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Copeland: Tax reform opportunity lost

Copeland: Tax reform opportunity lost

United Future finance spokesman, Gordon Copeland, welcomed today's Budget announcements that family support and family tax credits will be adjusted for inflation from 1 April 2003 and the reduction in tax rates on employer funded superannuation schemes.

"Families need all of the assistance they can get and the support and tax credits have not been adjusted for inflation since 1 April 1998. The way in which a nation provides for its children is a mark of its civilisation," he said.

"The reduction in tax rates on employer contributions to superannuation schemes, at a cost of $65 million over four years, is also a small step in the right direction.

"I must say I would have preferred seeing the Labour Government take this opportunity to significantly reform to our tax laws. Earlier this week, we saw the Australian Government reduce taxes for the average Australian and as far as I know, the sky hasn't fallen in across the Tasman.

"With the surpluses this Budget has delivered, we could have helped ease the tax burden on our families and businesses.

"Changes I will continue to push for include:

· An adjustment to the present tax bands for inflation since 1 April 2000. This would have given all tax payers a reduction of somewhere between around $1.16 and $16 per week. Failure to make that adjustment actually amounts to an increase in taxation, something which the Government specifically pledged not to do.

· A reduction in the company tax rate from 33% to 30%. This would give immediate benefit to the approximately 65,000 companies in New Zealand who form the bedrock of our economy. Tax reduction at that level would be an immediate spur to new investment and to the creation of new jobs. It would make New Zealand businesses competitive internationally and attract overseas investment in this country.

· A substantial decrease in Government spending by encouraging private provision of tertiary education, health services, and prisons. State provision is a core Labour Party ideology, but United Future believes that better outcomes could be achieved at a vastly reduced cost to the tax payer through a mixture of both private and state provision.

· Further encouragement for private superannuation savings through a front end rebate on the first $2,000 saved each year and an alignment of tax on earnings with personal tax rates.

"Taken together these measures would shrink the size of Government as a proportion of GDP. They would return taxes, boost the economy significantly and ensure that tax payers receive more bang for their precious bucks. We must never lose sight of the reality that Government only has funds to spend or to give away in terms of grants that they have first taken from the purses and pockets of the tax payers," concluded Mr Copeland.

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