no longer be taxed. 3. Offshore investment. Currently, individuals who invest directly in one of the eight so-called "grey list" countries will generally pay tax only on dividends. The new rules will require a reasonable and capped level of tax to be paid by direct investors who have substantial share portfolios outside Australia. This is not a full capital gains tax.

Plan to manage water resources
Government ministers this week announced a significant strategy to protect and improve New Zealand's freshwater resources. Forestry Minister Jim Anderton and Environment Minister David Benson-Pope revealed Cabinet had approved a staged package of actions to improve the sustainable management of rivers, lakes and ground water. The Sustainable Water Programme of Action will develop, for the first time, a strategic and nationally consistent approach to managing valuable freshwater resources. The ministers said there was a need to ensure efficient freshwater use; and to protect it from contamination from bugs, sediment, nutrients, stormwater and subdivision run-off. Central government will take a greater role in freshwater management including setting national priorities and direction, while working closely with parties with a significant interest. Actions agreed include the establishment of a leadership group within three months; and creation of policy on how to manage freshwater and protect nationally outstanding rivers, lakes and streams, including the drafting of a National Policy Statement and National Environmental Standards. Jim Anderton said the programme is about water management, not water ownership and that water will remain in public ownership. The government wants to ensure New Zealanders have fair and equal access to water and to ensure that economic growth occurs in a sustainable way, with the environment protected. The Cabinet Paper and more information is available at www.mfe.govt.nz or www.maf.govt.nz.

Afghanistan deployment extended
Prime Minister Helen Clark this week announced the extension of New Zealand's Defence Force Provincial Reconstruction Team (PRT) deployment to Afghanistan for a further 12 months. The team will continue to provide assistance in Bamyan province until 30 September 2007. New Zealand has been part of military operations in Afghanistan since December 2001, and the PRT has been in Bamyan province since September 2003. Helen Clark said she saw first hand the valuable contribution that Defence personnel are making to improve security and rebuild services and infrastructure in war torn Afghanistan, when she visited in October 2003. New Zealand is also contributing to Afghanistan's development through NZAID assistance worth over $20 million to June 2006 and with a further $15 million over the next three years, Helen Clark said. The Police mission in Afghanistan, providing training and mentoring, has also been extended to 2007.

Immunisation programme working
Health Minister Pete Hodgson this week announced new funding to extend the Meningococcal B immunisation campaign after new data revealed a dramatic drop in disease rates. A total $22 million has already been allocated in Budget 2006, to push the programme beyond June 30 including to all new newborns and under-fives to 2009. This week also marked the milestone delivery of the 3 millionth vaccine dose. Health Ministry data shows that in 2003, the year before the campaign started, there were 189 cases of epidemic strain meningococcal disease in under 20 year olds. This dropped to 82 cases last year - a 57 per cent reduction. Mr Hodgson said the rapid decline in meningococcal cases fuelled confidence to extend the campaign to ensure all New Zealand children get the protection they need.

Job training programmes a hit
Tertiary Education Minister Michael Cullen revealed record highs in the numbers of people in Industry Training and Modern Apprenticeship schemes in 2005. The government and industry aimed to get 150,000 workers in the Industry Training system by the end of 2005 but Tertiary Education Commission figures show a massive 161,000 people in the system, up 16 per cent on 2004. Investment in upskilling New Zealand's workforce is key to the government's goal to improve productivity and transform New Zealand into a high wage, higher value-added economy, Dr Cullen said. Industry Training includes the Modern Apprenticeships programme that in 2005 saw participant numbers increasing 17 per cent to 8,388.