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Headroom for tax cuts, says Copeland

Wednesday, 15 June 2005

Headroom for tax cuts, says Copeland

United Future finance and revenue spokesperson Gordon Copeland today questioned Finance Minister Dr Michael Cullen about the scope for immediate tax cuts at a select committee meeting.

Afterwards Mr Copeland said that it was clear that Labour's tactic between now and the election will be to repeat the mantra that "there is no room for tax cuts" ad nauseum.

"However the Minister's lack of analysis in that regard needs to be exposed," said Mr Copeland.

"The Budget forecasts an average surplus over the four years 2005 - 2008 of $5.8 billion per annum. An average of $2.3 billion per annum of that surplus will be used to pre-fund NZ superannuation - something which United Future fully supports.

"That leaves a surplus of $3.5 billion per annum.

"Those are the simple facts set out in the Budget. The $3.5 billion surplus is of course after all revenue expenditure on health, education , police, defence etc has been fully funded.

"In simple terms, the figures say that the government is collecting more than it needs to so there is obviously scope, and more, for tax cuts at the $2.5 billion level that United Future is proposing.

"Those are unquestionably the underlying realities and commentators for once should not allow Dr Cullen's stories to get in the way of the facts.

"Dr Cullen claims that he needs to hang on to that $3.5 billion a year, rather than give it back to hard working New Zealanders, because he needs it to fund capital assets and the like.

"But as he himself admitted to the committee his way is not carved in stone and as anyone who has ever bought a house will tell you, most people never dream of funding major assets solely from their annual income.

"There is headroom for tax cuts in New Zealand and no amount of rhetoric should be allowed to obscure that reality.

"This is a matter of great importance to NZ families, many of whom are struggling under a mountain of debt. I am not prepared to stand by and see the State enrich itself at the expense of its citizens," said Mr Copeland.

ENDS

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