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Send your questions to susan.edmunds@rnz.co.nz
I've often wondered, in the context of hearing a news article about some form of government spending, for example welfare or roading or trade envoys, what proportion of government income comes from the various tax sources. GST, PAYE, corporate tax etc. What proportion do they each make up of the total tax take?
The biggest chunk of tax comes from individuals paying income tax - in the 2024 financial year, that was 51 percent of tax revenues. That was followed by GST, which was 25 percent of revenue, corporate tax at 16 percent and "other" at 8 percent.
When it was releasing its report, IRD said the tax take hit $115.4 billion in the 2024 year, the highest level ever.
But it says with economic conditions being tough, more customers have struggled to pay their tax and there has been notable growth in overdue tax debt.
It is interesting that within that individual tax contribution, the majority is paid by higher-earning individuals. In the 2020 tax year, 24 percent was from the 3 percent of people earning more than $150,001 a year.
In 2022, the NZ initiative noted that the Working for Families system meant a family with two kids earning about $60,000 a year would get as many credits as they paid in tax, so they effectively would pay no tax.
I recently inherited $600,000 from the sale of my late father's property. I put $400,000 in Simplicity's High Growth managed fund, unfortunately just before the market turmoil that has seen it lose $25,000 to date. I'm 56 years old and I mainly plan for this money to boost my retirement savings, but I also want to do some travel and home renovations over the next few years.
I know high growth investments generally gain over the longer term, but now I'm scared I'll lose the lot. This money seemed "extra" so I was prepared to go with high risk, but now I wish I hadn't. Should I move it to a more conservative fund? My KiwiSaver and the rest of the inheritance are in balanced, which is where I save regularly.
Generally, if you are in a high growth fund you need to be able to stick with it for at least 10 years (maybe more).
High growth funds do tend to deliver better returns over time but they can be a lot more choppy and volatile.
Simplicity's high growth fund is 98 percent in growth assets, so it's going to move around a lot.
The assets might drop in price but the fund still owns them, so the value of the fund will recover when the market does.
I talked to Sam Stubbs, who is the founder of Simplicity, about this.
He said it would be worth you using a fund selector tool - Simplicity has one, or you could use Sorted's - to check what sort of fund you should be in.
That will at least give you a guide on how "wrong" - if at all - you are in having that money in a high growth fund.
Then you will have to decide whether you really do need to have access to the money in the short term.
"If you desperately need your money right now you desperately need your money, it doesn't matter where financial markets are, you need cash. If you ever get into that circumstance you should probably be in a lower risk fund. Otherwise stick to your guns, do not get emotional about this. This is the normal course of events. If markets always went up everyone would sell their houses and put money into financial markets. They don't. They go up and down ... Over the long term, time is your friend."
The disruption won't last forever and as, Stubbs says, it's only a paper loss at the moment.
"It's like a gain - you've only gained it on paper until you sell it. If you have a long-term perspective don't worry about what appears to be a loss, it's just a paper loss."
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