Who is right about Investment Boost? We're still not sure

When it comes to the savings that Labour can make by cancelling Investment Boost, who is right?Labour said it will save $7.7 billion if it cancels the policy, which allow businesses to claim an immediate 20 percent tax deduction on the cost of qualifying new assets.But Finance Minister Nicola Willis said the cost of Investment Boost is actually only $5.5 billion over the forecast period - leaving a gap of $2.2 billion.But does it?Even the experts say it is a bit confusing.Dentons partner Bruce Bernacchi said he had not seen the modelling behind it, but Willis's explanation made sense."The way Investment Boost works is, let's say you buy an asset for $100, you get to write off 20 percent upfront and then you bring its cost down to $80 and then you depreciate that remaining $80 over the life of the asset."You're not getting an extra tax write-off, you're just accelerating it. I think what the government is saying is you get this extra 20 percent but then your tax depreciation in later years is reduced because you've already taken that 20 upfront.So they're saying the $5.5 billion is the net cost over the forecast period. That to me intuitively makes sense. You've got this upfront 20 percent but then you have reduced deductions in alter years."Simplicity chief economist Shamubeel Eaqub.RNZ / Cole Eastham-FarrellySimplicity chief economist Shamubeel Eaqub said it was hard to judge without seeing the parties' workings."The start date of repeal and what is clawed back matter a lot. National is quoting the cost of keeping the scheme while Labour is quoting the revenue from stopping it."The scheme's cost falls over time because assets already bought get smaller deductions later, and that claw-back continues after a repeal. So repeal should raise more than the scheme's ongoing net cost."An economist who did not want to be quoted said he could not make head nor tail of the argument. He said one view of Investment Boost was that it had no permanent effect on the fiscal position at all because it was only a timing issue of when depreciation occurred.Another tax expert said it was hard to say without seeing the calculations."I think Labour would need to provide some more concrete explanation here as it's difficult to unpick it ... They gave a fiscal cost but also had a counter $2.6b increase in tax revenue, from a combination of economic growth and lower depreciation in future years."Sign up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make and spend money