"There is not a loophole. The legislation was introduced 17 years ago and the 'loophole' they refer to has existed for the last 10. It's political spin on tax changes to make it seem some people will pay more tax.
"People are doing exactly what the law allowed them to do. These changes won't close anything."
Finance Minister Bill English and Revenue Minister Peter Dunne announced the changes, saying they would increase the integrity of the tax system and help ensure everyone paid their fair share.
Among the changes, the one that particularly annoyed Mr Turner was the closing of loopholes in the tax treatment of loss-attributing qualifying companies (LAQCs) so shareholders could no longer claim losses against their personal income.
Also, the ministers were broadening the definition of income for Working for Families, student allowance and the community services card to prevent people structuring their income to inflate their entitlements.
Mr English said the changes increased fairness and consistency.
However, Mr Turner said, while the changes to LAQCs would affect all those people operating them, there would not be much more tax income to be gained.
"There are other structures available where exactly the same tax outcome can be achieved. There is a huge compliance cost for clients in deciding what to do."
The Government made it clear in the May 20 Budget it was removing the depreciation on buildings with an estimated useful life of 50 years or more, and that gave Messrs English and Dunne a chance to talk about the LAQCs.
The problem was, although the depreciation was gone, most rental-property owners could still claim cash expenses as losses.
The Government had got excited about people making losses and claiming them at 39% rather than say 33% and when they did make an income, paying tax at 33% rather than 39%.
But from April 1, 2011, those tax regimes would not exist.
"They are playing politics on something that has existed for 10 years and are getting rid of it in a year when it's no longer important."
Mr Turner said, on the face of it, the changes to Working for Families seemed fair and made a lot of sense.
Inland Revenue had always worried about the use of family trusts being used to keep income low and claim government entitlements.
"They are having a crack at those people saying it's not fair that other taxpayers are subsidising them. I have some sympathy for that."
The problem arose when the previous Labour government changed the rules and provided incentives for people to keep their incomes low to cash in on Working for Families.
"In our client base, I don't think we had anyone abusing the system. Maybe it is a South Island approach where people make moral decisions along those lines. But the IRD believed it was being widely abused and wanted the rules change to include the income from trusts."
If someone was claiming income of $10,000 and their family trust had an income of $100,000 then, from next year, the total income being assessed would be $110,000.
The Government expected to claim back about $32 million a year and that was not money which would lose it votes as it would be seen as morally the right decision, Mr Turner said.
What he had hoped would happen, but which had not been addressed, was an examination of the other side of the problem. A shareholder in a company did not qualify for government help if the company did "really badly" and the shareholder did not earn a salary.
There was no logic in that. The Government had tackled the abuse but had not addressed the fairness, Mr Turner said.
Mr English said the changes would reduce the opportunities for well-off people to structure their affairs for tax purposes.
Sheltering income to inflate Working for Families or student allowance payments was unfair to people in genuine need and to the taxpaying public, who paid the bill for those assistance programmes.
