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ACT backtracks on flat tax

Thursday, 1 July 2004

ACT backtracks on flat tax

United Future’s revenue spokesperson Gordon Copeland today highlighted the backtracking being done by ACT on its core policy of a flat tax rate.

He said “For years, ACT has been promoting a flat tax of 20 cents in the dollar.

“A few days after Rodney Hide was appointed the new leader of ACT, I pointed out that 76% of New Zealanders in fact pay tax now at either 15 cents in the dollar or 19.5 cents and that therefore the ACT proposal would see three quarters of all NZ taxpayers paying more rather than less tax!

“Mr Hide reacted angrily since apparently no one in recent years had done that piece of analysis and brought the facts to the attention of the public.

“He has since accepted that my figures are correct,” said Mr Copeland, “and is now changing the party’s policy from “a flat tax of 20 cents” to “a max tax of 20 cents”.

“Mr Hide appears not yet to have told his former leader Richard Prebble about that because just last Tuesday in asking a question of the Minister of Finance, Mr Prebble again referred to “a low flat rate of tax”.

“According to the answer provided to Parliament by Dr Michael Cullen, ACT policy would cost $6.5 billion so ACT’s task now is to explain to the nation exactly how they would make up that shortfall.

“To put it in perspective: the Budget projects a cash shortfall of $800 million after capital expenditure and last year the government spent $7.4 billion on health and $7.8 billion on education. So where is the $6.5 billion to come from?” asked Mr Copeland.


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