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Cullen Confirms Average Household $1,740 Worse Off


Cullen Confirms Average Household $1,740 Worse Off Under Labour

Thursday 11 Nov 2004
Rodney Hide
Press Releases -- Economy


Re-crunched figures supplied by Treasury on changes to household incomes and taxes dig the Finance Minister into a deeper hole, confirming that Kiwi households have been harder hit in real terms under Labour than even I initially thought, ACT New Zealand Leader Rodney Hide said today.

"Dr Cullen's new figures were compiled hastily by Treasury in an attempt to save the Minister's face over earlier data, he signed out, that showed cuts in nominal net incomes," Mr Hide said.

"I waited for the better news but unfortunately it didn't come - in fact, quite the opposite. The new figures reveal that the average Kiwi household is $1,740 a year worse off, with Labour's extra taxes swallowing up two-thirds of the increase in household income between 2000 and 2004.

"Dr Cullen is right when he says the figures only tell half the story. The 6 percent increase in net income must be offset by inflation. However, under Labour, inflation was at 10.4 percent from 2000-04. The fact is that a dollar today just doesn't buy what it did when Labour took office.

"Inflation and higher taxes have squeezed hardworking Kiwis, meaning in real terms, the average household is nearly 4 percent worse off over the last four years.

Treasury-supplied figures:

2000

2004

Increase

Percent

Income

$60,560

$68,280

$7,720

12.7%

Tax

$19,760

$24,960

$5,200

26.3%

Net

$40,800

$43,320

$2,520

6.2%

CPI change:

CPI

Dec-99

Dec-03

1006

1111

CPI increase

Dec years

10.40%

Net income in 2004 dollars:

2000

2004

Change

Percent

$45,058

$43,320

-1738.45

-3.9%

"In real terms, households are on average $1,740 a year worse off than four years ago. That's costing households a staggering $67 a fortnight in money they should've kept!

"Across all 1.5 million households, Kiwis are $2.5 billion worse off.

"It is good that Dr Cullen has now got Treasury to provide these accurate figures. It has been confirmed that New Zealanders are worse off under Labour, and no spin machine, no matter how great, will change this fact," Mr Hide said.

ENDS

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.


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