Tax breaks for health insurance on agenda
“At the moment any employer who offers health insurance gets hit by fringe benefit tax,” he says.
“I think that’s crazy. The more we can encourage employers to provide wholesale medical insurance for their staff the better.”
Key notes that health costs in the public system are already out of control, even before the baby boomers start to retire.
“The health issue creates a huge problem for the minister of finance.”
Asked about a tax rebate for health insurance – as private health insurance have lobbied for many times – Key was more circumspect.
Although there is some ongoing work there, he says at present the focus is on small steps rather than something as radical as a tax break rebate.
“Elimination of FBT on health insurance in the workplace is a good start.”
The Treasury has repeatedly advised successive ministers of finance the government cannot afford a personal tax rebate for health insurance.
The most recent work, carried out in 2002, calculated the revenue lost would not compensate for less costs in the public health system.
