SOE sell down would keep tax cake and eat it

Media statement Wednesday, June 7th, 2006

SOE sell down would keep tax cake and eat it

Tax cuts to attract expat Kiwis and stimulate economic transformation are possible if Government were to sell down part of its ownership in certain SOE’s, the Employers & Manufacturers Association (Northern) says.

“We urge Government to think further about how it could re-direct its capital,”said Alasdair Thompson, EMA’s chief executive.

“Finance Minister Dr Cullen said again today that individual tax cuts were not possible unless cuts were made to government spending.

“But Government could re-direct capital tied up unnecessarily in SOE’s without risking its present expenditure commitments.

“One option, if it had the political will, is for Government to sell to the public a minority shareholding in its SOE’s.

“Though we certainly don’t want to see SOE’s expand their commercial interests beyond core business, the sale of 49 per cent shareholdings in them could be re-deployed by Government to:

- cut taxes;

- maintain a sensible surplus;

- retain control of the SOE’s;

- provide New Zealanders with more savings/ investment opportunities, and

- fund investment in infrastructure.

“It would free up the investment capital required to speed up our economic transformation while protecting the Government’s fiscal position.

“This is what a conservative entrepreneur would do.”

ENDS

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