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Stopping New Tax Better Option

11 May 2004
PR 102/04

Stopping New Tax Better Option

The Government would help business more by stopping new taxes on exporters rather than subsidising individual companies' overseas marketing plans, said Tom Lambie, President of Federated Farmers of New Zealand (Inc).

Mr Lambie was commenting on Trade Negotiations Minister Jim Sutton saying that the government will spend $7.5 million, rising to $12.5 million, to part fund trade promotional activities.

"The government is giving with one hand and taking away with the other. It plans to spend all this extra money while pushing ahead with a terrorist tax which will cost exporters," Mr Lambie said.

The Minister of Customs intends to impose at least $9 million a year in a new tax on exporters to pay for the public good activity of deterring international terrorists from using New Zealand's supply chain to stage terrorist acts.

"Protecting the New Zealand economy from the effects of terrorism is a public good like the police or armed forces. Specific sectors of the economy should not be singled out to pay for a public good," Mr Lambie said.

The terrorist tax is just one of the many new taxes that the government is piling on exporters, undermining the competitiveness of New Zealand business.

Mr Sutton's statement said the Market Development Assistance Scheme would provide part-funding for trade promotional activities that help New Zealand companies develop linkages with overseas businesses and customers. Such activities might include developing overseas representation, creating marketing material, and communications programmes.

But Mr Lambie said it was time the government got back to core its business and stopped trying to play around in areas that are the responsibility of business.

"Promotion and marketing is the responsibility of those who actually own and sell the product, not the government's responsibility," Mr Lambie said.


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