Expansionary tax package applauded for recession

Media statement Wednesday, October 8th, 2008

Expansionary tax package applauded for recession

In a recession above all our people need confidence, and more money in their pockets, and National's tax package would deliver on these imperatives, the Employers & Manufacturers Association (Northern) says.

"National's plan to put $5 billion or 50 per cent more in taxpayers' pockets over three years than Labour would is the sort of response required by the scale of the crisis in world finance markets," said EMA chief executive Alasdair Thompson.

"If our people are not allowed to have the money they need for spending, saving and investing, we face the possibility of a full blown depression with severe job losses and a deteriorating standard of living.

"Business welcomes National's intention to deliver a smaller deficit than currently projected, and especially the review of all government departments to eradicate unproductive spending.

"But business is very disappointed that the 15 per cent tax credits for R&D are to go, to allow for the tax cuts. This was one advantage we had over Australia.

"The intention to restore a total remuneration approach to KiwiSaver is applauded. Employers will find the removal of employer tax credits on their employees KiwiSaver accounts not a big loss given the simpler compliance regime envisaged. It's what Trevor Mallard should have done instead of passing a self defeating law.

"Lowering the KiwiSaver entry contribution to two per cent will also allow more people access to the scheme."

ENDS

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