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Employers hope to pocket workers' tax cuts

31 August 2005

Employers hope to pocket workers' tax cuts

Employers will seek to pocket whatever small tax increase most workers get by off-setting it against future wage increases, said CTU President, Ross Wilson in advance of the launch of the Business NZ Tax Perspectives document tomorrow.

"Unions still remember the 90s when employers resisted wage increases after a government tax cut," he said.

"The scenario will go something like this: Under National, workers will get a small tax cut, while those on the highest incomes get a big one."

"But workers will also get lots of other cuts. They will get cuts in the number of nurses, teachers, radiologists, junior doctors and scientists, cuts in wages (due to scrapping the Employment Relations Act), cuts in holiday pay and cuts in health and safety protections."

"Then workers will pay higher interest on their mortgages. And when they next seek a pay rise, the boss will deduct the value of their tax cut from any wage offer and add the workers' meagre tax cut to their own much larger one. Then by 2008 employers would also pocket a cut in company tax worth about $600 million."

"How fair is that?"

ENDS

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