Prebble's Letter from Wellington - Special Edition
Letter from Wellington
Thursday, 06 June 2002
ACT Launches Economy and Tax Policy
taxes than Australia
Better business environment than Australia
Fast track back to first world status
Lower taxes for every worker
ACT will implement a well-designed package of tax cuts to boost growth, jobs and prosperity.
ACT policies will achieve the 4% plus growth needed to return New Zealand to the top half of OECD countries. ACT policies are pro-business (that in New Zealand means small business), pro-jobs and pro-growth. New Zealand is a trading nation in a global economy. Australia's company tax is 30 cents, i.e. 3 cents lower than New Zealand.
Under Labour, compliance costs have increased $26,000 over three years for a medium-sized business. OECD says New Zealand taxes on income and company profit are third highest in OECD. ACT will immediately:
* Cut company tax rate from 33 cents to 28 cents - (lower than Australia).
* Reduce personal income tax from 33 and 39 cents to 28 cents, and from the present 19.5 cents to 18 cents, ie. a tax cut for all workers.
* No one will be worse off - there will be no cuts to health or education.
* Conduct a zero-based review of regulations, a Regulatory Responsibility Act - rewrite Employment Relations Act, ACC, Resource Management Act and OSH - to make business friendly. Cost of tax package:
* $2.9 billion dollars. Paid for by cancelling Cullen's super scheme, corporate welfare for business, Maori TV, Kiwi Bank, Air New Zealand bail-out, and scrapping Closing the Gaps spending. Benefits:
* Increased investment
* Extra jobs
* Four percent plus growth
* Greater prosperity
Company Tax Rate
Cut to 28 cents
Reduce to 30 cents
Keep at 33 cents - Cutting Maori Company rate to 19.5 cents
Taxpayer earning $40,000 p.a.
$670 cash p.a. in hand