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Farmers: Cash Cows For Cullen's Cash Carrots

Farmers: Cash Cows For Cullen's Cash Carrots

Farmers see deep irony in the government's multi-billion dollar spend up announced in today's Budget.

While Minister of Finance Michael Cullen is letting some earners keep more of their taxable incomes, farmers are lumbered with another new tax, said Hugh Ritchie, a National Board member of Federated Farmers of New Zealand (Inc).

“Farmers are the cash cows for Dr Cullen's cash carrots,” Mr Ritchie said.

The latest new tax on farming is the border security fee or 'terrorist tax' applying from July 1. Legislation for the tax will be passed within a week.

"The terrorist tax is just one of 21 new taxes since late 1999. More significant tax grabs include several new taxes on fuel, increased ACC levies, and higher income taxes for the rapidly expanding number of middle class families with total income over $60,000 a year.

"These higher taxes and the convenience of a strong economy have given Dr Cullen the leeway to return some of his vast surplus to low income earners. Agriculture is one of the significant sectors which has reluctantly funded this cash bonanza.

"We do not criticise Dr Cullen for allowing people to keep more of their incomes. But what is grossly unfair is that other parts of society are paying more in taxes, levies, charges, and fees," Mr Ritchie said.

If the government provides the framework for lifting business competitiveness, then business will create the jobs which will lift the prosperity of all New Zealanders.

"Another serious concern with the Budget is the absence of any sound initiative to improve productivity -- the only way to lift New Zealand's wealth ranking among OECD countries," Mr Ritchie said.

From 1989 to 1994 New Zealand improved its position in the OECD's world competitiveness ranking from 18th to 8th. We have since fallen back to 14th in 2003.

"The government should be working to put us back up the rankings. But instead it shows a lack of commitment to improving the business environment. It should immediately reform taxation and remove red tape binding business through the Resource Management Act and local government bureaucracy."

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