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Sleight of hand in promise of business tax relief

John Key MP National Party Finance Spokesman

15 December 2004

Sleight of hand in promise of business tax relief

"Michael Cullen's promise of tax relief for businesses is nothing more than a sneaky sleight of hand that shouldn't be believed," says National Party Finance spokesman John Key.

"I'm certain that business will be left speechless when they learn that they are actually going to be funding their own lower taxes by way of Labour's proposed carbon tax .

"Dr Cullen's argument is a nonsense, and it is a complete flip-flop on his position of pre-funding New Zealand superannuation.

"What he's saying in relation to Kyoto, is that he's prepared to spend any gains now, and tax businesses more in the future to pay for his quick political fix," says Mr Key. "But what happens down the track, when New Zealand falls into deficit on carbon emissions?

"Dr Cullen's plan would leave businesses, which have paid the carbon tax, being forced to buy carbon credits. They will pay twice, unless Dr Cullen is telling business the Government will pick the tab?

"It's actually not tax relief, merely delaying the impact of future tax hikes already planned by Labour. National has previously said it will not impose a carbon tax on business.

"Dr Cullen also has remarkable confidence in the value of the carbon credits New Zealand is likely to earn in commitment period one of the Kyoto Protocol. It is now widely predicted the numbers will fall well short of his expectations.

"Rather than punishing poor environmental performers, wouldn't the Government be better off rewarding good behaviour?

"The Kyoto Protocol is set to become another funding mechanism for a greedy minister determined to hide his ideological opposition to real and meaningful tax relief," says Mr Key.


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