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Australia picks winners……

and leisure boat manufacturers strike it lucky.

The Australian Government has decided to offer some encouragement to manufacturers of new leisure boats by relaxing the GST rules on sales to non residents. Under current rules if a Kiwi buys a new boat from an Australian manufacturer it has to be exported to New Zealand within 60 days to qualify for GST free treatment.

What they’re proposing is the new boat can be bought free of GST provided it is exported out of Australia within 12 months. This allows the excited buyer time to sail their new boat around Australia for a few months before taking it home to New Zealand (or wherever).

The idea is to encourage more non residents to buy Australian made boats and spend more time (and money) in Australia before heading home with their new toy, creating greater economic activity and more jobs for Australians.

Of course in ideologically pure New Zealand we don’t believe in providing incentives through the tax system to generate economic activity and create jobs. Kiwi boat manufacturers will still have to ensure the boats they sell to non residents are exported within 28 days or, if the buyer sails it themselves out of New Zealand, within 60 days after purchase; otherwise they have to charge GST at the full 15% rate.

NZ catch up with Australia? Might be difficult if they keep installing turbo chargers in their tax system.

Iain

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