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Time for a Tax Cut for the Workers

Time for a Tax Cut for the Workers

“New Zealand can afford a tax cut for every worker and a cut in the company tax rate to below Australia’s rate right now,” said ACT Leader Richard Prebble.

“As a former finance minister I believe the correct way to interpret the December fiscal update is that the government is overtaxing New Zealand by $3.5 billion. The government can claim no kudos from a surplus - it simply means we’re all paying too much tax.

“This can be easily shown by the fact that real wages after tax are falling and company income is not increasing as fast as is needed for reinvestment. New Zealand now has the highest rate of company tax in the Asia-Pacific region.

“Personal tax rates on low-income earners are the highest of any of our trading partners.

“For $3.5 billion New Zealand could, using the MacLeod tax report recommendations, lower the company and top personal tax rate to just 26 cents, and lower the bottom rate of tax to 18 cents. This would give every working New Zealander and every company, which in New Zealand means small businesses, a tax cut.

“The first advantage will be to bring New Zealand’s tax rates significantly below Australia’s rates. The second is that a tax cut is fair. Under Labour working New Zealand families have paid significantly more tax and have not benefited from Labour’s social spending which is directed to those not in the productive sector,” Mr Prebble said.

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